MUNICH -- Central European new-car sales fell 8.7 percent to 216,000 vehicles in the third quarter. The fall reduced buoyant first-half growth to a modest 3.5 percent gain for the first nine months.
Despite the poor quarter, year-to-date sales are up 25,000 units to 732,000 vehicles in nine markets: the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.
Central Europe markets will have ups and downs, said John Lawson, managing director for automotive at Citigroup Smith Barney in London.
"But there's no doubt that the medium-term growth rate is going to be superior to what you see in western Europe," he said.
The Renault-designed Dacia Logan has only been on sale since September in Romania and won't be seen in most European markets until next year. But it may already be having an effect on its competitors in the region.
Only 4,641 of the low-price Logans were sold in the third quarter. But that helped boost Romania-based Dacia's volume 28.8 percent to 14,000 units.
The Logan competes with many vehicles in price-sensitive central Europe. But it may be especially aimed at the Skoda brand of the Volkswagen group. Skoda is the region's No. 1 brand and VW group the best-selling automaker. Renault including Dacia is No. 2.
Even though the Logan is not generally available in most markets, buyers may be waiting to see it before making a purchase. Skoda Fabia sales plummeted 25.3 percent in the last quarter to 21,852. That dragged down volume for the brand by 17.7 percent, and accounted for most of a VW group decline of 12.1 percent in the quarter.
Logan is much less expensive than the Fabia.
Analyst Lawson says consumer income and affordability are especially important in central Europe.
"One challenge is to get the price level down and get affordable technology into countries where income and pay levels are significantly behind the West," he said.
The sales fight between Skoda and Dacia reflects the larger battle between VW group and Renault. So far this year, VW group has a 180,000 to 110,000 lead. But the 70,000-unit lead is far lower than the 92,000-unit margin at the same time last year.
The luxury segment is far smaller, but another battle is sharpening. Led by the new 1 series, X3 and 6 series, BMW's sales rose 35 percent to 5,533 units in the first nine months.
Sales at Mercedes-Benz fell 890 units or 11.1 percent to 7,155 vehicles in the same period.