German car market set for 2% rise in 2026, says VDA

Germany’s passenger car market is expected to edge higher in 2026 but remain well below pre-crisis levels, according to forecasts from the German Association of the Automotive Industry (VDA).

The organisation expects new car registrations to increase by 2% to 2.9 million next year – still around 20% below 2019 levels – reflecting economic weakness and subdued momentum in the wider European market.

Electric vehicles continue to underpin growth. The VDA projects 979,000 new electric car registrations in 2026, a 17% rise on 2025, assuming government subsidies are implemented quickly and clearly. Battery-electric vehicle registrations are forecast to rise 30% to 693,000 units, while plug-in hybrid volumes are expected to fall 5% to 286,000 following a strong year in 2025.

The outlook comes amid rising global trade tensions. Europe’s passenger car market (EU, EFTA and UK) is forecast to grow 2% to 13.4 million units but remains “stuck at historically low levels compared to pre-crisis levels,” said VDA president Hildegard Müller.

China is expected to reach a record high of 24.5 million registrations, an increase of 1%, while US sales are forecast to fall 4% to 16 million.

German manufacturers’ exports from domestic plants are expected to fall 1% to 3.2 million vehicles in 2026, producing an export quota of 77.5%. Domestic car production is projected to decline slightly, by 1% to 4.11 million units, while foreign production of German brands is expected to rise 1% to 9.2 million.

Electric vehicle manufacturing is set to expand further. The VDA expects 1.76 million electric cars to be built in Germany in 2026, consolidating the country’s position as the world’s second-largest producer of electric vehicles. Production of battery-electric cars is forecast to grow 11%, contrasted with a projected 10% decline in plug-in hybrid output.

Commercial vehicle markets face mixed conditions. Registrations of trailers and heavy semi-trailers continue to fall amid weak industrial output, reaching levels below those seen during the 2020 pandemic. Light commercial vehicle registrations are expected to rise 3% to about 286,400 units in 2026. Medium-weight trucks (6–16 tonnes) are forecast to rebound 9% next year following a sharp drop this year, while heavy truck sales (over 16 tonnes) are expected to increase 9% from a low base.

The bus market is expected to reach 6,200 units in 2025 before falling 5% the following year. Across Europe, heavy commercial vehicle registrations are forecast to rise 8% to 312,000 units, while US volumes could increase 3% to 223,000 units and registrations in China may dip 1% to 1 million