The number of new passenger car registrations increased significantly by 52.4% y/y to 12,241 units in June, according to data published by the European Association of Car Producers (ACEA). The increase was among the highest in the EU, way above the 5.2% y/y region’s average.
The strong increase in June confirms that domestic demand remains robust, mainly encouraged by the elimination of the cars pollution tax. As shown in previous statistical reports, Dacia cars are still the most sold in Romania, covering about 30% of the car market. Imported new cars from Czech Republic, Germany and France follow in domestic consumer’s preferences, whereas the other local car producer Ford sell only a small share of its total production locally.
New registrations of Dacia cars remained on a double-digit growth trend, with a 11.5% y/y increase in June. The performance is weaker than in Q1, because the company’s sales in the EU are intensely dependent on the economic mood in a few markets, specifically Germany, France and Italy. Nonetheless, the improvement in Dacia sales should visible positive effects on domestic industry and exports. Dacia increased its market share in the region to 3.6% in June from 3.4% in the same period a year before.
Broadly, new car registrations took a surprising jump in June, contrary to expectations of domestic demand weakening and termination of this year’s governmental scrappage program. The elimination of the car pollution tax and fuel price developments might very likely be the major elements backing the increase. Yet, the tax cancelation has stronger effects on prices of used cars, so we see that segment as most probable to continue rising this year. Demand for new cars may be hampered by more expensive financing, rising inflation and increased income uncertainties, in our view.