Vienna  - The car industry in Central and Eastern Europe is expected to recover soon from the current crisis and to suffer less than producers in Western Europe, according to a study released in Vienna on Monday.

While industry and logistics experts at the Fraunhofer Austria Research institute said in their study that production would stagnate in Western Europe and the United States until 2012, the CEE region would see growth rates of 30 per cent.

"Central and Eastern Europe will not be able to keep up growth rates seen in recent years, but the region is not necessarily marked by pessimism," said institute head Wilfried Sihn.

In 2009, production would stagnate or grow only slowly in the region, but it would pick up as early as next year, the experts said.

As the 43 factories in that region mostly build compact cars, they are expected to benefit from increasingly budget-conscious buyers. The same cannot be said of Western European producers of high-end vehicles.

Cost structures are also still lower than in other European regions, although the experts at the Fraunhofer institute said that, in addition to current measures such as layoffs and production cuts, CEE factories should improve production and logistics processes now.

A large share of the growth is expected to take place in Russia, which is seen as having a large market potential.

Bulgaria and the Ukraine are not likely to participate in the growth as they are located too to far from Western Europe to be considered suppliers, the study said.

Registration of new cars in Europe plunged by 27 per cent in January, compared to a year earlier, as the auto industry continues to suffer from tight credit and reduced consumer spending, according to the European Automobile Manufacturers' Association (ACEA). (dpa)