Export declines slowing – Downturn seems to be bottoming out – Bigger order backlog
28-Percent Growth Recorded in August for Germany’s Passenger Vehicle Market
In August 275,000 new passenger vehicles were registered, surpassing the result posted in the same month last year by 28 percent. The strong revival of demand thus continued, thanks to the scrapping bonus and the revamped motor vehicle tax. Given that the global financial and economic crisis led to a plunge in exports, in particular, these incentives are boosting domestic demand, at least temporarily, and have thereby stabilized workforce levels this year.
Matthias Wissmann, President of the German Association of the Automotive Industry (VDA), commented: "It is also clear, however, that the bonus has led to an asymmetrical distribution of success for the individual brands and has sparked a temporary shift of the model mix on the passenger vehicle market in Germany. Its effect is being felt primarily in the subcompact and compact segment, but less so in the premium segment." The impact of the setback that hit the export markets will be somewhat cushioned during a transitional period, said Wissmann.
Nearly 2.7 million new passenger vehicles were registered in the first eight months of the year, an increase of 27 percent and 565,000 units compared to the result posted in the same period in 2008. Incoming domestic orders rose 40 percent in August, boosted by the end spurt in demand resulting from the scrapping bonus. The German automakers' order backlog of 521,000 units is up 39 percent compared to the corresponding figure from last year. "This is a confirmation of our forecast from early July, when we predicted that a volume of more than 3.5 million passenger vehicles would be recorded for the entire year," Wissmann said.
The automobile markets worldwide also were bolstered in recent months by numerous incentive programs. In the United States, for instance, 1.26 million light vehicles were sold in August, marking the first time in almost two years that the corresponding volume from the previous year has been surpassed (+1 percent). While this included a 14-percent increase in sales of passenger vehicles, there was a further decline in light truck sales (-13 percent). In the year to date, though, sales of light vehicles were still down 28 percent from the level reached in the same period last year. Despite the protectionist scrapping bonus, the German automakers succeeded in increasing their market share in the United States during the year to date by just under one percentage point, to 7.1 percent.
In August the German companies also recorded a decline in exports, but at slightly under ten percent the decrease was an improvement from the results in the preceding months. Exports during the year to date are down 29 percent compared to the level achieved in the same period in 2008. While orders from abroad remained at a lower level (-22 percent) in the first eight months of 2009 compared to the same period last year, in August they nearly matched the figure posted in the same month last year (-3 percent). A bottoming out is clearly in evidence, said Wissmann, which also is indicated by the figures when adjusted for seasonal effects.
And the falling production output also has significantly slowed. In August more than 326,000 passenger vehicles were produced in Germany, only four percent fewer than in the same month last year. This means there was only a single-digit decrease in production in Germany for the third month in a row. Production during the year to date is down 20 percent from the level reached in the same period in 2008.
"Our export and production levels for 2009 as a whole will be substantially below those recorded last year," said Wissmann, "but the current figures show that the bottom has been reached. If the automotive markets worldwide now continue to gain momentum, the situation could gradually improve in the coming months."
