The German new car market contracted for a 6th consecutive month in May as demand from customers continues a downward trend following on from the conclusion of the German scrappage incentive.
New car registrations dropped 34% in May compared to the same month in 2009, Germany’s VDA automotive industry association has revealed.
Last month’s result means the decline in the first five months of 2010 stands at 28%.
Demand from car buyers in Germany has decreased dramatically since the 5 billion euro federal vehicle “Umweltprämie” scrappage scheme ran out of money from the beginning of September. The decreasing number of orders placed has now fed through to new car registration figures.
Germany, Europe’s biggest car market, is bucking the trend seen in coutries like Spain and a few other key European markets which are growing as a result of the government incentives still in place, even though cessation of all of these subsidies later on this year hangs over the various markets like the proverbial Sword of Damocles.
The positive outlook for some markets such as Italy is also receding as European governments start the hefty budget cuts needed to rescue fiscal deficits.
German car exports jumped 46 percent in May and domestic car makers like VW hope their foreign trade markets will recover in 2010 in addition to a rebound in business fleet sales which are crucial for premium brands like BMW and Mercedes.