Germany In May 2010: Car-Nage

Remember carmageddon? It is not forgotten in Germany. As a matter of fact, Germany’s biggest carmageddon happened last month, in May. While champagne corks popped in the U.S., propelled by a 19 percent plus in May, the Germans are crying into their beers. According to numbers released by the German Kraftfahrt-Bundesamt (KBA,) the new car market collapsed by heart attack inducing 35.1 percent in May. That’s not the worst part of the story.

The really bad part is that sales in May were 9.3 percent below the same month in the dark days of 2008. The graph above tells the story. Germany had averted carmageddon in 2009 by pumping massive amounts of Abwrackprämien (cash for clunkers) money into the market. Result: See red line above. In 2009, the German market jumped well over normal levels.

With the money missing, the market is going into serious withdrawal. See green line for 2010. Except for March, new car sales have been below 2008 levels for each month of the current year. The traditionally active spring selling season collapsed.

Have a look at January. When January 2009 sales disintegrated (red line) it spooked the German government into laying on the cash for clunker program. You see it working. Then sales dropped as the money was withdrawn. Many cars are built to order in Germany, there were waits for delivery. The amphetamines, prescribed in Berlin, took a while to work themselves out of the system. With the market drug-free, we are now below crisis levels. Will there be Abrwackprämie, the Sequel? Only people on real drugs think so.

There is no end in sight. The headlines will get worse through June/July. By the end of the year, the numbers will have caught up with the new reality. So far, this is worse than the most pessimistic pundits projected.

In the first five months of the year of 2010, Germans bought 1.179,532 cars. That’s 450.000 less than in the same period of the prior year.

Small cars, the darlings of the Abwrackprämien high, are nearly unsalable. That segment shrunk by more than half. The formerly eschewed upper classes and SUVs enjoy a come-back from near extinction and are the only segments with growth.

As far as brands go, Mercedes-Benz is he only winner of the May slugfest. Daimler grew by 6 percent, mostly due to the brisk sales of the new E-Class. Ashen faces in Munich: BMW lost nearly 15 percent. The so-called volume manufacturer were seen lining up at the drugstores of Rüsselsheim, Cologne, and Wolfsburg, from where antacid shortages are reported. Opel lost 51.5 percent, Ford gave up 45.9 percent, VW said good-bye to 34.1 percent of 2099 May sales.

The import brands didn’t fare better, some worse. The few gains are by boutique brands on such a low level, that it could well be numerical flukes.

Bad omen: Lancia, which is supposed to be merged with the Chrysler and Dodge brands, is at the bottom of the list in May, with only 133 cars sold. Lada sold more (178.)

As far as the German market goes, I never subscribed to the pull forward theory. There was nothing to pull forward. Owners of clunkers usually don’t buy new. They buy used, a younger clunker. The thinking was that by luring that usually new-adverse segment into buying new, the missing new car buyers could be replaced. They still are missing. As Germany gets older, they might never be back. What’s back is the used car market. Solidly (+13,4 percent) up again in May.

If you want to cry for Germany, or watch with glee the belated carpet bombing of the German market, then you may download the data in all their ugliness here. In German, but the numbers need no translating. They are abgrundtief schrecklich (abysmally appalling.)