Worldwide automotive industry situation weakens

After record vehicle registrations in the previous year, global demand for passenger cars declined by 5.8% to 55.7 million vehicles in 2008. The effects of the international financial crisis became ever more noticeable during the year and culminated in an increasingly pronounced unwillingness to buy among consumers for reasons including the strained credit market situation. This development was intensified by the massive increase in commodity and energy prices in the first half of the year. The North American, Western European and South African markets in particular experienced above-average declines. In contrast, the positive demand for passenger vehicles in Central and Eastern Europe, South America and the Asia-Pacific region initially remained strong, but lost significant momentum during the second half of the year. In the 2008 reporting period, global automotive production decreased by 3.9% to 69.2 million units, of which 57.5 million were passenger cars (–4.8%).

North America

In North America, the volume of the passenger car and light commercial vehicles market in the reporting period was significantly lower than in the previous year
(–15.9%).

In the US automotive market, which was particularly hard hit by the financial crisis, vehicle sales declined to 13.2 million units (–18.0%), the lowest level since 1992. Reluctance to buy vehicles due to heavily shaken consumer confidence and difficulties in obtaining credit led to a drastic drop, particularly in the light commercial vehicles segment, which fell by 24.7% to 6.5 million units. The decrease in new passenger car registrations to 6.8 million vehicles (–10.4%) was slower.

In Canada, sales during the period fell slightly by 1.1% to 1.6 million vehicles. In Mexico, demand declined by 6.7% versus the prior year to 1.0 million units.

South America/South Africa

The positive market development in South America continued in 2008, the fifth year in a row. Vehicle sales reached a new record high in Brazil during the reporting period. A total of 2.7 million passenger cars and light commercial vehicles were newly registered (+14.1%), well above the previous high from the prior year. Truck sales also hit a new high with growth of 24.2% to 122 thousand units compared with 2007. In contrast, exports fell 7.0% below the previous year’s figure to 734 thousand vehicles. In Argentina, the overall volume of the passenger car market reached 429 thousand units, topping the previous record achieved in 2007 (+6.7%). Due to high key interest rates and a rise in inflation, demand in South Africa slid to 329 thousand passenger cars (–24.3%).

VOLKSWAGEN GROUP DELIVERIES BY MONTH
Vehicles in thousands
Volkswagen Group deliveries by month – vehicles in thousands (line chart)

Asia-Pacific

In the Asia-Pacific region, demand continued to grow in the past fiscal year. In China, the world’s second largest automotive market, 5.5 million passenger cars (+7.8%) were newly registered during the reporting period. However, the pace of growth of the Chinese passenger vehicle market slowed considerably during the year due to higher fuel prices and inflation-curbing measures in particular. The Japanese market shrank further in 2008: at 4.2 million passenger cars, this figure fell 3.9% below the prior-year figure. Total new registrations during the period dropped to their lowest level since 1980. In India, the passenger car market saw its sales volume increase slightly by 2.1% year-on-year to 1.2 million passenger vehicles. The rise in credit interest rates and high inflation put a damper on growth.

Europe/Remaining markets

Demand for passenger cars in Western Europe decreased by 8.4% to 13.6 million vehicles in the reporting period. The share of diesel vehicles hovered around the previous year’s high level at nearly 53% (previous year: 53.3%) due to more expensive fuel. A drastic drop in sales was seen in the volume markets of Spain
(–28.1%), Italy (–13.4%) and the UK (–11.3%), which were particularly hard hit by the financial crisis. In France (–0.7%), tax incentives introduced at the start of the year to encourage the purchase of vehicles with low CO2 emissions prevented a larger decline in sales. In contrast, Central and Eastern Europe new passenger car registrations increased again, but growth dropped off considerably in the second half of the year. As in the previous year, the main growth drivers were Russia (+15.5%) and Ukraine (+14.9%). The passenger car markets in the Central European EU countries recorded a decline of 2.6%. In Turkey, passenger car sales in the reporting period dropped markedly below the previous year’s level (–14.4%).

Germany

In 2008, the automotive market in Germany fell below the prior-year level by 1.6% for a total of 3.4 million vehicles. While new registrations of commercial vehicles amounted to 335 thousand (+0.3%), remaining at the previous year’s high level, passenger car demand decreased by 1.8% to 3.1 million vehicles for the lowest level since reunification. The main reasons for this decline were high fuel prices and uncertainty among customers due to the financial crisis, along with the announced CO2-based vehicle tax. New registrations of trucks with a gross vehicle weight of up to six tonnes increased by 0.9% to 224 thousand units. The weak demand in Germany and abroad led to a decline, compared with the records achieved in the previous year, at German manufacturers in both domestic production (–2.7% to 6.0 million automobiles) and exports (–3.5% to 4.5 million automobiles).


 

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