Are car manufacturers driving against the wall? German government seeks ways out of the crisis at "car summit"
In terms of turnover, the automotive industry is the largest industrial sector in Germany. However, it has come under pressure. Economics Minister Habeck has invited to a "car summit".
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- The automotive industry, a key sector in Germany, is in crisis.
- At a digital "car summit" this afternoon, German Economics Minister Robert Habeck (Greens), car manufacturers, associations and trade unions are looking for ways out.
- Prior to the talks, many demands were made to boost the slump in demand, particularly for electric cars.
- However, it remains to be seen whether concrete measures will be put in place at the "car summit".
The automotive industry, a key sector in Germany, is in crisis. At a digital "car summit" this afternoon, German Economics Minister Robert Habeck (Greens), car manufacturers, associations and trade unions are looking for ways out. Prior to the talks, many demands were made to boost the slump in demand, particularly for electric cars. However, it remains to be seen whether concrete measures will be put in place at the "car summit".
The situation:
German manufacturers are struggling with weak sales figures and high costs for the switch to e-drive. Mercedes recently had to cut its profit forecast for this year due to stuttering sales in China. Previously, BWM had already lowered its sales and profit expectations for the current year.
Volkswagen has terminated the decades-old job security agreement with the trade unions in Germany and no longer rules out plant closures and compulsory redundancies. There is fierce resistance to this from the works council and IG Metall. The crisis has also reached the automotive suppliers. At the same time, new competitors such as Tesla and manufacturers from China are forcing their way into the market.
A paper by SPD economic politicians talks about an inadequate model range, particularly for the mass market. Reference is also made to charging infrastructures being developed too late.
A study by the German Economic Institute states that production in Germany has been shrinking for years. It is now around 25 percent lower than in 2018. The location is also coming under increasing pressure due to high energy costs.
The summit:
Habeck has invited people to a video conference this Monday from 3.30 pm to 5 pm. The aim is to "exchange views" on the current situation in the automotive industry, according to the invitation. Representatives from the industry association VDA, IG Metall, Volkswagen, BMW, Mercedes Benz, Tesla Germany, Bosch, Continental and ZF have been invited.
One of the key questions is what the biggest obstacles to the ramp-up of e-mobility in Germany are and where the most urgent need for action is seen.
The announcement:
Habeck had held out the prospect of new government support measures for electric cars. "I already feel an obligation to see that the market picks up again now," he said during a visit to the VW plant in Emden.
Habeck pointed out that the German government is planning tax incentives for e-cars as company cars. This should also strengthen the used car market for e-cars, as company cars are available relatively quickly at a favorable price as used cars. Beyond that, Habeck said, we will see if anything else is possible.
In view of budgetary constraints, however, it seems unclear whether the German government will actually decide on comprehensive additional measures to boost demand for electric cars. Following the abrupt halt to state subsidies at the end of last year, new registrations of electric cars have plummeted.
The proposals:
Before the "car summit", politicians and associations were full of proposals to boost the car economy. "We have to stimulate the market," said Lower Saxony's Economics Minister Olaf Lies (SPD). "We now have to draw from the big pot of possible measures with the big ladle." Lies mentioned, for example, purchase incentives for private car buyers or more favorable leasing models.
SPD economic politicians are proposing a new "scrappage scheme 2.0". Anyone who "scraps" their combustion engine and buys a new e-car would receive a bonus of 6000 euros. For the purchase of a used e-car, there should then be 3000 euros. In addition, a "social leasing program" based on the French model could be introduced - people with low and medium incomes could receive a state supplement to the leasing premium for a mid-priced e-car.
In the view of the environmental association Greenpeace, the German government should introduce a premium for small, economical e-cars up to a maximum of 30,000 euros and finance this with a new registration tax for heavy combustion vehicles. The chairman of the European People's Party, Manfred Weber, called for the threat of fines for car manufacturers to be suspended if stricter fleet targets for CO2 emissions are introduced.
The warning:
Habeck had emphasized in Emden that possible new subsidy measures would apply retroactively. The message behind this is that potential buyers of e-cars should not hold back now. Industry expert Ferdinand Dudenhöffer warns: "The big risk of the car summit discussion that has now been triggered is further uncertainty among consumers. Of course, buyers are now waiting to see whether a bonus is coming." This does not bode well for the market for electric cars.