New car registrations in Germany fell for the second month in a row in January as the market continued to suffer a hangover from the ending of the country’s scrappage subsidy.
The VDIK foreign carmakers association said registrations fell 4.2% compared with January last year to around 181,500 vehicles, the weakest monthly total since German unification in 1990. It followed a 5% slip in December, the first year on year decline in 11 months.
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Demand for new cars in Germany has slumped sharply since the EUR5 bn (US$6.96 bn) federal vehicle scrapping scheme ran out of funds at the start of September. Declining orders are now starting to feed through to new car registration statistics.
Scrappage incentives are continuing to bolster other markets. France, Italy and Spain all rose strongly in January but carmakers face the uncertainty of subsidies running out in some key markets.
The VDIK forecast in December that German new car registrations for 2010 would plunge to between 2.8m to 2.9m vehicles from just over 3.8m last year. During 2009 government subsidies fuelled a 23% gain in the market.
The forecast range compares with rival German automaker association VDA for 2.75m to 3.0m. Both estimates are below the 3.09m cars registered two years ago, which was the lowest since reunification.
Domestic manufacturers like Volkswagen are hoping export markets will recover this year along with a rebound in corporate fleet sales that are so critical for premium brands like BMW and Mercedes-Benz.
