Würzburg, July 10, 2007

Economic institutes are reporting a strong upturn for Germany. They expect the number of unemployed to fall further, while consumer income and spending will increase. However, the overall positive economic development does not seem to be affecting the automotive industry: The mood of many business owners is gloomy. This is documented by the index values of brand-affiliated and independent companies. They fell from 105 points in the previous month to 96 and from 125 to 118 in June respectively.

The brand dealers are particularly concerned about the new vehicle business: around two thirds of the dealers surveyed reported a decline in sales compared to the same month last year. Although the economy is picking up in the rental and company business with new vehicles, "this positive trend is being overshadowed by a continuing reluctance to buy on the part of private vehicle owners and their tight mobility budgets", commented the German Association of the Automotive Industry (VDA) on the weak domestic demand. According to the VDA, incoming orders for new car sales also fell by nine percent. This means that a recovery in vehicle sales is still not in sight for the coming month.

The owners of dealerships rated the service business better than car sales. Almost a third of them recorded higher turnover compared to the previous year. Around 30 percent of those surveyed also forecast rising revenues for the coming month. Only 20 percent of franchised business owners anticipate a decline in turnover in service and the sale of spare parts and accessories.

If you have any questions, please contact

Norbert Rubbel

Editorial office "kfz-betrieb" weekly journal & online

Management/Economy Department

Vogel Auto Media

97064 Würzburg

Phone +49 931 418-2634

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E-mail: norbert_rubbel@vogel-automedien.de