Order books are getting thinner
The current high sales and profit figures seem to have reached a tipping point for many car manufacturers. That reports news agency Reuters. A number of car manufacturers, including Volkswagen and BMW, are seeing a decline in demand, particularly in Europe and North America. According to analysts, this is proof that consumers are keeping their hands on the purse strings due to high inflation and fears of a recession.
BMW CEO Oliver Zipse makes no bones about it. “Orders for new models are falling sharply,” he said in a statement to the quarterly results. According to Zipse, the decline in sales is particularly strong in Europe. The figures do not lie: ACEA, the European trade association, calculated that European car sales fell by no less than 15.4 percent in June compared to a year earlier. In the first half of this year, the red figure was 14 percent compared to the same period in 2021. The financial chief of Volkswagen, Arno Antlitz, also signals this development. “The warning signs are mainly for Europe and North America, but to a lesser extent for China.”
Stellantis CEO Carlos Tavares is also cautious about the future. “The impact of buying a car on the household budget is something that we are going to run into,” he said. For now, the car manufacturer can pass on its higher costs to the consumer, but Tavares recognizes that this cannot continue forever. “There is a limit to the price increases,” he says. Data from analysts Cox Automotive and the German Ifo Institute show that order books are indeed shrinking and demand for cars has been falling since March. The waiting time for a new car is therefore shorter, even with the production problems that still plague car manufacturers.
Top segment is spared
The top segment of the market is doing quite well. Mercedes-Benz, for example, is also dealing with declining sales, while the demand for its most expensive models is increasing. Brands such as Ferrari and Lamborghini are setting sales record after sales record and seem to be unaffected by the current market sentiment. However, most of the market is expected to feel the blows of inflation considerably.
– Thanks for information from Autoweek.nl