From the beginning of 2025, car registrations doubled across Central and Eastern Europe (CEE). This increase cut against the deep declines experienced across the European Union. All of these factors combined have made for a very mixed picture in the automotive sector according to the latest data, with many countries faring very differently.
As a real positive outlier Czechia has performed, recently registering a YoY growth of 4.9% in car registrations. A robust market demand for vehicles in the Czech Republic supports this impressive growth. At the same time, auto manufacturing has come to a halt, dropping 7.6% through the first four months of this year. The discrepancy between rising registrations and declining production may indicate a shift towards imported vehicles or a backlog from previous production issues.
Regional Trends in Car Registrations
Specifically, from January through April 2025, the entire CEE7 region—including Czechia, Hungary, and Romania—saw an impressive regional average of a 2.1% increase in new car registrations. Note growth figure excludes Serbia. Hybrid electric vehicles have taken a lion’s share of this market, making up 41% of CEE7 registrations. Petrol-powered vehicles followed closely behind with a 35.9% share, while battery-electric vehicles represented 15.3% of the total market share across the EU.
Unlike them, Romania and Slovakia saw their car registration numbers go down. Romania followed with a 6.1% drop year-on-year and Slovakia with an even sharper 7.7% decline. Each recent economic downturn has led to fears over consumer confidence and the larger economic environment in these countries. In neighbouring Slovakia, production prices increased 1.3% y-o-y in April, exacerbating these concerns.
Monetary Policy and Economic Indicators
In Hungary, the central bank maintained its policy rate at 6.50%, signaling a cautious approach to monetary policy amidst fluctuating economic conditions. The bank’s recent missive did not bring any new information or dramatic changes, indicating that things are steady as she goes on the bank’s current approach. The EUR/HUF exchange rate remained relatively stable. Foreign exchange markets throughout the region show little volatility.
Yet this is also a fast-changing picture — with Croatia about to publish its big-first quarter GDP report at 11 AM CET. This report illustrates just how fast and significantly the country’s growth paradigm is changing. All of these changes would greatly sway consumer spending and potentially shift car registrations in the long-term. Additionally, Slovenia is expected to announce its retail sales growth for April at 10:30 AM CET, offering further context on regional economic health.
Future Outlook for the Automotive Sector
The automotive sector’s course in the CEE region has always had its positive and negatives, where challenges come with unique opportunities. Despite Czechia’s positive growth in passenger car registrations, production slowdowns across the border in Germany and Poland surface possible weaknesses in its automotive supply chain. The uptick in hybrid and electric vehicles suggests that there’s a greater demand from consumers for more sustainable options.
Regional economies are getting crushed right now. Stakeholders are sure to be paying close attention to the next economic reports and data releases, as they could greatly change the market landscape. Keeping a pulse on these trends will be important for manufacturers and policymakers alike who hope to continue this upward trajectory in an ever growing and competitive market.