In 2010, a total of 7,467 new passenger cars were sold in Lithuania, an increase of 2.2% year on year (yo- y), according to figures from state registration agency Regitra. This figure was very much in line with BMI’s own forecast of 7,534 new passenger car sales for the year. All told, a total of 14,286 vehicles were sold over 2010.

Lithuania Autos Market Report 2012

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The total number of passenger vehicles registered in Lithuania stood at 161,253 for 2010, an increase of 17.6% y-o-y, according to Regitra. However, the vast majority of these (153,786) were used vehicles that had previously been registered in another country. The increase in used car registrations was up by 18.5%, a far higher rate than the 2.2% increase seen for new cars and reflecting a still-difficult economic backdrop for most Lithuanian citizens. Some 38% of cars imported into Lithuania over the course of 2010 came from Germany, with 16% from France, 15% from Italy and 10% from Belgium.

Looking at trends so far in 2011, a total of 18,722 new vehicles have been registered in Lithuania over the Jan-Oct period, according to data provided by Regitra, indicating that the full year should see total new vehicle sales somewhere in the region of 22,466 CBUs on current sales trends. This would represent a tripling of sales on 2010’s figures. Of this total, some 10,269 passenger cars were sold over the first nine months of 2011, so we are now forecasting sales of 12,356 CBUs for the full year, an increase of 65.5% y-o-y.

German carmaker Volkswagen (VW) is currently the most-popular brand on the Lithuanian market (as of October 2011). In that month, VW sold 145 units, followed by Italian company Fiat, which sold 135 units and then French carmaker Peugeot, which sold 126 units. Nissan (111 units) and Toyota (77 units) round out the Top 5.

Looking forward, there are reasons to be optimistic for continued growth in new vehicle sales in Lithuania beyond the current year. For one, economic growth is returning strongly, with BMI having recently raised our real GDP growth forecasts for Lithuania for 2011 and 2012 to 4.2% and 3.3 respectively, on account of relatively robust domestic demand. Encouragingly, household consumption growth accelerated to 6.7% y-o-y in Q211 from 5.5% in Q111, and we expect the last two quarters of 2011 to continue to display solid growth. Although global factors may see the rate of economic expansion decline slightly from 2013 on, our core forecast is for continued steady GDP growth across our forecast period to 2016.

Inflation is also set to moderate, from an average of 3.2% in 2011, to an average of 2.8% in 2012, according to our macroeconomic team. This should give scope for more attractive new car financing deals, which could also boost demand for new cars over our forecast period.

Against this backdrop, we are currently forecasting an impressive 76% growth in new vehicle sales in Lithuania over the 2011-16 period, which would take total new vehicle sales to around the 39,500 unit mark. Passenger cars will account for just over half of the total, with BMI targeting new car sales of 21,750 units in 2016. Commercial vehicle sales will also increase, to reach new CV sales of 13,841 units in 2016.

Focus on electric cars

Although Lithuania boasts petrol prices that, at EUR1.357 per litre, is well below the wider EU average of EUR1,504, the country is also taking steps to boost the use of electric cars, in line with its Baltic peers.

In July 2010, the Lithuanian Electric Vehicles Association (LEVA) was founded. This association has the twin aims of developing a local electric vehicle industry, as well as to promote the use of electric vehicles within Lithuania. In October 2010, the country registered its first electric car, with the capital Vilnius also playing host to ‘Vilnius CO2 green drive’, a three-day event designed to promote knowledge of electric cars.

More recently, in October 2011, the country’s parliament (Seimas) held a conference on the possibility of developing the wider use of electric cars within Lithuania. According to the organiser event, Egidijus Vareikis, a member of the ruling Homeland Union – Lithuanian Christian Democrats party, the conference was to discuss whether any legislative changes are required to increase the use of electric cars within Lithuania.

Clearly, electric car usage in Lithuania remains in its infancy, with the country currently only having one charging station in Kaunas, which opened in April 2011. Government plans are for there to be a national charging station network in place in major cities by 2015. There is also the issue of price, with electric cars tending to be expensive new models, which are likely beyond the budget of most Lithuanians, who are only able to buy used cars.

As such, while we think that their low running costs should make electric vehicles (EVs) attractive among cost-conscious consumers in emerging Europe over the long term, BMI believes that the Lithuanian government may have to do more to entice people into buying EVs in the short to medium term.

That said, the development of an indigenous electric car production base could well prove profitable for Lithuania moving forward. Indeed, the nation’s high skills set and low cost base could make the country an ideal location for the small-scale manufacture of electric vehicles over the coming decade.