
Germany
Germany has the largest economy in Europe and the fourth- or fifth-largest in the world, depending on whether you use nominal GDP ($4.02 trillion, 2018) or GDP (PPP) ($4.38 trillion, 2018) respectively. In 2017, Germany accounted for 28% of the economy in the eurozone.
Germany is ‘car country’: it’s home to a world-leading automobile industry that produces around 6 million cars per annum. One in 15 cars sold worldwide is made in Germany. One in 20 cars worldwide is registered in Germany. The German car industry plays a major role in the country’s economy and has a big impact on the culture – specifically the corporate culture. Company cars (‘Firmenwagen’) are an important element of that culture.
Source: Car Ownership and Usage Trends in Germany
For payroll tax purposes, the private use of company cars is considered a benefit in kind (BIK). The value of the BIK is calculated based on a driver's logbook of business and private journeys (the logbook comes with strict requirements for acceptance). Alternatively, the BIK can be calculated via a simplified method that equates the monthly BIK with 1% of the car's list price. The amount thus calculated via the '1% rule' is considered to represent the value of the car's private use per month. This amount is subject to income tax and social security contributions.
Other important fiscal topics:
– recharging EV batteries at the workplace is exempt from payroll tax;
– From 1 September, WLTP-based figures are being used to calculate CO2-based vehicle emission taxes. The trend is upwards, but with carbon taxes at €2 per gram over 95G/km, the impact is minimal.
Chapter 1: Economic and business environment
Demographics | 82.4 million (2019 estimate) Source: World Population Review |
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Capital | Berlin (3.4 million inhabitants) Source: World Population Review |
Major cities | Berlin, Hamburg (1.8 million), Munich (1.3 million), Cologne (1 million), Frankfurt am Main (672,000), Stuttgart (600,000), Düsseldorf (586,000), Dortmund (581,000), Essen (576,000), Bremen (548,000) Source: World Population Review |
Languages | German |
GDP | $44,659 per capita (2018) Source: countryeconomy.com |
Unemployment rate | 3.3% (Nov. 2018) Source: Eurostat |
Main industries | Technology, automotive, telecommunications, services, agriculture, chemical industry, transport, metallurgy. The economy is dominated by a few large companies, but 99% of all companies are SMEs, often family-owned. This is the so-called Mittelstand. It is considered the backbone of the German economy. |
Currency | Euro |
Interest rate | -0.88% (Jan. 2018) Source: basissinzsatz.de |
Fleet Maturity Index (scaling) | 5/5 |
Political key info | Germany is a democratic, federal parliamentary republic, and federal legislative power is vested in the Bundestag (the parliament of Germany) and the Bundesrat (the representative body of the Länder, Germany's regional states). There is a multi-party system that, since 1949, has been dominated by the Christian Democratic Union (CDU) and the Social Democratic Party of Germany (SPD). Angela Merkel has been serving as Chancellor of Germany since 2005 and leader of the centre-right Christian Democratic Union (CDU) since 2000. In domestic policy, health care reform, problems concerning future energy development and more recently her government's approach to the ongoing migrant crisis have been major issues during her Chancellorship. At the end of 2018, Ms Merkel announced that she would not seek reelection in 2021 and appointed Annegret Kramp-Karrenbauer as her successor as CDU party leader – and presumptive candidate for the Chancellorship. Source: The Guardian |
Inflation | 1.7% (Dec. 2018) Source: inflation.eu |
Chapter 2 : Automotive market, segments & sales
Total Car park | 46.5 million passenger cars (Jan. 2018), of which 64.5% German brands. Source: KBA The most popular vehicle types in 2018:
The most popular vehicle colours in 2018:
Source: KBA German car market at the end of August 2019: The German car market was up in July (+4.7%) and slightly down in August (-0.8%), resulting in a year-to-date gain for the first eight months of the year of +0.9% - corresponding to just under 2.5 million new cars registered.
Source: AutoActu
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New vehicle registrations (Cars, LCV, Trucks) | Compared to 2017, Germany's total motorised vehicle market expanded by +0.6% to 4,025,514 units last year, thanks mainly to increases in motorcycle and heavy-vehicle sales. Germany's new-car market, despite exceeding 3 million for the fifth year in a row, contracted slightly. This was attributed to the negative effects of the new WLTP regulations, introduced in September 2018. For 2019, the ZDK (German Federation for Motor Trades and Repairs) expects a similar volume of new car registrations as in 2018: about 3.4 million. Source: Autovista Due to WLTP, registrations went down as carmakers like Renault, Volkswagen and Audi struggled to get vehicles type-approved. The numbers suggest people preferred to wait for cars to become available rather than switching to other OEMs. Experts expect a catch-up effect in the first months of 2019 of around 30,000 additional registrations.
Source: Car Sales Statistics
In 2019 the total light vehicle market in Germany amounted to 3.32 million vehicles, up 125,000 units over 2018. Private sales declined by 0.5% (-6,000 vehicles). Source: Dataforce |
Top 5 brands (total market) | 1. Volkswagen (643,518 new registrations in 2018) Source: Statista
Market share per brand, August 2019 and year-to-date
Source: AutoActu |
Model preference top 5 (total market) | 1. Volkswagen Golf (211.512 new registrations in 2018) Source: Handelsblatt
Most popular private-market models in 2019: Source: Dataforce |
Used car market/renewal cycle | The average age of the car park is 9.4 years. Source: KBA In 2018, about 7.19 million used cars were sold in Germany, down 1.5% compared to 2017. That slight decline is expected to continue in 2019.
Source: Autovista |
Chapter 3: Company car market
Total Fleet Park (company cars)/Fleet penetration in total fleet sales | Around 4.5 million cars and LCVs were used as corporate vehicles in Germany in 2017. That's about 10% of the total vehicle park in Germany. There are about 1.6 million corporate fleets in Germany, of which about 16,000 consist of 20 or more vehicles. Source: VMF Of the 3.44 million new vehicles registered in Germany in 2018, 63.6% (-1.3%) were for corporate fleets, 36.4% (+2%) for private consumers. Source: KBA
The German fleet market is flourishing. In 2019, commercial fleet registrations grew by 14.9%. This establishes fleet managers in a more strategic and influential role than ever before. Source: Traxall |
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Evolution fleet sales (last 5 years) | 2014 +9.5% The decline was attributed to the introduction of WLTP from September. It should also be put in perspective: 2017 was a record year, the fleet channel marked up 800,000 units for only the third year ever, and Germany beat the UK as the biggest fleet market for the first time since 2012. Source: Dataforce The German fleet market is flourishing. Commercial fleet registrations grew by 14.9% in 2019, which establishes fleet managers in a more strategic and influential role than ever before. Fleet managers must now make business-enhancing decisions within the confines of eco-mobility and evolving taxation and EV subsidy regulations. Source: Traxall
In 2019, a total of 861,000 true fleet vehicles were sold in Germany, 107,900 (12.5%) more than in 2018. Source: Dataforce |
Top 5 fleet brands (fleet market) | 1. VW (December 2018) Source: KBA
Leasing ratio The leasing ratios of Germany’s most popular fleet brands varies strongly: 1. BMW: 67% (i.e. 67% of all BMWs in fleets are leased, but only 39% of Toyota’s fleet customers resort to leasing). Source: Dataforce |
Fleet Model preference top 5 (fleet market) | 1. VW Polo (full-year 2018) Source: Dataforce Most popular true-fleet models in 2019: Source: Dataforce
Leasing ratio The leasing ratios of Germany’s most popular fleet models varies strongly, from 50% for the Opel Astra to 70% for the Audi A4. The vehicle segment and premium factor can only partially explain these differences. The Skoda Octavia is leased more frequently than the Mercedes E-Class, SEAT more often than Ford or Opel. The PSA subsidiary, on the other hand, has the highest leasing share in small fleets in the top 10 brands. Source: Dataforce |
Chapter 4: Taxation & legislation
Get the complete analysis about taxation and legislation in the Fleet Europe Taxation Guide, developed in collaboration with PWC. Click here for more info
The German government levies various taxes and other charges on motoring, such as:
- motor vehicle tax (Kraftfahrzeugsteuer) but also
- VAT (Umsatzsteuer) and excise duties on the purchase of a car and
- indirect taxation on private use of company cars.
In addition, there are other taxes in Germany directly or indirectly related to the use of vehicles, such as
- fuel tax (Energiesteuergesetz) and the
- truck toll (LKW Maut).
Registration tax
There is no tax on the registration of cars in Germany. However, to obtain a number plate, a service charge is levied by the local municipality. The sum should not exceed €100.
Motor vehicle tax
Foreign-registered cars are subject to German motor vehicle tax if they are used in Germany for a period of one year or more.
Car registration is now strictly linked to a control process with the tax authorities, ensuring that the registered owner or user has paid the due taxes. The system of taxation for cars is quite complex, with a number of limited exemptions for cars with lower emissions of harmful substances, and altogether there are over 40 different tax rates which are partly still in place for older vehicles beside the new emissions-based system which is applicable for motor vehicles registered after July 1, 2009.
From May 1, 2005 onwards it is no longer possible to classify SUVs as commercial vehicles/trucks in order to achieve advantages in car taxation.
The tax incentives granted for the retrofitting of diesel vehicles with fine particle filters have expired on November 5, 2016.
The taxation for motor vehicles registered after July 1, 2009, has changed from a mere engine capacity-based tax to a mixed tax also taking CO2 emissions into account.
The introduction of a passenger car toll system is still under discussion.
WLTP
From 1 September 2018, WLTP-based figures are being used to calculate CO2-based vehicle emission taxes. The trend is upwards, but with carbon taxes at €2 per gram over 95G/km, the impact is minimal.
Industry experts say the increase in motor vehicle taxation due to WLTP to be between 15 and 25% (or around €50). Increases will be much steeper for some models.
For the period from 2018 to 2022, the German Ministry of Finance expects the adjusted motor vehicle tax to bring in additional revenue of €1.1 billion in total.
Source: Autozeitung
More info in the TAXATION GUIDE edited by NEXUS COMMUNICATION.
Chapter 5: Car policies
With the increasing number of suppliers, services and new technologies, fleet management has never been this complex. This is prompting an increase in the number of companies turning to external fleet management. The service providers offer cost transparency and standardised processes and, at the same time, are seeing growth in the demand for truly comprehensive services. Many fleet operators not only rely on external services for economic reasons, but also to adequately cover all legal requirements.
With the digitalisation of vehicle fleet data, the company car driver is playing an increasingly important role. In future, the connected car will be an important component of future-facing fleet management. A smart phone will establish the connection between the vehicle and user data and act as a data provider for the fleet operator, making manual recording obsolete.