AID Newsletter banner July 2014 the publication for automotive industry executives
Subscribe  |  FREE SAMPLE   Front Page Editions  |  Current Issue page 1  |  BACK COPIES  |  Info  |  REPORTS  |  CONSULTANCY SERVICES  |   CONTACT  |  MEMBERS 

Germany’s return to pre-crisis car sales levels
Peter Schmidt | Editor

Published: Fri, 04th October 2015 14:25:44 GMT

Berlin traffic Mercedes GLK August 2015

Open quote signGermany is much in the news these days. Large numbers of desperate refugees have been heading for what many now see as their promised land in the very centre of Europe. 

Estimates suggest that this year alone Germany could become home for up to 800,000 refugees. 

The governments’ widely applauded decision to provide a safe haven for these needy people is of course helped a great deal by an economy that is clearly on the mend.

With most economic dials pointing in the right direction and consumer confidence on the up, car dealers are again fighting a battle royal for the hearts and wallets of Germany’s more spend-happy consumers. 

Germany’s August sales bettered last year’s level by an encouraging 6.2 per cent, marking the 7th car sales gain in the past eight months. 

This in turn keeps this year’s German car market on course for around 3.1m units. 

If it turns out that way, which now seems likely, that would match Germany’s annual car sales level in pre-crisis 2007. 

All done and dusted then, crisis over. 

Not exactly.

Today’s outwardly encouraging looking car registration figures disguise a now widespread practise: metal shifting. 

In large numbers, dealers up and down the European continent are registering new cars for which there are no buyers. 

These cars, after first time registration are then sold with tempting double-digit discounts in the flourishing used car market. 

A case in point, some 65.2 per cent of the cars registered in Germany this August were attributable to non-private buyers. 

The tip of the iceberg? 

In July close on 100,000 cars were registered by both the autoindustry itself and the car rental business. 

Add to that a genuine upturn in underlying demand from private buyers, and what you’ve got is a healthily recovering car market that now looks in much better mettle than could have been expected. 

That’s born out by facts. Last month, provisional AID figures show, Western Europe saw yet another month of double-digit car sales growth. 

These upbeat trends were echoed in most markets, lifting West Europe’s cumulative sales to August by a provisional 8.6 per cent. 

Last month, apart from Germany, the UK saw a 9.6 per cent jump in sales, accompanied by double-digit gains in France, Italy and Spain. 

Eight months through the year, following the strong August turnout, gives rise to the upbeat view that this year’s West European new car market remains on course for 13m sales. 

If, as is now likely, this level is cracked, chances are that the 14m plus levels - last seen in the pre-crisis years of the early to mid 2000s – could again be reached earlier than previously feared.

So if latest estimates for the number of refugees heading for Germany this year will turn out as predicted, and some feel that these 800,000 estimates could still be on the low side, chances are that a large section of these new arrivals could soon start building a new life for themselves in their new country of choice.

Given latest soundings, many of these refugees are the professional cream of the countries they left. Fast forward just a few years. 

For a country handicapped by both an ageing and shrinking population, future demand from this large sudden influx of future consumers could conceivably boost Germany’s otherwise saturated new car market back to the higher 3m plus sales levels last seen in the early to mid 1990s, directly following Germany’s reunification. 

Aside from today’s simply heartbreaking human suffering played out in front of our eyes, it is good to know that out of this tragedy some mutually beneficial good might eventually emerge
Close quote sign

To continue reading this article, please register for a free sample without obligation...

Please note that is a subscriber-only site, and as such it can only be viewed by subscribers to the newsletter.