Subdued Demand For Vehicles Ahead

BMI has significantly revised down its 2011 Serbian vehicle sales growth forecast to a 12% year-on-year (y-o-y) contraction on the back of the latest industry figures, which suggest that new vehicle demand remains sluggish, and our expectations of a slowdown in economic growth. During the remainder of the forecast period to 2016, we expect vehicle demand to grow by a modest 7.8% y-o-y on average as an ageing population, limited credit availability and reduced public spending will keep internal demand subdued. Another major deterrent to new vehicle sales in Serbia will be the dominance of used cars over new vehicles.

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