Small Cars Take a Back Seat for German Car Buyers

Maybe it's a desire to take full advantage of those freeways with no speed limits; maybe it's a kind of compensation for other perceived shortcomings or mid-life crises -- either way Germans are flocking towards new cars with more muscular, and thirstier, engines. The trend has surprised the author of a study tracking car buying and gas price trends since 2000.

"We really did not expect this high increase in horsepower despite high fuel prices," said Ferdinand Dudenhöffer of B&D Forecast.

Some 17 percent of German auto buyers were interested in cars with less than 70 horsepower six years ago. But in 2006, only 9 percent want the smaller engines. Over the same period of time, sales of cars with between 136 and 190 horsepower doubled to 27 percent, Dudenhöffer said.

Cars are emotional products

"The automobile is still a very emotional product, and this emotion is expressed in sportiness," he said, adding that that leads people to make decisions in the car showroom they might not make if they were deciding while standing at a gas pump.

The emotional attachment that makes a fast car more than just a way to get from point A to point B can also be seen by the growing percentage of people buying cars with up to 350 horsepower. Though still less than one percent of car buyers, it has doubled over the last six years, even as fuel prices have increased by 33 percent, Dudenhöffer said.

"Automobiles are very valuable to Germans, they have a feeling of freedom in the car," he said. " A person's esteem is very closely connected to what they drive."

Fuel price still plays a role

Still, Germans are not willing to ignore the price of fuel completely and are often turning to diesel instead of gasoline, Dudenhöffer added.

"By emphasizing diesels over the last few years, manufactures have done a lot to help consumers," he said. "They are helping get around the conflicting objectives of more performance without more consumption."

Car buyers are turning to diesel engines because they can get similar performance with less fuel. The market share of diesel engines has climbed to nearly 45 percent since 2000 in Germany, according to Dudenhöffer's report.

More cars staying in the garage

In addition to switching to diesel, Germans are also extending the time between fill-ups by driving less, a separate study showed.

"Over the last year we observed that there were cuts in actual distance traveled, that the average distance traveled per car went down 3 percent," said Hartmut Kuhfeld of the German Institute for Economic Research in Berlin.

The decreases, however, may not hold, as a spate of compact sport utility vehicles from Volkswagen, Opel, Audi and Mercedes hit the German market over the next year, the trend toward more powerful engines is likely to continue for the short-term, Dudenhöffer said.

But when planning their long-term strategies, German carmakers may not want to overstress the importance of horsepower as changes occur in other markets, Dudenhöffer said.

"In the USA we are seeing that all the big SUVs are turning into the Americans' slow sellers," he said. "This is a very high economic burden for General Motors, Ford and Chrysler."