BMW AG 
"Without an ambitious program for competitiveness and location, we are in danger of permanently losing our global edge," said VDA boss Hildegard Müller at an online press conference on Wednesday. Germany is at risk of losing ground due to the US subsidy program worth billions and the confrontation with China. "The industrial location is falling behind internationally." If no countermeasures are taken here, the climate protection efforts in Europe will have the exact opposite effect, namely the relocation of companies abroad with low or hardly any environmental regulations there. At the same time, competition from Chinese car manufacturers in Europe is increasing.
"The USA is pursuing a consistent policy that creates the conditions to pave the way for climate neutrality in the transport sector too," said the head of the association. Europe must react to this. The global axes must be prevented from shifting. "Only if we remain internationally relevant will we continue to have global political weight in the future," emphasized Müller. She once again criticized the protectionism associated with the US government's Inflation Reduction Act. "The EU Commission must continue to work for improvements and a sustainable solution for vehicles from EU manufacturers." It is also important to prevent the USA's promotion practices from leading to imitators and counter-reactions that could result in a spiral of protectionism.
EUROPE NEEDS AN AGENCY FOR STRATEGIC RAW MATERIALS
The European response to trends towards de-globalization should be raw materials and trade agreements as well as energy partnerships in order to reduce dependencies. In order to prevent bottlenecks in the supply of raw materials required for the expansion of e-mobility, the pace must be increased. "Europe now needs an agency for strategic raw materials," said Müller.
Müller called on the German government to ensure an affordable and sufficient CO2-neutral energy supply. So far, politicians have mainly focused on dealing with the acute energy crisis without ensuring a long-term, strategic supply. Germany urgently needs to expand its energy supply, Müller demanded. The VDA boss did not specify from which sources the additional energy should come so that prices can fall. That was a matter for the suppliers, said the former lobbyist for the energy industry.
After the coronavirus pandemic, the energy crisis resulting from the war in Ukraine had ruthlessly exposed the weaknesses of the location. Müller said that the high costs were already having serious consequences for medium-sized companies. She is increasingly hearing the question of whether Germany is still the right location. According to a survey of suppliers, 22 percent want to relocate investments abroad. 53 percent want to postpone or even cancel planned expenditure.
CAUTIOUS OPTIMISM FOR 2023
After a mixed year, the industry is cautiously optimistic about 2023. Following the supply bottlenecks and production stoppages in the past coronavirus year, car manufacturers and suppliers are counting on supplies running smoothly again. At the same time, the exceptional economic situation is coming to an end, during which manufacturers were able to push through high prices and make substantial profits due to the strong demand.
Despite inflation and economic uncertainty, car sales in Germany are likely to grow by two percent to a good 2.7 million units. This would still be a quarter less than in the pre-crisis year of 2019. For Europe (EU27, EFTA, UK), the VDA is forecasting an increase in sales of five percent to 11.8 million vehicles. In the USA, the market for so-called light vehicles is expected to grow by four percent to 14.2 million units. For the world's largest passenger car market in China, the VDA is forecasting growth of three percent to 23.7 million units. This would result in moderate growth of four percent to 74 million vehicles for the global market, 6.5 million fewer than in 2019.
(Report by Jan C. Schwartz and Victoria Waldersee, edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
