Boston, MA -- (ReleaseWire) -- 01/25/2013 -- We believe that the weak Czech consumer story, combined with the slowdown in credit growth, will result in relatively lacklustre growth in passenger car sales over the remainder of 2012, in line with our forecast. In terms of sales, passenger car sales in 10M12 increased 3.3% y-o-y, to 147,022 units. This represents something of a slowdown from the 5.0% y-o-y growth seen over the first seven months of the year. BMI , however, has long maintained that passenger car sales will not be able to maintain the strong rate of growth observed earlier in the year due to weak macroeconomic factors. We stand by our forecast for 3.0% growth in this segment in 2012. Our 2012 Czech production forecast for 1% growth also marks a notable slowdown in growth from an 11.4% increase in 2011, and a 10.5% increase in 2010. We have previously cautioned that vehicle and equipment production capacity in Czech Republic could slow down and potentially decrease in the face of an increasingly uncompetitive business environment and ongoing economic malaise in Europe. Domestic production is export-oriented, with nine out of every 10 cars produced in the Czech Republic sold abroad. Indeed, we have long maintained that Czech auto production is orientated around export to Germany. Our previously bullish view on production growth was predicated on this sales outlook. More recently, however, we have become more bearish on passenger car sales in Germany, downgrading our 2012 sales forecast to a 1% decline. There are growth areas in the Czech passenger car segment, however. Czech power company CEZ has recently opened a charging station for electric vehicles (EVs) in the capital city Prague. It is its 25 th such unit in the country, and BMI believes that increasing the availability of a charging infrastructure will increase the uptake of EV technology over the longer term. The EV market in the Czech Republic remains very small, with an estimated 200 EV in use. Many of these are fleet vehicles. CEZ hopes to open 50 EV charging stations in the country by 2013. BMI believes that a substantial barrier to greater EV uptake (in the Czech Republic, but also more broadly across many markets) is the current paucity of a strong charging infrastructure. We believe that the increasing availability of such stations will increase the uptake of EVs across the country.
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