German car sales to lag global recovery, industry warns

FILE PHOTO: Volkswagen premieres new ID.7 electric sedan in Berlin

BERLIN (Reuters) - German car sales are lagging the recovery in the global passenger car market, with 2024 sales expected to be 25% below pre-pandemic levels, data from German auto association VDA showed on Tuesday.

The VDA expects the global passenger car market to grow by 2% this year to 77.4 million cars, close to the pre-pandemic level of 78.8 million.

Germany's passenger car market is expected to shrink by 1% to 2.82 million, still a quarter smaller than before the pandemic, the association added.

Supply chain problems have largely been sorted, but the business environment for German carmakers remains challenging, VDA chief economist Manuel Kallweit said.

German electric car sales fell by 16% in 2023, according to VDA data, and are forecast to drop another 9% in 2024.

While plug-in hybrid sales are expected to grow to 185,000 from 176,000, battery-electric vehicles sales will drop to 451,000 from 524,000, the association forecast.

Still, production of electric cars in Germany is forecast to increase by 19% this year to 1.45 million, it added, with much of German output destined for export.

Germany is the world's second-largest passenger electric vehicle producer after China, albeit lagging well behind with 1.2 million cars produced in 2023 compared to 6.6 million in China.

It is followed closely by the United States, which produced 1.1 million electric cars last year, according to VDA and S&P Global Mobility figures.

(Reporting by Victoria Waldersee; Editing by Madeline Chambers and Mark Potter)