Wednesday, February 10, 2016

German auto makers sell one third of their cars - to themselves

One third of new cars sold in Germany are bought by the respective auto makers themselves.

This article in Zeit Online is the most recent and best of reports we have seen over the past couple of years on the state of one of the world's premier auto countries.

Not to be too self congratulatory, but exactly as we saw that Americans are buying bigger cars since gas went down - confirmed in the meantime - we had the impression that something didn't jibe with German cars.

They seemed too expensive.

The Zeit article provides hard numbers: the price of new cares in Germany went up by 40% in 15 years, unlike the prices for other long lived goods, which have remained flat or even went down.
In terms of income, a single average earner has to spend 16.5 months of his or her income versus 13.5 in 2000.

At the cheaper end of the market, individuals buy more new cars, and - who would have thought - the same is true for the higher end Mercedes.

So, fleet vehicles and sales to themselves now make up 63% of the new car sales in Germany. The cars sold to themselves then go on sale as used vehicles a few weeks to a few months later.

Everybody wins?

Not really. Some people get much better deals.

About a year ago, a friend of the K-Landnews bought a brand new car at 50% off, with a set of winter tires as a freebie.

The maker introduced a new vehicle with a temporary discount of 25%. Our friend, the eventual buyer was told by a factory employee, that the company was holding a public introduction event in city A. She went there with her boyfriend, a former employee at said company, they talked to the event manager and walked out with another 25% off.

The episode highlights an aspect of the German way of doing business the blogster dislikes quite a bit: very little transparency, favoring insiders to a greater extent than, say in the US.

Similar processes can be found across the economy, for instance, when internet regulator ICANN opened up a bunch of new top level domains for sale, one disappointed bidder remarked what a coincidence it was that the best domain names for one of the states went to people who seemed eerily well connected to the state government.

And before you ask, no, there is virtually no recourse in matters like this.

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