Passenger car registrations in Germany have risen during June, helping to maintain momentum in the YTD.
IHS Automotive Perspective
- Significance: Passenger car registrations in Germany have risen 8.3% y/y during June, helping to maintain momentum in the YTD with an increase of 7.1% y/y.
- Implications: The German passenger car market has been on a solid and stable growth track so far during 2016, underpinned by the buoyant economy.
- Outlook: Looking forward, IHS Automotive currently anticipates that growth will be recorded during 2016 of around 4.5% y/y.
The German passenger car market has risen further in June. According to the latest data released by the German federal motor transport authority, the market has grown by 8.3% year on year (y/y) during the month to 339,563 units. Of this, private customers made up 34.8% of the market with an increase just behind the market as a whole, at 6.4% y/y. Overall, registrations for the first half of the year now stand at 1,733,839 units, up 7.1% y/y.
During the month, the compact segment remained the largest with a share of 25.9%, followed by sub-compacts (14.3%), mid-size (12.8%) and sport utility vehicles (SUVs; 12.2%). SUVs also saw some of the highest growth rates this month with an increase of 26.1% y/y.
Despite the ongoing strong gains in the market place, the largest selling Volkswagen (VW) brand continued to struggle. While recording 63,722 registrations this month, it increased just 0.2% y/y. This is despite the introduction of the second-generation Tiguan, which may have helped lift the SUV category, although it is unlikely to be helped by the age of some key models like the Golf or the Polo, although the former is due for an update later this year. Overall, this has done little for its first-half performance, as while its registrations now stand at 346,188 units, this is down by around 1.4% y/y.
Behind it, premium brand Mercedes stood firmly in second place this month with 31,776 units, a gain of 12.6% y/y, and is likely to have been helped by the latest Mercedes E-Class. It easily outpaced its two rivals, Audi and BMW, which had mixed months. The former ended up in third place with 27,765 units but recorded an increase of just 1.0% y/y, despite the introduction of the new generation of Audi A4. However, BMW jumped 17.2% y/y to 27,627 units.
Mainstream brands have fallen in behind this group. Opel ended the month in fifth with a gain broadly in line with the market as a whole at 5.9% y/y, while Ford in sixth had a stronger growth rate this month at 12.0% y/y. Skoda was in line with the market rate with an increase of 8.9% y/y. However, Renault recorded a further surge during June, with its registrations having increased by 29.9% y/y as the brand offers its a range of attractive deals to incentivise ownership. Conversely, SEAT in tenth has fallen by 6.5% y/y during the month, not helped by the age of its key Ibiza, and interest in the latest generation Leon waning. It may be helped in the coming months by the launch of the attractive Ateca SUV, a first for the brand.
Outlook and implications
The German passenger car market has been on a solid and stable growth track so far during 2016. This continued during June as the market recorded a more normal performance than May, which benefited from two additional working days compared to May 2015. The market has been underpinned by a buoyant economy which IHS had expected to see a modest acceleration in improvement this year. However, following the UK voting to leave the European Union (EU) on 23 June, some indicators may fall in the second half of the year. Indeed, IHS expects a deceleration in activity in the country's manufacturing sector. Nevertheless, with respect to overall GDP growth, the services sector (almost 70% of the economy) remains in a stronger position thanks to the strength of private and government consumption (helped by historically still fairly low oil prices and the refugee factor). Furthermore, the weaker euro stance post-Brexit should also provide partial support. Having forecast GDP growth for 2016 and 2017 at 1.9% and 2.0%, respectively, in its June forecast, IHS initially anticipates that this will now grow by around 1.5% in 2016 and little more than 1.0% in 2017 in the forthcoming July forecast round.
Looking forward, IHS Automotive currently anticipates that growth will be recorded during 2016 of around 4.5% y/y. These gains will be supported by those already seen, as well as new model introductions on top of those already seen, including the Audi Q2 sub-compact SUV which is making an entry in an already growing category.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.