With the aftereffects of the Abwrackprämie, that German cash for clunkers on steroids, slowly abating, Germany is slowly coming back to normal. In September, car sales were 17.8 percent below September 2009 (red line), but only 0.6 percent below September 2008 (blue line). For the first nine months, sales are 27.5 percent below prior year, but only 8.6 percent below the same period in 2008.
That according to data released by the ever so reliable Kraftfahrtbundesamt. They are counting registrations, not phony deliveries to dealers. 2.17m cars were bought by Germany in the first nine months. Small cars, the champs of last year, are being sneered at. Big is beautiful again. SUVs are up 12.8 percent. Sportscars are socially acceptable again and increased their sales by 24 percent.
The biggest gainer in the first 9 months? Would you believe it, Land Rover, +33.4 percent. Losers? Lots of them. Consult the downloaded table if you like blood and gore. Most painful: Opel is down 37 percent. Data (in German) can be downloaded here.
I’ve said it before, I say it again: The Abwrackprämie was one of those rare successes of a government-induced program. It created a run on new cars, by people who usually would never buy a new car. With 19 percent VAT, the program was self financing. Sure, compared to last year, sales are down. But last year’s sales were an obscenity. Compared to 2008, sales look normal again, and exports are well making up the difference. The German car industry (excluding Opel which until recently could not export to China in meaningful numbers) is doing just fine.
You are right calling it “one of those rare successes of a government-induced program”.
It should be noted, however, that there are some losers, as well. These are, e.g., those small shops that made a living by servicing & selling (now almost extinct) clunkers, as well as low-budget buyers.
I’d really miss the competent “independents”, and everybody else will, in the long term, as they have been a viable alternative to bloated, show-room- and marketing-centric approaches. Let’s wait and see.
Herb: The Abwrackprämie took 2 million clunkers off the streets. 2 million out of a total of 41.7 million passenger vehicles. 5%. The average age dropped from 8.2 years to 8.1. The independents are doing just fine.
Those clunkers are mostly exported to the East so those “independents” didn’t loose much
Wrong. Those cars have been shredded, not exported.
Anyway: I would not consider it a sound business model to follow clunkers to the East, wherever it is.