Car sales in the EU fall by 76 percent
The corona crisis is having a devastating effect on the automotive industry. Germany is doing even better than other European countries.
In the corona crisis, the car market in the European Union almost came to a standstill. In April, only around 271,000 new cars hit the streets, 76 percent fewer than a year ago. This was announced by the European manufacturers’ association ACEA on Tuesday in Brussels. This is the sharpest monthly decline since records began, the association said. The reason was the almost complete standstill of both auto production and the auto trade to contain the pandemic.
Sales fell the most in Italy and Spain, at around 97 percent. Both countries are particularly hard hit by the pandemic. In France, new registrations fell by 88.8 percent and in Germany by 61 percent.
All brands listed in the ACEA statistics posted high double-digit percentage sales declines. In Great Britain, which is no longer part of the EU, car sales also fell by 97 percent. Since the beginning of the year, demand for cars in the EU has fallen by almost 40 percent to 2.75 million vehicles. In March, new registrations had already more than halved because hardly any cars were sold during the crisis.
“Every fourth job depends on export”
The experts at the German Chamber of Commerce and Industry (DIHK) are now expecting a historic decline in German economic output this year, and they are even more pessimistic than the federal government. “Based on our survey results, we currently have to assume a double-digit percentage decline in gross domestic product,” said DIHK President Eric Schweitzer. The government expects a minus of 6.3 percent. That alone would be the biggest decline in the post-war period.
The DIHK has just surveyed thousands of member companies and has identified gloomy prospects, especially in industry. Three quarters of the companies there report a falling demand, 80 percent expect a decline in turnover, in some cases considerable. “When we look around the world, we can now feel all the signs of a global economic crisis,” said Schweitzer. “With us, every fourth job depends directly on exports, in industry even every second one.”
In order to get the economy going again, the federal government is planning an economic stimulus package. However, Schweitzer asked for further help at short notice. There are tax reliefs for small and medium-sized businesses in particular. “But for many companies that will not be enough until the end of the year. You must be able to immediately offset everything you realize in losses this year with profits from previous years. That brings money into the cash register quickly. ”Getting the money back from the tax office early via improved loss offsetting is better than having to borrow it yourself.
According to the DIHK, this could help many companies. Because the liquidity worries are increasing. More than every second industrial company reports a decline in equity, and around four in ten report liquidity bottlenecks. In an emergency, planned investments are put on hold or the corresponding budgets cut. That applies to two out of three large industrial groups. More and more jobs are being cut.
Meanwhile, German industrial companies have not yet suffered a wave of cancellations, at least at the beginning of the pandemic. The order backlog fell in March by 0.9 percent compared to the previous month, as the Federal Statistical Office announced on Tuesday. The stock from Germany fell by 1.3 percent and that from abroad by 0.6 percent.
“In March 2020, the corona pandemic did not yet have any significant effects on the order backlog in the manufacturing industry in Germany,” is the conclusion of the statistics office. “In particular, the data show that the industrial companies have not registered any exceptionally extensive order cancellations.” The range of the order backlog remained unchanged at 5.8 months. This number indicates how long the companies would theoretically have to produce in order to meet the existing demand, assuming sales remained the same without new orders.
However, experts reckon that the global recession will lead to a collapse of orders and massive cancellations. In March, the German industry already collected 15.6 percent fewer orders than in the previous month – there has never been such a sharp slump.