Fall in EU Car Sales Now Impacting Slovenian Firms (Feature)

By , 13 Mar 2019, 14:26 PM Business
A Twingo bring produced in Novo Mesto, 2016 A Twingo bring produced in Novo Mesto, 2016 Screenshot from the embedded video

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STA, 11 March 2019 - Slovenian companies have started to feel the impact of a downturn in car sales which has followed on the heels of several years of growth. Moreover, cars have become more expensive last year, as the industry had to adapt to new environmental standards that took effect in September.

 

In general, the number of new cars sold in the EU last year was still higher than in 2017. It went up by 0.1% to 15.14 million new cars.

However, the sales have been dropping since September. Volkswagen, the biggest car maker in Europe, saw its sales drop by 6.5% in January, while Audi saw a decline of 17% and BMW's sales went down by 2.7%.

In Slovenia, car sales went up by 2.7% in 2018 over 2017. However, the number of new cars registered in January was 4.6% lower than a year earlier. Moreover, prices went up by an average of 5% last year, the business newspaper Finance reported recently.

Experts believe that the decline in Europe was caused by a change in emissions testing brought about by new environmental standards in September. The month before, car sales went up by nearly 33% as buyers were offered considerable discounts.

In China as well, sales are going down. The country saw a 3.5% drop last year, which was the biggest decline in new car sales since 1990.

The situation still seems a bit more optimistic in the US, where sales have gone up due to economic growth and low oil prices. However, analysts expect the trend to reverse this year.

Buyers have also started to opt against diesel engines. In the EU, diesel engines made up only 34.1% of all newly registered vehicles in the final quarter of 2018, 7.1 percentage points less year-on-year.

On the other hand, the share of new petrol engines increased by 4.9 percentage points to 57.2%

The number of electric cars and plug-in hybrids has also been on the rise. Last year 2.1 million new alternative-fuel cars were sold globally in 2018, exceeding the two million mark for the first time.

Global downturn of car sales is likely to continue also due to urban ride services providers such as Uber and the increasingly popular concept of car sharing, which is especially popular in cities.

In Slovenia, Avnt2Go is the biggest car sharing service provider. Its services are available in Ljubljana, Maribor, Kranj, Murska Sobota and the Jože Pučnik Airport Ljubljana, the country's biggest airport.

It has a fleet of 200 cars, which it intends to expand by another 100 by the end of the year.

The downturn in car sales is already being felt by Slovenian car parts makers, such as Boxmark, a company sewing car seat covers for several European car makers.

"Last year already brought a slight drop. We expect this to continue and become more pronounced in the second half of the year," Boxmark boss Marjan Trobiš has told the STA.

The company is prepared for the downturn, according to Trobiš. It has expanded its assortment of products so as to branch out into aviation. Among other things, it signed a six-year contract with the Emirates airline.

Currently, the company is taking in enough orders but if the pessimistic forecasts come true, this will affect the company's work force, according to Trobiš.

Dani AFC, a Slovenj Gradec-based leather company servicing the car industry, has meanwhile abolished a third shift, creating 100 redundancies.

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