Automotive Sector Faces Mounting Pressures, Foreseeing Price Hikes and Lease Rate Convergence
German automotive dealerships representing Volkswagen and Audi brands are bracing for continued price increases by 2026, driven by a convergence of escalating costs and growing regulatory burdens. Alexander Sauer-Wagner, chairman of the Volkswagen and Audi Partner Association, voiced these concerns in an interview with Handelsblatt, highlighting a precarious situation facing the retail network.
The core issue, according to Sauer-Wagner, isn’t simply rising production costs, but a systemic squeeze on dealer margins. Increased interest rates, soaring energy prices and a persistent labor shortage are all contributing to the financial strain. Compounding these factors is a steadily expanding web of regulatory requirements, demanding more documentation, reporting and operational overhead. “We work more, document more, report more – but at the end, less remains” Sauer-Wagner stated, a sentiment reflective of dealer anxieties across the sector.
This pressure is anticipated to be passed on to consumers, with list prices likely to see a general upward trend. While Volkswagen recently implemented a 1.5% price increase in August, notably excluding electric vehicle models, Audi had previously raised prices on its combustion engine vehicles by slightly over 2%. These adjustments signal a broader industry strategy to mitigate financial pressures.
Interestingly, the future of electric vehicle sales hinges less on list prices and more on monthly lease rates, according to Sauer-Wagner. He emphasized that electric vehicle adoption is largely driven by leasing agreements and that the key to broader market penetration lies in bringing those rates closer to those offered on comparable combustion engine models. He predicts a potential convergence of these rates as early as 2026, a development that could significantly impact consumer purchasing decisions.
This outlook raises critical questions about the long-term affordability of electric vehicles and the political responsibility of policymakers regarding subsidies and incentives. While manufacturers are pushing for electric mobility, the reliance on leasing arrangements to drive sales underscores a potential chasm between government targets and consumer accessibility. The increasing strain on dealerships also highlights the fragility of the automotive retail network and its ability to navigate the complexities of the ongoing transition to electric vehicles, demanding a careful analysis of supportive frameworks and sustainable business models.