One Brand Increased Prices by 48% Yet Still Sold More Vehicles | Carscoops

      New car prices in Germany increased by 40 percent from 2019 to 2024, resulting in a 22 percent decline in sales.

      19 hours ago

      by Thanos Pappas

      One budget brand raised its prices by 48 percent, yet still experienced a 19 percent increase in sales.

      In Germany, new car prices have risen by 40 percent since 2019, driving many consumers away.

      Affordability has diminished by 11 percent as wages have not kept pace with vehicle price inflation.

      Globally, car prices have been rising, and this is not merely a perception. Automakers are contending with stricter emissions regulations, the costs associated with electrification, inflation, tariffs, and a general economic crunch, all of which are quietly compromising affordability. However, one automaker in Germany has successfully defied this trend by increasing prices while simultaneously boosting sales.

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      Data from JATO Dynamics indicates that a certain automaker achieved a 48% rise in its average transaction price while also seeing a sales increase of 19 percent in the German market. Although the report does not specify which brand, it mentions an average transaction price around €15,000 (approximately $17,200), strongly suggesting it is Dacia.

      The Romanian budget brand has gained recognition for offering practical, value-oriented vehicles like the Sandero, which was Europe's best-selling model in 2024.

      Still Affordable, Just Less So

      Despite the price hikes over recent years, Dacia's model range remains among the most affordable in each category. The brand’s straightforward approach to technology, features, and pricing continues to attract practical buyers seeking transportation without unnecessary flair.

      In Germany, the Sandero starts at €12,490 ($14,300), significantly lower than competitors in the small hatchback segment. The Spring EV begins at €16,900 ($19,300), the Jogger crossover estate at €17,990 ($20,600), the Duster SUV at €18,990 ($21,700), and the forthcoming Bigster SUV priced at €23,990 ($27,400). For customers weary of inflated MSRPs and extraneous features, this pricing structure appears refreshingly sensible.

      The Broader Market Is Struggling

      Dacia's success is in stark contrast to the broader German automotive market, which is facing significant challenges. According to “The Automotive Pricing Study,” new car prices have surged by 40 percent from 2019 to 2024, while overall sales have declined by 22 percent.

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      The most significant drops are in the sub-€30,000 ($34,400) segment, where genuinely affordable options are quickly disappearing. For many consumers, this means either stretching their budgets for more expensive models or abandoning the new car market altogether.

      Electrification Is Driving Up Costs

      The substantial price increase is largely attributed to the rising costs associated with electrification, along with broader economic factors. German and European consumers now have more choices among BEVs, MHEVs, and PHEVs than ever, but these drivetrains come with higher prices. Interestingly, the study notes that only about one-third of the overall price increase is directly related to fully electric vehicles.

      During the same five-year period, net salaries in Germany rose by a notable 24 percent; however, this was insufficient to keep up with car prices, resulting in an 11% decline in overall affordability. Consequently, more buyers are opting for financing, leasing, or the used car market. While the new car market remains active, fewer people can afford to participate.

      Automakers Risk Squeezing Their Own Future

      The study highlights a long-term concern: automakers are increasingly depending on a smaller, affluent customer base. As sales volumes decrease and prices increase, the pool of potential customers shrinks. If affordability continues to deteriorate, so will the foundation for sustainable growth.

      Analysts suggest that it is time for OEMs and dealers to reassess their strategies rather than just pursue profit margins. If the average consumer continues to be priced out, achieving the next sales record may be further away than anyone is willing to acknowledge.