Germany: And Now For The Bad News
Yesterday, Germany went ga-ga (in a subdued German way) about a 40 percent bounce in new car sales in March. Today, the cold shower: German exports dropped 26 percent year on year in March, and plunged by nearly a third in the first quarter, Reuters writes. “Three out of four cars assembled in Germany are exported,” VDA President Matthias Wissmann reminds us. So despite the huge jump in domestic sales, overall car production fell by a fifth a March and was down by a third in the first three months of the year.
As far as the domestic market goes, statistics compiled by the KBA motor vehicles agency show sales of the micro cars more than doubled in March, while deliveries of small cars advanced 75 percent and compact car turnover gained just over 8 percent.
Sales of the top-end vehicles fell by a quarter leaving premium brands like Mercedes-Benz and BMW out in the cold despite a market boom. Mercedes brand sales were down 7.6 percent, while BMW sales slipped 1.1 percent even including its Mini brand. Premium German carmakers are having a hard time handling the collapse of demand in major foreign markets.
If you want the unadulterated official version (in German) click here and you shall receive.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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@Bertel Schmitt: Unintended Consequences Dept.: - Each & every wrecked car means less business for the small manufacturer-independent garages. The old car is gone and he new car will be maintained via manufacturer-dependent workshops. - Each & every wrecked par means less options for buyers in the lowest section of the used car market. The sub-2,500 Euro segment has vanished and you will have to shell out more for a used car. - This forced wreckage of old cars obviously will bring problems for after-market/replacement part manufacturers, as well. Suddenly and unexpectedly a high percentage of their customer base is dead now. So, there already are losers. We don't have to wait until this cash4clunker program expires to find that out. But from a macro-economical viewpoint, where the short-term goal was to prevent a sagging of new car sales to give a boost to the economy, it might already have worked out well.
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Schiff predicted the crash of the US economy and he is right about the economy not going to recover for a long time. We will wait a few months and see if PCH with your prediction of recovery are correct or if Schiff is correct that this economy will continue to worsen. Schiff has been dead right on this. The dollar is still gonna get crushed, it is just a matter of when and gold and silver are going to be very valuable at some point. We will see.