Is new too expensive?

D in the German new car market the customers run away. What sounds like a joke in view of the increasing number of registrations is unfortunately bitter reality. The manufacturers owe the plus in the approvals exclusively to the commercial customers. On the other hand, sadness among private owners: Only a third of all sales are made to this customer group, 15 years ago it was half.
What's going wrong? The costs that driving a car cause are decisive for this development. According to a survey by the DAT market observers, the vehicle price ranks right behind reliability in the hit list of the most important purchase criteria for new vehicles - and this has exploded compared to the average wage in the past 20 years.

Prices rose by 60 percent

New car prices rose by 60 percent during this time, and operating costs even increased by 130 percent in some cases. Salaries did not keep up with this development. The average wage only increased by 33 percent. An employee now has to work for a new car for around 16 months - in 1994 it was three less. For many, the limit has been reached, the majority of private car buyers are turning away from the new car trade. The bare figures: According to DAT, brand dealers have lost around 800,000 customers to their used car colleagues in the past five years alone.

How does the market work today? While new cars are only slightly based on demand when it comes to pricing, the situation is different for used cars. A car's value quickly comes under pressure as it evolves into a grandfather clock. It is therefore not surprising that the price trend in this area has been moderate over the past 20 years. The prices rose here by just 32 percent and thus correspond to the salary development. In plain language: Back then, as now, an employee only has to work for around six months for a used vehicle.

The industry lures with discounts

Those responsible at the manufacturers are aware of this situation. But instead of pricing the new car models in line with the market, the industry is trying to counteract this with discounts - especially with cheap daily registrations. As the market observers from Dataforce found out, the approvals for manufacturers and retailers increased by a good ten percent in the first four months.
In other words: There are now many cars waiting for customers that promise discounts of between 20 and 35 percent. And the average discount level also shows that there are many of these offersgives. While the average discount in an auto motor und sport evaluation at the end of last year was 23 percent, it is now 25 percent.
But whether the non-commercial market can be revived with these means is questionable. Private customer interest is still limited in many models - and not just in premium vehicles. Although the top discounts for mid-range models such as the Ford Mondeo, Opel Insignia and VW Passat reach up to 25 percent, their share of private customers does not exceed the 15 percent threshold.

That is not surprising, after all, Passat and Co. with normal equipment and economical engine at least 30,000 euros - minus the discount still around 23,000 euros. This corresponds almost to the annual net earnings of a high earner, which starts at 30,000 euros. Even smaller cars like the Ford Focus, Opel Astra or VW Golf eat around two thirds of the annual income of high earners with normal equipment.

As nice as the high discounts on paper are, the cars are after the corresponding deduction still too expensive for most citizens. The discount campaigns are of little use when it comes to stimulating the market, but their negative characteristics are much worse. They are shaking up the residual values ​​of the cars. This is not an exaggeration. A calculation example illustrates what the discount battle has done so far. A EurotaxGlass’s study puts the possible damage in Germany alone in the all-important fleet business at up to 428 million euros in the coming years. In other words: the manufacturers have to raise this sum to compensate for the falling residual values ​​in the wholesale and leasing business.

Market-based prices necessary

The only way out of the tight spot is market-based vehicle prices, then it doesn't need so many of the harmful discount promotions. Dacia, for example, proves that this tactic can work. There are no large discounts, the end is reached at a maximum of three percent. Customers are satisfied with this - in view of the new car prices of in part under 10,000 euros. Resale value plays a minor role in such expenses. Another example that a lot is about price is the Skoda brand. It has a reputation for offering VW technology at fair prices. Not to be forgotten are Hyundai and Kia, which, with their five- and seven-year guarantee promises, bring cheap and at the same time well-equipped models to men. who always demand low prices from the Internet - and often they can no longer afford new cars.

Big gap between car costs and salaries

These are alarming figures: In the last few 20 years ago, new car prices rose by 60 percent, while salaries only rose by 33 percent.This means that an employee has to work for a new car for around 16 months. In 1994 it was twelve weeks less. The development in fuel prices is even worse: a liter of petrol costs around 90 percent more than it did 20 years ago, and a liter of diesel even 130 percent. The lower consumption of modern cars cannot compensate for this price increase. Only used car prices have developed linearly to salaries. That means: Back then, as now, an employee only works for a used vehicle for around six months.

Most car buyers are looking for used ones

According to a survey by DAT, the majority of drivers will use the next vehicle the used car market. That fits into the picture: As can be seen from another study, more and more customers have been switching from the new to the used car sector for years. In the last five years, vehicle manufacturers have lost around 800,000 drivers. Instead of reacting to this with new car prices in line with the market, the industry relies on discount campaigns that have a detrimental effect on the residual values.

Dangerous trend

Vehicle prices are a sacred cow that many manufacturers do not touch want. Why also? As long as the commercial customer market works halfway and compensates for losses among private customers, this is not necessary. But this perspective leads to ruin - at the latest with the next economic crisis. This is not an exaggeration, in 2009 it was almost time. If the government hadn't triggered a special boom with the scrappage bonus at that time, it would have become tight for dealers and manufacturers expensive. In the end, the taxpayer bailed out the industry. Unfortunately she learned nothing from that. Since the last economic crisis, new car prices have again risen faster than wages.