Bmw, Vw and Mercedes-Benz see record sales in Germany from strong company-car market

Article by Christian Andrei, on January 7, 2013

Even if the demand in Europe for cars has plunged, record sales are likely to be posted by BMW, Volkswagen Group and Mercedes-Benz. The automakers can credit part of this success to Deutsche Telekom AG, which is the largest phone company in Germany. The company has about 38,000 vehicles in its domestic country, which means that there’s one vehicle for every two employees.

Deutsche Telecom is one of several corporate car buyers that took advantage of tax breaks that have supported the auto market. KBA, the motor vehicle office in the country, said that with the weakening of private demand, cars purchased by companies to be used by employees made up for 32% of German auto sales last year. This is about 27% higher than in 2010.

Due to the demand from corporate fleets, sales in Europe's largest auto market were kept relatively steady, falling 2.9% last year even if the demand in Europe fell to its lowest level in nearly two decades.

Christoph Stuermer, an analyst with IHS Automotive in Frankfurt, said that company cars are the most stable sector in Germany. He added that the market for private buyers is highly uncertain while business clients were still continuing to invest their profits from earlier years. It’s likely that it will be a bit different this year.

The VDA trade group said that as regional deliveries are expected to drop for the sixth consecutive year, German car sales are predicted to drop to around 3 million vehicles this year from 3.1 million in 2012. Once again, company cars will offer a solid base. CNW Marketing Research Inc. in Bandon, Oregon, said that in the U.S. market in 2011, employers (including government agencies) bought 20% of cars, in line with the past years.

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