Strong economic growth, rising incomes, and the growth of credit options for car loans combined to make the Bulgarian car market one of the fastest growing in Europe - before the global economic downturn struck. However, car sales have fallen dramatically amid the financial crisis, which has put an end to freely available consumer credit. Wages, which have risen rapidly in the last few years, are starting to slow. The extent to which they slow will likely affect the country’s competitiveness. We believe 2009 will be a difficult year for the economy and subsequently the car market. However, we believe both will return to growth in 2010.
With no domestic manufacturing facilities, Bulgaria imports all of its autos. But that may change as Chinese manufacturer Great Wall Motor (GWM) began construction of a plant in the city of Lovech in May 2009. The EUR80mn facility will produce its Florid models and could create as many as 1,500 direct jobs. This might be an encouraging sign; other Chinese brands looking to diversify may also choose to set up in Bulgaria once the global economy recovers.
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