Why motorists are hesitant on buying new cars
25 May 2004 , BONN - Car sales in many industrialised countries indicate a growing reluctance by motorists to buy new cars with market observers citing more reasons behind the trend than "bad economic times". Not so long ago many motorists regularly took a trip to the dealer they trusted to order a new car. But over the years the price of a new car has steadily increased. An average new car in continental Europe was last year priced at EUR 22,360 compared to EUR 19,120 in 1999, according to the German auto
25 May 2004
BONN - Car sales in many industrialised countries indicate a growing reluctance by motorists to buy new cars with market observers citing more reasons behind the trend than "bad economic times".
Not so long ago many motorists regularly took a trip to the dealer they trusted to order a new car. But over the years the price of a new car has steadily increased.
An average new car in continental Europe was last year priced at EUR 22,360 compared to EUR 19,120 in 1999, according to the German automobile (DAT) report 2004.
Automobile researcher Professor Ferdinand Dudenhoeffer from the B & D research institute has calculated an even bigger increase during the past two decades since 1983.
"During this period the average price of a new car has increased by 134 percent. The cost of living during the same period rose between 50 and 60 percent," Dudenhoeffer says.
Maximilian Maurer of Germany's largest automobile association ADAC said: "One has to look at how this increase has come about. A car of today cannot be compared to a car of the past. Cars today have more extras and therefore have to be more expensive".
According to B & D Forecast only about 10 percent of the vehicles were fitted with air conditioning in 1990 compared to 76 percent in 2003. Anti-lock brake systems (ABS) rose from 20 to more than 90 percent and central door locking from 45 to 90 percent.
"These extras have certainly contributed to the price increase," says Helmut Bluemer of the Central Association of the German Car Industry (ZDK) in Bonn.
"The effect is that cars have become unaffordable for many people, especially when it comes to buying a new car," according to Bluemer.
This becomes especially apparent when analysing the age of cars on German roads. Some 13.1 million cars are up to four years old, 10.3 million have been on the road between five and seven years. But 24 million cars are eight years and older, 15 million of them older than 11 years.
DAT spokesman Juergen Schoenleber said that in 2002 the average life of a car was 11.9 years. The experts differ on whether this is a good or a bad sign.
"Higher prices also mean higher quality. Twenty years ago cars lasted 2.5 years less," says Schoenleber.
Helmut Bluemer differs: "Cars don't get older because they are better but because people don't have the money to buy new cars". The ZDK has calculated what a car can cost during a lifetime between the ages of 18 and 72. When counting the purchase price, taxes and fuel costs the figure comes to 297,000 euros.
It is unlikely that many of the extras in cars today will disappear. "People have become used to the comfort," says Ferdinand Dudenhoeffer. Juergen Schoenleber also points out that extras such as ABS and airbags are an important safety aspect.
But it is possible that buyers change their favourite image marque for a cheaper model. While many of the bigger manufacturers complain of declining sales, smaller producers are celebrating.
The Korean producer Daewoo reported in Germany alone last year a sales increase of 157 percent compared to 2002. In the first quarter of this year sales were up again by 75 percent.
Another Korean manufacturer Kia is also reporting higher sales. The SUV Sorento is among the best sellers at a price of 24,900 euros.
"People who normally would buy Audi or Volvo are now buying the Sorento," Kia spokesman for Germany Klaus Rippelmeyer said.
Subject: German news