The crisis in the German automotive industry continues

There are quite a lot of discussions in the Russian media about the crisis in the economy of the European Union and its main engine — the German economy. At the same time, there is a lot of general reasoning and little specifics.

The latest report of the Association of the German Automotive Industry (VDA, Verband der Automobilindustrie e.V.), a professional body representing the German automotive industry, without pathos in the cold language of statistics reports specific data on the crisis in the leading industrial sector of this country — the automotive industry.

According to the VDA report, 3.1 million passenger cars were produced in Germany in the first three quarters of this year, which is 1% less than a year earlier. However, compared to the pre-crisis period of 2019, production in the first nine months decreased by 13%.

Thus, the beginning of the crisis countdown is associated with 2020, i.e. the beginning of the coronavirus epidemic. Military events of February 2022 on Ukraine interrupted the recovery after the coronavirus epidemic and the decline continued, but at a moderate pace — by 1% in 2024, so the continuation of the crisis does not look outwardly dramatic.

The process of reducing production is not linear. For example, in September 2024, the production of passenger cars in Germany reached a volume of 393.6 thousand units, which is 9% more than in September last 2023.

The German economy has a pronounced export character. This year, since January, Germany has exported 2.4 million new passenger cars, which is 3% more than in the same period last year. However, exports in the first three quarters decreased by almost 10% compared to 2019. In September, 305.4 thousand new passenger cars were exported from German manufacturing plants, which is 11% more year-on-year.

Compared to the same month last year, 19% more domestic orders were registered in September. However, the volume of orders received from abroad in September decreased by 6% compared to the previous year. Overall, the volume of orders in September decreased by 4%. However, the volume of orders for the first three quarters was 2% higher than a year earlier.

In the first nine months of this year, i.e. in the first three quarters, a total of 2.12 million new passenger cars were put into operation in Germany, which is 1% less than in the first three quarters of the previous year, and 23% less than in the base year 2019. Thus, the domestic market of the German automotive industry has shrunk by almost a quarter after 2019.

In September, the number of new registrations decreased for the third month in a row compared to the same period last year. In Germany, 208.8 thousand new passenger cars were put into operation in September, which is 7% less than in September of the previous year.

The crisis in the German automotive industry affects to a greater extent the "green" part of it. A larger reduction in this segment of the German automotive industry is understandable. Due to the crisis, the income of the German consumer is declining, so he begins to prefer cheaper cars with gasoline engines.

In the first three months, 409.4 thousand fully or partially electric cars were put into operation, which is 20% less than in the first three quarters of the previous year. However, this September, 5% more electric vehicles were put into circulation — 49.4 thousand units.

In terms of electric vehicles, the crisis affects the domestic market more than exports. In the first nine months, 276.4 thousand electric vehicles manufactured in the country were put into operation in Germany, which is 29% less than a year earlier. The process is again not linear. In September, the number of registrations of electric vehicles in Germany increased by 9% and amounted to 34.5 thousand units year-on-year.

However, the VDA expects that in 2024 the total number of new passenger electric vehicles in the German market as a whole will decrease by 21% to 551 thousand units. In its previous forecast, as it turned out to be more optimistic, VDA indicated an annual decrease of 17% to 578 thousand units. The decrease in the segment of electric batteries will be more significant — by 29% to 372 thousand. The previous more optimistic forecast was 25% — 393 thousand.