Global Economics

Bulgaria: Where Old Cars Retire


Secondhand cars are flooding from Western Europe into this former Communist country

"Come to Bulgaria your car is already here," goes a popular Bulgarian joke intended for Western European holidaymakers.

But for Bulgarians, it is no joke. The country's roads are filling with cars that Italians, Germans, and Dutch drove years ago. These "Western veterans" join a parade of Soviet-era cars that jam the streets of the capital. City officials say these older, less efficient automobiles and lorries contribute to the city's pollution and there are plans to do something about it.

Walk down the streets of Sofia or any other Bulgarian city and you see a motley collection of vehicles, from boxy Soviet-era Ladas to older German and Italian brands. In rural areas, the number of older vehicles is even more pronounced.

The flood of Western veterans has increased since Bulgaria jointed the European Union at the start of 2007, when import duties were lifted on other EU countries. In the first three months of 2007, 15,037 new cars were sold while the number of imported second-hand vehicles was more than 60,000, nearly double the number a year earlier.

The trend is likely to continue, according to the Union of Importers of Automobiles in Bulgaria. Imports of second-hand vehicles are expected to nearly double this year, to 320,000.

IT'S ABOUT THE ECONOMY, NOT NOSTALGIA

The high number of second-hand imports in Bulgaria has several explanations. First, there is no indigenous automotive industry in Bulgaria to create incentives to purchase new models or to "buy Bulgarian." And unlike other EU countries with high emissions standards and tax incentives to buy planet-friendly cars, Bulgaria's lower standards make it fertile ground for unloading older vehicles that are being sold off in richer countries to the West.

As one of the EU's poorer states, with gross national income on a per-capita basis only one-third of the EU average, many of Bulgaria's 8 million citizens cannot afford new cars. According to the European Automobile Manufacturers Association and European Union statistics, the average car age in Bulgaria is 14 years, compared to eight years throughout Europe. Cars in the Czech Republic, Slovakia, Hungary, and Poland also rank among the oldest.

One motorist in the city of Plovdiv, Evgeni Petrov, says he used to drive an East Germanbuilt Wartburg noted for their three-cylinder, double-stroke engines which he replaced with an Opel Vectra. "I had grown fond of my Wartburg, of its peculiar engine sound and roominess," he says. "But eventually I had to replace it with a newer, more reliable car. The Opel I drive now is way better than the Wartburg but, still, it is a 15-year-old car. I wish I could afford to buy a brand-new car."

Ognyan Kolev, whose Europa Auto Service specializes in maintaining older cars, says most second-hand vehicles coming into Bulgaria are from Italy. Older Fiats and other brands are preferred because Italy's milder climate means there is less corrosion from road salt, and cars from Italy tend to be cheaper than imports from Germany and Austria, which are costlier because of those countries' strict maintenance regulations. "The cars we import from Italy tend to be cheaper," Ognyan says. "Until recently no one wanted to buy an Italian car but now things have changed and we find a good market for what we import from Italy."

Some EU countries are offering incentives to motorists who buy more efficient, cleaner-burning cars. Such initiatives are still just good intentions here. In late 2006 Bulgarians shuddered at plans for a new environmental tax that would replace the import tax. The government initially discussed a tax of up to 2,000 leva, or 1,000 euros, but later cut the tax to 100250 leva. Owners of less fuel-efficient cars would pay higher taxes if the measure becomes law.

Currently, 11 EU countries (Austria, Belgium, Cyprus, Denmark, France, Italy, Luxembourg, the Netherlands, Portugal, Sweden and the United Kingdom) impose motor vehicle taxes that are totally or partially based on the car's carbon emissions and/or fuel consumption, according to the European Automobile Manufacturers Association.

TIGHTER EMISSION STANDARDS

The Sofia municipal government is considering an eventual ban on cars without a catalytic converter, which makes cars burn cleaner, Deputy Mayor Velizar Stoilov told the Standard Daily newspaper. If approved, the law would affect an estimated half of the cars in the capital.

Romania which also joined the European Union this year imposes a registration tax on used imported vehicles which is meant to deter consumers from buying older, more polluting cars. The Romanian government vows to defend the registration fee against complaints from the European Commission that the tax interferes with free trade.

Bulgaria has no domestic auto industry, but not for lack of trying. The country's history of car-manufacturing is marked by a series of ambitious but short-lived attempts to produce cars here. In the late 1960s two joint ventures between Bulgarian firms and French automakers led to production of cars branded Bulgarrenault and Bulgaralpine, and a Pirin-Fiat was produced for half a decade before production ended in 1971. In 1996, Britain's Rover dropped its investment plans in Bulgaria.

A "UNIVERSE" IN THE FUTURE?

But there is hope that a new car will be built in Bulgaria. On 5 May the people of Sliven saw the public unveiling of a concept car designed by three Sofia Technical University students. Volodia Dimitrov, Daniel Chavdarov, and Ivan Ivanov won a competition to design a car costing no more than 8,000 euros. The competition was sponsored by Daimler-Chrysler and Samsung, and the student's car, which they dub the Universe, uses the engine of Daimler's Smart car and electronics from Samsung.

Officials from Daimler were among those on hand for the unveiling. However, there is as yet no commitment from the German auto giant to go ahead with production or to build a factory in Bulgaria.

Despite the number of second-hand cars available in Bulgaria, sales of new cars have grown along with the health of the economy. In 2006 new-vehicle sales reached 42,625 units, up from 33,434 in the previous year. However, the number is low compared to other EU countries. In Slovenia, with a population four times less than Bulgaria's, 60,026 cars were sold in 2006. Car dealers in Hungary, with a population slightly more than Bulgaria's, sold 193,462 new cars in 2006, and even tiny Luxembourg sold more new cars than Bulgaria.


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