Germany: dealers registered vehicles in their own name to offset decline in May image

The situation in Europe is in the red area, and now, Germany is reporting weak new car sales. According to motor vehicle authority KBA, German new passenger car registrations declined by 4.8 percent to 289,977 in May.

Taking the first five months of the year as a whole, the number of new registrations edged up by 0.3 percent to 1.338 million however, the KBA data showed.

But, carmakers and dealers intervened to prop up Germany’s flagging new car sales in May by registering vehicles in their own name to offset an ongoing decline in household demand.

Germany is generally considered to be a rare bright spot for car sales in Europe, but data is beginning to suggest that the industry is artificially inflating sales at record levels.

VDIK chief Volker Lange declined to give details of last month’s registration figures.

“We’re seeing the macro-economic unease spreading to German consumers,” said Stephen Reitman, a London-based auto analyst with Societe Generale.

“They’re highly sensitive to these things – at the slightest sign of trouble the chequebook snaps shut.”

However, the German Chambers of Industry and Commerce, or DIHK, predicted that Germany’s gross domestic product will grow 1.3% this year, an increase from its previous forecast of 1% growth.

The association based its revision on the results of its most recent annual member survey of some 25,000 German companies. According to the survey, about 25% of the companies that responded expect business to improve over the coming months and 14% expect business to weaken.
At the beginning of the year, 22% of companies surveyed expected business to improve and 17% anticipated a weaker year, said DIHK.