The past two years have been a difficult period for the automotive sector. Factors such as high inflation, rising car prices, both new and used, and increasing interest rates have all contributed to this struggle. Despite negative forecasts for 2023, including those related to the sale of new cars, the year ended with an increase in registrations. This brings hope for the stabilization of the automotive industry in 2024 as most of the detrimental factors have noticeably slowed down. What is the source of these positive prospects? An expert from Santander Consumer Multirent, part of the Santander Consumer Bank Group, responds.
Optimistic forecasts are primarily due to the level of inflation which has significantly decreased. According to data from the Central Statistical Office, it was at 6.2% year on year in December 2023. This is good news as not long ago, single-digit inflation was uncertain. The slowing inflation led the central bank of Poland to lower interest rates in the autumn of 2023. This means that borrowers have more money left in their wallets but also translates to more attractive car financing conditions and greater possibilities for subsidizing the product from importers, thereby undoubtedly stimulating demand.
“A ‘valorization’ of the 500+ program can also be added to this,” comments Piotr Półtorzycki from Santander Consumer Multirent. “Many indications point to the fact that Polish consumers will have more free or additional funds. This means that purchasing power will increase, which will undoubtedly also benefit the automotive sector. Especially since many postponed their purchasing decisions due to earlier, unfavorable conditions such as rising car prices. Another advantage is the unblocking of funds from the Employee Capital Plans, which should boost investments, new projects, and orders. A reviving economy needs the automotive sector, so we can expect an acceleration in this industry as well.”
Chinese Brands Emerging
As the expert from Santander Consumer Multirent points out, the entry of Chinese brands into the Polish market could give the automotive sector a boost. Due to the unique features of these companies, price in particular, they could add value to the volume of domestic car registrations. This may lead to a scenario where buyers, who were not presently considering the purchase of a new vehicle, might reconsider due to the attractive offers from China.
“An increase in the sale of electric cars might also turn out to be a plus – from this perspective, the overall volume of car registrations in 2024 might not increase, but the mix of cars will change somewhat,” adds Piotr Półtorzycki from Santander Consumer Multirent of Santander Consumer Bank Group. “As a company that offers leasing of electric cars, with subsidies from the “My electric car” program, we will definitely keep an eye on this issue.”
New Year, Old Worries
A potential threat to the positive forecasts for the automotive sector could be the unstable geopolitical situation. The war in Ukraine might last for a long time, impacting the economic policies of neighboring countries. Additionally, the conflict in the Middle East, impacting fuel prices, still prevails.
Assuming these issues do not escalate, the positive forecasts for 2024 can be maintained. The purchasing power of Polish consumers should be higher than last year, indicating a good period for dealers and the automotive sector. A time of long-awaited calm and stability, with an indication of growth, is approaching.
