Special effect distorts balance sheet
Car market in crisis mode – slump in electric cars
May 6, 2024, 4:26 p.m
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A good quarter of a million new cars will hit the road in April. The market is stagnating, especially for electric cars. According to experts, the end of the subsidy and the announced end of combustion engines are unsettling customers. The industry is therefore still a long way from pre-Corona levels.
Car manufacturers handed over significantly more new cars to customers in April than a year ago. However, the share of electric cars fell. 243,102 registrations corresponded to an increase of 19.8 percent, as the Federal Motor Transport Authority (KBA) in Flensburg announced. However, there was a strong calendar effect: As experts emphasized, the adjusted increase is only around three percent. The automotive industry complained about the “undynamic” development of electric cars.
“Despite the initially good development in April, the German new car market is still in crisis mode,” said EY partner Constantin M. Gall. Among other things, he referred to the weakening economy and continued high new car prices. Sales in April were 22 percent below the level from the same month in 2019.
“Customers confused about electric cars”
According to KBA, most newly registered cars (37.3 percent) were gasoline engines. Registrations here increased by 18.6 percent year-on-year to 90,729. Almost 31 percent of new registrations were cars with hybrid drives, the year-on-year increase was 26.4 percent. For new diesel cars the increase was 28.2 percent to a share of 19.1 percent.
The number of new registrations of electric cars remained roughly at the same level as the previous year at 29,668. Their share fell from 14.7 to 12.2 percent. “Demand for electric cars is not recovering after the slump at the beginning of the year – despite price reductions across the board and new models,” Gall continued.
With the end of government support for electric car purchases last year, sales collapsed. “The market stagnated in April,” explained the Association of the Automotive Industry (VDA). Over the first four months, electric car registrations remained eleven percent below the previous year’s level.
“We are seeing increasing uncertainty in the market regarding the ramp-up of electromobility,” added Gall from EY. “Customers doubt the prospects of electric cars even though politicians are no longer willing to promote this technology.” The debate about the EU-wide phase-out of combustion engines in 2035 is also “poison for sales of electric cars”.
VW with sales increase, Mercedes sells less
EY and VDA also point to a calendar effect: April 2024 had three more working days than the same month last year. Adjusted for the calendar, the increase of almost 20 percent in total new registrations only results in an increase of three percent. “The strong market growth in April cannot yet be interpreted as a sign of a positive trend reversal,” explained EY.
By brand, market leader Volkswagen reported a strong jump in sales of 37.4 percent to 50,739 cars. The premium subsidiary Audi recorded a small increase of 4.7 percent to 18,620 vehicles. BMW grew much more strongly, with an increase of a good 25 percent to 21,626 cars. Mercedes sold 22,557 vehicles, which was 7.5 percent more than in the previous year.
Car production in Germany rose by a quarter to 399,500 units in April, as the Association of the Automotive Industry (VDA) announced. Since January, 1.4 million cars have been manufactured in Germany, two percent less than in the previous year. Compared to 2019, production in the first four months was 15 percent below the previous value.