RIGA - Car dealers and monitor forecasts are optimistic that despite the current economic crisis, new car sales and registration will start improving in two to four years after a sharp dip in the short term.
Janis Pormalis, the head and co-owner of a Nissan dealership, Motorcentrs, said car sales depend on the general state of the world economy and the policy of leasing providers.
In Latvia, leasing companies have set restrictions, slowing down car sales substantially in September and October.
Pormalis said he assumes that delays caused by the leasing companies may be caused by insufficient funding.
"Leasing companies are not saying no, but they make car purchases longer by creating various obstacles, such as additional references, guarantees, and so there is a possibility that the car will not be bought eventually," he said.
Pormalis predicted that if the situation persists with strict leasing requirements and an economic downturn, next year new car sales may be back to the level of 2004-2005, but it may take about four years to return to the high level of 2007.
Juris Bogdanovs, owner of Inchcape Motors Latvia (IML), a dealer of Jaguar and Mazda cars, told reporters that the car market was likely to start recovering within a couple of years but that it largely depends on the state of the global economy.
"New car registration and sales are certain to fall this and next year, as people are revising their spending priorities," said Bogdanovs.
He also said that another obstacle slowing down car sales is the tougher requirements set forth by leasing providers.
Nippon Auto CEO Dainis Zalitis, whose company sells Honda vehicles, said he looks forward to seeing a slight improvement in April 2009, when people will start buying cars again.
"The next four months will be especially difficult for our car salesmen and dealerships, as neither individuals nor companies are likely to have any money to spare for extra purchases," said the CEO.
Zalitis reckons that should people have extra money, they will most likely not spend it on buying new cars.
"But if they still have some money, it will be spent on more basic goods," Zalitis said.
However, he went on to explain that the people who would by cars regardless of the economic situation would continue to purchase new vehicles.
"As a matter of fact, those people who earn their living for themselves and their families with cars, will buy them anyway," he said.
In the first three quarters of this year, the Latvian new car market has shrunk 37.7 percent. The number of new car registrations also went down 10,434 from the same time last year 's reaching only 17,239 's reported the Latvian Authorized Car Dealers Association (LACDA).
According to the data of LACDA, the registration of almost all car brands dropped in Latvia this year, though brands such as Nissan, Lada, Fiat, Jaguar and Maserati showed a slight increase.
Bentley and Ferrari also reported more registrations in Latvia.
However, Russian carmaker Lada showed the most growth in terms of sales and registration in 2008. Approximately 449 new Lada cars were registered this year, almost twice as many as the same period in 2007.