Corona crisis still impacting the European car market in August

The corona crisis is still having an impact on the German car market in August. Despite high purchase premiums and a reduction in VAT, sales are not recovering.

(photo by Volkswagen)

The upward trend on the German car market has stopped again for the time being. As the Flensburg Federal Motor Transport Authority (KBA) announced on Thursday, 251,000 new cars were registered on Germany’s roads in August. Compared to the same month last year, this means a decrease of 20 percent.

Because of the Corona-related compulsory breaks in production and sales, the slump for the German automotive industry was strongest in April. In spring, the number of new car registrations fell by more than 60 percent year-on-year. After that it went up again month after month. In July the minus was only five percent.

At first glance, the August minus of 20 percent is a setback for the auto industry. But the industry is warning against hasty negative conclusions. “This is an both-and-result,” said an association representative. The high minus should not be overestimated.

In August of last year, the entire industry increasingly pushed new vehicles onto the market because new and more stringent emissions regulations came into force within the EU on September 1 (“WLTP”). Older vehicles that did not meet the new requirements at the time were increasingly sold before September 1st via daily registrations and special discounts.

“That is why a comparatively large number of new vehicles were registered a year ago in August,” said a spokesman for the Association of International Motor Vehicle Manufacturers (VDIK), which brings together brands such as Toyota, Fiat and Renault. In addition, there was one less working day in August 2020, which also contributed to the high sales deficit.

A longer-term comparison shows that the current August figures are not that bad. During the past ten years, an average of 245,000 new cars were sold in Germany in August. With 251,000 new registrations, August 2020 is higher.

The private customer business with new vehicles developed better, which was only seven percent in the red in August. According to the VDIK, the reduction in VAT is likely to have played a major role in this. Business with fleets is more difficult: major customers such as companies and car rental companies are even more reluctant to buy new vehicles due to the Corona.

The auto industry remains cautious when looking ahead. “It is still too early to give the all-clear,” said the Association of the Automotive Industry (VDA), the association of major German manufacturers and suppliers. Because of a comparatively weak order intake, the association is concerned about the capacity utilization of the German car factories.

After incoming orders from Germany in the months of June and July were above the previous year’s values ​​due to catch-up effects from the first quarters, the previous year’s level was again significantly below the previous year’s level in August at minus ten percent, according to the VDA.

Contact the author:

Inline Feedbacks
View all comments