Germany hit by 'scrappage hangover'

The German car industry is suffering from the effects of the 'scrappage hangover' and new car demand has declined according to research carried out by motoring data analysts JATO.The results, which show the effects on brands and European sales figures showed that February sales in Germany, once the automotive industry's powerhouse, was down almost one third (29.8%), versus the same period in 2009. Last month, it was outsold again by Italy, which is still operating a scrappage incentive scheme worth EUR1,500 - 5,000, for every 10 year-old car traded for a new, low emissions model.One of the biggest casualties of this drop in demand was the Volkswagen Golf, whose lead over Ford’s Fiesta was cut to 4,737 sales (February 2009: 9,764 sales). Overall, Golf sales were down 4.0% across Europe last month, mainly due to a 9.4% drop in Germany; its largest market, responsible for approximately almost half of its European sales (February 2010: 45.2%).David Di Girolamo, Head of JATO Consult, said: “This is the true picture of consumer confidence in the German market, after a series of smaller monthly declines. If this situation were to affect all markets at the end of their scrappage schemes, we could lose a third of all European new car registrations by mid-2010.”The UK scrappage scheme extension expires at the end of March, while schemes will be phased out in Spain, Italy and France through 2010.The continued buoyant sales in these markets ensured overall European sales remained positive in February, versus 2009 (Spain up 47.2%, UK up 26.4%, Italy up 20.5% and France up 18.7%).Volkswagen’s Golf continues to dominate the sales charts but its reliance on German car buyers puts this position in doubt for the first time in over a year.Fiesta, which is much stronger in UK, Spain and Italy, has benefitted and more than halved the sales gap, compared with February 2009. These two remain clear of other top sellers, but the Renault Clio, Fiat Punto and Volkswagen Polo all posted double-digit sales gains.Opel/Vauxhall’s new Astra got off to a strong start, edging the Ford Focus out of the European top ten.

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