It's not just a feeling, it's bitter reality: New car prices are rising, the price spiral is in full swing - even for bread-and-butter cars. We have the "evidence".
The rise in inflation slowed down somewhat towards the end of the year. Nevertheless, the Federal Statistical Office determined an annual inflation rate of 7.9 percent for 2022. "Historically high" is that, says Dr. Ruth Brand, who has been the agency's president since the beginning of the year. And yet many car buyers would be happy if their dream model were "only" 7.9 percent more expensive than a year ago. For many new car prices, however, the inflation rate is significantly higher than the national average.
Extreme inflation rates for the Mercedes GLE
A particularly striking example from the recent past is the refreshed Mercedes GLE. At the turn of the year, its base price was 75,946 euros for the GLE 350 e 4-Matic. The 333 hp plug-in hybrid does not yet have a new price tag; that he breaks the 80,000 euro limit should be considered certain. Finally, the 300 d 4-Matic also jumps sharply, from 78,326 to 85,055 euros - an increase of 8.6 percent. The price of the GLE 450 4-Matic model version has even increased by 14.7 percent, namely from 83,205 to 95,456 euros.
An even greater discrepancy is revealed when comparing the prices from spring 2022. That is, before the prices, which had already increased due to the Corona crisis, lack of chips, collapsed supply chains, etc. due to the Ukraine war, rose sharply again. At that time, a Mercedes GLE 450 4-Matic cost "only" 79,932 euros, the 300 diesel was 75,053 euros and the 350 petrol PHEV was 75,946 euros.
C-Class increases by up to 11,000 euros
Mercedes is also increasing the price of the public's favorite C-Class. The entry-level models from C 180 to C 220 d increase by around 1,300 euros on average. For example, the smallest petrol engine will cost 45,202 instead of 43,881 euros in the future. The C-300 versions, which add up to more than 11,000 euros, are noticeably more expensive. The reason for this: Mercedes includes the AMG Advanced package as standard in the model variants. That alone is otherwise in the catalog with 9,200 euros.
By the way, this isn't the first upward price adjustment since the W 206 generation was launched. Since the market launch, the price of the C-Class has already risen by 2,700 euros. In return, Mercedes had at least reduced the combination surcharge for the station wagons by 400 euros. ,
Corolla price increases by 28.6 percent
However, it does not have to be a luxury model. Toyota, for example, is turning the price screw heavily on the Corolla. The starting price in spring 2022? 25,920 euros for the hybrid with a 1.8-liter petrol engine and 122 hp.In the course of a facelift, the model has meanwhile been boosted to 140 hp, received slight optical retouching and a more modern infotainment system. At the same time, it became more expensive: the first price increase to 31,890 euros was severe. The 1.8 hybrid now even costs 33,340 euros - that's 28.6 percent more than a year ago!
The trick with the equipment
The two examples demonstrate the tricks with which the manufacturers try to justify their price increases - or to obfuscate them, depending on your point of view. Toyota uses a facelift to raise Corolla prices. This is nothing new; Up to now, model updates have usually led to higher tariffs. But by no means to this extent - a five percent surcharge was usually considered heavy. Mercedes is also padding out the equipment on the GLE. But by no means to such a large extent that it would justify the surcharges. Adjusted for equipment, the price difference melts by just a few percent.
Also popular: the omission of the basic equipment. VW, for example, used this trick on its Elektroknirps E-Up. In November 2019, it received a facelift that, among other things, increased its WLTP range to almost 260 kilometers. In combination with the low starting price of 21,975 euros and the e-car subsidy that was valid at the time, the price ultimately to be paid fell to just around 13,000 euros. The model was correspondingly popular until the chip shortage and supply chain problems came. VW only took the model off the market and back into its range in February 2022 - but only in the higher-quality Style Plus equipment for at least 26,895 euros. Another comeback followed after another farewell. The E-Up is now only available in the Edition version for at least 29,995 euros.
An isolated case? Not at all! Peugeot is similar to the E-2008. The small electric SUV, which was available at market launch in 2019 from 35,250 euros and has since risen to 37,900 euros, has cost at least 41,000 euros since March 1, 2023 - an increase of 16.3 percent within around three years. Instead of three equipment lines (Allure, Allure Pack and GT), there are now only two (Allure+ and GT+). The equipment levels were raised somewhat in each case; but not to an extent that would fully justify the price increase.
Farewell base engine!
Incidentally, Volkswagen is not only eliminating basic equipment, but also entire basic models. In the summer of 2021, at the beginning of the semiconductor crisis, the Golf with the basic engine (1.0 TSI with 90 PS) and the ID.3 Pure with 110 kW (150 PS) and a 45-kilowatt-hour battery were suddenly no longer available. What was supposed to remain a temporary phenomenon has become permanent. The weakest Golf currently available, the 1.0 eTSI with seven-speed DSG, has 110 hp. However, the 1st is the cheapest.5 TSI with six-speed manual transmission and 130 hp for 31,145 euros - that's 10,750 euros or 52.7 percent more than the earlier 90-hp Golf! The situation is similar with the ID.3: Today, the model with 150 kW (204 hp) and a 58-kilowatt-hour battery embodies the entry-level model. Base price: 41,315 euros. For comparison: when the Pure disappeared from the range, its starting price was 31,495 euros; the VW ID.3 is currently 31.2 percent more expensive than it is now.
Many examples show that sharply rising car prices are not completely new, but they currently seem to have reached an all-time high. A ADAC evaluation from September 2022 shows: On average, cars have become 19 percent more expensive in the five years before, while inflation rose a little less rapidly in the same period (16 percent). Incidentally, the inflation rates for micro (44 percent) and small cars (about 30 percent) were particularly high.
Opel Corsa-e is becoming more expensive for no reason
The current example of the Opel Corsa-e shows that it doesn't always need a reason to make cars more expensive (at least not product-related). At the beginning of February 2023, the basic price for a small car with an electric drive rose from 33,895 to 36,395 euros – an increase of 2,500 euros. Nothing has changed in terms of technology or equipment. Incidentally, a year ago the Corsa-e was still in the price list at 29,900 euros; it has become 23.4 percent more expensive since then. So it's small consolation that the higher quality GS equipment has been reduced by 500 euros.
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Which brings us to the topic of "electric cars". For those interested, the current price development can be doubly annoying, because the state e-car subsidy is also on the brink. This already crumbled at the turn of the year (pure electric models) or was completely eliminated (plug-in hybrids). Now it may be that it will fall further because of the more expensive base prices or that it may no longer be an option at all. After all, the purchase premium is only paid in full if the net list price of the desired model is less than 40,000 euros. If this rises above 65,000 euros, there is no discount at all.
The perspective
So are car prices going sky high? Probably not: If you want to sell products, you have to make sure that the targeted clientele can (at least somehow) afford them. It is more likely that the situation will be as it was two years ago with wood prices and currently with fuel prices: After an all-time high, tariffs will fall, albeit to a slightly higher level than at the time when the price spiral began. The customers are still happy and are only too happy to buy again. Sales are right again and the provider has increased its margin – so it wins twice over.
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We are currently experiencing this with electric cars in the USA and China. Tesla started a price war here in January 2023 , in which the Texans massively reduced the price of selected versions of the Model 3 and Y - without, of course, reaching the lowest price level that had previously applied to both series. Other manufacturers - and certainly not small ones - apparently felt so pressured by the measure that they immediately lowered their prices: the Ford Mustang Mach-E GT suddenly cost only 63,995 instead of 69,895 dollars in the USA (about 59,500 instead of a good 65,000 Euro). In November 2022, Mercedes lowered the price of its electric luxury class sedan EQS 450+ in China from the equivalent of 148,000 to 116,000 euros. And Toyota now offers the BZ4X there for the equivalent of 23,200 instead of 27,400 euros - and only about four months after the market launch.
The prices that are currently being asked in this country for the models mentioned show that the clocks tick differently in Europe. The Ford Mustang Mach-E costs at least 86,200 euros in Germany, Toyota offers the BZ4X from 47,490 euros. But the Mercedes EQS 450+ costs "only" 109,551 euros - well, that's going in the right direction.
Conclusion
Our samples show that new car prices have soared to absurd heights since the beginning of the chip crisis. Price increases of 20 to 40 percent compared to the level of two years ago? Rather the rule than the exception! But there are increasing signs that price gouging is gradually reaching its peak. It shouldn't be long before the well-known market mechanisms take effect again in Europe. Such tendencies can already be seen in the USA – in China anyway.
