The German car market is catching up – but the manufacturers’ business is still problematic

E-cars on the rise
The German car market is catching up – but the business of BMW, Mercedes, VW and Co. is problematic

Despite the strong increase in new car registrations, German car manufacturers are having problems in business (symbol image)

© Sven Simon / Imago Images

In May, new car registrations in Germany increased significantly. The number of electric cars even increased by almost 50 percent. The German manufacturers BMW, Mercedes, VW and Co. achieved large growth – but they still encounter problems.

The German passenger car market has recovered. According to current figures from the Federal Motor Transport Authority (KBA), 246,966 cars were newly registered in May of this year. This is an increase of 19.2 percent compared to the same month last year. E-cars recorded an increase of 46.6 percent and thus accounted for 17.3 percent of new registrations. Gasoline engines increased by 17.6 percent and accounted for the largest share of new registrations at 35.5 percent. Then came hybrid cars with 29 percent and an increase of 18.1 percent. Plug-in hybrids grew 5.6 percent – down from 40.5 percent. Prof. Stefan Bratzel, Director of the Center of Automotive Management (CAM) in Bergisch Gladbach, summarized in a report: “While the overall market is only growing by 10 percent, BEV registrations are increasing [Abkürzung für batteriebetriebenes Elektrofahrzeug] by 24 percent.”

Among the German brands, BMW achieved the largest increase with a plus of 60.2 percent. This was followed by Mercedes (plus 55 percent), Audi (plus 36 percent), Porsche (plus 20.4 percent) and VW (plus 13 percent). With 17.7 percent, VW was the largest German brand. The leader among the import brands was the electric car manufacturer Tesla with an increase of 1696.9 percent and 5265 newly registered units.

BMW, Mercedes, VW and Co. report a sharp increase in e-car deliveries

BMW, Mercedes, VW and Co. each announced significant sales increases after the end of the first quarter of 2023. According to the company, e-car sales at Mercedes increased by 89 percent to 51,600 units sold in the first quarter of 2023 compared to 27,400 units sold in Q1 2022. In Germany, sales increased by 29 percent. Our customers’ demand for top-end and battery electric vehicles is the driving force behind our sales performance in the first quarter.”, Britta Seeger, Member of the Board of Management of Mercedes-Benz Group AG, responsible for Mercedes-Benz Cars Sales, said in a statement.

In April, BMW even reported that global electric car sales had more than doubled. According to the company, with 55,979 all-electric units delivered, growth of 112.3 percent was achieved. In Europe, on the other hand, the BMW Group reported slightly lower sales figures compared to the same period of the previous year. In Q1 2023, 57,317 BMW and Mini vehicles were registered, which corresponds to a decrease of 7.2 percent compared to the same period last year. BMW spokeswoman Carolin Bachmann told the star with regard to the global market: “Demand for BMW Group automobiles remains high; we are seeing a positive development in incoming orders. The BMW Group can also look back on a very high order backlog that will last for several months.”

The Volkswagen Group also announced an increase in deliveries of electric cars at the end of April. Europe was the “biggest growth driver”. Here, the Wolfsburg-based group was able to increase its electric car sales by 68 percent. In the first quarter of the current year, 98,300 vehicles were handed out to customers. In Q1 2022 there were still 58,500 vehicles. Around half of the electric cars delivered were from the VW brand (70,000). Audi had 34,600 deliveries in the past quarter compared to 24,200 in the same period last year. Porsche recorded a drop from 9,500 to 9,200 delivered e-cars.

However, similar to BMW, a problematic business is also emerging at VW. Press spokesman Christoph Oemisch told the star: “For fully electric vehicles (BEV) we are currently seeing lower order intake than in the same quarter of the previous year. The reasons for this are pull-forward effects from last year (e.g. subsidy cuts in Germany) and price campaigns by our competitors as well as their shorter waiting times.”

German car manufacturers are registering a decline in incoming orders

The delivery figures may initially appear positive on paper, but in fact the Association of the Automotive Industry (VDA) also drew attention to the existing problems at German car manufacturers after the latest registration figures from the KBA. Accordingly, incoming orders from Germany and abroad continued to decline in May. “Although the number is higher than the values ​​in the past four years, significantly more cars were registered in May from 1991 to 2019 than in May 2023,” says a VDA report. The gap to the pre-crisis level is still large: “Compared to the first five months of 2019, new registrations are a good quarter lower.”

This coincides with the statements made by Thomas Peckruhn, Vice President of the Central Association of the German Motor Trade and spokesman for the manufacturer trade in Germany: “The situation with private new registrations in particular remains critical. Issues such as persistently high retail prices or possible future burdens such as heating renewal make potential buyers hesitate,” he said in a statement. A VDA spokeswoman led to the star the reasons for the decline in incoming orders: “Although the rate of inflation has slowed down slightly recently, the macroeconomic price level is still at a high level. In addition, the higher interest rates are making financing conditions worse for consumers.”

In addition, the reduction in state subsidies for electric cars is likely to influence consumers’ purchasing decisions. Since the beginning of the year, the environmental bonus granted by the state and the manufacturer has been 6750 euros instead of 9000 euros. For plug-in hybrids, the environmental bonus was completely eliminated. And from 2024 there will only be funding for fully electric cars with a reported base list price of a maximum of 45,000 euros.

VDA expects the German market to grow

According to the VDA, the automotive industry is still on a growth path. The Automobile Association assumes that the German market will grow by four percent to 2.8 million cars. The VW Group is also expecting the BEV order intake to increase again over the course of the year, “because the Volkswagen Group’s delivery times will improve, especially in the second half of the year,” said press spokesman Oemisch. “For further growth, however, cities in particular will need an even more dynamic expansion of the charging infrastructure and more models in lower price segments,” says Prof. Stefan Bratzel from CAM.

Sources: KBA, Mercedes Benz, Volkswagen Group, BMW Group, ZDK

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