New Car Sales in Germany Expected to Fall in 2013 image

Industry association VDA said it expects new car sales in Germany to reach the second-lowest level in more than 20 years in 2013.

According to VDA, registrations in Germany, Europe’s largest economy, are expected to fall 3.2% to around 3 million vehicles next year from an expected 3.1 million this year. If this is true, 2013 will be the second worst year since 1991 after the 2.92 million vehicles sold in 2010, when registrations of new vehicles dropped 23.4% after the scrappage incentives introduced to support sales ended.

“We must brace for the difficult situation in the euro zone to persist in 2013,” VDA president Matthias Wissmann said. “That’s why we’re keeping to a subdued forecast.”

Compared with other European markets Germany has dealt very well with the economic crisis until now, with high consumer confidence and largely resilient labor market, compared with southern European countries which were forced to cut jobs and salaries, and increase taxes.

The French market is also expected to fall 13%-15% by the end of this year, after new car registration fell 19.2% last month, compared with only 3% drop in November in Germany to 260,000 vehicles and 2% year-to-date to 2.88 million.