Author: Ryan James Tutak

Eastern Europe is speeding
into the new millennium in overdrive. Auto sales in the region capped nine-straight
years of growth in 1999, finishing over 1.3 million units for the first time
in the 11 markets with reliable statistics, though this volume still paled against
the demand of 1.7 million units last year in Spain alone.

Volkswagen AG closed the
decade as the dominant player in Eastern Europe, firmly supplanting Fiat SpA,
historically the automaker with the biggest presence in the region. VW has led
in sales since 1996, despite periodic surges from Daewoo Group, the upstart
conglomerate from South Korea now battling financial ruin.

Sales jumped 12.0% to 1,380,608
in 1999 from 1,233,036 in 1998 for the region including Bulgaria, Croatia, the
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia
and Slovenia.

Figures cover new vehicles
not over 3.5 tonnes gross weight.

VW, also atop Western Europe
in sales throughout the 1990s, underperformed demand in Eastern Europe, due
to a downturn in its main market of the Czech Republic, home to Skoda. The Czech
brand generated 62.4% of total turnover of the German group, which also includes
Audi, SEAT and specialty marks. VW’s regional share fell to 20.0% in 1999 from
20.8% in 1998, as sales rose only 7.6% to 276,426 from 256,850.

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Fiat, the region’s leader
from 1993 to 1995, kept pace with demand, holding its market share at 15.9%
in 1999, unchanged from 1998. Sales grew 12.3% to 219,657 from 195,529. The
Italian group (Alfa Romeo, Fiat, Iveco, Lancia and specialty brands) now suffers
from a narrow profile in the region, making cars only in Poland.

Daewoo, Fiat and VW were
alone to sell over 200,000 units in 1999. Together, they captured 54.4% of regional
demand. After them were Renault SA (165,477), General Motors Corp (109,517),
PSA Peugeot Citroën (85,041) and Ford Motor Co (66,836). No other group
sold over 40,000 units.

Renault finished the year
as a burgeoning powerhouse, following its recent purchase of 51.0% of SC Automobile
Dacia SA of Romania. Sales of the French company slid 3.1%, due to a 17.9% downturn
at its new acquisition, but Renault still passed GM in the rankings for the
first time.

In contrast, Lada-maker
AO AvtoVAZ ended the 1990s dismally. The Russians enjoyed big exports of its
cheap vehicles to Eastern Europe under Communism, but the evolution of free
trade in the region has destroyed this business, especially the influx of modern
alternatives from Western Europe and Japan. The company upped sales 52.8% in
Eastern Europe last year, but the volume of 5,244 units was a small fraction
of totals in the 1980s.

Among countries, Poland
still dominated with its best-ever performance: sales of 704,272 in 1999, a
remarkable 51.0% of regional demand. It remained the eighth-biggest consumer
of autos in all Europe – ahead of Belgium, behind the Netherlands.

Slovenia, home to only two
million people, had a record year with 84,507 units. It is the most developed
market in Eastern Europe, selling 42.3 new autos per 1,000 people in 1999. This
outpaced Western Europe with sales of 40.5 units per 1,000 people.

Hungary also had its strongest
year post-Communism. Sales of 155,092 units ranked third in the region, closely
trailing the Czech Republic with 161,999 units. Hungary’s growth of 22.5% was
second to Poland.

Eastern Europe has sustained
growth in auto sales throughout the 1990s, despite broader economic turbulence.
A slowdown is inevitable, and six of 11 markets slumped last year. But, if turnarounds
emerge in any under-performers, especially the Czech Republic, this year could
build on the success of the past decade.

Auto Sales – Eastern Europe
.	1999 %Share	1998 %Share	1999 Units	1998 Units	1999/1998 % Change
AUTO GROUPS	.		1,380,608	1,233,036	12.0
Volkswagen	20.0	20.8	276,426	256,850	7.6
Daewoo	18.5	17.7	255,357	218,152	17.1
Fiat	15.9	15.9	219,657	195,529	12.3
Renault	12.0	13.9	165,477	170,781	-3.1
General Motors	7.9	7.2	109,517	88,908	23.2
Peugeot Citroen	6.2	5.3	85,041	65,195	30.4
Ford	4.8	5.2	66,836	63,588	5.1
Suzuki	2.9	2.5	39,361	30,974	27.1
Hyundai	2.7	2.2	37,947	27,539	37.8
Toyota	2.2	2.3	30,445	27,852	9.3
Nissan	1.4	1.5	19,840	18,762	5.7
Honda	1.3	1.6	18,356	19,837	-7.5
DaimlerChrysler	1.2	1.1	16,339	13,739	18.9
Mazda	0.9	1.0	12,867	12,417	3.6
BMW	0.6	0.6	7,998	7,041	13.4
Others	1.4	1.3	19,154	15,872	20.7
.
MARKETS	.		1,308,608	1,223,036	12.0
Poland	51.0	45.8	704,272	565,108	24.6
Czech Republic	11.7	12.7	161,999	156,813	3.3
Hungary	11.2	10.3	155,092	126,588	22.5
Romania	8.4	10.9	115,651	134,160	-13.8
Slovenia	6.1	5.9	84,507	72,607	16.4
Slovakia	4.5	6.2	62,090	76,394	-18.7
Croatia	4.2	5.0	58,661	61,339	-4.5
Bulgaria	0.9	1.0	11,888	12,196	-2.5
Estonia	0.7	1.0	10,329	12,573	-17.8
Latvia	0.7	0.7	10,185	8,674	17.4
Lithuania	0.4	0.5	5,934	6,524	-9.0

Ryan James Tutak has covered
the auto business in Eastern Europe since 1992. His work has been reported and
used by companies, institutions and media in 30 countries – including Arthur
Andersen, Automotive Business International, CNN, Financial Times, Japan Automotive
News, KPMG, Morgan Stanley, Nikkei, Reuters, Ward’s, WirtschaftsBlatt and World
Bank.

He can be reached
by:
E-Mail rjt@pronet.hu
Telefon +36-1 / 266-2693
Telefax +36-1 / 317-7257