FLENSBURG (dpa-AFX) - There are signs of a trend reversal on the German car market. After years of falling sales figures, the compact class is currently experiencing a second spring. In line with the 50th anniversary of its most prominent representative, the VW Golf, its market share in the current year is 19.6 percent, a whopping 3.3 points higher than in 2023 as a whole and even 3.7 points above the low point in 2022, according to figures from the Federal Motor Transport Authority analyzed by dpa.

At the same time, SUVs are weakening: while they have been gaining market share for years and overtook the compact class at the top of German buyers' favorites in 2019, they are currently down 1.4 points at 28.4. Although the lead is still clear, it seemed only a matter of time before SUVs would double their share of the compact market in 2022.

Range of compact cars has been reduced

"I think the development is mainly down to supply," says Thomas Peckruhn, Vice President of the German Association of the Motor Trade (ZDK). "The demand for compact cars is high. We have simply had too few of them recently. But that has now changed again. And the manufacturers are also offering promotions for these models again."

After the particularly weak previous years for the compact class, there is a need to catch up, says industry expert Frank Schwope, who teaches automotive economics at the Fachhochschule des Mittelstands in Koln and Hanover. In recent years, the compact class has clearly lagged behind its potential. "First corona, then parts shortages. We had very weak sales figures."

In view of the shortage of chips, manufacturers such as VW specifically installed the few available semiconductors in high-priced models and cut back on the production of small and compact cars. "There is now a need for replacements," says Schwope. And the demand can now be met thanks to better availability of parts. In view of the overall weak demand, manufacturers are still supporting this in order to keep their plants running at full capacity. Another figure also fits in with the supply theory: the KBA currently lists 32 models in the compact segment, with more than 100 SUVs.

Economic situation makes compacts more attractive

According to Schwope, the current tense economic situation is another factor. "People are keeping their money together." And instead of an expensive SUV, they prefer to buy a cheaper compact. With the result that "many now prefer to drive a Golf rather than a Tiguan".

The fact that more customers who are willing to save money have not migrated to even smaller cars could in turn be due to the range on offer: Manufacturers have recently thinned this out considerably, for example in the Minis - the particularly small cars. The KBA currently counts 9 models, compared to 13 in 2021. At that time, the market share was 6.4 percent, now it is only half.

Another effect that may have contributed to the current shift in favor of compact cars is the weakness of electric cars. This affects the compact class significantly less than SUVs, for example, among which electric vehicles have a much larger share.

SUV trend at an end?

And especially in view of the current discussion about turning away from the end of combustion engines in Europe in 2035, there is a lot of uncertainty among customers, says Schwope. "Many were still waiting to see what would happen with electromobility. Now they're buying a new Golf after all."

However, Schwope does not see this as a general trend reversal back to compact cars. "This is yet another interim rebellion, the last gasp of the compact class." This will not change the general trend towards SUVs. "It will continue like this." Even if not as rapidly as before, believes Stefan Bratzel from the Center of Automotive Management (CAM) in Bergisch Gladbach. "The trend towards SUVization also has its limits somewhere. I don't think we'll have 70 percent SUVs any time soon." However, the proportion will not fall noticeably again. "It won't reverse again."

The Golf could also have contributed to the current upswing in the compact class, at least to some extent. In the first five months of 2024, the model's market share of just under 4.5 percent is significantly higher than in 2023 - so much so that, in purely mathematical terms, it explains almost half of the current increase in the compact class. However, the return of the compact class is not a pure Golf story: if you compare it with the low point in 2022, only around a third of the increase can be attributed to the old top dog. And the Golf is a far cry from earlier successes, when VW sold more than 380,000 of them per year in Germany alone. Even if you extrapolate the current figures for the whole year, it would only account for around half of this figure./ruc/DP/stk