JATO Dynamics, the global leader in automotive data, analysis, and intelligence, and Oliver Wyman, a global management consulting firm and a business of Marsh McLennan (NYSE: MMC), have today revealed a new study that analyses the impact of the industry's shift toward electrification on sales and affordability, and how original equipment manufacturers (OEMs) and dealers are responding to these challenges.
According to The Automotive Pricing Study, the increase in supply of Battery Electric Vehicles (BEVs), Mild Hybrid Electric Vehicles (MHEVs), and Plug-in Hybrid Electric Vehicles (PHEVs), contributed to a 40% rise in prices and a 22% decrease in volumes between 2019 and 2024. Notably, only one-third of the price increase is linked to BEVs; the rest is driven by other electrified powertrains, inflation, and economic factors.
Sales declines are most significant in the under €30,000 price category. While higher price segments have partially offset these losses, consumers are either opting for more expensive vehicles or being priced out of the market altogether. Some entry-level brands, however, have thrived. For example, one OEM increased prices by 48% but saw a 19% increase in sales by keeping a low average price around €15,000.
Despite a 24% rise in net salaries between 2019 to 2024, car affordability in Germany has fallen by 11% due to rising prices and a decrease in the availability of entry-level options. As a result, consumers are becoming increasingly reliant on financing, leasing, and more affordable used vehicles.
As the market contracts, the study highlights that OEMs may struggle to compete for a shrinking pool of affluent customers, risking their long-term sustainability and profitability.
Steffen Rilling, Associate Partner at Oliver Wyman, said: "The affordability crisis in the automotive industry calls for immediate and strategic action from OEMs and dealers. By revising their product portfolios, offer structures, pricing strategies, and financing models, manufacturers can effectively address the challenges posed by rising prices and declining sales. Those who adapt quickly and efficiently will be best positioned for profitable growth in the evolving market landscape, as this crisis threatens the future of both Original Equipment Manufacturers (OEMs) and dealers."
David Di Girolamo, Global Head of Professional Services at JATO, added: “With so many changes happening at pace in the automotive market, it's more important than ever to understand the sales evolution on a granular pricing level. To help OEMs identify revenue pools that can be profitably served with current and new vehicle offers, JATO has been monitoring market performance with derivative-level precision. This study highlights the hidden effect of the changes implemented by OEMs, the effect of powertrain shifts, pricing actions, and ultimately the decision making of consumers. By partnering with Oliver Wyman, we have enhanced our ability to provide OEMs with the strategic insights needed to make well-informed decisions.”
Contact:
Bex Barton, +44 7874 866091, jatoteam@firstlightgroup.io
Felipe Munoz, +57 314 680 9848, felipe.munoz@jato.com
About JATO
JATO Dynamics is the world’s leading supplier of automotive business intelligence. Working across more than 50 countries, we deliver accurate analysis and trustworthy insights to support the industry.
Our specialist research solutions are designed to enable automotive businesses to thrive. Whether you need to compare vehicle specifications, optimise your digital marketplace offering, or identify regional trends, our range of customisable tools and reporting solutions can help.
Visit JATO at www.jato.com for more information.
About Oliver Wyman
Oliver Wyman, a business of Marsh McLennan (NYSE: MMC), is a management consulting firm combining deep industry knowledge with specialized expertise to help clients optimize their business, improve operations and accelerate performance. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit marshmclennan.com.
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