Lower discounts on new car prices point to long-term capacity cuts in Germany: study
October 2, 2020
BERLIN, Oct. 2 (Xinhua) — Dealer discounts on new car prices in Germany decreased for the first time in over ten years in September, said a study published by the Center for Automotive Research (CAR) on Friday.
“This is an extremely untypical result, because in September, carmakers usually try to get customers to buy again after the vacation period,” commented CAR Director Ferdinand Dudenhoeffer.
Lower discounts in September were a further sign that car manufacturers were sticking to their strategy of selling at higher prices while toning down sales promotion, according to the CAR.
“Sustainable sales or higher prices in the economic crisis are a clear sign that longer-term capacity cuts are being planned,” noted Dudenhoeffer.
According to the CAR, the market for car subscription offers in Germany was still in its infancy, but the dynamics were “enormous.” Increasing numbers of car manufacturers were expected to enter this new market in the coming months and years.
Lynk & Co, an automobile brand formed as a joint venture between Chinese automaker Geely Auto Group and Volvo Car Group, was the latest carmaker to join the German car subscriptions market on Thursday.
For a monthly fee of 500 euros (586 U.S. dollars), customers would be able to use Lynk’s new SUV (sport utility vehicle) from spring 2021 onwards. The subscription will also include membership of the Lynk & Co club, which would allow customers to rent their car to other club members.
“Car subscriptions will change our relationship to cars,” Dudenhoeffer explained. “A fixed monthly rate for 12 or 36 months, including all costs except fuel, makes the car more transparent, less risky and the use much more comfortable.”