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20% of the Greek retail car business closed in 2011

16 January 2012 / 20:01:36  GRReporter
3739 reads

Victoria Mindova

"In 2011 alone, 20% of the official shops that sell new cars closed. Now, there are only about 1,500 of almost 2,000 shops a few years ago," said for GRReporter the president of the Association of Motor Vehicle Importers Representatives Dimitrios Patsios. The representations in Greece are resisting the crisis and there is no complete withdrawal of companies yet. The situation is difficult for the retail dealerships.

A total of just over 97,000 cars were sold in 2011, which is 31% less than in 2010, when 141,000 new cars were sold. "The problems in our sector are mainly three. The first is the lack of funding. Banks do not lend easily and household incomes have significantly decreased. This means that if there are no funds, people are satisfied with the available resources. The second problem is the increased tax bases, mainly for high-end cars. They were introduced in the summer of last year and aggravated the situation. Third comes the general feeling of uncertainty in the market, which slows the completion of commercial transactions."

The old system allowing the citizens to purchase a new car (usually on a lease) and then to replace it for a new one in a few years against a surcharge still applies. This system is still in force and companies continue to purchase cars on a lease. The percentage remains the same, but the absolute number of sales is lower. "The market is operating the same way, but at a reduced scale. There is interest primarily in small cars," states the specialist. The trend from 2010 continues, as the Greek consumers prefer economic and lower class cars. These are mainly urban-type vehicles up to 1,400 cc, which are a new generation. They are cheaper to maintain and are more affordable for the empty pocket of consumers.

In 2008 and 2009, the proportion of new 4x4 cars sold was respectively 13.23% and 14.88% of the total number of new cars purchased. In 2010, that percentage had dropped to 10% and last year, it collapsed to 6.5%. In fact, the analysis of data shows that most of the jeeps purchased in 2011, whether SUV or off-road, were of the most inexpensive class of this type of personal cars. A significant decline in market share has occurred in the so-called family cars. The cars between 1,601 and 1,800 cc have lost many of their faithful fans, who can afford such a car and their market share fell to 5.3% in 2011 from 10% in 2007. The share in sales of this type of mid-range cars was 29.23% in 2008 and it reached 24.9% in 2011. There is comparative growth in sales in the smallest (mini) cars, which reached 17.5% in 2011 compared to 12.35% in 2008. The most dramatic decline is in powerful cars.

Re-enforcing the measure of recycling of old cars in Greece, which provides for a discount when purchasing a new vehicle, somewhat boosted the car market in 2011. "If the subsidies for a new car through recycling the old one had not been introduced, the market results for the end of last year would be worse," said Dimitrios Patsios. He said cars sold last year would not have exceeded 80,000 instead of 97,000 at the end of 2011. The expectations for 2012 are even bleaker and Greek traders are seeking alternatives.

Exports

Exports of old cars from Greece have jumped by almost 400%, reveals the Eurostat data published this week. The economic crisis has clearly led to a new paradox, taking into account that the Mediterranean country does not produce cars. The collapse of the Greek economy, which was preceded by prosperity and lending for all goods and services, has turned car representations and importers in Greece into fish out of water and they have had to reorientate themselves and seek new potential customers.

"What we see is that some more expensive cars can now be found at unexpectedly low prices. The shrunken domestic market and low prices allow retailers to sell the old cars in other countries," said Patsios. Official figures show that during the first ten months of 2010, only 195 cars were exported from Greece for sale. They brought slightly more than € 2.6 million profit. For the same period of 2011, exports of cars from the country reached nearly 1,000 and brought the dealers over 4.8 million euro. Market opportunities and new markets that had not previously been of interest recently have recently been emerging.

In previous periods, these markets were open to Greek merchants through their German and Belgian counterparts, but today they themselves export to countries of the European Union, Africa and Asia. There is demand there for cars in the range of two to three thousand euro.

Tags: EconomyMarketsCar marketGreeceExportsCarsLow prices
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