Demand for new cars in Germany will rise modestly this year, helped by improving conditions in Europe’s biggest economy and new models, the country’s VDA auto industry said, according to Reuters, which noted that, after three years of declining registrations, the second half of 2003 showed signs of stability with overall sales for the year ending roughly flat.
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“2004 will bring a silver lining to the auto cloud, even if it will be paler than we would have liked,” VDA president Bernd Gottschalk reportedly said at the motor trade group’s annual press conference, adding: “It will be a better car year, but it is still too early to say it will be a good one.”
He reportedly restated an earlier prediction of 3.35 million new car registrations in 2004, 3% up on 2003 but noted that the hoped-for turnaround in January had not transpired.
Reuters noted that the car industry, which employs one in five Germans and accounts for around 10% of industrial output, was plagued by weak home market demand last year when the economy shrank for the first time in a decade.
But VDA also reportedly said German car exports reached a record 3.67 million last year and that the strong euro against the US dollar had so far had no substantial impact.
“Once again it was exports which were the auto industry’s most stable pillar and helped us to grow despite a stagnant domestic market,” VDA president Bernd Gottschalk reportedly said in a statement. Reuters said he anticipates car exports will remain “at a high level” this year, but declined to give a specific forecast.
Reuters noted that the recent surge of the euro against the US dollar has been a concern for German carmakers, who export more than a fifth of their vehicles to the United States, and continued appreciation of the euro may pose a bigger problem.
“It will become problematic if the dollar-euro exchange rate settles at a very low level in the long term,” the VDA told the news agency.
Most carmakers’ profits are protected for the next year or so through hedging policies, but these transactions become expensive in the longer term, Reuters added.
The news agency noted that German manufacturers are launching an unprecedented number of volume new models, including Volkswagen’s new Golf and Opel’s Astra which they hope will entice consumers back into showrooms.
But reports this week said that both makers were already offering discount packages for the brand-new model lines, in Opel’s case even before the Astra goes on sale.
