Prices continue to fall across Poland’s automotive markets

01 August 2024

Price pressures across Poland’s automotive markets have not let up so far this year. Marcin Kardas, head of valuations at Eurotax Poland (part of J.D. Power), analyses passenger car and commercial vehicle trends with Autovista24 editor Tom Geggus.

Both passenger cars and light-commercial vehicles (LCVs) enjoyed registrations growth in Poland during the first half of 2024. According to data from industry authority PZPM, 276,957 new cars were delivered, up 16% year on year. The LCV market grew by 4.3%, with 32,885 registrations. Meanwhile, the new-truck market fell by 10.2% as only 15,540 units were delivered.

However, June was an exceptional month for Poland’s new-vehicle markets. This was the result of dealers and importers self-registering stock ahead of the introduction of General Safety Regulation 2 (GSR2). These results highlight the large amount of stock still waiting to be sold, rather than a sudden market breakthrough.

Increasing availability in Poland

Poland’s passenger car market has seen increasing availability of new and used vehicles for several months. Strong competition is forcing the aggressive discounting of new cars, especially among premium brands, such as Audi and Volvo.

This results in greater depreciation of younger used models, and makes two-to-three-year-old cars harder to remarket. In contrast, the values of older vehicles are stabilising, and even increasing slightly in some age brackets. There is a greater demand for smaller, older models, due to a price-sensitive market.

Poland leads European revaluation

Looking across Europe, used-car values are returning to more regular patterns of decline. Despite this, Poland continues to lead the revaluation of cars, relative to the start of the pandemic.

Falling used-car values may be compensated for by the introduction of GSR2, which will make new cars more costly. However, some brands are not increasing list prices and are limiting discounts. With greater levels of standard equipment, the purchase of a new model is still an attractive proposition among cheaper segments.

This popularity is helping to combat competition from Chinese manufacturers. These carmakers are gaining influence in Europe, especially with battery-electric vehicles (BEVs), but the situation is slightly different in Poland.

In this market, China-based companies are primarily offering internal-combustion engine (ICE) powered vehicles, rather than all-electric models. Sales projects are still in development, as are importer and dealer structures.

However, competition is intensifying with the arrival of new carmakers in the budget segment of a price-sensitive market. The quality of Chinese models is comparable to European brands, generating considerable consumer interest. This attraction is only intensified by longer warranty periods.

BEVs on the margins

Battery-electric vehicles still make up a marginal proportion of sales in Poland. The country has clearly not accepted the technology, a situation which is particularly apparent on the used-car market.

This results in higher depreciation compared with ICE vehicles. The descent in values is further accelerated by falling list prices for all-electric models, in contrast to the overall new-car market. This means BEVs on the used-car market struggle to compete with newer models.

This trend is being observed across most of Europe. Plans to introduce subsidies for used BEVs are still in the pipeline. This could help popularise the powertrain, but it will take time to build consumer confidence. Additionally, there also needs to be quicker development of the charging infrastructure in Poland.

As long as demand for used BEVs does not increase, residual values will continue to fall. However, it must be remembered that this current trend is tied to the inflation of values during the COVID-19 pandemic. Therefore, the situation can be considered safe, as the market returns to the normality observed in the previous decade.

Declining commercial values in Poland

Poland’s used commercial vehicle market continues to see values fall significantly. This trend is being observed across all segments, highlighting a wide-reaching problem with both the economy and the short-haul logistics sector.

Declines are most pronounced for vehicles between 31 and 53 months of age. However, the second quarter of 2024 did see a slowing of the descent, especially compared to the heavy discounting observed in the second half of last year. The price pressure is minimal for older vehicles, and the supply of these models is also significantly lower.

Alongside demand, importer discounting plays a large part in shaping the value of used commercial vehicles. At the moment, discounts are primarily being applied to stock vehicles from 2023, the volume of which is starting to fall.

Despite fierce competition, 2024 vehicles are no longer discounted so heavily, and their prices may rise again soon. This is because of the introduction of vehicles complying with GSR2. The new safety systems will push up the price of new vehicles, which should slow the decline of used-vehicle values in the long term.

Minimal electric demand

Interest in new and used battery-electric vans is still minimal in Poland, as the powertrain’s market share keeps falling. Values are declining significantly across all segments and are well below the levels for models powered by diesel.

However, compared to new technology, these used commercial BEVs are known for their poor performance. Newer models beginning to enter the market may improve the public perception of BEVs in the used-vehicle market. A long road to win over buyers lies ahead, as there is a great deal of distrust for all-electric propulsion in Poland.

No changes for trucks

The second quarter of 2024 saw no changes for the truck market, which remained exceptionally negative. Transportation companies suffering from low profitability have stopped buying new and used vehicles.

The stock of used tractor units is growing rapidly, but prices are still falling slightly. This is because low prices are no longer motivating buyers. Dealers have slowed the pace of their discounts, hoping for a market rebound in the second half of 2024. But so far there are no signs of a market recovery. Due to the holiday period, there are unlikely to be any answers within the next two months.

Currently, there is minimal demand only for the youngest tractor units with low mileage. These newer vehicles are used to restock fleets, replacing old and damaged models. Buyers feel encouraged to take advantage of low prices thanks to market discounting. Annual declines in the value of three-year-old tractor units reached up to 25%.

Meanwhile, older vehicles are not in demand and are experiencing marked declines in value. This is due to the lack of exports of these models to Asia.

Domestic market sees spill-over

Tractor units, primarily used for international transport, are suffering from poor demand. This issue is being compounded by poor sales for vehicles serving the domestic market. Models up to 18 tonnes gross-vehicle weight (GVW) are pointedly cheaper, confirming the spill-over of the transport crisis into the domestic market.

Construction vehicles, mainly dump trucks, are seeing values fall. However, this is happening at a much slower rate due to the ongoing scarcity of these units on the market and their specialised purposes.