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37b8c64d39668e93749ec917a8a76c6e0cdf7fb07009eac6f5367d636def2450;;[{"layout":"detailed","uid":26898,"publicationDate":"17 Dec 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_182020.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBcmVMUvH8DWq-BkW2dbNqY=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Car price inflation in Germany up as new car sales are down","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> New passenger car registrations in Germany have significantly declined since the beginning of the pandemic and again since July 2021. In contrast, CPI inflation for used cars has rapidly increased since May and for new cars since January. The highest price increases were seen in the medium, small, compact and upper-medium car segments, whereas the smallest price increases have been seen at vans\/small buses, SUVs, sports cars, hybrid cars and natural-gas cars. The drivers behind these sales and car price developments have been 1. the increased importance of individual mobility due to lockdown measures during the pandemic and the resulting higher demand for the small and medium car segments, but also for motor homes; 2. supply chain disruptions, such as the chip and materials shortage, which led to a decline in the production and supply of new cars, emptying car inventories and resulting in long delivery times for new cars; and 3. auto manufacturers focused their reduced production and deliveries on the higher-margin car segments and electrified car segments.<\/li><li> Our Chart of the Week shows a negative correlation between new car registrations and used car prices. This means that used car prices usually decline when demand and registrations for new cars go up, and vice versa. In the crisis period in 2009, for example, the German government supported car sales with scrapping incentives. This led to a significant pull-forward effect, i. e. an increase in new passenger car registrations and at the same time a decline in the prices of used cars as car buyers switched from the purchase of used cars to new cars. Since 2021, the correlation between new car sales and used car prices has been negative again, but there are differences to earlier periods. This time, the government only incentivized purchases of electrified vehicles and not overall car purchases. As a result, the pull-forward impact on overall new registrations was small. In addition, in contrast to the mentioned previous periods, car supply and the offering choice were limited by bottlenecks, which has led to opportunities for auto makers to also raise prices for new cars.<\/li><li> The further development of car prices and sales mainly depends on the normalization of the three factors mentioned above, which are ultimately all pandemic-related. Given that bottlenecks will probably remain elevated in 1H22, global light-vehicle (LV) production and sales are expected to show a recovery from 2H22 at the earliest. As a result of inventory restocking, however, LV production growth is expected to be stronger compared to LV sales growth in 2022, assuming easing chip shortages and supply chain disruptions in 2H22. Such a normalization will likely lead to an increase of new car registrations and a decline in used car prices.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Sven","last":"Kreitmair","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=7&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=6686d18ba8fc3e19767913c41c2ec49d"}],"countries":[{"name":"Germany","ticker":"DE","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=9&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=b98f1916ef68c367defade63b875243d"}],"hash":"37b8c64d39668e93749ec917a8a76c6e0cdf7fb07009eac6f5367d636def2450","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"2","showcompanies":"2","showcountries":"2","showcurrencies":"2","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"5"}},{"layout":"detailed","uid":24449,"publicationDate":"02 Feb 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_179118.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJMytj_yIB6BfzWox34cw4Po=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Global light-vehicle sales on the mend","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Sven","last":"Kreitmair","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=7&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=6686d18ba8fc3e19767913c41c2ec49d"}],"countries":[{"name":"Global","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=33&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=4c1b220737febcefc785f67dbe920bab"}]},{"layout":"detailed","uid":20225,"publicationDate":"12 Sep 19","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2019_174522.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJB8VAK6fwEQSM5cwDXUhs1U=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - German car production should pick up","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> This chart shows that the decline in German car production started in 2017 and continued through August 2019. In the last 12 months (LTM) ending August 2019, car production in Germany was down to a level close to that of September 2009, which was during the financial crisis, and is significantly below the peak of roughly 5.7mn units in 2015-17.<\/li><\/ul><ul class=\"ucrBullets\"><li> According to the latest available data from VDA, roughly 85% of total car production in Germany was attributable to Germany\u2019s big three automakers, and roughly three quarters of German cars produced were exported. These exports were delivered mainly to other countries in the EU (62%), to Asia and to the US. In 2018 and YTD 2019, domestic light-vehicles sales have declined in western Europe and China. Exports to the UK and Italy, where domestic light vehicle sales have also declined in this period, have accounted for a large portion of exports.<\/li><\/ul><ul class=\"ucrBullets\"><li> As illustrated in the chart above, in the last two phases of decline (2008\/09 and 2012\/13), the Ifo automobile-production orders and order-assessment values were early indicators of production growth, and in 2014-17, the lines generally trended closely together. The chart shows that since 4Q18, production has been hit much more than orders. This trend has likely been driven by the WLTP and is explained (presumably) by a run-down of inventories and\/or a build-up of work backlogs.<\/li><\/ul><ul class=\"ucrBullets\"><li> We think that German car production should pick up. In August 2019, production increased by 0.9% yoy and IFO automobile production orders and order-assessment values improved significantly compared to July, which should be a signal of stabilization and the recovery of production from its current low level. Also, smoothed seasonally adjusted data, such as the 6M moving sum of annualized sa data, which usually front-runs the 12M moving sum, already signaled some stabilization in 1Q19. Moreover, as the production decline started in 2017 and the rate of decline accelerated from August 2018, the yoy-comparison growth-rate numbers are more likely to result in lower yoy-decline rates or even positive growth rates in 4Q19. Nevertheless, the visibility for a significant recovery in production numbers is rather low for the time being.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Sven","last":"Kreitmair","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=7&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=6686d18ba8fc3e19767913c41c2ec49d"}],"countries":[{"name":"Germany","ticker":"DE","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=9&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=b98f1916ef68c367defade63b875243d"}]}]

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Dr. Sven Kreitmair, CFA
Head of Credit Research
Automotive & Mobility
UniCredit Bank, Munich
Am Eisbach 4 - MRE3CC
80538 Munich
Germany
+49 89 378-13246

Sven Kreitmair is Head of the Credit Research team and, since 2001, has covered both High Grade and High Yield credit in Automobiles & Parts (auto and truck manufacturers, auto suppliers, car r...

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