German sales rose 10% in December as buyers rushed to beat VAT rise

FRANKFURT -- German registrations rose 9.9 percent to 311,394 vehicles in December, boosted by private customers ordering cars before a reduction in VAT ended on Dec. 31.

Tesla, Jaguar, Toyota and Alfa Romeo were among brands that had big gains, while Honda, Ford and Mini saw their registrations drop.

"The strong finish to the year can be explained by the expiry of the VAT cut," Reinhard Zirpel, president of the VDIK importers association, said in an emailed statement.

Two extra working days in December also benefited sales.

The German government introduced a six-month cut in the VAT rate to 16 percent from 19 percent on July 1 as part of a stimulus package to boost the economy after lockdowns last spring.

The VDIK said private registrations increased 45 percent in December, almost five times as much as the overall market.

The association said it expects "a difficult start" to 2021 after a countrywide lockdown to curb the spread of the coronavirus was extended to Jan. 31. The lockdown has forced showrooms to close.

Tesla recorded the biggest percentage gain in December, with sales soaring 214 percent to 3,545.

Jaguar sales increased 63 percent and Toyota registrations rose 52 percent. Alfa Romeo and DS both had volume gains of 49 percent. Fiat was up 47 percent and Opel registrations rose by 39 percent.

Volkswagen Group brands had a good month, with Skoda up 34 percent, Seat up 33 percent and Porsche up 32 percent. VW brand registrations increased by 22 percent and Audi sales rose 12 percent.

Click here to download Germany's December, 12-month sales by brand

Among other winners were Renault, with sales were up by 30 percent;  Mercedes-Benz, up 23 percent; and Citroen, up 21 percent.

Brands that did not benefit from the December surge included Honda, with sales down 29 percent; Ford, down 20 percent; and Peugeot down 13 percent. BMW's registrations fell 3.1 percent.

A growing shift to electrified cars continued last year.

Sales of full-electric cars rose 207 percent to 194,163 units in 2020 for a 6.7 percent market share. Plug-in hybrid models gained 342 percent to 200,469 for a 6.9 percent share.

Sales of gasoline cars dropped 36 percent, giving the fuel type a 46.7 percent share. Diesel sales fell 29 percent to a 28.1 percent share.

Sales to business buyers declined 22 percent last year to a 62.8 percent share, while private sales fell 13 percent to a 37.1 percent share.

The VDIK said the private market drove a recovery in the second half. Between July and December, new private registrations were up 14 percent in an overall market down 3 percent. But higher demand in the private market did not make up for the heavy losses of the first half.

In 2020, about 160,000 fewer passenger cars were newly registered by private customers than in 2019, the VDIK said.

Germany fared better than the other four major European markets last month. Demand fell 15 percent in Italy and 12 percent in France. In the UK, sales dropped 11 percent, while in Spain registrations were flat.

Through December, German registrations are down 19 percent to 2.92 million.