Automakers' profits in 2022 are sure to be handsome again.
But this does not necessarily mean that the car companies and their German suppliers will continue to be successful in the future.
Even less is that a guarantee for Germany as a car location and its jobs.
Tobias Piller
Editor in Business.
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For the time being, car manufacturers are literally benefiting from the scarce supply of new cars.
Production has been cut everywhere, citing shortages of semiconductors and other strategic supplies from Asia.
Given this shortage, automakers can afford to scrap the 10 to 15 percent discount that used to be the norm.
In addition, some cheaper models are no longer available.
The model range for the Volkswagen Golf used to have a petrol engine with 95 hp as an entry-level version.
The cheapest Golf now has 130 hp (96 kW), Life equipment and costs 29,560 euros.
The formerly second-smallest engine with 110 hp (81 kW) is only available as a mild hybrid with automatic transmission for 30,575 euros.
Other manufacturers do the same.
Under the impression of this situation, Mercedes-Benz immediately decided on a change of strategy, in which the cheaper models on offer will be phased out and only luxury will be offered in the future.
The German car manufacturers are still benefiting from a huge order backlog, which at the end of 2022 was twice the value of 2018 - a not exactly bad car year.
But the number of new orders received has continued to shrink since 2021.
According to the Association of the German Automotive Industry (VDA), new orders from Germany in 2022 were 15 percent below the figure for 2021. The December 2022 figure was 36 percent worse than the comparative figure for the previous year.
Orders from abroad shrank by 6 percent in 2022.
The somewhat better delivery situation, especially for semiconductors, ensured at least a slight recovery in car production in Germany in 2022.
It ended up at 3.4 million, after a low of 3 million in 2021. But the usual numbers of the past decade, which have been above 5.6 million for five out of ten years, are still a long way off.
The export of passenger cars, from 2010 to 2017 always well above 4 million, continued to languish at just over half.
From the low of 2.37 million in 2021, the result has at least recovered somewhat, to 2.61 million for 2022.
Flash in the pan or real relaxation?
One of the factors causing uncertainty for the German car market in 2023 is the reduced funding for e-cars.
While plug-in hybrids were subsidized by the state up to the end of 2022 with up to 4500 euros (from the dealer another 2250 euros, plus there is also a saving in VAT), there will be no subsidies from 2023 onwards.
For purely battery-electric cars, the maximum state subsidy drops from 6,000 euros (plus 3,000 from the dealer) to 4,500 euros (plus 2,250 euros from the dealer).
Before the end of 2022, many electrically powered cars were therefore still being registered.
The car expert Peter Fuss from the management consultancy EY therefore described the registration figures for e-cars in December as a flash in the pan and expects a damper for electric cars for 2023. The forecast by Ferdinand Dudenhöffer, director of the Car Center for Automotive Research in Duisburg, is really gloomy.
After a combined registration share of plug-in cars and battery-electric cars of more than 31 percent for 2022, he now expects a steep drop to 17.8 percent for 2023 and only 12 percent for 2024.
The Ifo Institute, which regularly asks market players about their expectations, came to the conclusion: "Manufacturers are looking to the new year with restrained optimism".
The Ifo business expectations in December, with an index value of 5.9, were significantly higher than the annual mean for 2022 of just under 2, albeit with huge fluctuations, reports Oliver Falck, department director at the Ifo Institute and director of the Center for Industrial Organization and New Technologies at Munich Ludwig -Maximilian University.
"The large fluctuations in the index values illustrate the prevailing uncertainty," comments Falck.
The change caused by electrification, digitization and globalization make forecasts difficult, and there is also the question of the energy supply and the development of the corona pandemic in China,
the important sales market of German car manufacturers.
The business prospects for the suppliers are significantly more negative than for the car manufacturers.
In contrast to the index of 5.9 for automakers, the Ifo business expectations index for suppliers was -33.7 in December.
Because, like car manufacturers, they cannot win back margins with smaller quantities through higher sales prices.
The question of whether German car companies and suppliers are relocating further parts of their production to other countries remains particularly exciting at the moment.
It is possible that the previously German companies and the German economy are developing on separate paths.
Two years ago, analysts at Deutsche Bank said: "The German automotive industry is better equipped for the future of electromobility and other structural challenges in the industry than Germany as an automotive location."