New car sales for 2010 in Germany could plunge by as much as 25 per cent year-on-year now that the country's scrappage incentive scheme has run out.
Germany is Europe's largest economy and the largest European market for new car sales. Its scrappage scheme was the most generous in Europe, with almost £5 billion in government subsidies being paid out to owners of cars more than nine years old who were scrapping it for a new one.
Scrappage money officially ran out in Germany in September, but sales have continued to rise as cars ordered under the scheme continue to be delivered. But auto industry analyst VDA predicts that sales will begin to suffer in Germany next year when the effects of the scheme finally wear off.
"The domestic car market is going to be tough in 2010," VDA president Matthias Wissmann told a news conference in Germany. "Trees do not grow to the sky."
New car sales in Germany were up 20 per cent year on year for November, bringing the total number sold so far in 2009 to almost 3.6 million units, a rise of 25 per cent on 2008.
Wissmann did predict, however, that manufacturers selling in Germany wouldn't be left with large piles of unsold stock, as scrappage has ensured stock levels are very low and a waiting list is now in place on many popular models.