News: German Chancellor Angela Merkel has restated her goal of seeing 1mn electric cars in Germany by 2020, despite slow take up from domestic car buyers because of high costs and range limitations, Reuters reports. Fewer than 3,000 electric cars were sold in the country in 2012, and Merkel is planning to promote fledging technology and invest US$15.52bn in alternative powertrains up to 2017. At least 16 electric vehicles will also be on sale by the end of 2014. However, German motoring club ADAC found that nearly half of all German car owners are unwilling to pay extra for an electric car for their next purchase.
BMI View: In the first four months of 2013, passenger car sales in Germany fell 8.5% y-o-y , to 958,500 units. BMI forecasts a decrease of 10.0% in passenger car sales over the year. We maintain a bearish outlook for consumer sentiment in the country. Indeed, BMI expects ongoing deterioration in the German labour market, combined with weakness in the euro, to cause private consumption in the country to remain subdued in 2013. We believe that this will serve to moderate passenger car sales growth somewhat, and has informed our sales forecast.