Call from German Economy and Climate Protection Minister to Volkswagen
German Minister of Economy and Climate Protection Robert Habeck made an important call to German car manufacturer Volkswagen, saying, “Produce an electric car for 20 thousand euros. Your name should not be luxury, but people’s car.” Habeck warned about the future of Germany’s automotive sector, drawing attention to the increasing competition from China.
'VOLKSWAGEN SHOULD PRODUCE VEHICLES FOR 20 THOUSAND EUROS'
In his speech at the “Industry Summit 2024” conference organized by Handelsblatt, Habeck assessed the effects of China’s rapid entry into the automotive market on the sector. Stating that China has made an effective entry into the market, especially in areas such as solar panels, Habeck emphasized that Germany needs to take further steps to revitalize the electric vehicle market. For this purpose, he presented examples such as charging credits for used or new electric vehicle purchases and tax incentives for low and middle-income groups. He also reiterated the importance of producing affordable electric vehicles in line with his demands for Volkswagen.
Habeck said, “Volkswagen should produce an electric vehicle for 20 thousand Euros. Your brand name should be 'people's car', not a luxury vehicle,” and added that demand for such vehicles will gradually increase.
WEAKNESS IN GERMAN AUTOMOTIVE INDUSTRY CAUSES CONCERNS
The German automotive industry has been going through a difficult period in recent years with technological innovations coming from China and the US. Increasing competition from Chinese manufacturers and Volkswagen's plans for layoffs and factory closures have led to discussions about the future of the sector. These developments have deepened the weakening of the sector.
The crisis experienced by the German automotive industry has led to the country losing its competitiveness and decreasing employment in the sector. The automotive sector accounts for 5 percent of total value added in Germany, provides 3 percent of employment and is the country's largest industrial sector in terms of income. However, as of 2023, employment in the sector has decreased by 0,8 percent.
German carmakers exported 272,6 billion euros last year, or 17,3 percent of total exports. However, the weakening of the automotive sector continues to slow the growth rate of the German economy.
