German car market extends rebound in July

FRANKFURT – The German car market extended its rebound in July, official data showed Friday, driven by booming electric vehicle sales as supply chain woes continue to ease.

In total, 243,277 new cars were registered in Europe’s biggest economy last month, an 18.1-percent increase from a year earlier, according to the KBA federal transport authority.

Car sales have been rebounding since the start of the year, although they still remain substantially below the level recorded in 2019 before the coronavirus pandemic.

Manufacturers in Germany, home to industry titans like Volkswagen and BMW, produced 300,300 vehicles in July, 20 percent more than in the same period last year, according to the VDA industry association.

The sector is gradually recovering from supply chain issues – notably when it comes to semiconductors — that had slowed deliveries to customers.

In particular, the market was boosted by registrations of electric vehicles, which rose almost 70 percent in July year on year, making up 20 percent of all registrations.

But analysts warn that the end of electric car subsidies for company fleets from September will have a dampening effect.

“The current boom in new electric registrations is likely due in large part to the fact that commercial owners… still want to benefit from the government subsidy,” said EY analyst Jan Miller.

It is “likely to run out of steam very soon,” the analyst added. 

Observers have also warned that the weakening economy in Germany, where growth is stagnating amid high inflation and rising interest rates, will weigh on the market. – AFP / pic BLOOMBERG