German auto market will not recover before 2005, say analysts

Frankfurt. Analysts are increasingly pessimistic that a long-awaited recovery of the German auto market will happen this year.

Several analysts have lowered forecasts for the current calendar year recently. For example, B&D Forecast in Leverkusen now expects 3.24 million new-car sales this year in Germany, down from its original prediction of 3.4 million.

"The hope for a new revival of the auto business has been postponed to 2005," said B&D.

The Association of the German Automotive Industry, the VDA, which had expected a market volume of 3.35 million units, is expected to announce a revised forecast soon.

Last year, automakers sold 3.24 million new cars in Germany. That was down from 3.52 million in 2002.

Only Christoph Stuermer of Global Insight remains optimistic. He still expects 3.3 million new cars will be sold this year. He believes demand will grow in the second half of 2004 due to new models such as the Mercedes A class, BMW 1 series and Opel Astra Caravan.

He also is encouraged by significantly increased demand for used cars since the European Union's expansion eastwards in May.

According to the institute, approximately 47,000 used cars were exported to Poland in May. This is 40 percent more than in 2003.

An increase in domestic demand is not in sight. A poll by the automobile industry research center at Bamberg University showed that only 10 percent of Germans plan to buy a new car within two years.

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