New car sales up 17 percent

New car sales in Germany gained an annualised 17 percent in January to 211,100 vehicles, the VDA auto federation said on Wednesday, with diesel-powered autos posting particularly strong gains.

New car sales up 17 percent
Photo: DPA

German exports grew by 10 percent to 312,800 vehicles while production in general was also 10 percent stronger at 416,100 units, a VDA statement said.

The sector’s order backlog jumped by 27 percent to 435,300 automobiles, the highest level for a month of January since 2001, it added.

German brands profited in particular from the increase in domestic sales, and a breakdown of the data showed sales of diesel-powered German cars leapt by 40 percent to represent more than half of all the new German cars sold.

A global economic rebound has boosted demand for German autos in many emerging markets, especially China.

In 2009, the German market contracted by about one-quarter, following the expiration of subsidies for drivers that turned in old cars to buy new ones.

This year, VDA expects 3.1 million autos to be sold in Germany, which would mark a gain of about six percent and exceed the level recorded in 2008.

On Tuesday, French automakers reported an increase of 8.2 percent in January sales, while the Italian market saw a decline of 20.7 percent and Spain said its car sales had slumped by 23.5 percent.

VDA said that a key factor helping German autos was their falling levels of carbon dioxide emissions.

New German cars registered in the country emitted three percent less CO2 than a year earlier, compared with 0.6 percent less for imported vehicles, VDA said.

That contrasted with a widespread perception that German brands are often more powerful and therefore pollute more, it added.

In the past four years, German manufacturers have reduced CO2 emissions in cars sold domestically by 13 percent.

The European transport association T&E nonetheless ranks Germany 17th out of the European Union’s 27 members in terms of the overall level of auto emissions.

VDA president Matthias Wissmann stressed on Wednesday that Germany would meet an EU emissions limit of 120 grammes of CO2 per kilometre by 2015.

The average level at present is 152 grammes/kilometre.


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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.


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.