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Customer LoginsGerman passenger car market rises 11.9% y/y in May
German passenger car market rises 11.9% y/y in May
IHS Automotive Perspective
- Significance: German passenger car registrations have risen by 11.9% y/y during May to 286,931 units, helping to lift its YTD by 6.8% y/y.
- Implications: The double-digit percentage gain this month has been helped by additional working days, although is being supported by positive economic factors as well
- Outlook: Overall, IHS Automotive forecasts growth in the German passenger car market for 2016 to stand at around 4.5% y/y, reaching 3.35 million units.
The German passenger car market recorded a further round of strong growth during May, according to the latest data released by the German federal motor transport authority, KBA. According to a statement, the market increased by 11.9% year on year (y/y) during the month to 286,931 units. Private demand underpinned this gain, with registrations by this type of customer up by 12.9% y/y to take a share of 37.4%. Overall, the year to date (YTD) figures now stand at 1,394,276 units, up 6.8% y/y.
During the month, the majority of passenger car categories made gains. Compact models led the way with a share of 25.7%, followed by a 15.0% share from the small car segment. Sport utility vehicles (SUVs) and mid-sized cars also offered up a share of around 12% each.
In terms of fuel type, gasoline (petrol) has been the most popular in May with a share of 52.3%, with a gain in volume that outpaced the market as a whole at 16.1% y/y. Diesel fuel also recorded a gain in volume of 8.3% y/y, taking it to a market share of 46.3%. Alternative powertrain vehicles saw very little in the way of improvement with electric vehicles (EVs) up by 2.4% to take a share of 0.2%, while hybrid vehicles fell 4.8%, taking a 1.0% market share.
Despite the strong gains in the market place, the largest selling Volkswagen (VW) brand struggled to make further headway. It recorded registrations of 55,472 units, a decline of 0.6% y/y. This is despite the introduction of the latest-generation Tiguan crossover, although is unlikely to be helped by the age of some key models like the Golf or the Polo, although the former is due for an update later this year. Overall, this has not helped its YTD performance, as while its registrations now stand at 282,466 units, this is down by around 1.8% y/y.
Behind it, local premium brands jostled for position, with Audi eventually winning out. Its registrations reached 26,713 units taking it to second place, a gain of 27.0% y/y, likely to be helped by the introduction of the latest-generation A4 sedan. The brand will also enter the popular sub-compact crossover market with the Q2 later this year which is likely to further improve its position. Mercedes in third achieved more moderate growth rates of 5.6% y/y, taking it to 25,064 units, while BMW recorded registrations of 21,146 units, a gain of 7.4% y/y. This pair were split by the Opel brand which surged to fourth place with sales of 21,254 units thanks to a gain of 25.9% y/y, with some benefit likely to be coming from the latest-generation C-segment Astra.
Other strong gainers in the market this month have included the Renault brand in eighth spot which has risen 37.9% y/y to 11,397 units, likely to be helped by recent launches, notably in new categories. Other notable increases are Jaguar's 155.9% y/y increase and Land Rover's 20.0% y/y improvement, as new models help these brands make further headway. However, they are very much a niche interest in a market dominated by domestic players.
Outlook and implications
The German passenger car market continues on a solid and stable growth track during 2016. However, the growth rate this month was helped by two additional working days as one public holiday fell on a weekend. The market is being underpinned by a buoyant economy which IHS believes could see a modest acceleration in improvement this year, notwithstanding some restraining influences on a European and global basis, as well as the refugee burden on administrative capacity locally. Indeed, there are some indications of this improvement in economic data, with the purchasing managers' index (PMI) and Ifo leading indicators rebounding since March, and service-sector PMI levels stand historically high. In addition, there is also persistently robust consumer demand resulting from very supportive real income and labour-market developments, which have been enhanced by weaker energy costs at the turn of the year, although this is now starting to unwind. Furthermore, euro weakening of almost 20% against the US dollar since mid-2014 is supporting exports, and the European Central Bank's (ECB) extreme easing course helps investment via favourable financing conditions.
Overall, IHS Automotive forecasts growth in the German passenger car market for 2016 to stand at around 4.5% y/y, reaching 3.35 million units, which suggests some moderation later in the year. This looks eminently achievable without any potential shocks, and is anticipated to lead to further small growth in 2017. This is likely to be underpinned by further new model launches by local players during the next 6-12 months.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.