CEE auto sector to emerge from crisis with fewer but potentially stronger dealer networks

“The results of the survey show that dealers in CEE expect a very difficult year. We are likely to see even more consolidation in the industry and this will not be via acquisition of smaller dealers by larger ones, but through dealers waiting for the collapse of their competitors to pick up their assets and brands at bargain basement prices” said Daniel Anghel, Partner, Indirect Tax, PricewaterhouseCoopers.

Even though banks are introducing stricter lending criteria and consumer are still very cautious, in the longer term dealers expect new car sales to maintain an upward trend in CEE, given the large number of first-time car buyers and a still higher economic growth perspective than in Western Europe after the crisis.

“It is reasonable to believe that dealer groups, emerging after consolidations, will play a more significant role on the international stage. We believe that the new players in the CEE, including Russia, could rapidly outgrow their Western European counterparts by taking advantage of acquiring businesses at the bottom of the market”, Daniel Anghel added.

The survey features an overview of the auto sector in CEE and offers specific data on the current conditions and expected trends in the car dealer sector through extended country reports on Poland, Czech Republic, Slovakia and Hungary.

As the survey found, similar changes in the dealers’ behaviour in individual countries of the region are becoming more visible. Dealers are becoming more aware of the business risks and opportunities on the market.

Many of them have already started to take steps to protect their businesses against the market downturn: investing in new areas (e.g. buy-back schemes and hourly rent-a-car services, real estate, rental and leasing options, financial services), hiring professional managers from the market.


Dealership consolidation process is accelerating, PwC survey revealed. Current market situation is expected to increase the speed of changes and to lead to an improvement in the quality of services, lowering of costs of dealers’ operations which eventually will result in lower prices for cars and better services offering.

CEE dealers are likely to face some stiff challenges over the coming year with respect to a very difficult market situation, PwC said.

The winners will be those dealers who adapt their business structure (e.g. placing less reliance on new car sales and more on services), start to explore new business ideas, such as buy-back schemes, hourly rent services or add new business streams to their offer, review the financial situation in their business (e.g. by taking out non value added costs, renegotiating agreements with suppliers and keep a very close watch on the cash flow situation).

In the largest markets in Eastern Europe (Russia, Poland, the Czech Republic, Slovakia, Hungary and Romania) the full impact of the financial crisis is likely to be felt in first half of 2009. So far, Hungary (-9%) and Romania (-8%) have experienced the biggest declines in sales in year 2008.

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services for its clients and their stakeholders. The company has more than 155,000 of staff in 153 countries.

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