The German ruling coalition appears divided on the issue of assistance in the automotive industry.

date
23/09/2024
avatar
GMT Eight
Prior to a meeting on Monday with executives from the automotive industry and labor officials that German Minister of Economic Affairs Robert Habeck plans to host, there are still disagreements within the German ruling coalition on how to assist the country's struggling car manufacturers. German Finance Minister Christian Lindner stated that he is unlikely to support the proposal put forward by Chancellor Olaf Scholz's Social Democratic Party to provide 6,000 euros in scrappage bonuses for drivers switching from fuel cars to electric vehicles. Lindner, known for his fiscal hawkishness and also the leader of the Free Democratic Party, said at a press conference, "I am currently not interested in other parties' proposals." This indicates internal discord within the ruling coalition, which has been publicly arguing over limited funds for the past few months. Lindner added, "I regret that there have been no discussions internally about what measures should now be taken to strengthen the framework conditions for the automotive industry, but individual proposals have now been made public." Furthermore, Green Party member and Vice Chancellor Habeck raised the possibility of providing additional support for the industry. While visiting a Volkswagen car factory in northwest Germany, he told workers that while car manufacturers must bear some responsibility for the current difficulties, he felt "obliged to do something to get the market moving again." Habeck's government department spokesperson, Stefan Gabriel Haufe, stated that Monday's meeting would be conducted via video conference and is not the appropriate place to make "specific decisions." It is more like an effort to analyze the industry's situation and discuss possible solutions, and Haubeck will make a statement after the discussion in Berlin at 5:15 pm. In response, BMW issued a statement on Monday rejecting the demands made at the so-called "today's car summit." The company stated via email, "The German automotive industry does not need short-term, market-distorting, one-off bonuses. Instead, the focus should be on sustainable framework conditions that make it easier for customers to choose electric cars." With governments, including Germany, reducing fiscal incentives, the European automotive industry is facing the impact of declining demand for electric vehicles. The European Automobile Manufacturers' Association reported last week that in August, Germany saw a 69% decrease in electric vehicle deliveries, leading to a 36% decline in electric car deliveries across the entire region. It is worth mentioning that German automotive giants have been hit by a series of bad news. Last week, Mercedes-Benz and BMW both lowered their full-year performance expectations. The company's CEO Kllenius promised that he would do everything possible to improve returns, which may indicate a greater effort to cut costs. Due to lagging demand, Europe's largest car manufacturer, Volkswagen, is considering shutting down factories in Germany for the first time.

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