German car sales up in February, but Ukraine dims outlook

Frankfurt, Germany March 3-Car sales in Germany rose again in February, official figures showed on Thursday, but the outlook for the industry has been clouded by production disruptions due to the conflict in Ukraine.

Around 200,000 new cars were registered in Germany in February, up 3.2% from the same month last year, according to the federal transport agency KBA.

The new figure confirmed the positive start to the year for the auto market after a similar 8.5% rise in January, but the industry faces new challenges.

The comparative increase is attributable to weak sales figures last year, said Peter Fuss, partner at EY.

“A rapid market recovery in light of the recent geopolitical escalation has become even less likely,” Fuss said, warning of shipping delays and price increases.

The conflict in Ukraine has caused disruption for German automakers at home and abroad.

Germany’s three major automakers, Volkswagen, BMW and Mercedes-Benz, all halted production and exports to Russia following the invasion.

Suppliers based in Ukraine have also seen production halted or forced to close as the Russian military advances, with repercussions for factories in Germany.

Volkswagen, Germany’s largest automaker, will close its main plant in Wolfsburg for a week in mid-March and has adjusted production schedules at other plants in Germany and Poland.

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The prospect of new challenges ahead will deal a heavy blow to the industry, which has had a difficult 2021 due to coronavirus restrictions and bottlenecks.

An acute lack of semiconductors, a key component of conventional and electric vehicles, has notably contributed to Germany’s sales falling by more than 10% in 2021.

Electric vehicles outpaced the rest of the market, with sales up 54.9% in February from a year ago.

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