October new passenger car sales in Germany were down eight percent in November, to 258,800 cars. This means that year-to-date the market is on a par with last year’s already weak level.

Matthias Wissmann, president of the German automotive industry trade association, the Verband der Automobilindustrie (VDA) said: “The scale and speed of the effects of the financial market crisis on stock exchanges and the real economy were not foreseeable. At the moment it is still not clear whether the global economy is gearing up for a long recession. What is clear is that this crisis will have dramatic repercussions on the nature of global automotive competitiveness.”

Domestic manufacturers suffered less from the impact of the downturn in October than import makes. Sales of German brands were down four percent in the month, compared to 17% for import brands.

The president of the import manufacturers’ trade association, Volker Lange, used the results to comment on recent proposals for a new CO2-based tax system. “The figures make it clear that because of the current financial crisis, consumers need clear signals to give them confidence. Politicians must end the dispute between national and state concerns and implement the proposed tax exemption for cars that meet Euro4, Euro5 and Euro6 emissions standards.”

The VDA noted that domestic order intakes were down 12% in october, suggesting that there is no sign of an upturn in the market. As a result the VDA is downgraded its forecast for the year from 3.2m units to 3.1m units. However Wissmann noted that this would only be achieved if the CO2 tax issue is resolved and the new tax system introduced speedily. “A new public debate without decisions would lead to even more customers delaying purchases and intensify the increasingly precarious state of the industry,” he said.

Exports from Germany also fell markedly in October. The VDA noted that exports had only fallen slightly during first nine months of 2008, after a record 2007, but they fell 10% in October to 336,000 units. German sales in the US were down 13% in the month. Export order intakes were down 24% in October.