German car market is struggling to get going
After a decline in sales in May, the German car market has slightly recovered. According to the responsible authority, more cars were sold in June than the previous year. However, electric cars continue to struggle. In light of the slow overall development, the manufacturers' association has lowered its forecast for domestic production.
The German car market has slightly recovered in the first half of the year. From January to June, 1.47 million new cars were registered, which is 5.4% more than in the previous year's period, as the Federal Motor Transport Authority announced. However, the decline in electric cars is holding back the market: Registrations fell by 16.4% in the first six months. The reason is the withdrawal of state subsidies at the end of last year. In addition, smaller, affordable electric models are in short supply. Price-conscious customers, who are willing to contribute to climate protection, have reportedly been hiding in the market according to experts in recent years. The mass market is lagging behind, but is not yet catching up.
"The discussion about the withdrawal of the combustion engine ban in 2035 is promoting this development further and hindering the high-speed development of electromobility," explained the president of the automobile importers association VDIK, Michael Lohscheller. The federal government's goal of 15 million electric cars by 2030 is moving further away.
In June, according to the data, 297,329 cars were handed over to customers - an increase of 6.1%. In May, there was a significant decrease of more than 30% below the line. In June, 43,412 electric cars were registered, which was 18.1% fewer than in the previous year's month. Their share of new registrations was 14.6% in the previous month. Hybrid cars are still popular, with nearly 88,000 new registrations in June, which was 12.4% more than the previous year. Their share reached 29.6%. In the first six months of the year, the number also increased compared to the previous year, by 12.5%.
The majority of cars registered are still gasoline engines. Their share was 37.6% in June. Diesel cars are also being sold more again, with a plus of 12.4% in June compared to the previous year - their share was 17.7%.
In comparison to the year before the Corona crisis in 2019, the German car market is 20% lower in the yearly development, explained Constantin Gall, automotive expert at the consulting firm EY. "It doesn't look like the gap to the pre-crisis level can be closed medium-term." A weak economy and the purchasing power loss of consumers due to inflation, as well as uncertainty about electric cars, are obstructing this.
The Association of the German Automobile Industry (VDA) adjusted its production forecast for battery electric cars in Germany due to the weaker demand: "We had calculated at the beginning of this year with a production volume of 1.15 million units, but now expect a domestic production of battery electric vehicles in the amount of 1 million vehicles." The VDA therefore expects only 5% growth compared to the previous year after 20% growth before.
The German car manufacturers are closely monitoring the economic situation, as the automotive industry plays a significant role in the country's economy. The Federal Motor Transport Authority is responsible for regulating the industry, including the implementation of regulations like the potential combustion engine ban by 2035. Despite the slight recovery of the car market, German carmakers are facing challenges in the electric vehicle sector due to decreased registrations and the withdrawal of subsidies.
