Automotive Industry and Markets

German passenger car market

Last year was a good one on the German passenger car market.

German passenger car market gains in 2017

Last year was a good one on the German passenger car market. A total of 3.44 million vehicles were newly registered in a context of healthy overall economic growth. The result took the market volume to its highest level this decade, with growth of 2.7 percent in comparison with 2016. It also continued the positive trend of the preceding years. The development was supported by expansion of the workforce and the associated reduction in unemployment. Financing conditions remain favorable, and the European Central Bank kept the basic interest rate in the euro zone at the record low level of zero percent.

Additional backing came from the trade-in bonuses provided by the manufacturers from August 2017 onward, which may also be expected to boost the figures in the first half of 2018.

The year was most strongly affected by the ongoing debate over the future of diesels and the resulting structural market effects. In particular, the possibility of bans on driving diesel cars left a tangible sense of uncertainty among potential customers. This has led to clear shifts among the market shares of the various types of fuel. Growth was especially keen in new registrations of vehicles with a gasoline engine. Over the year as a whole, their market share came to 57.7 percent. This was almost 5 percentage points more than in the previous year. Apart from 2009 and 2010, when the scrapping bonus distorted the market in favor of gasoline-powered vehicles, similarly large shifts were last seen at the end of the 1990s, when diesels greatly expanded their market share. In addition, electrically powered vehicles (BEVs and PHEVs) are slowly but steadily gaining in importance. The environmental bonus in particular is promoting demand for electrically powered vehicles. Their market volume of around 55,000 vehicles brought growth of 117 percent. However, their market share – of 1.6 percent – is still very small.

How did sales develop for the German group brands? They remained at the high level of the previous year, with 2.39 million new vehicles bought by consumers, i.e. more than at any time since 2006. Business was somewhat more dynamic for the importers and they enjoyed growth of around 8 percent. The market share going to German group brands was 69.4 percent.

The trend to off-road vehicles and SUVs continued unabated in 2017. For the first time ever, this was the vehicle segment with the highest demand. Off-road vehicles and SUVs accounted for 23.8 percent of new registrations, which was a new record. Right behind, on 23.3 percent, comes the compact class. Until now it has been the most popular with customers. Huge strides were also made by the upper medium segment. Eighteen percent more vehicles in this class were newly registered in 2017 than during the previous year.

Only tiny shifts were seen among the groups of car users. The proportion of new registrations by private owners increased by 0.6 percentage points, while new registrations by businesses fell by the same amount. This meant that once again, more than one third of new passenger car registrations were by private customers.

Dr. Manuel Kallweit Head of Department Markets, Analysis, Raw Materials, Statistics

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