According to The Estonian Association of Automobile Sales and Service Companies (AMTEL), new car sales in the first quarter were nearly twice as high as a year earlier.

"This was clearly the first quarter of growth. Perhaps I wouldn't even focus solely on sales. What was encouraging was that the first quarter also clearly showed signs of improvement in customer orders," said Margus Nõmmik, a member of the management board of Toyota seller Amserv.

However, such a sharp increase in sales was only possible due to the very low comparison base from last year, when the car tax came into effect.

"If we look at last year, the baseline was simply so low that it's not difficult to grow from there. But looking at the market overall, it is clear that activity has picked up," said Priit Ärmpalu, CEO of Ideal Auto.

AMTEL's executive manager Meelis Telliskivi said the downturn has not yet been fully overcome. "A large number of procurement transfers and handovers to major clients happened to fall in March, which is why the March figure was higher," Telliskivi said. "The March result showed there were quite a lot of procurements and rental companies also purchased many vehicles to expand their fleets," he added.

Companies are currently more active in renewing their fleets. "Businesses are faced with the reality that when a vehicle is reaching the end of its lifecycle, it has to be replaced. We are also seeing smaller companies begin to do this. However, many private individuals are still taking a wait-and-see approach," Telliskivi said.

Rising fuel prices are also beginning to have an impact on the market.

"Interest in electric cars and the costs associated with them has clearly increased, precisely because fuel prices have risen so high," said Margus Nõmmik.

Priit Ärmpalu likewise noted that high fuel prices have sparked interest in electric vehicles.

For now, however, electric vehicles still account for only about 7 percent of car sales in Estonia.

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