The Central and Eastern European (CEE) region has seen a notable strengthening of its currencies against the euro since the beginning of the week, contributing to an impressive performance in the automotive sector. The region, particularly the CEE7 nations excluding Serbia, recorded an average growth of 9.5% in car registrations. This growth significantly surpassed that of the broader European Union, where countries such as France and Germany experienced declines of 3.2% and 1%, respectively.
In 2024, the EU saw a modest increase in new car registrations, rising by 0.8% to approximately 10.6 million units. This slight uptick, however, was overshadowed by the CEE region's robust performance. The potential for vehicle numbers in the EU to increase to 1.5 million units highlights a positive outlook for the automotive market. Stellantis, one of the prominent automotive manufacturers, is expected to ramp up production this year, further contributing to the sector's expansion.
Slovakia stands out as a key player in the region, potentially producing a record number of cars, with projections reaching up to 1.2 million units. However, there was a decline in car production in Slovakia by approximately 7% in 2024, resulting in 993,000 units produced. This decrease is attributed to preparations for new model production. Meanwhile, Czechia reported a record high in car production, increasing by 3.9% year-on-year to reach 1.4 million vehicles.
Poland exhibited the most dynamic growth in registered cars, achieving an impressive increase of 16.1%. In contrast, Romania saw the weakest growth among the CEE nations at 5.6%. These variations indicate differing levels of market expansion within the region, reflecting diverse economic and industrial conditions.
Financial markets also responded to developments in the region. Long-term yields have been on a decline this week, influenced by dovish talks from the European Central Bank (ECB) that have impacted the EUR/USD pair. As a result, the EUR/USD pair held losses near 1.0400 during European trading hours on Wednesday.