The German car industry is under increasing pressure

The car industry will cease to be a driver of economic growth in Germany, according to a study by the Institute for German Economics (IW) in Cologne. This was announced on the eve of a meeting between representatives of the automotive industry and the federal government. The corona crisis and the transition of the car industry from internal combustion engines to electric motors is hitting the car industry hard. And thus the overall German economy, for which the car industry has long been a driver of economic growth.

The importance of car manufacturers and their subcontractors can be seen in a few figures: almost ten percent of Germany’s GDP goes to the car industry. More than two million people in Germany live directly and indirectly from this industry. And it is at the forefront of innovation. Nearly 40 percent of all research and development expenditure goes to the automotive industry.

Under pressure both small and large Crisis meetings of car industry representatives with policy representatives, such as today’s (8 September) video conference, are regularly accompanied by requests for incentives to buy new cars. But this time, the belief that the differences between big and small are such that one cannot go with the same incentives for everyone seems to have prevailed. True, car manufacturers and their subcontractors, large concerns, as well as medium and small businesses, are all under pressure. But some are threatened with survival, others are not.

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Japanese car manufacturers

The Japanese automobile industry is unique from a historical point of view, and some parallels can be drawn, common to all brands from the Far East. Car manufacturers from the „Land of the Rising Sun“ mostly originated from large industrial corporations as branches, in the first half of the 20th century. Initially, they were in line with the requirements of the domestic market, especially when it comes to commercial and passenger vehicles. However, it is only since the 1960s that the Japanese automobile industry has experienced enormous success on a global scale, being among the three countries with the most developed automobile industry in the world.

The oil crisis of 1973 was largely in favor of the placement of Japanese vehicles. Millions of customers in the North American market have exchanged their powerful, but also very „thirsty“ cars for „Made in Japan“ economical models with four-cylinder engines. Meanwhile, Japanese cars have proven to be extremely reliable in maximizing opportunities. From then until today, the „Japanese“ have become synonymous with affordability, low running costs and of course reliability

Bmw

BRAND HISTORY – BMW Although their engines are closest to perfection, the acronym BMW does not represent „Best Motors in the World“, it actually means „Bayerische Motoren Werke“. The secret of their success lies in the constant pursuit of quality and excellence. Unlike other manufacturers, he initially focused his production primarily on engine production. The company was founded, back in 1913, by Karl Friedrich Rapp. Rapp-Motorenwerke, which would later change its name to BMW, focused primarily on aircraft engines, due to huge demand during the First World War. Despite the success, Rapp failed to sell its stake in the company, due to unwanted vibrations produced by the engines. Due to financial difficulties, Karl Rapp resigned in 1916. The Austrian company formed by Franz-Josef Popp and Camillio Castiglionia re-launched BMW, convincing its then-owner Gustavo Otto of the merger. That is how the „Bayerische Flugeug-Werke“ was formed, i.e.

The car industry in 2022: crown, chips and uncertainty Will the crisis in the automotive industry continue next year?

Due to the crown, there is great uncertainty. Production processes are interrupted, factories are closed, and the government is short of chips. After more than three decades in which the production of the automobile industry exceeded the demand, during the corona virus pandemic, the situation changed completely. Manufacturers lack chips, there are problems in supply chains, and the prices of raw materials are rising. Production is stuck, vehicle buyers can no longer count on big discounts, and they are waiting for ordered cars much longer than before. „Comprehensive recovery is unlikely to happen until 2023,“ said car industry expert Ferdinand Dudenhefer of the German Center for Automotive Research (CAR) in a recent study.

In 2019, ie the year before the crown crisis, 3.6 million cars were sold in Germany, and in 2020 that number dropped to 2.9 million. According to the forecasts of the Center for Automotive Research, 2.69 million can be expected to be sold this year. Although CAR Dudenhefer expects that in the first half of next year, German manufacturers will continue to struggle with the consequences of the chip shortage, sales should still increase to around 3.01 million cars. Dudenhefer expects a return to the level from before the panemia, ie a complete recovery of the car market in Germany, only in the second half of 2023. Only then, he says, can it be expected that the market’s supply will stabilize. According to that expert, at the end of 2023, the average age of vehicles registered in Germany will be over ten years, and that could lead to „rejuvenation“ of the vehicle fleet, ie to increased purchase of new cars. This process of renewal is primarily encouraged by electric cars, which are increas

WHAT THE FUTURE OF THE AUTOMOTIVE INDUSTRY LOOK LIKE One factory has totally changed a strategy that says a lot

Global sales of electric vehicles could grow by 50 percent or even more this year, while sales of internal combustion vehicles are expected to grow between 2 and 5 percent. These are the estimates of analysts Morgan Stanley, who in their analysis also predicted that the global penetration of electric vehicles will reach 4 percent, and that by 2030, their share will rise to 31 percent.
Such forecasts are certainly one of the reasons why more and more car giants are deciding to switch to electric vehicles, and many companies are also planning to build their own battery factories. According to some projections, the wars of the future will be fought precisely because of the batteries for electric cars.
That is why the company Tesla Ilona Maska is already announcing the production of a new type of battery that will have six times more power, take up less space and consume less energy. Volkswagen has announced that it plans to launch six plants for the production of fuel cell batteries in Europe by 2030, and the British luxury car manufacturer Jaguar has announced that by 2025 all its models will be electrically powered.

And General Motors claims that it is on the verge of commercialization of "the most exotic battery chemistry of all", so the legendary American car manufacturer says that it will "tame lithium metal"
For many car manufacturers, e-mobility is becoming the main focus and core business. "We are now systematically integrating additional processes into the value chain," said Volkswagen CEO Herbert Dis.

The company announced that it would reduce the cost of battery systems to well below 100 euros per kilowatt hour on average ($ 119) and pointed out that this would finally make e-mobility an affordable and dominant propulsion technology.
They still see the lack of infrastructure as a major obstacle to the mass acceptance of battery-powered cars.