The German Economy Minister is meeting on Monday with the main players in the crisis-ridden national automotive sector, such as Volkswagen, and is calling for rapid aid to support this emblematic industry in the country.
The German automotive sector is under pressure due to the collapse in demand for electric vehicles.
Symbol of this crisis, the VW brand, with the legendary Golf, announced an unprecedented austerity measure that could lead to the closure of factories, the first time in the manufacturer’s history in more than 80 years.
The exchange, which is scheduled for this afternoon, is not expected to lead to any concrete and dramatic announcements immediately. Whether this is necessary will be a matter for decisions to be made later by Chancellor Olaf Scholz’s government, a spokesman for the Economics Ministry said on Monday. Nevertheless, manufacturers have made a number of demands for emergency aid.
Tightening of CO2 regulations
“Bonuses can stimulate vehicle sales in the short term,” especially in the basic segments, said Oliver Blume, while Germany eliminated bonuses for the purchase of electric vehicles from January, causing sales of this type of vehicle to collapse.
The Volkswagen official added that tax incentives should also be considered “for vehicles used for professional purposes” and “registrations of new electric vehicles.”
High costs, such as electricity prices, “which play an important role in recharging” vehicles, will also have to be considered, stressed Oliver Blume.
“We will also have to talk about CO2 regulation in Europe,” Ola Källenius, CEO of the premium car group Mercedes-Benz, told Handelsblatt on Monday.
Most European car manufacturers last week officially asked Brussels for urgent aid measures to cope with the tightening of CO2 emissions standards in 2025, which they consider they are unable to comply with. A warning signal given the low sales of electric vehicles by these manufacturers, which therefore risk colossal fines of several billion euros.
The German automotive industry is facing a major crisis: production has fallen by 25% since 2018, according to a study by the IW institute. At issue: increasing competition from China, which now produces a third of the world’s vehicles at lower cost, and the technological lag of German manufacturers in electromobility.
Source: BFM TV
