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Vehicle Sales in CEE – How Far Can it Go…? Light Vehicle Sales Forecast Scenarios in Central and East Europe
AUTOMOTIVE
Tatiana Hristova, Light Vehicle Sales Forecast Manager, CEE +49(0)69 20 973 331, [email protected]
26 January 2017 | Frankfurt, Germany
© 2017 IHS Markit 2
2017 New Year’s Briefing | 26 January 2017
Contents
• Vehicle Sales in Central Europe
Is there more potential for growth?
• Vehicle Sales in East Europe
Which markets can bring incremental volumes?
What are the obstacles for growth?
What is going on in Russia?
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Light Vehicle Sales in Central Europe Poland and Czech Republic leading sales in the region
3
CE Share 6.4%
CE Share 6.8%
CE Share 7.9%
2006
~1.4m
2016
~1.3m
2026
~1.8m
Total European Sales
Total European Sales
Total European Sales
Other (50%) - Serbia +9.8%*
Romania +8.0%* Bosnia-Herz. +5.8%*
Croatia +4.0%* *CAGR (2016-2026)
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Vehicle Sales Evolution in Central Europe Optimistic and pessimistic scenario
0
500000
1000000
1500000
2000000
2500000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
CE Base CE Opt CE Pes
4
• Stable econ growth • Subsidy programs • Reduced demand
for used cars
• Decrease in incomes • Strong emigration • More used cars
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Scenario Assumptions Available resources restricting faster growth
Pessimistic
Scenario
Optimistic
Scenario
5
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Vehicle Sales Evolution in Central Europe Optimistic and pessimistic scenario – Scenario probabilities
6
10%
20%
70%
Scenario Probability
0
500000
1000000
1500000
2000000
2500000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
CE Base CE Opt CE Pes
• Stable econ growth • Subsidy programs • Reduced demand
for used cars
• Decrease in incomes
• Strong emigration • More used cars
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
EE share 14.5%
EE share 13.2%
EE share 22.1%
Light Vehicle Sales in East Europe Substantial uncovered potential in the region
2016
~2.6m
2026
~4.9m
*CAGR (2016-2026)
Total European Sales
Total European Sales
Total European Sales
Other (15%) - Ukraine +17.8%*
Uzbekistan +6.5%* Kazakhstan +18.2%*
Belarus +8.3%*
2006
~3.1m
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Light Vehicle Sales in East Europe Huge potential in the region restricted by unfavorable environment
8
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
EE Base EE Opt EE Pes
10%
30%
60%
Scenario Probability
• Oil price >80USD/bar in the short term
• Reforms in pol and econ starting ‘18
• Geopolitical improvements
• Oil price below 50USD/bar • Low production • Slumped crediting market • Sanctions prolongation
beyond 2017
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
•Unpredictable events leading to political tensions and economic constrains
•Sanctions to end mid 2017 (Trump implications?)
•Oil prices to recover to 80USD (critical level for Russian budget) by 2021
•and reach the desired 100USD by 2024
•Current oil extraction on record level
•Lack of institutional reforms
•Insufficient success in anti-corruption campaign
•Most of diversification projects turned ineffective
•Huge dependence on energy exports remains
•Reform of financial system
Economics Politics
Geo-Politics
Energy Prices
Market Assumptions
Russia - Forecast Assumptions Market in a deep stagnation – but recovery already in sight
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Russia - Governmental Support Same money, different channels
11
Russian Stimulus Program
- Started in Sept.2014, expected to end Dec.’16
- Only for families or first time purchase next
year
- ~890K vehicles sold, ~500K incremental – 80K
total payback
Subsidy Program
(3rd round)
- Started in 2015 and should end by mid 2017
-2/3 of the key policy rate reimbursed
-~1/2 of all car loans were subsidized in 2015 and
2016
Direct OEM’s Support
- Direct subsidies will be reduced in 2017
-Export subsidies
- High import barriers
- Special Investment Contracts to replace
Decrees 166
Couple more programs under consideration – e.g. circulation tax withdrawal for companies,
LCV purchasing program
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Russia – Short Term Development Market reached is bottom – stagnation is expected
-5,00
-4,00
-3,00
-2,00
-1,00
0,00
1,00
2,00
3,00
4,00
2013-Q
1
2013-Q
2
2013-Q
3
2013-Q
4
2014-Q
1
2014-Q
2
2014-Q
3
2014-Q
4
2015-Q
1
2015-Q
2
2015-Q
3
2015-Q
4
2016-Q
1
2016-Q
2
2016-Q
3
2016-Q
4
2017-Q
1
2017-Q
2
2017-Q
3
2017-Q
4
2018-Q
1
2018-Q
2
2018-Q
3
2018-Q
4
Real GDP Growth, quarterly, Year-on-Year, %
First positive rate in 2Q2017 will be translated into the vehicles sales
market in the 2H 2017
-50,00%
-40,00%
-30,00%
-20,00%
-10,00%
0,00%
10,00%
20,00%
30,00%
2013-Q
1
2013-Q
2
2013-Q
3
2013-Q
4
2014-Q
1
2014-Q
2
2014-Q
3
2014-Q
4
2015-Q
1
2015-Q
2
2015-Q
3
2015-Q
4
2016-Q
1
2016-Q
2
2016-Q
3
2016-Q
4
2017-Q
1
2017-Q
2
2017-Q
3
2017-Q
4
2018-Q
1
2018-Q
2
2018-Q
3
2018-Q
4
Russia, Light Vehicles Sales, Year-on-Year, %
What looks like a strong growth, isn’t really –low comparison base makes the growth rates
high, but volumes are still very low
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Russia – Specific Contingency Forecast 3m mark reachable only in optimistic scenario
13
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Russia Russia Opt Russia Pes
• 80USD/bar by mid ‘18, 100USD/bar by ‘21 • Election campaign with stimulus programs • Notable improvements in econ reforms
and anti-corruption programs after ’18 • Full sanctions withdrawal mid 2017
• 80USD/bar by mid ‘24, 100USD/bar by ‘30
• Sanctions prolongation (long term sanctions)
• Slow down in reform programs
• 80USD/bar by ‘21, 100USD/bar by ‘24 • Sanctions to end mid 2017, long term
sanctions to remain • Stagnation in econ and pol reforms
20%
15%
65%
Scenario Probability
© 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
Premium and LCV Market Pent-up demand on the LCV market, pay-back on the Premium
14
0
50000
100000
150000
200000
250000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
LCV+HVAN
0
50000
100000
150000
200000
250000
300000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Prem+Lux
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