GERMANY: Car market down 13% in November

By just-auto.com editorial team | 6 December 2007

The German car market is showing no signs of recovery with registrations dropping almost 13% in November.

According to data from the Kraftfahrt Bundesamt (KBA), 283,921 cars were sold during the month, bringing year-to-date registrations to 2,906,258 units, a decrease of 8.2% compared to the first eleven months of 2006. The KBA is forecasting that the market will turn out at 3.15m units, which will be the lowest figure since reunification.

November 2006 was a particularly strong month with car sales up 18% as car buyers brought new car purchases forward to avoid the introduction of a new higher rate of value-added tax in January 2007.

Volkswagen remained market leader but sales were down 17.6% to 58,352 units. Audi sales were down 12.1% to 22,569 units, while Seat registrations were down 26.8% to 4,123 units. Skoda was the best performer of the group with new registrations down 6.8% to 10,957 units.

BMW managed to keep its sales decline down to just 0.9% with 26,342 units BMWs and Minis sold. Mercedes did not fare so well with sales down 20.9% to 26,693 units. Smart bucked the trend with a 68.5% increase in sales to 4,545 units.

Other results include Opel sales down 18.1% and Porsche down 19.5%.

The German international vehicle manufacturers' trade association, the Verband der Internationalen Kraftfahrzeughersteller (VDIK),  said that part of the decline in the market was expected, following the overheating in the market at the end of 2006, but the private car market is still being held back by uncertainty over the introduction of a new CO2 based ownership tax system. The VDIK called for the government to offer incentives to make low emission and fuel efficient cars more attractive. "Only this can motivate citizens to snap up the wide variety of modern cars available in 2008. The politicians can not longer 'sit out' of the situation. It must get involved," said VDIK president Volker Lange, according to Automobilwoche.

A recent study by the Centre for Automotive Research (CAR) has suggested that the German car market is at the beginning of an overall downward trend in the car market. It is forecasting that by 2015 the German car market will be 2.8m vehicles. Between now and then the market will range up to a maximum of 3.3m units a year. According to Automobilwoche the background to this conclusion is a number of political and economic factors such as reduced per capita income, car density, the age of the vehicle parc and socio-demographic factors.

CAR says vehicle manufacturers are currently geared up for a market of between 3.5m and 4m units a year, but they will have to reduce their production and their dealer networks significantly to remain competitive.

The used car market has already fallen ten percent since the 1990s. The volume of the service market is also expected to fall.