It could be the start of an autumn recovery for the German auto industry: The number of newly registered cars in the country rose sharply in September to around 225,000 vehicles, as reported by the Federal Motor Transport Authority (KBA). This is an increase of 14 percent compared to September of the previous year, according to the Association of Car Importers the strongest increase in 15 months.
“We may see a trend reversal here,” says Peter Fuss, partner at the management consultancy EY. "The pre-crisis level is no longer as far off as it was in the first half of the year, and the lack of chips seems to be slowly losing relevance."
Figures from the USA also point to a recovery. On an annual basis, however, car sales are still below the bad car year 2021, in Germany by 7.4 percent.
In view of the many crises, growing car sales figures are good news for the industry. It means factories can operate at higher capacity, fewer lost shifts and suppliers can sell more components to manufacturers. Production has been stagnating regularly for two years because there are no semiconductors that are used in many places in cars.
Managers of the major car manufacturers had predicted an improvement in the supply of semiconductors for the fall of this year, which has now at least partially occurred. According to the Association of the Automotive Industry, car production in Germany increased in September for the fifth time in a row, to 366,700 cars. However, the production level is still 30 percent below the pre-corona year 2019.
Currently, the number of cars sold depends almost exclusively on supply. Automakers' order books are so full that practically every vehicle that rolls off the assembly line has already been sold. Customers sometimes have to wait more than a year for new electric cars in particular.
The analysts at the investment bank UBS estimate that the production of combustion models is sold on average three to six months in advance, so the order backlog for e-cars goes even further. This also explains why the mood in the auto industry is still significantly better than in other areas of the economy, despite the many current crises.
"The order backlog will support capacity utilization (...) in the coming months," says a current assessment by Deutsche Bank Research. "However, it is more than likely that some of the existing orders will be canceled due to higher prices, rising interest rates or a deteriorating economic situation of customers."
Potential problems on the demand side cast their shadows ahead. Power in the car market could shift back from the seller to the customer. The prices would have to go down.
It's not that far yet, but some experts see the car market at a turning point. For example, UBS lowered its global sales and production forecast for industry. "We expect 2023 to be a zero growth year despite improved parts availability," the analysts write. Consequently, it is expected that manufacturers' pricing power will come under pressure "when the market switches to oversupply mode".
Daniel Röska from the US investment bank Bernstein points out a contradiction between the forthcoming quarterly figures of the corporations and the actual market outlook: "Unfortunately, the top managers in the automotive industry will also report record orders, prices and profit margins in the third quarter," he writes in a recent analysis.
This positive view is contrary to what the markets fear. Bernstein has recently observed falling delivery times for cars on average - a sign that the market is moving towards normalization.
In its statistics, the KBA always shows the number of new registrations since the beginning of the year. For the first time in a long time, there are green bars next to the names of the German manufacturers Audi, Mercedes and Porsche in this graphic. In other words: the three brands were able to increase their domestic sales in the first nine months of the year compared to the corresponding period of the previous year.
BMW is still in the red at 10.6 percent, Volkswagen at 13 percent. The biggest winners in percentage terms are Polestar, Tesla and Dacia, with market shares of 0.2 percent (Polestar), 2.1 percent (Tesla) and 2.2 percent (Dacia). Top dog in the German car market is still Volkswagen, with a market share of 18.3 percent since the beginning of the year, despite severe losses in sales figures. They are followed by Mercedes (8.9 percent), BMW (8.2 percent) and Audi (8.1 percent).
In the USA, too, the sales figures for passenger cars have recently increased significantly. According to "Automotive News", the Volkswagen Group was able to increase its sales there by 11.7 percent in the past three months, while BMW's US sales grew by 3.8 percent at the same time. The values for Mercedes-Benz are not yet available.
If you look at the figures since the beginning of the year, company sales are still well into the red, as is the entire market. There is still nothing to be seen of the offensive with which ex-Volkswagen boss Herbert Diess wanted to make the group's brands relevant again in the USA. On the contrary: The electric car manufacturer Tesla has overtaken the Volkswagen Group (including all subsidiary brands) in the USA in terms of car sales.
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