Cars Made In Germany Are Now A Thing Of The Past
- Written by : Ashton G. Curran
- Date Published : 2023-04-08
- Date Updated : 2023-04-08
- Category / Tag : articles
The automobile industry has been one of Germany's core industries for many years.
However, the country now faces the threat of an exodus from this industry, as automobile manufacturers struggle with higher costs and a tangle of regulations.
The United States, on the other hand, welcomes these manufacturers with open arms, which could have devastating consequences for the German economy.
An analysis by the management consultancy Berylls confirms the dire situation, predicting a loss of jobs, a decline in gross domestic product, and a relocation of production away from Europe.
This article will delve deeper into the issue, discussing the causes of the situation, its consequences, and possible solutions.
The high costs and strict regulations imposed on the automobile industry are the primary reasons for its struggles in Germany.
High energy costs, in particular, have become a significant concern, which is accepted as an unavoidable consequence of the energy transition.
Moreover, dogmatism is reigning in Germany and Europe, with companies being overwhelmed with requirements and regulations.
In contrast, the USA is creating business-friendly conditions, including subsidies, with the "Inflation Reduction Act," which makes it easier for companies to operate.
The result is that the USA welcomes companies like Volkswagen, BMW, and others, while Europe's bureaucracy and regulation are driving them away.
The consequences of the emigration from Germany's automobile industry are severe.
An analysis by the management consultancy Berylls predicts that around 4.1 million fewer cars will be built in Germany by 2029, resulting in a loss of around 100,000 jobs by the same year.
Gross domestic product will also fall by 0.6 percent.
Additionally, the relocation of factories and jobs will have a ripple effect on other sectors of the economy, including suppliers, who depend on the automobile industry for their livelihood.
The President of the Association of the German Automobile Industry (VDA), Hildegard Müller, has called on Berlin and Brussels to ensure Europe's competitiveness as quickly as possible.
However, it remains to be seen whether the warning comes too late, and the emigration from Germany can no longer be reversed.
One possible solution is for Germany to adopt business-friendly policies, including subsidies and fewer regulations.
Moreover, the country needs to focus on innovation and invest in technologies that will make the automobile industry more efficient, such as electric vehicles.
Finally, there is a need to develop a more skilled workforce that can keep up with the demands of the industry.