After water, tea is the most popular beverage globally. Maximum of tea consumption is locally, in the country or region of production. The tea sector is marked by a handful of companies monitoring the complete tea supply chain. 85% of to…
New passenger car sales in Lithuania rose 64.6% year-on-year (y-o-y) in 2011, to 12,294 units, according
to the state registration agency Regitra. New commercial vehicle sales also grew by 95.8% y-o-y, to 4,690
units, according to figures released by the European Automobile Manufacturers Association (ACEA).
This gave a total new vehicle sales figure of 16,984 units for the year, an increase of 72.2% y-o-y.
However, it has been a different story in 2012 year-to-date, with new passenger car sales down by 2.5
%over the first nine months of the year, at 8,900 units. Commercial vehicles sales have also fallen back,
down by 5.2%, to 2,972 units over the January-August period.
Against this deteriorating backdrop, BMI has revised down its 2012 new passenger car sales forecast to a
fall of 5% for the full year. With commercial vehicle sales also set to decline by some 7%, this equates to
a 5.5% annual decline across the new vehicle sales market as a whole. The forecast is based on increased
evidence of a renewed slowdown in the Lithuanian economy, with BMI's Macroeconomic team
forecasting growth of just 1.4% in 2013, down from 2.3% growth in 2012. Domestic demand is also
being suppressed by both falling private consumption growth and still-high unemployment (13.3% in
Q212). Inflation is also still potentially a concern for the domestic economy, with the HICP measure of
inflation standing at 3.4% in September 2012, although this is down from earlier in the year. This raises
the spectre of the Bank of Lithuania potentially having to increase interest rates from current low levels of
just 1.5%. Higher interest rates would also feed into higher loan rates on car financing agreements, which
could further depress demand over the short term.
Beyond 2013, BMI is more optimistic on the longer term outlook for the Lithuanian new vehicle sales
market, forecasting expansion of 36.9% in total vehicle sales between end-2013 and end-2017, to reach
23,695 units. This is based on our view that a more pronounced recovery in demand from developed
markets and improved fiscal dynamics should pave the way for a stronger growth trajectory and, by
extension, higher new car sales for the country. Commercial vehicle sales will grow at a faster rate than
that for passenger cars over the forecast period. The main threat to our new car sales forecasts remains a
break-up of the eurozone, with the risk remaining that Greece may have to default in 2013.
In terms of manufacturers, Germany's Volkswagen (VW) is the dominant player in the Lithuanian new
car sales market, selling 2,257 units in 2011. In second place is Japanese automaker Nissan Motor, which
sold 1,663 units, followed by French carmaker Peugeot, which sold 1,398 units.
Other key players on the Lithuanian new vehicle market include Skoda and Toyota Motor in the
passenger car segment and Fiat in the commercial vehicle segment.