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U.S.-China trade conflict hurting German car sector: VDA

Bernhard Mattes, President of the German Association of the Automotive Industry (VDA), is seen at the 88th International Motor Show at Palexpo in Geneva, Switzerland, March 6, 2018. REUTERS/Denis Balibouse

FRANKFURT/BERLIN (Reuters) - A trade spat between the United States and China is leaving its mark on Germany's automotive sector with the number of new vehicles in the Chinese market expected to fall this year, the VDA industry association said on Wednesday.

China is the most important and historically the fastest growing market for Germany's carmakers but Chinese tariffs on German cars built in the United States have taken their toll.

"China is currently taking a breather", said VDA president Bernhard Mattes in Berlin, adding the export of German cars from factories in the United States to China fell by a third in the first 10 months of the year.

The VDA said it expected the number of new vehicles in China to decline by 1 percent this year to 23.9 million. It forecast growth in 2019 of 2 percent to 24.4 million.

The association said it expected the global car market to reach 85 million new vehicles this year. In Europe, it expected the number of new vehicles to climb to 15.8 million in 2018 and remain at a similar level in 2019.

Sales of new cars in Germany will decline by 1 percent this year, it added.

Separately, the German auto importers association VDIK also forecast slightly weaker sales in Germany this year and said sales would probably remain at 2018 levels next year.

Some 3.42 million cars will probably be registered in 2018, the VDIK said, adding that this showed the new car market was performing well. VDIK members expect sales to rise by 1 percent to 1.325 million vehicles this year.


(Reporting by Ilona Wissenbach and Markus Wacket; Writing by Michelle Martin and Caroline Copley; Editing by Thomas Seythal and Jon Boyle)