Germany has managed to counter the car market situation in Europe by posting a slight increase in new car sales for the first six months of 2012, according to industry association ACEA. In contrast to Italy and France, which car markets shrank 20 percent and 14 percent respectively, Germany, the largest car market in Europe, posted a 0.7-percent surge.
While the positive figure may look promising for Germany, the actual customer demand is a far cry from the posted numbers as carmakers record sales regardless of whether customers are really interested in buying through a process called self-registrations. According to data from German auto-dealer group ZDK, 87,454 vehicles in Germany were registered in June 2012 to dealers and carmakers, rather than to consumers.
The number represents roughly 29 percent of the market. For the first half of 2012, self-registrations were up 11 percent to 479,385, compared to the figure reported for the same period in 2011.
According to Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, dealers sold these self-registered vehicles as zero-kilometer used cars at discounts of over 20 percent, just to get them off their lots. These phantom sales underscored the pressure to cut prices, which has now become prevalent not only in southern Europe but also in stronger markets like Germany and the UK.
Andy Palmer, executive vice president for global planning at Nissan, described the situation as a “bloodbath” adding that since the industry “needs volume,” manufacturers have to sell even at as discount. Even premium carmakers are affected by the situation. For instance, it is not difficult to find a bargain on a new BMW vehicle, despite the company’s forecast of record sales for 2012. According to ACEA, car sales in the European Union will drop this year to the lowest level since 1995.