Würzburg/Germany, 10 July, 2007

Economy experts are proclaiming a strong upturn in the German economy. They expect to see a further drop in unemployment figures at the same time as a rise in consumers‘ income and expenditure. However, although the country’s economy is developing favourably overall, this does not seem to be having a knock-on effect on Germany’s automobile sector. Moods are subdued among many of the car industry’s business owners. This fact is reflected by the current index figures for independent car businesses and for those dealing in specific makes of car. The figures dropped from 125 and 105 points respectively in the previous month to 118 and 96 points respectively.

Dealers of specific makes are worried most about the level of sales of new cars: Approximately two thirds of the dealers taking part in the survey registered a decline in sales in relation to the previous month. When asked about the weak demand on the domestic market, the German Automobile Industry Association (VDA) commented as follows: It feels that although the economic climate is rising with regard to the market for new cars within the car rental and company car business segment, this positive trend is being overshadowed by the sustained reluctance of private consumers to purchase new cars and by their tight „mobility budget“. According to VDA, incoming orders relating to the sale of new cars have also shown a nine percent drop. In other words, for the coming month it must be said that a pick-up in sales of vehicles is still not yet in sight.

The owners of contract-bound car businesses assess the automobile service sector as being more favourable than the sales sector. Just under one third of these businesses registered higher sales than in the previous year. Thirty percent of those included in the survey forecast a rise in sales revenues for the coming month too. Only twenty percent of the owners of such businesses dealing in specific makes of car are expecting to see a decline in revenues in their service sector and in the sale of spare parts and accessories.

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