Autos Sector Turning A Corner

Croatia's new passenger car sales plunged 49% y-o-y in 2009, to less than 45,000 units, down from close to 88,000 in 2008. The market was hit hard by a recession in the wider economy, which contracted in real terms by just over 5% across 2009, after moderate growth of 2.3% in 2008. The recession impacted on consumer demand particularly hard, against a backdrop where car sales, like other big-ticket consumer items, are always highly vulnerable to cyclical economic shocks. As the economic gloom deepened, banks became increasingly risk averse, so even those consumers brave enough to seek credit to part-fund new purchases, often found that they were not able to secure such credit.

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