Economy

Car Bonus Poker: Why VW, Audi and Co. are Stingy about Discounts?

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It’s getting tight for the car premium. A large majority of Germans are against them. 61 percent reject car premiums in any form, according to a new survey by the ZDF Politbarometer. 28 percent could only imagine a premium for environmentally friendly cars. Only nine percent are for a premium for all new cars.

It is becoming even more uncomfortable for car award supporters. A new study shows that car manufacturers are currently not really trying to increase demand without government aid. Ferdinand Dudenhöffer and Karsten Neuberger from the Duisburg CAR Center Automotive Research researched a total of 394 special campaigns for car manufacturers nationwide, including special financing or special models. This is a slight plus compared to the previous month, but significantly lower than in May 2019.

Take the Fiat 500, for example: There is currently a 25.5 percent discount on the small car. Sounds like a lot to laypeople. For the authors, however, this is “not a real bargain.” The car has been on the market for a long time, they write. And for years it has been offered at very high discounts. Already in April 2017 there was more than 30 percent discount.

The CAR graphic shows: The car manufacturers save on discounts – despite Corona

Source: Center Automotive Research

Auto experts: Audi and VW even raise prices for numerous models

The study authors sum up: “Bargains in the corona crisis are non-existent.” Corona crisis, what was there?

Of course, Dudenhöffer and Neuberger know that the corona crisis in the German auto industry has caused huge sales losses. In the shutdown month of April, new registrations for cars in Europe fell by almost 80 percent, in Germany by more than 60 percent. In Germany, too, the so-called “big three” VW, Daimler and BMW are producing waste stock, also because demand is on the ground.

It is all the more surprising that the two car experts find that Audi wants to increase the prices of numerous models by an average of 1.2 percent from around June 3. Audi cites inflation and rising raw material prices as reasons. VW in turn raised its prices for the majority of its models at the end of May. Consequence: “For car buyers it is hardly worth going to the dealer,” write Dudenhöffer and Neuberger. Can the German auto industry really want that?

This is where the discussion about car awards comes into play again. It should gain momentum next week if the grand coalition wants to put together an extensive stimulus package. The fronts run across the parties. The majority of the SPD should be against a car premium. However, there is an influential advocate with Lower Saxony’s Prime Minister Stephan Weil.

Read also: The auto industry is really so important for the German economy

Car premium? Highly controversial in Union and SPD

There are also many opponents of the car premium in the Union, including economist and parliamentary group leader Carsten Linnemann. Representatives from the car strongholds of Baden-Württemberg and Bavaria are likely to see this quite differently. Bavaria’s Prime Minister Markus Söder, who is also the head of the CSU, has been campaigning for a car premium for weeks, which even includes modern combustion engines.

It is questionable whether the car manufacturers do themselves a favor in such a delicate situation with their price and discount strategy. Even before the car summit in early May, Dudenhöffer called the automaker’s approach “amateurish”. He also said, “With that, they will […] fail. ”He should be right. A working group came instead of a car premium.

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