Demand for new cars in Germany set to fall: analyst

Demand for new cars is likely to fall significantly in the coming months in Germany, according to an analysis the head of the Centre for Automotive Research (CAR), Ferdinand Dudenhöffer, reported dpa.

Customers' reluctance to buy cars will be the main problem for manufacturers, instead of the supply chain difficulties they have long struggled with, said Dudenhöffer.

Alongside high inflation, plans to reduce government subsidies for electric cars is also curtailing demand.

Car manufacturers can still reduce their order backlogs and sell the new cars available without having to offer major discounts, he said.

Many carmakers have lengthy backlogs of orders but production is recovering, allowing them to rapidly address these, Dudenhöffer said, citing German manufacturers' production data.

Carmakers in Germany built 21% more vehicles in May and June than in the same period last year.

However, there are few incentives to buy new cars and buyers should expect prices to rise in the coming months, according to the analysts.

This applies in particular to electric cars, because lithium, nickel and other raw materials for battery production have already become significantly more expensive.