Technavio’s latest report on the automotive industry in Bulgaria provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
Siddharth Jaiswal, a lead analyst from Technavio, specializing in research on auto accessories sector, says, “Bulgaria, with limited automobile production, has emerged as one of the major automobile importing countries in the EU, importing both used and new automobiles. Though the sales of new automobiles in Bulgaria have been growing, they constitute only about 20% of the total automobile registrations, including new and used imported automobiles. Taxi fleets account for about 35% of new car sales in Bulgaria. Used imported cars, being duty free, are cheaper than new cars, which makes them an attractive proposition.”
The Bulgarian government has been encouraging manufacturers of automotive parts and accessories to set up and expand their manufacturing facilities in the country. This has led to the expansion of the manufacturing capacity of automotive parts and accessories in the country by about 85%, post the economic crisis in 2008. This is likely to expand further, supported by government policies that favor investors and the availability of cheap skilled labor in the country. Bulgaria is likely to emerge as a key supplier of automotive parts and accessories in the EU and the Middle East as a result of this expansion, thereby, presenting potential growth opportunities for manufacturers.
The top three emerging trends driving the automotive industry in Bulgaria according to Technavio automotive research analysts are:
• Adoption of electronic devices in automobiles
• Focus on niche segments
• Strong demand for batteries from automotive sector
Adoption of electronic devices in automobiles
“Vehicle manufacturers have started to incorporate electronic gadgets and components in the automobiles to differentiate their products. A shift in customer preference toward automobiles incorporated with advanced electronics is propelling the demand for devices such as infotainment systems, and active and passive safety systems,” according to Siddharth.
Focus on niche segments
The market for energy-efficient lighting systems in automobiles, especially LED-based lighting systems, is in a nascent stage in Bulgaria. The potential for growth is significant, which has attracted new players into the market. While, most of these manufacturers offer conventional LED-based products for interior and exterior lighting in automobiles, an increasing number of manufacturers are focusing on niche applications, such as LED modules for speedometers. Fincom-2 is one such manufacturer that offers LED products for niche applications. The company also provides solar-powered LED lighting systems for traffic signals.
Strong demand for batteries from automotive sector
The automotive sector is expected to generate a steady demand for batteries during the forecast period. Lead-acid batteries are in particular demand from the automotive aftermarket. Manufacturers of lead-acid batteries have also witnessed a slight increase in profitability owing to a decline in the price of lead in Bulgaria during 2014-2015.
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Source : businesswire.com