F.For major German car companies, 2021 began when the old one went almost continuously: in crisis mode. Production stops at Mercedes in Rastatt, as does Volkswagen at the main plant in Wolfsburg and in Emden. The reason for this is the bottlenecks of computer chips. According to the industry, manufacturers in Asia have simply misjudged demand.
It sounds plausible, after all, the company’s buyers and logisticians were last year constantly busy supporting the flow of materials. A bottleneck similar to what happened now could hit factories in 2020. To reduce losses, VW and Mercedes-Benz are temporarily forcing the affected employees for a short time.
There is still little to see of the expected recovery of a key industry in Germany after the economic downturn during the pandemic. All manufacturers are looking forward to the rapidly growing number of electric cars and hybrids they were able to sell last year. But the share of these cars in total sales is still so small that to compensate for losses in gasoline and diesel cars is still far away.
At least in December, there were signs of hope: the number of new registrations in Germany rose to more than 312,000 vehicles, according to the Federal Road Transport Administration (KBA), an increase of 9.9 percent over the previous year. But it could also have an effect on sales. “At the end of the year, many private customers purchased the car to benefit from the VAT reduction. In December, new private registrations increased by 45 percent – almost five times more than the general market, “said Reinhard Tsirpel, president of the Association of International Automobile Manufacturers, about these figures. , and early figures are also included in the December figures.
For the whole industry, the ray of hope of the German figures for December is possibly smaller. How badly the effects of the crown pandemic have affected carmakers in this country is evident from the 2020 sales figures. Particularly affected is the VW Group, whose global car sales fell from almost eleven million in 2019 to just 9.3 million.
The effects of Covid-19 are clearly reflected in the group’s portfolio of brands. The Spanish subsidiary Seat, which was able to sell a quarter less cars than in the year before Corona, suffered the sharpest drop in sales among car brands. Spain is the country most affected by the pandemic in Europe.
Only sales of the subsidiary Scania fell even more clearly in the group, namely by 27.5 percent. This indicates a clear reluctance of companies to make the expected investments. Logistics companies, which of course also have to deal with the economic consequences of the effects of Covid-19, obviously did not want to buy new trucks. This also applies to smaller vans: sales of Volkswagen Commercial Vehicles fell by more than 24 percent.
In contrast, the premium Audi brand has survived the pandemic year relatively stably. Due to high sales figures in China, the sales decline was only 8.3 percent lower than the previous year. Porsche, a subsidiary of sports cars, achieved the best results, which, despite the Corona, sold only 3.1 percent fewer cars worldwide, namely 272,000.
Luxury works at BMW
Figures show that the luxury market was much more stable than the large mass market in the crisis year. Wealthy people gladly bought a new car despite the Corona. Perhaps also because there were fewer other ways to spend money with joy.
BMW has been able to benefit from this trend. The Munich-based manufacturer recorded a 7.2 percent drop in sales, and total sales totaled just over two million vehicles. Compared to the three groups, this is the least poor annual result.
“The strong performance of the upper-end luxury segment models made a significant contribution to this thanks to the 7 and 8 series and the BMW X7, which increased 12.4 percent over the previous year to a total of 115,420 units,” BMW said.
Compared to 2018, sales of luxury cars increased by 70 percent. From a shareholder perspective, this is encouraging, as you can make much more money on expensive luxury cars than on cheaper cars, which should make a profit from the maximum possible sales.
What the economic balance of corporations will look like after the pandemic year will become clear only in the coming month, when income reports for the fourth quarter will be presented. It is clear that companies have been able to mitigate most of the losses by sending their employees for a short time. In addition, discounts on new cars in Germany have dropped significantly over the past few months. Car expert Ferdinand Dudenhofer sees this as a sign that companies are paying more attention to the contribution of profits from individual sales.
Daimler is betting on a new S-Class
Daimler also survived the crisis year relatively insignificantly. Overall, Mercedes-Benz sales fell 7.5 percent, while the entire passenger car division fell 10.3 percent to 2.2 million vehicles sold worldwide.
Even before the pandemic, the group’s board decided to significantly strengthen the luxury segment and pay more attention to the impact of smaller models.
“We are optimistic about 2021,” CEO Ola Kelenius told reporters last week. In the second half of 2020, there was a significant recovery – after the market during the first blockade sometimes almost completely collapsed.
His sales colleague Brita Sieger, who is in charge of sales, said of the figures: “The new S-Class is particularly enthusiastic and exciting, as evidenced by the high number of more than 40,000 orders worldwide.”
Mercedes-Benz released the car in September. Overall sales of the S-Classes fell 17.2 percent year-over-year when the model was redesigned. However, approximately 60,000 units of the car is the best-selling luxury sedan in the world. Last year, the best-selling model of Mercedes-Benz was the GLC with about 320,000 cars sold.
Thus, the small Benz SUV even beats the leading car in Europe from the serial manufacturer Volkswagen – Golf. For the flagship company based in Wolfsburg, 2020 was accompanied by problems, the introduction of the eighth generation had to be postponed due to software errors, even now VW has to call back tens of thousands of cars to install updates. However, the Golf remains the best-selling car in Europe and Germany: 312,000 cars have been delivered, 136,000 of them to the domestic market. Worldwide, the Tiguan is ahead of VW sales statistics.
Electronic cars: small sales, strong growth
Clean electric cars are still far from reaching such values. Last year, the best-selling battery car in Germany was the Renault Zoe with just over 30,000 units. This is followed in the KBA statistics by the Tesla Model 3 with 15,200 and the Volkswagen ID.3, which is only available since September, when 14,500 cars were sold.
The fact that electric cars are the most important topic in this area is largely related to the crisis. Although the numbers have fallen sharply in almost all areas, sales of cars with electric motors are growing by a huge percentage – starting from a very low level. Manufacturers use this to convey positive messages and make themselves environmentally friendly paint.
In fact, almost only hybrid cars lag behind Daimler’s electricity growth rate. So far in the market the group has only Mercedes EQC, EQV and Elektro-Smart. The mini-brand is currently being restarted in a joint venture with Chinese group Geely. In 2020, Smart sold 27,000 fully electric cars. Mercedes has been able to sell about 20,000 units of the newly introduced EQC worldwide.
At VW Group, the share of battery-powered cars in total deliveries in 2020 was just under 2.5 percent. So even the world’s largest carmaker still has a lot to do when it comes to electrification. Compared to its competitor Tesla, VW has not sold even half as many electric cars worldwide.
Last year, Elon Musk was able to simply achieve the goal he set for himself – 500,000 cars sold. This year Volkswagen has to catch up hard. Tesla’s growth rate was 74 percent over the previous year. At VW, it was 214 percent, based on pure battery-powered cars such as the ID.3 and Audi E-Tron.
In particular, VW and Daimler are planning a major electric offensive for the new year. “We have increased our share of the electricity market – and in 2021 we will introduce ten electronic models from five brands to the market,” wrote VW CEO Herbert Diss about sales figures on LinkedIn. In particular, Wolfsburg expects a lot from the small SUV ID.4. It should become the new “world car” of the group.
New models from Mercedes and BMW for 2021
Mercedes-Benz has announced four new all-electric models. The EQS, a luxury electric sedan that is expected to beat the Tesla Model S in many areas, is eagerly awaited. According to the group, the car should have a range of 700 kilometers on a single battery charge.
In addition, it can be additionally equipped with a huge 1.40-meter-wide display that fills the entire leading edge and adapts to the user’s needs with artificial intelligence. The share of electrified cars in Mercedes sales is expected to grow to 13 percent – albeit with hybrids.
The former pioneer of the German electric car BMW is a little behind in the race for new models. In addition to its eight-year-old i3, the Bavarians are now selling a new SUV called the iX3, which was first introduced in China, and the e-Mini. Production of the iX and i4 luxury cars, an electric car with which BMW will also focus on the mass market, is due to start this year.