Asian car makers make in-roads in Germany

5th January 2005, Comments 0 comments

5 January 2005 , FRANKFURT - Asian carmakers, chiefly from South Korea and Japan, made strong advances in the German car market in 2004, according to industry figures released on Wednesday. Preliminary figures from the German Automobile Manufacturers Association VDA in Frankfurt showed that new car registrations dropped slightly, to 3.2 million, in Germany last year, the fifth straight annual drop. But Asian carmakers defied the trends by managing to boost sales and to improve their share of the German ca

5 January 2005  

FRANKFURT - Asian carmakers, chiefly from South Korea and Japan, made strong advances in the German car market in 2004, according to industry figures released on Wednesday.

Preliminary figures from the German Automobile Manufacturers Association VDA in Frankfurt showed that new car registrations dropped slightly, to 3.2 million, in Germany last year, the fifth straight annual drop.

But Asian carmakers defied the trends by managing to boost sales and to improve their share of the German car market to around 14.5 percent, the VDA reported.

"The facts show that the Japanese and Koreans are doing particularly well at the moment," VDA president Bernd Gottschalk commented.

At the German car importers federation VDIK in Bad Homburg, official Reinhard Elkmann added, "in 2004 the Japanese pushed aside the French from the top position among the importers".

Elkmann, in charge of statistics at the VDIK, said that in the first 11 months of 2004, the carmakers Toyota, Honda and Mazda had reached a market share of 11.6 percent, from 11.2 percent a year earlier.

At the same time, Korean carmakers Hyundai, Kia and Daewoo surged ahead to garner a 2.9 percent share of the German market, after posting sales growth of 27 percent in the first 11 months.

Car industry analysts noted that the trends were putting a squeeze on the middle segment of the market. Buyers were either going for upscale brands like BMW or Porsche, or were choosing the much cheaper low-tech cars from Asia. This was putting the squeeze on the middle segment represented by such brands as Opel, Ford and VW.

Deutsche Bank car analyst Eric Heymann said that the Japanese carmakers have improved their standing with buyers.

"The Japanese have caught up with regard to the trend towards diesels and are offering European designs," Heymann said. "In addition, there is reliability and a good price-performance ratio."

But the success of the Japanese carmakers was questioned by Martin Winterkorn, chief executive of the VW car division Audi, who said Japan's car sales were being boosted by an "artificially low" yen.

In an interview in the Munich daily Sueddeutsche Zeitung, he cited many problems facing his and other German carmakers at the moment, chiefly surging steel prices and the high value of the euro which was cutting into export earnings.

At the same time, the German market faced a challenge from cheap imports from Asian carmakers, chiefly South Korea and Japan, with Winterkorn pointing to currency factors.

"Japanese exporters thrive on a yen being kept artificially low," he said. "This has the effect of being an export aid."

Winterkorn indicated that Audi, a division of the Volkswagen group, was thinking about starting production in the United States to counter the effects of the high value of the euro on US sales.

"The current dollar rate naturally raises the question about whether one should invest more strongly in the dollar region," he told the newspaper. "This is a strategic question which we must decide together with VW.

"But it is, very clearly, an advantage when one produces on the US market. The American buyer honours this," Winterkorn said.

DPA

Subject: German news 

0 Comments To This Article