2023-07-10 17:00:00
The German economy is in recession, but the German car market and auto industry are booming. In the first half of 2023, almost 1.4 million new passenger cars hit German roads, which is 12.8% more than at the same time last year. At the same time, the production of cars Made in Germany increased by 32%. This is facilitated by both the accuracy of the supply of components, which restores the fulfillment of back orders, and the increased interest in exports.
The relevant data is presented by the Federal Motor Transport Office (Kraftfahrt-Bundesamt, KBA) and the Association of the German Automotive Industry (VDA). The main thing these data show is that Germany is currently experiencing a technological recession, when the GDP is decreasing normally, but this does not lead to a decrease in production in key industries. In Germany, one such company is the automotive industry.
Demand for hybrids is growing, demand for plug-in hybrids is falling
The big statistics presented by KBA for the end of May and the first six months of the year allow us to draw a number of conclusions about the main trends in the large European car market, and the popularity of many German and foreign brands in Germany.
The segment of vehicles that work exclusively on electric power (Battery Electric Vehicle, BEV) also shows the greatest potential. Here sales increased by almost a third (31.7%). “No other platform has achieved significant growth during the analysis period,” said KBA. This means that electric vehicles have even surpassed many hybrid systems that combine internal combustion engines (ICE) with electric motors in terms of sales growth.
Two fast charging points for electric vehicles at the Aral gas station in DortmundPhoto: ARAL
Also, in June, the growth of BEV sales is even 64.4% compared to June of last year, so that their share in the total sales of new cars this month is close to one fifth (18.9%). This indicates that the decrease in demand for electric vehicles observed in Germany at the beginning of the year due to the reduction of some subsidies for their purchase is rather a temporary phenomenon and is felt very little towards the middle of the year.
At the same time, the complete abolition of subsidies for buyers of plug-in hybrids (chargeable hybrids) from January 1, 2023 leads to a reduction in land, but not a complete suspension of sales of such model. Almost 40% more new plug-in hybrids were registered in June than a year ago, but almost 20% more other types of hybrids. Therefore, the various combinations of internal combustion engines and electric engines continue to be in very high demand in Germany and, in terms of total sales volumes, are still ahead of BEV sales, although the gap is narrowing.
Volkswagen controls almost 40% of the German market
In general, almost half of the new cars registered monthly in Germany have alternative engines. It is important, however, that natural gas vehicles still account for less than 1% of the market, with LPG vehicles sold exclusively. Here we are talking about at least several thousand new cars, while a car running on compressed gas – only hundreds. And if you take hydrogen cars, there are actually very few.
The undisputed leaders of the German car market are also passenger cars with gasoline engines; But the share of diesel cars, which was about half of the market ten years ago, fell in June to less than 17%. Thus the internal combustion engine continues to lose ground, although in absolute terms sales increase slightly in the context of overall sales growth in the first half of 2023.
Production of the VW ID.4 electric car at the Volkswagen plant in EmdenPhoto: Sina Schuldt/dpa/image alliance
The most famous car brand in Germany has been and remains VW. The first brand of the Volkswagen group accounts for 18.6% of all new cars registered in the first half of 2023. If we add in other brands of this auto (Audi, Skoda, Seat, Porsche), then its share is The German car market is almost 40% (Audi only has 9%).
Mercedes-Benz (10.4%) and BMW (8%) took second and third place by a wide margin. Then there is Opel (4.8%), part of the new European automaker Stellantis, and the European branch of the American corporation Ford (4.3%). KBA also classifies them as German manufacturers, because their main car plants are in Germany.
Tesla Model Y takes the lead
If we take the part of the market that is currently growing the fastest, the part of electric cars, then Volkswagen with the VW brand finds itself in an unusual role of catching up. The dpa news agency recalls that in the second half of last year, the American company Tesla became the leader in the German BEV market, which opened a plant in Grünheide near Berlin in March 2022 and that since increase in production level by step. As a result, the Tesla Model Y produced there has become the most popular electric car in Germany.
Tesla CEO Elon Musk launches production at the Grünheide car factory near Berlin on March 22, 2022. Photo: Patrick Pleul/Pool/REUTERS
In the first half of 2023, Elon Musk’s company continues to maintain leadership in the German BEV market, although the gap from seven and a half units has decreased to two thousand, dpa points out. Of the 220,200 vehicles registered in Germany in the first six months of this year, Tesla accounted for 36,400, VW – 34,400 Then Mercedes-Benz (16,900), Audi (14,400) and BMW (12,800).
Electric cars from China: lots of noise, few sales
Recently, a lot has been written in Germany about the expansion of electric vehicles from China starting in Europe – the Chinese did not even try to promote cars with internal combustion engines in the EU. KBA statistics for the first half of 2023 show that autos from the PRC are still taking only the first steps in the German market. Thus, BYD, which, thanks to success in its native Chinese market, became the world’s largest BEV manufacturer last year, overtaking Tesla, sold only 228 vehicles in Germany from January to May. However, BYD has started selling.
Chinese manufacturer BYD unveiled the Tang electric car model in May 2023 at the Barcelona Motor Show Photo: Adria Puig/AA/picture alliance
Another Chinese brand, MG Roewe, which has been on the German market for about two years, has increased its sales in the past six months to 9,400 units. This is an increase of 125% compared to the first half of last year. Young but fast growing brand Lynk & Co in China saw sales in Germany of less than 1,700 units, with a moderate growth of 13%.
Polestar electric vehicles, which Chinese automaker Geely produces jointly with European subsidiary Volvo Cars, grew by 39%, but sales did not reach 3,200 units. In short, there is no word yet any significant competition from Chinese electric vehicles for the leaders of the German market. For comparison: Tesla, with an incomparably higher initial base, grew over 99% compared to the first six months of last year.
Professor Dudenhoeffer: Cars will become cheaper
However, the beginning of the second half of 2023 may lead to a slowdown in the current growth in the German car market in general and in the electric car segment in particular. “Given the general economic situation and the dynamics of incoming orders, it should be assumed that the high growth rate will decrease soon,” warned Hildegard Müller, head of the Association of the German Automotive Industry. Therefore, according to the VDA , in the first half of the year the number of orders for new passenger cars in Germany decreased by 27%.
A stand of the new Tesla Model Y electric vehicles next to the American automaker’s plant in Grünheide near BerlinPhoto: Patrick Pleul/dpa-Zentralbild/picture association
Professor Ferdinand Dudenhöffer, director of the Automotive Research of the CAR Company in Duisburg, also pointed to a significant decrease in new orders – and emphasized that the growth in the first half of the year is mainly due to the fact that the automakers fulfilled the backlog of orders last . year.
“I expect strong price competition in the electric car market in Europe,” the expert said in an interview with dpa “In the past 15 months, Tesla has produced many more cars than it managed to sell, but in China can’t make this manufacturer put its cars on the market with big discounts, so the price war will go to Europe. Another 10%. For consumers, he said, this is good news, “but for manufacturers it will mean some late nights.”
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