German carmakers warn of ‘unprecedented collapse’ in sales

Frankfurt – Some 35 percent fewer new cars were registered on German roads in the first half of 2020 compared with last year, industry data showed, as the coronavirus pandemic plunges manufacturers into crisis.

In Germany, across Europe and around the world, “the collapse in markets is unprecedented in its size and global extent,” Hildegard Mueller, president of the powerful VDA auto industry federation, said on July 3.

The Europe-wide passenger car market fell 43 percent in January-June, compared with 23 percent in the US and 27 percent in China, according to VDA figures.

Production within Germany’s borders fell 40 percent year-on-year to “its lowest level in 45 years” at just under 1.5 million vehicles, while exports fell at the same pace, to 1.1 million.

So far the impact on the roughly 814,000 jobs in the country’s auto industry has been limited, dipping just three percent.

New car registrations across the EU

But around half of those still in work are on government-backed shorter hours schemes, the VDA noted.

“Massively lower production does not just have grave consequences for manufacturers, but also for many small- and medium-sized component suppliers,” federation boss Mueller said, predicting more job losses by the end of the year.

Over all of 2020, the VDA forecasts the global car market to shrink 17 percent to 65.9 million vehicles.

It forecasts an “especially strong” fall of 24 percent for Europe, compared with 23 percent for Germany alone, 18 percent for the US and 10 percent for China.