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CHAPTER 1 EXECUTIVE SUMMARY	3
Poland, the Czech Republic, Hungary and Romania are the markets that have developed the most between 2000 and 2004	3
The Czech market is the most developed overall and, although Hungary is less developed, its non-fuel operations are relatively mature	4
Czech Republic	4
Hungary	4
Poland	5
Romania	5
The Czech market offers the most opportunities and least obstacles to development whilst Romania is more challenging	6
Romania and the Czech Republic offer the greatest potential for network expansion	8
New entrants and existing players should consider network expansion in the Czech Republic and Romania	8
Players entering or operating in the Polish market should concentrate on improving site efficiency	8
The Hungarian fuel market is verging on saturation so network expansion should not be considered	8
The Czech Republic and Hungary have the most developed ancillary services on the forecourt	9
The Czech Republic and Hungary have the most developed ancillary services on the forecourt	9
Players in the Romanian or Polish markets must modernise sites to include shop and carwash facilities	9
Market liberalisation is fully-fledged in the Czech Republic and Poland whilst former state monopolies dominate Hungary and Romania	10
Hungary and Romania are still dominated by the former state monopolies but site efficiency rather than a large presence is key	10
Market liberalisation is fully-fledged in the Czech Republic and Poland so players can manipulate brand, fuel prices or non-fuel elements to their advantage	10
CHAPTER 2 INTRODUCTION	22
The Fuel Development Index is a weighted average of fuel volume, fuel value, car parc and site CAGRs	23
The non-fuel development index combines the status of the forecourt shop and carwash industry, site efficiency and ownership	25
The competitive intensity index is a based on site efficiency and the combined market share of the top three players	26
The majority of the primary data is extracted from Datamonitor's European Forecourt Retailing Database, 2005	27
This report is aimed at those needing a greater insight into the current and future competitive environments in CEE's forecourt retailing markets	28
Market analysts	28
Planners and Strategists	28
Equipment manufacturers	28
CHAPTER 3 MARKET CONTEXT	29
Key findings	29
In Poland, Romania and the Czech Republic, motor fuel consumption grew at a rate above the CEE average	30
Motor fuel value increased between 2000 and 2004 in the Czech Republic and Hungary but fell in Poland	31
Poland's ratio of sites to volumes far exceeds that of Romania	32
Poland, the Czech Republic, Hungary and Romania are the markets that have developed the most between 2000 and 2004	33
CHAPTER 4 MARKET TRENDS	34
Key findings	34
Despite the total number of vehicles in the Czech Republic falling each year, the average volume consumed per vehicle is rising	36
The Czech Republic is a fast-growing market with the value of service stations growing over 4% annually	37
Fuel tourism is one of the key factors increasing fuel volume consumption	37
Fuel value growth surge is partly a result of dramatic price increases in 2003	38
The majority of new builds can be attributed to national and local players	38
77% of Czech sites have a shop and over one third have a carwash	39
Supermarkets accounted for 6% of the fuel volumes sold in 2004 in the Czech Republic	39
77% of Czech filling stations have a shop on the forecourt and 53 new sites with a forecourt have opened since 2002	39
Hypermarkets' entrance into the fuel retailing market signals the growing demand for convenience products on the forecourt	40
Of the total sites in the market at the start of January 2005, 98% were company owned and 2% were dealer owned	40
According to Datamonitor's analysis, the Czech Republic has a non-fuel development score of 6.2	41
In the Czech Republic, Shell and Benzina vie for position as market leader	42
Benzina is the largest player in the Czech market in terms of network coverage and second to Shell in terms of market share	43
PKN Orlen's stake in Unipetrol in 2004 saw it acquire Benzina making it the second largest player in the market after Shell	43
The three biggest players have a combined market share of 40.9%	44
In 2005 ConocoPhillips enters the market whilst Agip exits	44
According to Datamonitor's analysis, the Czech Republic has a competitive intensity score of -3.2	45
In the Polish market, fuel volumes grew at a CAGR of 5.3% although fuel value fell by a CAGR of 0.9% between 2000 and 2004	47
Between 2000 and 2004, the value of the market increased by 5.3% per annum	47
The total number of vehicles has increased strongly between 2000 and 2004, growing at an annual rate of 12.4%	48
Smaller independent players are suffering site closures as a result of price competition and stricter environmental legislation	48
According to Datamonitor's analysis, Poland has a fuel development score of -6.7	49
51% of Polish sites have a forecourt shop and 19% of stations are dealer owned	50
Major fuel retailers dominate the growing convenience market in Poland	50
In the convenience sector, petrol station operators are the dominant players	50
The trend to develop additional services, such as C-stores, carwashes and cafés, is becoming clearly marked	50
Of the total sites in the market at the start of 2005, 67% were company owned and 33% were dealer owned	51
According to Datamonitor's analysis, Poland has a non-fuel development score of 4.1	51
The three largest fuel retailers in Poland account for a combined volume market share of 48%	52
Network improvements and expansion are a key concern for major players in the Polish markets	53
Price wars are frequently instigated by major players as they grapple for market share	54
According to Datamonitor's analysis, Poland has a competitive intensity score of - 4.1	54
The average vehicle in Romania consumed 512 liters of fuel more in 2004 than in 2000	55
Whilst the number of Romanian sites peaked in 2001 and have fallen slowly since, value and volume growth are still strong	56
Although the number of sites in the market is falling, fuel volumes are rising steadily year-on-year	56
The value of the service station market grew on average by 12.2% per annum between 2000 and 2004	57
The total number of registered vehicles has remained relatively static	57
According to Datamonitor's analysis, Romania has a fuel development score of 4	58
54% of sites in Romania have a forecourt shop but only 17% have carwash facilities	59
Although the number of sites with as shop is low, new builds by major players will often have a large forecourt store	59
New builds typically have a large format forecourt store	59
Of the total number of sites 17.2% or 345 stations have a carwash	60
Of the total sites in the market at the start of 2005, 80% are company owned and the remaining 20% are dealer owned	60
According to Datamonitor's analysis, Romania has a non-fuel development score of 4.8	60
Whilst Petrom's position as market leader remains secure, Lukoil moved to second place ahead of Rompetrol in 2005	61
Petrom's dominance in Romania is due to its long-established presence and extensive network	62
The top three players in the market account for 53% of volumes sold in Romania in 2004	62
Petrom was formerly the largest state-owned oil company in south-eastern Europe	63
Shell was the last player to exit the market citing a lack of downstream profitability	63
Datamonitor's analysis gives the Romanian market a competitive intensity score of -5.1	63
Whilst Hungarian car parc is growing, the amount of fuel consumed per vehicle is declining due to network rationalisation	64
The Hungarian market developed rapidly but, as fuel volumes fall by 0.7% annually, is verging on saturation	65
Although the fuel retailing market has flourished since the political transition of the 1990s, Hungary has now reached saturation point	65
Over the four-year period, the value of the service station market fell on average by 1.7% per annum	66
In January 2005, the Hungarian station network totalled 1447 sites compared with 1,568 in 2001	66
According to Datamonitor's research, Hungary has a fuel development score of -5.5	67
Due to many new builds, 77% of Hungarian stations have a forecourt shop and 2 in every 5 sites has a carwash	68
Forecourt retailers in Hungary are beginning to balance low fuel margins with shop profits	68
Many older sites have been modernised to include ancillary services between 2001 and 2005	68
The average throughput per site in Hungary is 2.7m liters per site	69
90% of sites are company-owned with foreign players such as Jet and ExxonMobil having no dealer-owned sites in their network at all	69
According to Datamonitor's analysis, Hungary has a non-fuel development score of 6.3	70
In Hungary, 81% of fuel volume is controlled by the three largest players, MOL, Shell and OMV	71
Whilst Mol's dominance is not in jeopardy, OMV and Shell are battling for second place on the Hungarian forecourt	72
The three largest players in the market account for a significant 81% of fuel volumes sold in 2004	72
Whilst it is unlikely that any player in the market will surpass MOL in terms of volumes or network, its dominance is challenged to a certain degree.	73
The newest entrants into the market are the UK supermarket, Tesco, and the Russian oil major, Lukoil	73
According to Datamonitor's research, Hungary has a competitive intensity score of -6.5	74
CHAPTER 5 RECOMMENDATIONS	75
Hungary and Poland are less attractive markets in terms of fuel development than the Czech Republic and Romania	76
Romania and the Czech Republic offer the greatest potential for network expansion	76
New entrants and existing players should consider network expansion in the Czech Republic and Romania	76
Players entering or operating in the Polish market should concentrate on improving site efficiency	77
The Hungarian fuel market is verging on saturation so network expansion should not be considered	77
Hungary and the Czech Republic offer the best market conditions for non-fuel investment and development	78
The Czech Republic and Hungary have the most developed ancillary services on the forecourt	78
The Czech Republic and Hungary have the most developed ancillary services on the forecourt	78
Players in the Romanian or Polish markets must modernise sites to include shop and carwash facilities	79
The dominance of MOL in Hungary gives this market the lowest score on the competitive intensity index	80
Market liberalisation is fully-fledged in the Czech Republic and Poland whilst former state monopolies dominate Hungary and Romania	80
Hungary and Romania are still dominated by the former state monopolies but site efficiency rather than a large presence is key	80
Market liberalisation is fully-fledged in the Czech Republic and Poland so players can manipulate brand, fuel prices or non-fuel elements to their advantage	81
CHAPTER 5 APPENDIX	82
Future readings	83
SPP writing team	84
How to contact experts in your industry	84
List of Figures
Figure 1: Hungary and Poland are less attractive markets for fuel	6
development than the Czech Republic and Romania	6
Figure 2: Hungary and the Czech Republic offer the best conditions for non-fuel investment and development	7
Figure 3: Fuel volumes in Poland and the Czech Republic are more evenly distributed than Hungary where one player dominates	7
Figure 4: The largest CEE markets are the Czech Republic, Hungary, Poland and Romania	22
Figure 5: Fuel volume, fuel value and site growth are key indicators of fuel development	23
Figure 6: The proportion of sites with a shop and a carwash as well as site efficiency as a measure of shop traffic are key indicators of non-fuel development	25
Figure 7: Market concentration and site efficiency are key indicators of competitive intensity	26
Figure 8: Poland is the market demonstrating the greatest amount of fuel consumption growth between 2000-2004	30
Figure 9: Romania is the market demonstrating the greatest amount of fuel value growth between 2000-2004	31
Figure 10: Poland has the greatest number of sites and fuel volumes but has the least efficient stations	32
Figure 11: Whilst the total number of vehicles in the market fell between 2000 and 2004, fuel volumes per vehicle grew over the same period	36
Figure 12: The number of sites increased steadily between 2000 and 2004	37
Figure 13: The Czech Republic has a fuel development score of 8	38
Figure 14: 77% of Czech sites have a forecourt store, 35% have a carwash and 95% are company owned	39
Figure 15: The Czech Republic has a non-fuel score of 6.2	41
Figure 16: Although Benzina has a more extensive network, Shell sites more efficient	42
Figure 17: Shell, Benzina and OMV collectively account for nearly half of fuel volumes in the market	43
Figure 18: The Czech Republic has a competitive intensity score of -3.2	45
Figure 19: Fuel consumption per vehicle fell between 2000 and 2004 despite the total number of vehicles in the market increased strongly	46
Figure 20: The number of sites increased steadily between 2001 and 2005	47
Figure 21: Poland has a fuel development score of -6.7	49
Figure 22: 89% of forecourts are without a carwash but, more importantly, 49% of petrol stations are without a shop	50
Figure 23: Poland has a non-fuel development score of 4.1	51
Figure 24: The foreign oil majors, such as Shell and BP, have smaller, more efficient sites than the market leader PKN Orlen	52
Figure 25: PKN Orlen has a fuel volume market share of 28.6%, twice as much as its closest competitors	53
Figure 26: Poland has a competitive intensity score of -4.1	54
Figure 27: Fuel consumption per vehicle rose steadily between 2000 and 2004 whilst car parc remained static over the same period	55
Figure 28: Despite peaking in 2003, the number of sites has been falling steadily between 2000 and 2004	56
Figure 29: Romania has a fuel development score of 4	58
Figure 30: 54% of Romanian sites have a shop, 17% have a carwash and 97% are company owned	59
Figure 31: Romania has a non-fuel development score of 4.8	60
Figure 32: Petrom has an extensive network but Rompetrol has more efficient sites	61
Figure 33: The market is dominated by Petrom who has a market volume share of 35%	62
Figure 34: Romania has a competitive intensity score of -5.1	63
Figure 35: Whilst fuel consumption per vehicle declined, the total number of vehicles in the market increased between 2000 and 2004	64
Figure 36: The number of sites has been increasing steadily between 2000 and 2004	65
Figure 37: Hungary has a fuel development score of -5.5	67
Figure 38: 77% of Hungarian sites have a shop, 40% have a carwash and 90% are company owned	68
Figure 39: Hungary has a non-fuel development score of 6.3	70
Figure 40: Although MOL dominates the scene, smaller players such as Lukoil have very a much higher throughput	71
Figure 41: MOL account for 43.5% of the fuel volumes sold in the market in 2004	72
Figure 42: Hungary has a competitive intensity score of -6.5	74
Figure 43: The Czech Republic has the highest fuel development score due to growing fuel volumes and value rates and new builds	76
Figure 44: All of the markets investigated demonstrate a growing and far from saturated demand for ancillary services on the forecourt	78
Figure 45: Market conditions are less intense in Poland than in markets such as Romania where former state monopolies still dominate	80

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