Automotive industry Q1 report

A look into the Polish automotive industry

The automotive industry has been an important part of the Polish economy for years. In recent years, we have seen significant declines in the automotive industry caused by the coronavirus pandemic, Russia’s aggression against Ukraine, or even the unavailability of new cars on the market. What was the situation in Q1 2023? There was a certain degree of stabilization and even an upward trend. The number of new car registrations is growing, electric and hybrid vehicles have never been this popular, and car manufacturers and spare parts distributors are also seeing improvements.

Polish automotive plants produced 65% more cars in the first three months of 2023 than in the same period in the previous year. This is in response to the growing supply and demand for cars among Polish consumers. Passenger cars up to 3.5 tons experienced the biggest improvement, but trucks recorded slight increases, as well. The biggest challenge for the Polish automotive industry at the moment is infrastructure.

Current trends in the Polish automotive industry

• increased consumer interest in electric vehicles, along with greater availability of electric vehicles in dealer networks and on the used car market
• Polish consumers are getting accustomed to extended delivery times of goods if this means higher product quality
• according to the 2023 Global Automotive Consumer Study report, dealers and approved auto repair facilities enjoy the greatest trust among consumers, but in Poland where the market is dominated by older cars, transparent and clear cooperation with a trusted mechanic is essential
• Polish drivers have a negative attitude towards paid applications and subscriptions; they believe these should be included in the cost of a new vehicle purchase

Car sales in the first quarter – the most popular cars

Toyota has been a leader in new car sales for a long time. Nearly 20% of vehicles sold up to 3.5 tons are cars from the Japanese giant. In addition, the three most popular car models sold in the first quarter of 2023 are Toyota flagships. Skoda was in second place (9.6%), followed by KIA (6.5%), Volkswagen (6.45%) and Renault (5.5%).

The most popular passenger car models – Q1 2023

• Toyota Yaris
• Toyota Yaris Cross
• Toyota Corolla
• Skoda Octavia
• Toyota C-HR

We still have to wait for the electrification of transport

We are also seeing a significant increase in interest in electric cars. In Q1 2023, the number of these vehicles in Poland increased by 84% in comparison to the same period in 2022. In the first three months of 2023, as many as 53.6 thousand hybrid and electric cars were sold, which constitutes about 43.5% of the Polish market. Diesel cars, which currently account for only 9.2% of the new car market, are suffering the most from electrification.

Electrification and electromobility should go hand in hand with the expansion of the vehicle charging station network. According to data from the Polish Alternative Fuels Association from the end of February 2023, there are 2680 publicly available charging stations in Poland. None of them is adapted to electric trucks. It is hard to expect a revolution in transport if the appropriate infrastructure for the use of vehicles with alternative drives is not provided.

Q1 2023 car registrations in Poland

According to the data presented by the Polish Automotive Industry Association, the Q1 2023 brought about a significant increase in the registration of new vehicles, amounting to 21% compared to the same period in 2022. Thus, 138,859 cars were registered in the first quarter. One could even say that the registration of new cars has returned to the level from before the coronavirus pandemic. Are these the first signs of the end of the global crisis in the automotive industry? Everything points to it.

Truck registration is growing in popularity

The transport industry has been in crisis for some time. There is a shortage of professional drivers in Poland, and the changes introduced by the Mobility Package significantly reduce the competitiveness of domestic transport companies compared to the competition. However, the problems have not translated into a decrease in the number of truck registrations. In Q1 2023, there were over 8.6 thousand registrations of new trucks over 3.5 tons, which is an 18% increase compared to the same period in 2022. Additionally, nearly 7,000 registrations of trailers and semi-trailers were noted. This is only a slight increase compared to the first quarter of 2022 (2.2%), but it may herald further investment in new vehicles by forwarding and transport companies.

The spare parts market in 2023

Automotive spare parts are distributed in various ways. The main pillar of the car parts market in Poland, however, remain wholesalers, who are part of extensive capital groups. They cooperate with repair shops, mechanics and automotive shops, offering several deliveries of spare parts every day. The largest car parts distributors recently presented their financial results for Q1 2023 and one has to admit that they are really impressive.

• Inter Cars sales in Poland increased by 22.1%, and by 26.8% for the entire Capital Group
• Auto Partner Group attained an increase of 30.8% in the first quarter of 2023

This is connected to the business expansion of these entities and a certain seasonality of the market. Inter Cars opened its branches in Croatia and Norway while Auto Partner has been recording the highest sales in the spring season (from March to April) for years.

Tire sales in Poland are declining

The first quarter of 2023 was not a good one for the tire industry. Tire sales decreased in all segments except motorcycles. Interestingly, it did not negatively affect the value of the shares of the Polish company Oponeo.pl SA, which increased by over a dozen percent over the first three months of this year. Let’s take a look however at the dry facts presented by the Polish Tire Industry Association. Tire sales decreased by:

• 25% for passenger car tires
• 15% for SUV tires
• 30% for light commercial vehicle tires
• 37% for truck tires
• 34% for agricultural vehicle tires

Forecasts predict the situation will improve in the second half of 2023, due to falling inflation. What will actually happen? Only time will tell.

 Automotive predictions for 2023

At the moment, it looks as though 2023 will see significant increases compared to 2022. This is clearly seen in both the automotive industry Q1 2023 results and several external factors. The more stable situation with fuel prices means people are more willing to buy cars and use them. Stable fuel prices also have a direct impact on transport prices, which in turn affect the final prices of retail products. The upcoming parliamentary elections are also noteworthy, as they may result in further concessions to Polish consumers. The Polish government announced, among other things, that motorways managed by GDDKiA will be free from 1 July.

Summary: automotive industry in Poland Q1 2023 report

The presented Q1 2023 report for the automotive industry in Poland points to stabilization and upward trends. Car production increased by 65% ​​compared to Q1 2022. In the same period, new vehicle registrations increased by 21%, with Toyota as the sales leader. We are seeing growing interest in electric and hybrid cars, which in the coming years may completely dominate our market. Sales of spare parts distributors, such as Inter Cars and Grupa Auto Partner, have noticeably increased. The decrease affected only the tire market, which is characterized by high seasonality. Forecasts for the rest of the year are optimistic, with high expected growth compared to 2022.