Car prices are escalating at a rate surpassing income growth.
In recent years, the affordability of new cars in Germany has deteriorated due to a significant increase in new car prices. According to a study by consulting firm Oliver Wyman and market researchers from Jato Dynamics, the gap between net income and new car prices has widened substantially between 2019 and 2024.
Average annual net incomes have risen by 24%, from around €26,100 in 2019 to nearly €32,400 by 2024. However, new car prices have risen at an even faster pace, with an average increase of more than 38%. This has led to a decrease in affordability. In 2019, the average person in Germany had to pay around 1.16 annual incomes for a new car. By 2024, this had increased to 1.29.
The rising cost of new cars has resulted in a substantial financial burden for consumers, making it more difficult for many to afford a new vehicle. The trend towards electric vehicles in the German automotive market may not directly address this issue, as the cost of electric cars has not yet become more competitive with traditional models.
Sources: ntv.de, dpa
[1] New car prices in Germany have risen from approximately €30,200 in 2019 to €41,800 by 2024, reflecting a 40% increase and various factors, such as inflation and changes in consumer preferences towards more expensive models.
[2] The growth of average annual net incomes in Germany has been slower than the increase in new car prices, exacerbating the affordability issue.
[5] The production of electric cars in Germany has significantly increased, reflecting a trend towards electric vehicles in the automotive market.
[1] These rising new car prices in Germany, which increased from €30,200 in 2019 to €41,800 by 2024, reflecting a whopping 40% increase, can be attributed to various factors including inflation and shifts in consumer preferences towards more expensive models.
[2] In contrast, the growth of average annual net incomes in Germany has been comparatively slower than the escalation of new car prices, exacerbating the affordability issue.
[3] The increase in new car prices impacts not only the automotive industry, but also affects other sectors such as finance, as consumers face increased financial burdens when purchasing a new vehicle.
[4] Moreover, the rising costs of cars, including car-maintenance, have reverberated beyond the transport sector and influence lifestyle choices, potentially discouraging car ownership for many Germans.
