German authorities will help restore the auto industryApril 20, 2020
Germany’s automotive industry and senior politicians are embarking on a new recycling program to recover demand from the coronavirus crisis as Volkswagen and Daimler gradually resume production at European plants this week.
VW CEO Ralph Brandstatter said Monday in his email that securing car sales to customers is critical to ramping up production.
“Sales support could be a smart contribution to protecting the market’s climate,” he added, suggesting that the program could target low CO2 emissions. Germany’s automotive export sector has been hit hard by stops around the world to prevent the spread of coronavirus.
Across Europe, car sales fell 52% in March, a record high, as showrooms were closed to help curb the outbreak of coronavirus and stop production worldwide.
The recycling program to replace old cars with new ones helped the German economy quickly emerge from the effects of the financial crisis that took place ten years ago. The production of vehicles and automotive parts is the largest industrial sector in Europe’s largest economy and provides hundreds of thousands of jobs in the region.
On Monday, Germany reopened its car dealerships as it begins to weaken some blocking measures. But Brandstatter argues that this is probably not enough to get the industry back on track.
The auto industry “must be at least as strong after the crisis as it was before the crisis,” said BMW Prime Minister Oliver Zipse, Bavarian State Prime Minister Markus Soeder, in a speech on April 8.
“Currently, various demands and proposals are being made to the automotive industry,” a spokeswoman for the Ministry of Economy said. “We are closely following them. But there is no solution yet, ”she added.
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