German car sales pick up pace in June

Germany: The car market in Europe’s mightiest economy Germany picked up in June, official figures showed Tuesday, as consumers defied trade war fears but shied away from scandal-tainted diesel.

Some 341,308 cars were registered by the KBA motor vehicle authority last month, an increase of 4.2 percent compared with June 2017.

Over the first six months, sales grew 2.9 percent to more than 1.8 million vehicles.

New registrations are a key indicator of performance in Germany’s auto-centric industrial sector and are tracked closely by economists.

Consumers remain confident enough to make big purchases like cars even though fears are mounting of a trade war between the European Union and United States that could sap the economy.

High-end manufacturer BMW last week urged the White House not to hit car imports to the United States with 20 percent tariffs.

But after Brussels retaliated to US duties on steel and aluminium with its own border taxes on items like jeans and Harley Davidson motorcycles, President Donald Trump appears set on punishing the EU for perceived unfairness in the auto trade.

For now, “orders from abroad are on the rise,” commented Bernhard Mattes, president of the VDA car industry federation.

The VDA expects the global car market to grow 2.0 percent this year, prompting German manufacturers to increase production 1.0 percent, to 16.7 million units.

But output is set to grow exclusively at the multinationals’ factories on foreign soil, with some 3.0 percent fewer cars built at home in Germany.

Meanwhile the industry is still dealing with a “massive lost of trust and credibility” over the “dieselgate” scandal, Matthes acknowledged.

Volkswagen admitted in 2015 to cheating emissions tests on 11 million diesel vehicles worldwide, and suspicion has fallen on other producers including Mercedes-Benz maker Daimler and BMW this year.

Over the first six months of 2018, just 32.1 percent of cars sold in Germany were powered by diesel — a fall of 20 percentage points compared with the same period last year.

Nevertheless, Volkswagen remains by far the most popular auto brand, accounting for almost one in five cars sold between January and June, far outstripping Mercedes with 8.8 percent and VW subsidiary Audi with 8.2.