German car sales rose 40 percent in May, spurred by the continuing government scrappage incentives, but shares in car companies fell, with investors unconvinced that the measures were generating a sustainable turnaround in demand.
Germany’s KBA motor vehicles agency said May car registrations rose to 384,578 units, up 39.7 percent from the same month last year.
Shares in VW had slipped 4.1 percent to 242.92 euros by 1500 GMT, despite the fact that it was the clear beneficiary of the scheme among German car makers. Figures show that VW’s German new vehicle registrations in May rose 60.2 percent.
“People know it’s steroids, it’s not real,” Morgan Stanley analyst Adam Jonas said. “It’s pleasure upfront with the pain coming next year.” In the absence of strong incentives, unit volume in Germany in May 2010 could be down as much as 30 percent year on year, he said.
Shares in luxury auto makers were also down as the incentive scheme has mainly benefited makers of smaller cars. Daimler shares were down 3.5 percent at 26.06 euros. Its May vehicle registrations fell 2.4 percent and BMW shares were down 1.1 percent following news of a 6.7 percent fall in registrations.
Source: Automotive News Europe