German car sales drop as oil price soars

7th June 2004, Comments 0 comments

7 June 2004, FRANKFURT – German car orders plunged 18 percent in May compared with the same month last year, the German automobile industry reported Monday, as higher fuel prices, taxes and other costs kept buyers away from showrooms.

7 June 2004

FRANKFURT – German car orders plunged 18 percent in May compared with the same month last year, the German automobile industry reported Monday, as higher fuel prices, taxes and other costs kept buyers away from showrooms.

The automobile industry association VDA in Frankfurt said that for the first five months of 2004, domestic orders were down by two percent.

The release of the new data came as Chancellor Gerhard Schroeder met with leading members of the European car industry.

VDA said that besides rising fuel prices, orders were also hit by additional tax costs for cars and the discussion about imposing tolls on private motorists using Germany's highways.

In Berlin, Economics Minister Wolfgang Clement in remarks coinciding with the VDA report argued against imposing further burdens on the car industry.

In particular, Clement said he opposed plans for carmakers to move quickly to install soot filters in diesel-powered private cars, a demand being made by the Green party. Clement, a Social Democrat, said that given the current economic situation, carmakers should not have additional burdens imposed on them.

Amid the overall sluggishness of the domestic market, Munich-based carmaker BMW reported Monday that its sales in May reached 105,655 cars, up about 12 percent from May 2003 levels.

For the first five months, BMW group sales had reached 477,070 cars, up 6.5 percent over the same period last year.

But in another sign of the market slump, German automotive giant Volkswagen has announced that its summer holiday production shutdown will be four weeks, instead of three as previously planned.

Volkswagen representatives are among top figures from the European car industry in Berlin Monday to meet Schroeder amid reports they would demand a delay in environmental legislation that will add to the price of new diesel-powered cars.

According to government officials the key topic of the talks is to be the general competitiveness of the industry. However analysts said the talks would bring to a head a long struggle by Volkswagen against particulate filters on diesels.

The German company contends that its turbo diesel technology can reduce the smoke from diesels and opposes the introduction of filters as embraced by other car manufacturers. Diesel cars are common in Europe because the fuel is less heavily taxed than petrol.

[Copyright DPA with Expatica]

Subject: German news

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