Latvia’s New Car Market sees a Surge in Activity as 2024 Comes to a Close
The Latvian new car market experienced a notable uptick in activity toward the end of 2024, with a 7% increase in transactions in October and a 13% rise in November compared to the same period the previous year, according to data from Citadele Leasing. This surge was particularly driven by private individuals, whose transactions jumped by 33% in October and 10% in November. Simultaneously occurring, legal entities also contributed to the growth, with a 14% increase in November alone.
Despite this late-year boost, the overall car market in 2024 saw a decline, with new car transactions dropping by 6%—equivalent to 1,287 fewer registrations than in 2023.Leasing remains a popular financing option, with private individuals opting for it in approximately 65% of cases, while legal entities use it in about half of their transactions.
“As 2021, the new car market has shown growth for four consecutive years, and the drop in the number of transactions in 2024 is the first since the times of the Covid pandemic. The reasons for such a dynamic are various—both the increase in interest rates and total costs,as well as the rising prices of new cars,the beginning of which can be traced back to previous years. The number of transactions by private individuals started to increase in the second half of the year, responding more quickly to the decline of Euribor and the expected drop in interest rates,” explains Đirts Glazers, Chairman of Citadele Leasing.
Shifts in Popular car Models
In 2024, Toyota, Škoda, and Volkswagen continued to dominate the Latvian car market, maintaining their leading positions among both private buyers and legal entities. Toyota emerged as the clear frontrunner, outselling the second-place brand by nearly 1,000 units. however, it also saw the steepest decline among the top 10 brands, with a 24% drop in new car registrations compared to 2023. This decline was largely attributed to reduced transactions in the car rental sector.
On the other hand, Renault and Audi made meaningful strides, with new car registrations increasing by 23% and 25%, respectively. Among private buyers, the Škoda Kodiaq claimed the top spot, moving up from fifth place in 2023, while the Volkswagen Tiguan climbed to second place from eighth. Meanwhile, the Škoda Octavia made a strong showing in the legal entity segment, rising from fifth to third place, with Toyota’s Corolla and Hilux securing the top two spots.
In the electric vehicle (EV) category,the GWM Ora Funky Cat emerged as the most popular model,followed by the Volkswagen ID.3 and Tesla’s Model Y and Model 3.
Growing Demand for Alternative Fuel Vehicles
Across the Baltic States, the demand for vehicles powered by alternative fuels is on the rise, mirroring a broader European trend. While the European Union saw a 7.7% increase in sales of such vehicles, the Baltic region outpaced this with a 15% growth rate. Tho, Latvia’s adoption of alternative fuel vehicles has been more modest, with only a 3.5% increase compared to Lithuania’s 21.8% and Estonia’s 14.7%.
Conversely, customary gasoline and diesel vehicles continue to lose ground, with Latvia experiencing the steepest decline at 21.8%, followed by Lithuania at 20.1% and Estonia at 11.2%. When it comes to car colors, gray, white, and black remain the most popular choices, accounting for 64% of all private car transactions. Blue, green, and red round out the list, making up 10%, 8%, and 7% of sales, respectively.
What Does This Mean for the Future?
the Latvian car market’s late-year surge suggests a potential rebound in consumer confidence, particularly among private buyers. However, the overall decline in 2024 highlights the challenges posed by rising costs and shifting preferences toward alternative fuel vehicles. As interest rates stabilize and EV infrastructure improves, the market may see further transformations in the coming years.
For now, Toyota, Škoda, and Volkswagen remain the brands to watch, while Renault and Audi are making impressive gains. With the GWM Ora Funky Cat leading the EV charge, it’s clear that the future of Latvia’s car market is as dynamic as ever.
