Skip to main content

15-09-2023 | Automotive Manufacturing | Editor´s Pick | News

Germany's Roads Are Riddled with Older and Older Cars

Author: Christiane Köllner

2 min reading time

The average age of a passenger car in Germany is now ten years. That is a new record. According to an analysis by Deutsche Bank, there are several reasons for this development.

Not only is the number of cars in Germany rising. At the same time, they are becoming older and older on average, according to a press release from the Deutsche Bank. According to the Kraftfahrt-Bundesamt (KBA), the average age of cars in the fleet was ten years at the beginning of 2023. This is a new record value. Since 2014, the average age has increased by 2.7 years (+20.5 %).

For Deutsche Bank's industry analysts, the rising average age is a positive sign in terms of the quality and durability of vehicles. However, the fact that consumers are keeping their vehicles longer is also due to lower production levels on the supply side – for example due to bottlenecks in intermediate products (e.g. semiconductors) and other disruptions in the supply chain (e.g. Ukraine war). Due to this decline in supply, potential car buyers would have to wait longer for new cars and use their existing vehicles for longer.

High Prices and Uncertainty Weaken Demand 

According to Deutsche Bank analysts, the short supply in recent years is also reflected in the prices of new and used cars. In the first half of 2023, prices for new passenger cars would have been just under 16 % higher than the average level in 2020, according to the Federal Statistical Office of Germany. For used cars, the figure was 33.5 %. Together with supply shortages, this price trend is dampening demand for cars. According to analysts, prices for cars with combustion engines could continue to rise in the future due to the planned Euro 7 emissions standard.

In addition, there are higher energy costs and general economic uncertainty among private households, which has a negative impact on the propensity to buy. According to the analysts, this is reflected in new car registrations in Germany, which in 2022, with an increase of 1 %, have barely recovered from the two declines in 2020 (-19 %) and 2021 (-10 %). If fewer new cars are registered, this favors a rising average age in the stock.

Trend Towards Electromobility Restricts Supply

Even with the trend toward electromobility, the supply of vehicles with combustion engines is gradually declining, according to the analysts. At the same time, for many drivers the switch to electric cars is not yet affordable in practice. In this respect, the potential supply for some potential car buyers is being reduced even further, which is why the existing car is being used for longer.

Deutsche Bank's industry analysts also state that manufacturers could withdraw from the volume segment, at least in part, in the coming years, as the returns per vehicle in the premium segment are generally more lucrative. As a result, it could become difficult for low-income households to find affordable used cars in the future. The current vehicle would be driven longer and the supply of used cars would thus be further limited.


Related topics

Background information for this content

Premium Partner