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Customer LoginsSame-Day Analysis: German passenger car market enjoys strong 12.1% y/y increase in February
The German market was fueled by the calendar effect of the extra working day in February and by increasing consumer confidence.
IHS Automotive Perspective
- Significance: The German passenger car market has posted a very strong increase in sales that goes with robust gains in other European markets, although an additional working day fueled sales, which rose by 12.1% y/y to 250,302 units.
- Implications: When the extra working day is taken into account as a result of the leap year, the rise is a still healthy 7% and the German market continues to be fueled by a highly competitive market environment that is keeping priced down and incentives up and the ongoing robust state of the German economy.
- Outlook: The German passenger car market continues on a growth path that follows on from the figure 3.2 million posted in 2015, although growth is set to slow on the current run rate to 3% generating a forecast for 2016 of 3.28 million units.
The German passenger car market posted a very strong uplift in February of 12.1% year on year (y/y) to 250,302 units, according to the latest data released by the German Federal Motor Transport Authority (KBA). This strong result, like the other positive results recorded by major Western European markets, was helped by the one extra working day created during the month by the leap year, with the seasonally adjusted increase at a still healthy 7%. For the year to date (YTD), sales in the first two months of the year rose at an equally robust 7.8% y/y to 468,667 units. In February, 751 cars with electric drive and 3,532 hybrids were sold in the market. The diesel share was 47.2%, with sales of gasoline cars coming in at 50.9%.
The country's leading brand Volkswagen (VW) underperformed the overall market significantly in February as it did in January, with sales only rising by 4.3% y/y during the month to 52,282 units, which with the calendar effect taken into account would have actually translated to a negative result for the month. This means that the brand's YTD sales fell by 2.4% y/y to 99,429 units. This is perhaps evidence of some ongoing negative effect of the emissions affair but it is also likely to be partly the result of model cycle issues, with the Golf due a refresh this year and the Polo also particularly far advanced in terms of its model cycle, while the new Tiguan is only just being rolled out. Audi is the real growth brand among the German OEMs at the moment, with keen deals and new models like the new A4 fuelling sales, which were up by 14.5% y/y in February to 23,401 units. YTD sales rose by 18.2%, following the strong January sales, to 45,142 units. Audi's sales will be further bolstered from the second quarter with roll-out of the new Q2 SUV-B crossover which made its debut at this week's Geneva Motor Show. However, third-placed Mercedes-Benz which usually occupies second spot saw a highly accelerated rise in its February sales, with a 23.3% y/y increase to 22,253 units, with this result compared against the comparatively low base in February 2015 and ongoing strong sales of key models and new products like the GLC-Class. BMW in fourth underperformed the monthly gain in the overall market with a rise of 7.8% y/y to 19,546 units, with sales for the January and February combined rising 5.9% y/y to 36,714 units. Opel nearly broke the hegemony of the top-four German brands in February by posting a highly impressive increase in sales of 28.1% y/y to 19,159 units, with the new Astra leading the way. The new Sport Tourer variant of the range will be launched in the next few weeks after debuting at the Geneva show. However, it was a bad month for small vehicle brands with Mini sales falling by 7% and Smart sales declining by 2%.
Outlook and implications
The German market posted yet another month of strong growth, in line with the sales data from the other major Western European markets that have reported so far, although of course the market was buoyed by the extra working day provided by the leap year. Overall market conditions remain relatively robust in Germany, although it still remains heavily driven by incentives, discounting and fleet sales, with the latter category taking 67.1% y/y of the overall sales base in Germany. Some OEMs are still taking the option of offering attractive discounts and incentives to generate volume and share. Indeed it seems as if OEMs are almost taking it in turns to offer strong incentives and discounts. Fpor example Ausi was the sixth best-selling brand and recently as December and it was second in February. This kind of volatility can be partly put down to the changes in individual incentive and discount programs. However, there have been some very strong performances at the start of the year even on this basis, with Opel and Audi standing out in particular. Opel should continue to generate gains from the new Astra and the revised Mokka which was shown at Geneva, while the new Audi Q2 will open up a brand new market segment for the Ingolstadt brand. German consumers continue to have their confidence boosted by rising employment and (partly due to very low overall inflation) some of the highest real wage gains of the past two decades. The renewed slide in oil prices in late 2015 has also lowered running costs, which can be especially attractive to buyers and fleet managers when combined with the latest fuel-efficient powertrains. Consumer confidence as measured by the GfK rebounded during December 2015-February 2016 following a six-month corrective decline, driven by consumers' more optimistic expectations regarding their financial situation and greater willingness to make large, big-ticket item purchases. Following the figure of 3.20 million car registrations recorded in 2015 (up 5.6% y/y), IHS Automotive is forecasting growth in 2016 of 3% y/y to 3.28 million units, which will obviously see a moderation on the rate of current growth after January and February.
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.