By on June 4, 2009

Sick of sinking car sales? Two choices: Relocate to Germany. Or go to China. In both countries, #4 and #3 on the world’s GDP ranking, cars are flying off dealer lots at breakneck speed.

In Germany, Abwrackprämien-powered new car registrations rose nearly 40 percent in May, compared to May 2008, Automobilwoche [sub] reports. Forty friggen percent! And we thought 19.4 percent in April was strong. In the first 5 months, 1.63 million units were sold to Deutschland’s motorists. In the beginning of the year, everybody in Germany was worried that sales could be less than 3 million cars for the whole year. Now, im Gegenteil: 2009 looks like a record breaker.

“Buyers mob showrooms,” headlines Das Autohaus, the weekly must-read of the German car dealer. Biggest winners were VW (+60.2 percent), Opel (+57.1 percent) and Ford (+48.3 percent), once more debunking the myth that cash4clunkers will only benefit el cheapo imports. Premium makers look at the numbers with Abwrack-envy. Daimler spoiled the party with a loss of 2.4 percent, BMW (-6.7 percent), Audi (-5.1 percent). Details (in German, but the numbers speak for themselves) are provided by the ever so efficient Kraftfahrtbundesamt, free for your downloading pleasure. Or envy. Except if you are Chinese.

China hasn’t reported full May numbers yet, but preliminary reports indicate a bumper crop of new bumpers. Ford China’s sales rose 49 percent in May, Gasgoo reports. Shanghai Volkswagen’s May sales erupted to the tune of 57 percent. Shanghai GM’s sales rose more than 50 percent in May. SAIC-GM-Wuling, General Motors’ mini-commercial vehicle venture in China, sold 442,000 vehicles in the first five months this year, up 49 percent. With these numbers under the belt, China should easily break the 10m unit number in 2009, most likely unseating the U.S.A. which keeps reporting dwindling numbers.

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17 Comments on “Mayday! Mayday! We Are Rising!...”


  • avatar
    TonyJZX

    China is a bit strange. We get a lot of documentaries about masses of unemployed and empty factories all over China. I suppose the types of people without jobs were never car buyers in the first place?

  • avatar
    KatiePuckrik

    With figures like that, this growth CANNOT be sustainable.

    All this cash4clunkers scheme is doing is bringing forward sales. Car sales are going to slump again, all this scheme has done is delay it.

    Look at the economy, we’re going through a recession, because the market needs to contract, in order to correct itself. But by giving “stimulus packages” or whatever spin you care to give it, all one is doing is delaying that contraction. You’re trying to sustain unnatural growth.

    On a side note, I didn’t realise Ford was such a popular make in Germany. I thought Germans only considered German marques and nothing else, hence small market share for the Koreans, Japanese, Italians, etc.

    P.S. GREAT choice of picture!

    “I’m Johnny Knoxville and welcome to TTAC!”

  • avatar
    BuzzDog

    Too bad that both of these countries’ import restrictions are stopping us from shipping over the surplus of new cars in the U.S.

  • avatar
    Sammy B

    Interesting on the German sales chart to see the Japanese makers with such a small presence. Specifically Toyota and Honda. Suzuki makes a fair showing, though.

    Any idea what those 62 GM cars are? Chevrolet is listed separately, so I’m confused. Cadillacs?

  • avatar

    BuzzDog: What import restrictions? Care to amplify?

    Katie: Ford has always been regarded as a “German” brand by the Germans. After all, they have been in Germany since 1925, and in Cologne since 1929. As we all know, Henry was a fan …

    Moving the Ford HQ to the U.K. in 1967 caused a rebellion amongst Ford Germany execs. Many deserted to VW, where they were known as “the Ford Mafia”

    1998, Cologne became the seat of Ford Europe again.

  • avatar
    brapoza

    Is that Super Dave Osborne in the picture? Gotta love Super Dave.

  • avatar
    paulie

    Bertel

    This whole world economy crisis is suposed to have hit Germany as well.
    And they started the whole cash for clunkers idea awhile back.
    I cannot remember if that was government sponsored or not.
    Can you remind me?

    Also, if you have the data of auto sales break down in Europe, please help with the number of diesel vs gas.
    I heard that although diesel had sold more, in recent times the gas car had begun to overtake in sales.
    I would like to know if this is still so.
    Thanks…

  • avatar

    On the bringing forward issue:

    The program is limited to cars 9 years and older. In Germany, people who own cars 9 years or older usually don’t buy new, they usually buy used.

    This program doesn’t bring 2010 sales into 2009. It mostly prods people who would have never bought new to buy a new small car.

    Of course, when the program expires by the end of the year, sales will go down. The gamble in Berlin is that come 2010, the worst is over and the usual new car buyers will stop refraining from buying new cars. BMW, Daimler et al can’t wait.

  • avatar

    Paulie:

    Cash4Clunkers actually was a French idea. France operated a similar incentive program from 1994 to 1996. Yes, it was followed by a big decline in 1997 and 1998. Nevertheless, France dusted it off in December of 2008. They gave EUR 1500. Germany must have hit the sweet spot with EUR 2500.

    Diesel: I don’t have any “Europe” numbers (Europe reports by country) but I can give you Germany off the top of my head. In 2007, Diesel had a market share of 50% in Germany. In 2008, that share eroded, mainly because the price of diesel caught up with the price of gasoline. Cash4clunkers is bad for diesels: It moves small cars, small cars mostly have gasoline engines. Last I looked, diesel had a market share below 30% in Germany.

  • avatar
    Leif_Eriksson

    @paulie

    You can find statistics over European car sales over at the ACEA site. Numbers for May may take a week or two before they are compiled. Diesel/gas is about 50/50, with a small overweight for gas right now (53% gas).

  • avatar
    Bunter1

    Aw c’mon bluecon, can’t you just put your head in the MSM sand and drink their Kool-aid when you come up for a breather like the general public.

    Gosh, isn’t Prez Goodwrench terrific? Why didn’t we just think of printing more money before…

    Love and bullets,

    Bunter

  • avatar

    All this cash4clunkers scheme is doing is bringing forward sales. Car sales are going to slump again, all this scheme has done is delay it.

    And probably make it worse when it finally comes

  • avatar
    joeaverage

    Perhaps they just trying to make sure there isn’t a German recession when the rest of us are having a recession?

    VW doing well there, terrible everywhere else is better than terrible everywhere all at once?

    Just wondering…

  • avatar

    Sammy B: Referring to the April 09 numbers, I don’t know either where these 62 GM cars came from. Chevrolet is mostly cheap ex-Daewoo stuff, that’s why they are relatively well-positioned at No. 24 in a list of 53. Can’t be Cadillac (10 have been sold in April), can’t be the Corvette (18 sold). Hummer sold 11, so probably these are some privately imported GM cars not officially available here.
    BTW: The imports now have a market share of 43.2% in April 09 (compared to 34.5% in April 08).
    (Source: “Auto Motor und Sport”, issue 12/09)
    The Diesel share according to this April list of new cars sold is 28%.

  • avatar
    zaitcev

    I disagree with the assertion that all Cash4Clunkers does is bring pending sales forward. It’s the same fallacy that considers economy overall a zero sum game. Reducing the mean fleet age will undoubtedly boost average sales of new cars. It’s equally certain that there’s going to be a wave effect with the crest and fall, so over a period of, say, 5 years, the program does not create a 40% jump, more like 10% (depending on the number of junk cars in the tail of the country’s fleet).

  • avatar

    It doesn’t bring car sales forward. I worked for more than 30 years for the German car industry, and if I know something, then it’s the behavior of the German buyer.

    Owners of cars 9 years or older usually don’t buy new. They buy used.

    So what does the program do?

    - It creates demand for new cars from a customer segment that usually wouldn’t buy new. Incremental sales.

    - It lowers demand for used cars under 9 years, making their prices sink.

    - Which makes new car prices look even more attractive in comparison.

    - Value of cars 9 years or older rises (however, you can’t just buy a clunker and trade it in, must have owned it for at least a year to qualify.)

    - Steel prices sink (more scrap)

    - Used or reconditioned parts prices sink

    - Fleet gets marginally younger. Germany has 50m cars at an average age of 8.5 years. Program capped at 2m cars. Barely a dent.

    - At 19% VAT, program is pretty much revenue neutral

    - Most of all, it keeps the factories open until the September elections …..

    - Unintended consequence: Used American cars sell better in Africa or Middle East. Used to be German clunker central. No more supply!

  • avatar
    dolorean23

    Thanks Bertel, I couldn’t have said it better. Yes the economy is not going to get fixed anytime soon. And yes, we have increased the deficit by a paltry amount considering the 8 years of punting the financial football down the road. Its going to take awhile to get it back running again. I’m for any idea that will stimulate any kind of buying, especially a major item like a car.

    Chyrsler lots have thousands of clunkers clogging their lots as does GM due to stupid CEO mindthink and overproduction. The average person who only buys used is suddenly in a very good position to buy what most people would not. Yes, its a temporary spike in the economy, but as long as it gets dealer lots to empty the langorious Pacifica and equally dispondent Impala from their rooted positions then I’m for it.

    This plan will get the 6-9 year old cars off the road. You know the ones I’m talking about. The Oldsmobile Silhoutte blowing blue smoke and riding on its spare donut, the 1996 Lumina with cancerous black paint and cracked rear view, and the desparately ugly 2004 Aztek/Rendezvous will be taken off to pasture and subsequently given a decent burial.


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