Less Growth in the Auto Industry in Germany and China

After 5 years of growth, 2017 has so far seen a 3% drop in German car production to 2.9 million cars. Car exports also dropped by 2%.
The VDA speculates that the drop was because of more cars being built in foreign countriesand because of Brexit, which has weakened and added uncertainty in the British car market.

This decline in growth in the market is problematic for German CCC for car manufacturers, because nearly 80% of all cars that Germany build are exported.
The VDA has noted that whilst this dip is disappointing, other car markets are also seeing drops, for example the Chinese car market is only estimated to grow by 2% for the whole year, despite record growth last year of 18%.

Despite declining sales, the VDA and Federal Motor Vehicles Office noted that there were 3%more cars registered than in the same period last year. But the growth can almost entirely be attributed to foreign brand vehicles.

The debate over diesel vehicles is also thought to be reflected in new registrations. The Federal Motor Vehicle Office pointed out that the diesel vehicle registrations only made up for41.3% of the market share, which is a drop from 46.9% for the first two quarters of 2016.

It is thought that the drop of diesel registrations and sales could be linked to the potential ban of diesel vehicles in several German cities, which was announced by Matthias Wissman, President of the VDA, as part of an initiative of German car owners to reduce emissions from older diesel models.

In response, all German manufacturers have expressed a desire to offer special software to modernise engines, which Wissmann has noted would mean diesel vehicle owners will avoid the ban.

The package of these measures announced by German car manufacturers will be presented to the Diesel Summit at the Ministry of the Environment on 2nd August 2017; and both BMW and Audi are planning special discussions with the Bavarian Government to make the Diesel modernisations.

At this stage, it remains unclear who will bear the costs for the modernisations, but this matter will also be raised at the Diesel Summit.

Diesel is not a topic in China with diesel for normal passenger cars already banned in major cities, such as Beijing.

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