Stoyan Jelev, Chairman of the Association of Car Manufacturers and Their Authorised Representatives for Bulgaria: Our country has become a net exporter of new cars to Germany

- Mr. Zhelev, which were the main tendencies in car sales in Bulgaria last year?
- In 2011, the decline in new car sales on the Bulgarian market gradually slowed down and, at the same time, re-export to some countries, Germany, for instance, increased dramatically. Both tendencies are basically due to the extremely attractive prices offered in Bulgaria by most car manufacturers. These prices are in conformity with the sharp price competition in our country and the relatively low purchasing power of our potential clients. For another consecutive year, there was lack of public information about the state of the car fleet and the changes occurring in its composition, e.g. the age, energy efficiency, level of harmful emissions, etc. of the newly registered and deregistered vehicles. This greatly hampers any attempt to analyse the issue.

- How shall we expect the market to develop this year? Will the downturn be overcome? Will sales increase, albeit at a slow pace?
- The purchase of a car is an investment for both companies and the budget of individuals, although Bulgarian tax laws fail to take this into consideration. Now, uncertainty prevails about the future of the European economy and this will continue to suppress consumption in Bulgaria. Nevertheless, we do not expect car sales to fall below the 2011 level.

- Which type of cars do Bulgarians prefer? Which are the best-selling brands and models and in which price range?
- Most of the customers buying new vehicles are companies. In recent years, firms have been hit harder by the crisis than individual clients. This resulted in an increase in the share of natural persons among our customers. Another trend is the relative decline in the purchase of middle-class cars to the benefit of smaller models. This is connected with both the desire to reduce the amount of the investment and with the fact that it is easier to drive and park such vehicles in the busy traffic of cities.

- Is the trend of foreigners buying cars in Bulgaria and exporting these abroad still being maintained? How serious is the problem with re-exports?
- This trend became clearly noticeable in 2011. In the first half of the year, Bulgaria became a net exporter of new cars to Germany - the largest car producer in Europe, according to data of the Ministry of Economy, Energy and Tourism. And this happened before the plant in Lovech started operating. We expect the summary data for the entire 2011, but I fear that the re-export of cars is beyond all reasonable limits and proportions.

- Just ten days ago, the automobile plant of Great Wall Motor, near the town of Lovech, started operating. How do customers view the appearance of cars assembled in Bulgaria? How will this production affect the market and sales as a whole?
- For me, it's difficult to comment on the part of consumers in Bulgaria, but I am proud of this industrial investment, as a Bulgarian citizen and as an entrepreneur. I wish with all my heart that Mr. Grisha Ganchev and his team are able to develop and complete this investment! I think that, now, the fact that Bulgaria has joined the club of car-producing countries is irrefutable. It is very important for us to be able to attract more investments in the respective supporting industries - spare parts, units, etc. This is the only way for the plant in Lovech not to remain the only automotive investment in the country.

- Before the crisis, lease contracts were an engine of purchases. Have car dealers managed to cope with the high number of returned cars in the years of economic crisis?
- I think that the peak in troubled leases has long passed. Now, our customers make more careful estimates and do not assume such reckless risks as they did before 2008. It seems to me that the accumulated retained lease cars at the parking lots of leasing companies have already reached their normal levels and do not pose a significant problem for the companies.

- What will the role of lease financing in sales be from now on?
- Throughout the world, cars are mainly sold on lease. Bulgaria is not and cannot be an exception to this rule. Along with this, users should carefully examine the lease terms offered, make detailed comparisons, read the small print! This will save them a lot of money.

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