In Germany, the Company Car Is a Porsche

Even though demand for cars in Europe has tumbled, BMW, Volkswagen, and Daimler’s Mercedes-Benz are all likely to post record sales for 2012. Deutsche Telekom is partly to thank for that. Germany’s largest phone company, which owns 38,000 vehicles in its home country, according to company reports, is taking advantage of tax breaks that have propped up the local auto market and turned company cars into a widespread employee perk. More than 85 percent of the high-end cars sold in Germany are registered to companies, including most of the Porsches in the tony sports car’s home market. “Without the company car system, I’d certainly be driving something smaller,” says Timo Kob, managing director of Berlin-based IT consultant HiSolutions, who has a 2010 BMW 5 Series GT from work.

In the U.S., fewer than 20 percent of cars were purchased by employers, including government agencies, in 2011, according to CNW Marketing Research. Cars bought by companies for employee use accounted for 32 percent of German auto sales last year, says the country’s motor vehicle office, KBA, up from 27 percent in 2010. Corporate purchases helped keep sales in Europe’s largest auto market relatively steady, slipping 2.9 percent in 2012 even as demand in Europe as a whole plunged to the lowest level in almost two decades. “Company cars are the most stable sector of the German market,” says Christoph Stuermer, an analyst with IHS Automotive in Frankfurt. “Private buyers face high uncertainty, while business clients were still investing their profits from previous years.”