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BUSINESS

German new car registrations rebound in April

German automakers led a continued rebound in new car registrations in April following a dismal previous year, figures released on Monday by the VDA automobile federation showed.

German new car registrations rebound in April
Smart car registrations grew 70 percent in April. Photo: DPA

A total of 317,960 new cars were registered, a jump of 20 percent over the same month last year, VDA said.

With the exception of Audi and Porsche, which posted 9.1 percent and 13.5 percent growth, respectively, every German automaker saw registrations outpace the overall growth rate.

Volkswagen led the way with 64,428 new car registrations, 25 percent growth over April 2007. Daimler luxury brand Mercedes-Benz saw 26 percent growth, with 36,038 new registrations, while the carmaker’s subcompact Smart model saw 69.8 percent growth over April 2007, with 3,858 registrations.

With Mini, BMW saw 27.7 percent growth over last year to 30,689 new registrations. GM subsidiary Opel showed 25.5 percent growth to 27,994 new cars registered.

“The domestic market is on the path to stabilization,” a VDA statement said.

The federation pointed to a drop in unemployment and improved prospects for a pick-up in consumer spending as factors that contributed to the results.

The April figures are an upturn over March, which most automakers saw declining new car registrations – attributed in part to early Easter holidays. There were three more working days in April this year than in 2007.

In the first four months of 2008, new car registrations have increased by an annualized 7.0 percent, with more than one million deliveries.

“That gives hope for a more stable year than in 2007, even though a vigorous rebound is not yet underway,” VDA president Matthias Wissmann was quoted as saying.

Last year was the worst for the German car market since the country was reunified in 1990.

A study by management consulting firm McKinsey & Co. summarized on Sunday in the German newspaper Die Welt predicted Germany’s auto industry would no longer be a leading driver of new jobs.

Titled Deutschland 2020, the report predicted a maximal annual growth potential of 1.3 percent through 2020 for Germany’s auto industry, the lowest among 11 industries surveyed in the report. Without economic reforms, the report predicted auto industry growth of only 0.3 percent through 2020 and a loss of 100,000 industry jobs.

dpa/afp

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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