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German Car Sales Not Having a Good Time
Dec 05, 2008

Car sales in Germany witnessed a fall in October 2008, as the consumers are opting to reduce the expenditure on major purchases in the phase of economic recession.

According to the Federation of the German Automotive Industry Association (VDA), a drop of 8% was recorded in car sales in October 2008 on YOY basis due to the reason that customers are hesitating to go for big purchases in this period of financial crisis, as per the news published by ap.

Continuing the weak trend reported in October 2007, the number of registrations of new cars slipped down to 258,800. According to VDA, the sales figure at 3.10 Million was falling short of the previous annual projection of 3.20 Million. In October 2008, the demand for new cars in Germany, the biggest economy of Europe, declined by 12%. Exports from Germany fell 10% to 336,600 during the same period while the orders from overseas customers dipped 24%.

The rising uncertainty among the consumers, emerging from the worldwide economic crunch, is the main factor that is pushing the sales of new cars towards decline. Also, the demand has significantly contained in last three years. Obviously, the entire European economy and other sectors, like automobile that depend on credit, would suffer until the financial market comes back on track, bringing back the confidence of consumers.

Moreover, the elevated prices of fuel and an uncertainty over the expected car taxes and emission regulations are evenly responsible for containing the sales. In addition to these factors, poor property market and slow growth in the country’s economy have also held the credit availability for the purchase of vehicles. Consequently, the consumers are facing difficulty to meet their expenditure.

Additionally, the car industry of Germany has slashed down its sales for 2008, corresponding to the global economic meltdown and the darkening clouds of economic fear that are surrounding the largest automobile market of Europe.

According to a Research Analyst at RNCOS, “The deepening financial crunch has shaken off the confidence of consumers and consequently, the registrations of new cars in Germany are declining speedily. Moreover, with the global economy showing no signs of recovery, there is less probability of boost in the car sales in coming times also. Hence, the German car industry has no other option except to hope for the weakening of the financial crisis.”

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