New Car Sales in Germany Dropped 2.9% in 2012 image

According to VDIK association of car importers, auto sales in Germany fell 2.9% in 2012, reaching the lowest level in two years.

In December, new car registrations in Germany, Europe’s biggest economy, fell 16% to 204,000 units, leading to a full-year sales decline to 3.08 million units. Although Germany managed to hold up well amid Europe’s debt crisis, compared with the other countries, the higher consumer confidence and resilient labor market couldn’t keep the ripple effects away.

“If the economic situation stabilises and existing consumption extends to the car market, then the VDIK believes new car registrations of more than 3 million to as much as the 2012 level are possible,” VDIK President Volker Lange said in a statement.

Volkswagen, BMW and Mercedes have increasingly offered discounts to encourage customers and still, this wasn’t enough. France, Italy and Spain, which suffer from tax hikes, budget cuts and joblessness, have seen auto sales drop to the lowest level in years and analysts expect sales to fall even more in 2013.

In December, the VDA association warned that new car sales in Germany could drop to the second-lowest level in ore than 20 years in 2013 as the euro zone debt crisis still affects demand.