The End of Eldorado in China
Automotive industry in Europe he couldn’t cope with it falling demand for electric vehicles after governments cut financial incentives. German manufacturers were also hit particularly hard falling demand from Chinaa key market for Volkswagen, Mercedes-Benz and BMW.
Habeck, a Green Party member who also serves as vice chancellor, organized a rally on Monday video conference with car company directors and trade union representativesto make a fresh attempt to solve the problems weighing on the country’s most important industry. “What was interesting to me was that the really consistent message in the discussion was that we need clear, credible signals to the market,” Habeck told reporters. “We don’t need shorting and one-time actions.”
No subsidies for new electric cars
Known for his hawkish approach to fiscal issues Finance Minister Christian Lindnerhas indicated that he is unlikely to support Chancellor Scholz’s SPD proposal. This is about issues related to the reintroduction bonus of 6000 eurosfor drivers who they will scrap their combustion car and buy an electric vehicle.
Problems in the government coalition
“I don’t want to focus on the proposals of other parties now,” Lindner, who is chairman of the Free Democrats, told a news conference in Berlin. It was the latest discord in the tense government alliancewhich in recent months has been publicly discussing how to allocate limited funds.
“I regret that there is no internal debate on what can be done now to strengthen framework conditions for the automotive industrybut also that the individual proposals are now being made public,” Lindner added.
Proposal for government support
During a visit to the VW plant in northwestern Germany on Friday, Habeck presented the prospect of additional support for industry. He then announced to the employees that although car manufacturers must shoulder some of the blame for their current problems, he feels “obliged to do something to stimulate the market.”
Stephan Gabriel Haufe, spokesman for the Ministry of Finance, told a government press conference that the talks scheduled for Monday, are not the right forum for making “specific decisions”. Haufe said it was more about analysing the situation in the sector and discussing possible solutions.
Electric car sales in Germany plunge as battery car registrations fall after incentives were withdrawn last year / Bloomberg
The automotive industry expects decisive action from the government
BMW issued a statement Monday in which it addressed the “demands circulating around today’s car summit.” “The German car industry does not need short-term, market-distorting stocks,” the company said in an email. “Instead, the focus should be on sustainable framework conditions that will make it easier for customers to make decisions in favour of electric vehicles”.
The electric car market is shrinking dramatically
Electric Vehicle Deliveries in Germanythe region’s largest car market, fell 69% in August, leading to a 36% drop in car supply across the region, the European Automobile Manufacturers’ Association said last week.
German automotive giants face an avalanche of bad news. Mercedes-Benz Last week he joined BMWlowering its full-year revenue and profit forecasts. It cited weak demand for cars in China. CEO Ola Källenius has promised to do whatever it takes to increase profits, which could signal the need for additional cost-cutting measures.
In a similar situation there is VW. The continent’s largest car manufacturer, for the first time is considering closing factories in Germany due to weak demand.
