German Car Makers Expect Falling Demand in 2002

Germany’s automobiles industry goes into 2002 in a slightly downcast mood. The industry association forecasts that new registrations will be at their lowest level in almost a decade, but it also stresses that the industry is a long way from a crisis.

New registrations in 2001 already look set to fall to 3.35 million.

Bernd Gottschalk, the president of automobile industry federation VDA, forecast that the 2002 figure will be even less than this, making it the worst year for new registrations since 1994.

Right now, export demand is supporting production. Sales of German cars on foreign markets are set to reach a record 3.6 million units this year.

But car producers are expecting to see a slight decline in foreign sales next year, their first in eight years.

The decline in other western European countries, which between them absorb over 60% of German car exports, is not expected to exceed 4%.

In the United States, too, German producers expect to escape the worst of the downturn on the automobiles market.

But the upshot is that it won’t be possible next year to keep German car production at 2001 levels, according to Gottschalk.

He forecast that the number of cars produced in Germany will in 2002 fall below the 5 million level for the first time in five years.

So Germany’s car makers may be seeing weakening demand for their products, but they’re a long way from crisis point, the VDA chief reasoned. "Next year will be difficult, but no unrelievedly so," he forecast.

"An optimistic scenario would see us even managing to repeat the 2001 figures," he added.

VDIK, the association of car importers to Germany, has taken this optimistic scenario to its heart. It believes that the 2001 new-registrations figure of 3.35 million can be repeated in 2002.

But analysts take a less upbeat view. Krista Kopler, car analyst at Merck Finck, is expecting new registrations to fall to just over 3 million next year.

Still, demand is expected to be boosted in the first half of next year by the introduction of a number of new models – VW Polo, Ford Fiesta, Opel Vectra, Mercedes E-Class, and Audi A4.

This is one reason why Gottschalk is confident that the decline from 2001 levels can be contained.