Demand for new cars falls in Germany as coronavirus cases rebound

The German car market deepened its slump in August as a jump in coronavirus cases caused consumers to hold back on new purchases, industry figures indicated Thursday.

Demand for new cars falls in Germany as coronavirus cases rebound
A busy road near Hamburg on May 29th. Photo: DPA

Registrations fell 20 percent compared with August 2019, a large drop compared to July, when registrations were down only 5.4 percent year-on-year, data published by the Federal Motor Transport Authority showed.

Germany recently reported its highest case numbers since April, and is starting to tighten restrictions again.

Chancellor Angela Merkel last week said coping with the outbreak will become more challenging in the coming months.

READ ALSO: Coronavirus fight 'will be more difficult' in coming months

“A sharp rise in infections and local restrictions on public life could once again have a major impact on the new car market and lead to renewed uncertainty among buyers,” said Peter Fuss, analyst at EY, who expects new registrations to fall by a quarter this year.

“New car purchases are being postponed where possible,” Fuss said, with declines more pronounced in the commercial sector.

The effect of the German government's decision to cut VAT, which Berlin introduced from July until the end of the year, has “fizzled out”, EY said.

The first eight months of 2020 show a 29 percent drop in registrations, the lowest level since reunification in 1990.

The market collapsed in April and May, when demand fell 61 percent and 32 percent respectively, as lockdowns put in place due to the pandemic meant demand was almost non-existent.

However, the dire numbers do not affect all car makers equally.

BMW continues to have a relatively good year compared to its competitors. It sold 15.2 percent more cars in August than in the same month of 2019.

But all other German brands, apart from BMW-owned Mini, showed declines, including Mercedes, and Opel, which dropped 47 percent.

VW held its position with the largest share of new registrations at 43,842, despite a fall of 17 percent compared with the previous year.

Tesla continued its growth in Germany, with more than five times as many cars sold in August as in the same month last year, and is the only brand to have increased sales in 2020.

It came as chief Elon Musk visited Germany this week while construction of a massive new plant outside Berlin continues.

READ ALSO: Tesla founder Elon Musk reveals new 'Giga Berlin' factory design

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Sleep, seaside, potato soup: What will Merkel do next?

 After 16 years in charge of Europe's biggest economy, the first thing Angela Merkel wants to do when she retires from politics is take "a little nap". But what about after that?

Outgoing German Chancellor Angela Merkel briefly closes her eyes and smiles at a 2018 press conference in Berlin.
Outgoing German Chancellor Angela Merkel briefly closes her eyes at a 2018 press conference in Berlin. Aside from plans to take "a little nap" after retiring this week, she hasn't given much away about what she might do next. Tobias SCHWARZ / AFP

The veteran chancellor has been tight-lipped about what she will do after handing over the reins to her successor Olaf Scholz on December 8th.

During her four terms in office, 67-year-old Merkel was often described as the most powerful woman in the world — but she hinted recently that she will not miss being in charge.

“I will understand very quickly that all this is now someone else’s responsibility. And I think I’m going to like that situation a lot,” she said during a trip to Washington this summer.

Famous for her stamina and her ability to remain fresh after all-night meetings, Merkel once said she can store sleep like a camel stores water.

But when asked about her retirement in Washington, she replied: “Maybe I’ll try to read something, then my eyes will start to close because I’m tired, so I’ll take a little nap, and then we’ll see where I show up.”

READ ALSO: ‘Eternal’ chancellor: Germany’s Merkel to hand over power
READ ALSO: The Merkel-Raute: How a hand gesture became a brand

‘See what happens’
First elected as an MP in 1990, just after German reunification, Merkel recently suggested she had never had time to stop and reflect on what else she might like to do.

“I have never had a normal working day and… I have naturally stopped asking myself what interests me most outside politics,” she told an audience during a joint interview with Nigerian writer Chimamanda Ngozi Adichie.

“As I have reached the age of 67, I don’t have an infinite amount of time left. This means that I want to think carefully about what I want to do in the next phase of my life,” she said.

“Do I want to write, do I want to speak, do I want to go hiking, do I want to stay at home, do I want to see the world? I’ve decided to just do nothing to begin with and see what happens.”

Merkel’s predecessors have not stayed quiet for long. Helmut Schmidt, who left the chancellery in 1982, became co-editor of the weekly newspaper Die Zeit and a popular commentator on political life.

Helmut Kohl set up his own consultancy firm and Gerhard Schroeder became a lobbyist, taking a controversial position as chairman of the board of the Russian oil giant Rosneft.

German writer David Safier has imagined a more eccentric future for Merkel, penning a crime novel called Miss Merkel: Mord in der Uckermark  that sees her tempted out of retirement to investigate a mysterious murder.

German Chancellor Angela Merkel forms her trademark hand gesture, the so-called “Merkel-Raute” (known in English as the Merkel rhombus, Merkel diamond or Triangle of Power). (Photo by Tobias SCHWARZ / AFP)

Planting vegetables
Merkel may wish to spend more time with her husband Joachim Sauer in Hohenwalde, near Templin in the former East Germany where she grew up, and where she has a holiday home that she retreats to when she’s weary.

Among the leisure activities she may undertake there is vegetable, and especially, potato planting, something that she once told Bunte magazine in an interview in 2013 that she enjoyed doing.

She is also known to be a fan of the volcanic island of D’Ischia, especially the remote seaside village of Sant’Angelo.

Merkel was captured on a smartphone video this week browsing the footwear in a Berlin sportswear store, leading to speculation that she may be planning something active.

Or the former scientist could embark on a speaking tour of the countless universities from Seoul to Tel Aviv that have awarded her honorary doctorates.

Merkel is set to receive a monthly pension of around 15,000 euros ($16,900) in her retirement, according to a calculation by the German Taxpayers’ Association.

But she has never been one for lavish spending, living in a fourth-floor apartment in Berlin and often doing her own grocery shopping.

In 2014, she even took Chinese Premier Li Keqiang to her favourite supermarket in Berlin after a bilateral meeting.

So perhaps she will simply spend some quiet nights in sipping her beloved white wine and whipping up the dish she once declared as her favourite, a “really good potato soup”.