German passenger car market recovers only slowly in the first half of the year

Around 1.39 million new passenger cars were registered in Germany in the first half of 2021. This is an increase of 15 percent compared to the same period last year. Nevertheless, the market only reached the second lowest level since 1991. Reinhard Zirpel, President of the Association of International Motor Vehicle Manufacturers (VDIK), commented: “After the dramatic slump last year, the passenger car market is only slowly recovering this year. New registrations in 2021 will still be significantly below the level before the Corona pandemic began. By contrast, things are looking better in the commercial vehicle market, which is returning to its pre-crisis level.”

The international brands increased by 13 percent in the first half of the year, registering around 546,000 new passenger cars. The market share of the VDIK members during this period was a good 39 percent (previous year: 40 percent). In the month of June, the passenger car market grew by 24 percent to 274,200 new registrations, starting from the very weak level of the previous year.

Private customers

The market for private new registrations recovered much more slowly than the market as a whole. With 455,000 vehicles from January to June, the increase was only 7 percent. Many private customers had bought a new car earlier than planned in the second half of 2020 to benefit from the lowered VAT. This demand is now missing. In the second half of 2021, the private market is expected to fall short of the record level of the same period last year. Commercial registrations were up 20 per cent after six months.

Drives

Alternative drive systems continued to record significant growth rates. In the first half of the year, about 540,000 new passenger cars with an alternative drive technology were registered. This corresponds to an increase of 159 percent. The share of newly registered passenger cars with an alternative drive system was 39 percent (same period last year: 17 percent) and was thus as high as the market share for conventional petrol engines (39 percent). The market for diesel passenger cars amounted to 314,500 units in the first half of the year and continued to decline with minus 19 percent. For petrol cars the minus was 13 percent, with 537,000 new vehicles registered.

New registrations included 149,000 cars with battery-electric drive (plus 236 percent) and more than 163,500 plug-in hybrids, with an increase of about 230 percent. Hybrids without plugs as well as gas and fuel cell vehicles were also significantly up.

Commercial vehicles

Commercial vehicles experienced strong demand in the first half of 2021. The market grew by 22 percent to 185,000 new registrations. This means that new registrations of commercial vehicles in the first six months were back at the level of the years before 2019. Light commercial vehicles up to 3.5 tonnes grew by 23 per cent. Heavy commercial vehicles over 16 tonnes also increased by 23 percent. The growth in the medium weight class was lower.

Forecast

For the second half of the year, the VDIK expects the market volume to remain at the previous year’s level, with 1.7 million new passenger cars. According to our estimate, 3.1 million new passenger car registrations will be achieved in 2021 as a whole. This corresponds to a growth of 6 percent. Zirpel: “The overall market will then only be 4 percent below the long-term average. In other words: We expect a stronger market in the second half of the year than in the first six months.” Among all new registrations, the VDIK estimates that more than 700,000 passenger cars will have an electric drive (purely battery-electric or plug-in hybrid) in the current year.