VDA sees hope for domestic market thanks to motor vehicle tax reform and environment premium; exports still a cause for concern
Frankfurt am Main, February 3, 2009. German demand for passenger cars has picked up significantly following the introduction of the environment premium and the agreement on motor vehicle tax reform. Compared to the same month last year, incoming orders from the domestic market were down by 13 percent for January 2009 as a whole. By the penultimate week of the month, however, German manufacturers were already reporting a noticeable reversal in this trend. In the last week of January, German manufacturers recorded an increase in incoming orders of 16 percent, the first rise since September 2008. And following the dramatic fall in order backlogs over the fourth quarter of last year, levels here are now up by 19 percent on the figure for December 2008 and have risen to reach more or less the level of January 2008. Matthias Wissman, President of the German Association of the Automotive Industry (VDA), emphasized: "Now that people know where they stand with regard to future developments on the car market, there's a greater readiness to buy new vehicles. These are the first encouraging signs for the industry. They provide hope that the difficult situation on the domestic market might now be starting to stabilize. The additional marketing measures by the manufacturers ought to provide a further boost."
Despite the positive signs at the end of the month, January as a whole was still affected by the continuing decline in demand from the end of last year. Given the low levels of incoming orders over the fourth quarter, the mood on the domestic market was still very subdued at the beginning of the year. A total of 189,400 new passenger cars were registered in January 2009, down by 14 percent on the same month last year. That said, the figures were substantially better than most of the other markets of Western Europe or even the U.S. Taking into account the difference in the number of working days, registrations of new cars were actually down by only 6 percent on January 2008. However, the global recession and the attendant uncertainty of potential car buyers are continuing to have an impact on sales worldwide. Orders from abroad remain weak and, as expected, were substantially below the volume for January 2008, falling by 37 percent. As in previous months, the volume of exports of passenger cars to the majority of foreign markets was also disappointing. In January 2009, German manufacturers sold 222,700 passenger cars abroad, down by 39 percent on the same month last year. "Even if we end up increasing market shares around the world, 2009 is still going to be a difficult year for exports," Wissmann underlined.
German carmakers are adjusting production to the very weak level of demand from export markets. In the first month of the new year, German automobile plants produced 314,000 passenger cars, a fall of 34 percent on the same month last year. The German automobile manufacturers have reacted quickly and decisively to the global slump in demand and have adjusted their output to avoid costly production for the stockyard. Measures include, in some cases, substantially increasing the length of plant shutdowns over Christmas and the New Year, terminating temporary employment contracts, substantially reducing the working-time accounts of regular workforces, and, on several occasions, introducing reduced working hours.
