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Customer LoginsSame-Day Analysis: German passenger car sales rise 3.3% y/y in January as VW sales fall
The German passenger car market has started 2016 in a steady fashion, although there is significant volatility between the performance of the market's leading brands.
IHS Automotive Perspective
- Significance: The German passenger car market began 2016 in relatively robust fashion with an increase of 3.3% y/y during January to 218,365 units, according to the latest data released by the German federal motor transport authority.
- Implications: The increase continued along a slightly lower trajectory than last year, which had a growth rate of 5.6% y/y for the full year, but it still showed a relatively buoyant market, although it was still dependent on discounting, offers and incentives for OEMs to generate significant growth. Although many OEMs posted steady growth the VW brand posted a decline of 8.8%, with the effects of the diesel emissions situation possibly having a negative effect.
- Outlook: For the time being, the macroeconomic fundamentals of the German market remain positive and stable and this means that IHS Automotive foresees a very small rise in the market for 2016 of 1.2% y/y to 3.25 million units.
The German passenger car market has enjoyed a stable and solid start to 2016 with a 3.3% year-on-year (y/y) increase in sales to 218,365 units, according to the latest data released by the German federal motor authority, the KBA. The fleet market still accounted for the vast majority of registrations in the market, rising from around 66% to 69% in January, with private customers accounting for 31% of sales. In terms of segmentation sales were driven by growth in A-segment and SUV sales, although the biggest segment that the KBA classifies as "compact" witnessed a decline in sales volumes of 3.8% y/y. In January, 2,814 hybrid cars have been newly registered (including 976 plug-in hybrids), up 48.7% month on month (m/m). The 477 electric vehicles (0.2%) was a decrease of 27.6%. Combustion engines with gasoline (49.6%) and diesel (48.7%) were the preferred type of drive. The average CO2 emissions decreased in total to 127.9 g/km (1.9%).
In terms of the brand sales picture, the German market's perennial market leader Volkswagen (VW) suffered a significant reverse in January with the brand underperforming the overall market by quite some margin, with sales declining by 8.8% y/y to 47,147 units. This might be evidence of the effects of the negative publicity from the diesel emissions situation that has dogged VW's public image since the end of September 2015. VW has announced this week that it has begun the recall of the vehicles fitted with the affected EA189 powertrains in Europe; the first vehicles to be recalled will be the Amarok pick-up, followed by the Passat, and then others. However, if VW brand sales were negatively affected by the diesel emissions situation, this fails to explain the performance of Audi which jumped from sixth in the December sales chart to second in January with sales rising by 22.5% y/y to 22,741 units, after a 5.9% fall during December 2015. The new A4 is now coming fully on stream, and a number of other models showed strongly during the month, but January offers and discounts also played a significant role in this accelerated sales growth performance. The Mercedes-Benz brand, which usually occupies second, fell to third place with a 0,7% y/y rise in sales to 20,300 units. BMW occupied fourth place; its growth was in line with the overall market with a 3.5% y/y increase to 17,368 units. However, fifth- and sixth-placed Opel and Ford both posted significantly higher growth levels with rises of 21.9% y/y to 16,459 units and 19.2% y/y to 14,945 units respectively during the month. Opel's particularly robust performance was fuelled by the launch last year of the new Corsa and Astra. In terms of imported vehicles, brands to post significant increases included SsangYong (+85.6%), Honda (+80.9%), Jaguar (+68.2%), and Land Rover (+46.8%)
Outlook and implications
The German passenger car market has started 2016 in a steady fashion, despite some significant disparities between individual brand performances. The steady rise posted in January reflects the ongoing stable macroeconomic picture that exists in the German market, the high level of consumer and business sentiment, and the relatively low level of consumer debt. However, the possibility remains that a number of global issues could lead to a significant slowdown in German economic growth, and therefore affect the German passenger car market. The effects of the potential for geopolitical crises, terrorism, uncertainty about Greece, concerns about China, and disruptions caused by the massive influx of refugees, should not be underestimated. However, these risks for the German economy must not be overstated, given the resilience demonstrated on average by recent purchasing managers' index (PMI), Ifo, and ZEW leading indicators, along with the support provided by a fairly weak euro, and most importantly, the inherent robustness of domestic consumption in this economic cycle. Furthermore, the euro having weakened around 20% against the US dollar since mid-2014 is supporting exports. Our January forecast predicts GDP growth, following 1.5% (calendar adjusted) in 2015, at 2.0% in 2016. In terms of the market on the ground there will be a steady stream of new models, and model revisions, including the aforementioned new Opel Astra, the revised BMW 3-Series, the all-new Mercedes-Benz E-Class and the new VW Tiguan which will act as catalysts to attract new customers into showrooms. For the full year 2016, IHS Automotive forecasts that sales will post a very steady rise from 3.21 million units to 3.25 million units, a rise of 1.2% y/y.
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.