German new car registrations expected to be down in December

Contrary to other main European markets the biggest new-car market in Germany has declined for the first month since the introduction of their government scrappage incentive first began boosting demand back in February 2009, a source at Germany’s VDIK (The German Association of International Motor Vehicle Manufacturers) told Reuters news Agency on Tuesday.

New-car registrations dropped 4-5 percent in December after the 5 billion euro scrappage subsidy ran out at the beginning of September. However it’s not all bad news as registrations for the whole of 2009 are expected to amount to more than 3.8 million new vehicles, the best year since 1992.

The dip in registrations had been expected at the end of the scheme and the lag between sales and registrations explains why it is now starting to bite in December. The predicted drop would put the market’s volume for December at about 215,000 to 217,000 after new-car registrations came in at nearly 226,000 in December 2008.

VDIK said it continues to expect new-car registrations in 2010 to plunge to just 2.8-2.9 million vehicles due to the elimination of scrapping incentives which would be a drop of around 1 million units on 2008’s bumper year.