Companies, the main drivers for growth on the automotive market

We are happy to see more and more companies and individuals orientated towards ecofriendly products.

1.How do you see the evolution of the auto market in 2015 in Romania? What are the main drivers of growth?

In 2015 we expect the market to continue the growing trend registered last year. The situation for the first 8 months of the year shows an increase of about 10% and by the end of the year we see similar evolution. The main drivers for growth are companies. The Scrapping Program has helped the overall market, but still with limited impact of the Individual market, only 23% from the total market.


2.Do you see any structural changes in the auto market (relative to your expectations for 2015)?

No major changes, except 2 key elements: we are happy to see more and more companies and individuals orientated towards eco-friendly products. Therefore, the hybrids and electric cars have doubled the sales, to 272 units in 2015, cumulative for the first 8 months. This is even more important for us, as 210 units out of total 272 belong to Toyota and Lexus, and 19 are electric cars. On the other hand, the used car market has increased and at this stage we have 3.7 used cars at 1 new car. This shows that the scrapping program has not really produced the expected outcome as long as it was designed to renew the Romanian Car Park with new eco-friendly cars.


3.In terms of the number of units sold per year, what is the potential of the Romanian market? What stops the market from achieving its potential?

This is a long discussion. If we take into account our penetration/ per 1,000 habitants, we are far behind European Union countries. In Bucharest, our penetration is in line with the European Union, 540 cars/ 1,000 habitants, but in the province we are behind. Actually, Romania and Bulgaria have the lowest penetration. Judging from this perspective, our market
potential is at 300,000 units. On the other hand, if we judge the potential of the market based on our infrastructure, we cannot grow above 5% per year. Also, the individual market is still behind the European Union. For the last 7 years, the individual market is only 20% of total market. The fact that individuals have limited access to credit due to restrictive scorings, affects the development of the automotive market.


4.So far, in 2015, have more cars been purchased by companies or by individuals? Please detail the reasons behind this evolution.

Companies represent the driver for growth in 2015, being above 75% of the total market. Also for Toyota, companies are the major driver as we now have solutions for all categories of cars needed by a company, irrespective of the company’s profile. On top of this, our Total Cost of Ownership is becoming more appealing due to our presence in the major segments with Hybrid models (Yaris and Auris).


5.Do you see any impulse for growth coming from the credit market?

This year, I can see several tempting offers for the individuals, but still the qualification criteria are restrictive. Therefore, the individual market is still limited at 23%, driven by the Scrapping Program.


6.What is your biggest fear for 2015-2016 in terms of growth?

Recently, I can see many discussions about building charging infrastructure for the electric cars. This is great as long as the state is also willing to support such initiatives. But, the most important thing for us and for the automotive market is to have road infrastructure. Our efforts of producing and trading cars eco-friendly will be in vane if no adequate highways and roads are in place. Another important factor to support the growth is the involvement of our state in supporting the hybrid, electric and another eco-friendly car. Recently, we have launched Toyota Mirai with hydrogen propulsion. It is a fantastic car, but without state support, this model is too expensive for our market.