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Citing motor industry association VDA, Reuters reports that new car registrations in Germany, Europe’s biggest market, climbed 6% in May to 300,000 vehicles, trimming the fall in the year to date to 1%.

According to the news agency, VDA said in a statement that demand was boosted by improved consumer confidence following the end of the Iraq war and greater willingness on the part of firms to expand their fleets after the government dropped plans to increase company car tax.

Registrations rose year-on-year for the first time in 2003, taking the cumulative January-May total to 1,374,200 vehicles, down 1% on the same period last year, Reuters said, adding that VDA, which tends to be more optimistic than individual manufacturers, said the data provided a “glimmer of hope” for the German car market.

“The more positive underlying sentiment was also reflected in domestic orders, even if the effect of forthcoming price increases helped fill the books,” it said, noting that May orders for new cars were up 6% over last year, according to Reuters.

Reuters said VDA stood by its forecast of stronger demand in the second half of 2003 last month. It is expecting some 3.25 million new car registrations for 2003, broadly unchanged from last year.

Monthly production climbed 9% to 437,300 vehicles and exports rose 3% to 288,500, the VDA said, according to Reuters.

Reuters noted that DaimlerChrysler last week posted a 1% decline in May sales of its luxury Mercedes-Benz cars, reporting weak demand in Germany, while rival BMW said group unit sales in the month were roughly stable.

Registrations of foreign brands rose by 7% in May to 98,000 cars. For January-May, foreign brand registrations are up 2% at 476,900, Reuters added.