Greece: Darkest days are over, but still no sunshine on the rise

The Greek automotive industry has seen dark days. But things are getting better. In 2014, 71,218 new cars were registered in Greece, an increase of 21.3% over 2013. The corporate fleet sector did even better, increasing 26.3% to 35,218 units – half of all new registrations.

Of course, that is a far cry from the situation before the economic crisis of 2008, which in the case of Greece has only continued to get worse, until very recently. Vehicle sales declined from over a quarter of a million in 2010 to less than 60,000 in 2013. The operating leasing market in Greece grew to 112,000 units in 2009, after which it consistently shrank, year after year, to 66,000 units in 2014.

The good news is that the economic situation has stabilised and the Greek car fleet sector has consolidated – smaller players have left the market.

Today's Greek car market is dominated by Toyota (11.3% share of the overall market in 2014), Volkswagen (9.7%), Opel (9.1%), Nissan (8.3%) and Fiat (5.6%). Those are also the five dominant brands in the fleet segment, but with Fiat in third place with 9.2% after Toyota and VW (both 10.3%) and before Nissan (8.0%) and Opel (6.5%).

Thanks to recent relaxation of limits on leasing LCVs, the sale of vans in Greece has skyrocketed to 4,888 units last year, up 42.5% over 2013. In some cases, LCVs are even replacing fleet cars. And indeed, singling out the fleet sector, the increase of LCVs is even more impressive: 62.3%, to 3,323 units. Again, Toyota is the dominant brand – but less so in fleet (16.3%) than in retail (31.2%). Ford (14.3%) but also Fiat (13.6%) and Citroën (12.9%) are giving the Japanese brand a run for its money in the fleet van sector.

As for specific models, the latest figures – for August 2015 – attest to the overall popularity of the Toyota Yaris (403 units registered in August, 8.94% of the total), followed at quite a distance by the Renault Clio (5.81%), the Opel Corsa (4.48%), the BMW Series 1 (3.59%) and the Citroën C3 (6.35%).

In the fleet segment, the Clio (7.55%) beats the Yaris (7.10%), followed in close succession by the Series 1 (5.75%), the Mercedes A-Class (5.55%) and the C3 (5.50%).

Around 85% of Greek fleet vehicles are diesels. Electric cars are not on the map; there is hardly any infrastructure, and no beneficial fiscal system in place, making them far too unattractive.

The most common criteria for car selection are lease rate, fuel consumption and car brand – only multinationals will also include CO2 emissions as a major criterion.

Drivers usually don't get to choose their vehicle, and often are saddled with additional costs, such as insurance excesses. Also, 30% of the yearly leasing cost (including VAT) is considered additional income for the car driver.

Current fleet trends in Greece include brand consolidation (with companies focusing on one or two brands to maximise discounts) and model downgrading (e.g. sales reps get a B segment car instead of C segment one).

Will the Greek automotive market and its fleet segment continue their positive trends in the near future? The economics are encouraging – the politics may be a problem. Hopefully, the current Greek government has the courage to see through the tough measures needed to restore economic vibrancy.