700 guests at VDA’s New Year Reception in Berlin – planning security for customers
Wissmann: German automotive industry may emerge from the economic crisis stronger than others
Berlin/Frankfurt am Main, 21 January 2009. "The global economic and financial crisis is now also exerting painful effects on the automotive industry. The companies are taking decisive action and adjusting their production very promptly to the falling demand. This requires taking hours off working time accounts, extended plant holidays and in some cases short-term working. However, I am convinced that with their drive for innovation and their outstanding products the German manufacturers and suppliers will emerge from this crisis faster and stronger than others," stressed Matthias Wissmann, President of the German Association of the Automotive Industry (VDA). He was speaking to 700 guests at the VDA's New Year Reception in Berlin's "Meilenwerk."
The German Federal Government was well represented - by Federal Minister of Finance Peer Steinbrück, who gave a welcoming address, Federal Minister of Transport Wolfgang Tiefensee, the Federal Chancellor's Economic Adviser Dr. Jens Weidmann, and numerous state secretaries. The Deutsche Bundestag (the lower parliamentary chamber) was also well represented - by Fritz Kuhn, head of the Green Party's parliamentary group, Peter Ramsauer, head of the parliamentary group of Bavaria's Christian Social Union (CSU), Dr. Werner Hoyer, deputy head of the parliamentary group of the liberal Free Democrats (FDP), and several other members of the German parliament. Ambassadors from 14 countries were present, including Canada, Mexico and Russia, along with 13 members of the VDA's Managing Board, including Prof. Martin Winterkorn, Chairman of the Board of Management at Volkswagen AG, Rupert Stadler, Chairman of the Board of Management at Audi AG Bernhard Mattes, management chairman at Ford-Werke GmbH, and Franz Fehrenbach, chairman of the Board of Management at Robert Bosch GmbH.
At this time nobody can say precisely what the coming months will bring, Wissmann underscored, adding, "It will depend mostly on what the effects are of the billions put into economic recovery programs in America, Europe and Asia. But even if these instruments have their intended effects, the great likelihood is that we will continue to have shrinking markets at least in the first half of 2009." He also said that initial signs of an improvement could be expected in the second half of 2009 at the earliest.
The German Financial Market Stabilization Act (Finanzmarktstabilisierungsgesetz) and the two recovery packages put in place by politicians have sent out a "clear signal" and demonstrated their capability to take action, said Wissmann. And the German Government's decision on new regulations for motor-vehicle tax and the "environmental bonus" (to customers who scrap an old car and buy a new one) are important initial steps for replacing old vehicles on German roads with new ones. "The combination of financial guarantees for companies, reform of the motor-vehicle tax and the "environmental bonus" can now provide a boost to the domestic passenger car market and help the companies overcome the difficult economic situation. Along with the exemption of Euro 4 and Euro 5 vehicles from motor-vehicle tax, this means that the time has come for consumers to take advantage of the tax breaks and the lower car prices. In this way customers will have long-term planning security when buying a new car," Wissmann said. "The measures can contribute to safeguarding jobs at manufacturers and suppliers, and help to achieve the ambitious climate protection goals," he emphasized. Reducing the current average age of the vehicle fleet of almost 9 years by one year would save 2 million tonnes of CO2, while new cars' lower fuel consumption would also be good for motorists' wallets, Wissmann explained.
He stressed that "At this time the most important goal is for the German automotive industry to do everything it can to secure the value added chain. The vehicle manufacturers regard the difficult position of many suppliers with particular concern and are doing their bit to safeguard their successful development partnership." However, the commercial banks and the Public Banks must also live up to their role in relation to the national economy as a whole. He added that the German Government's "rescue package" for the finance sector served first and foremost to provide the manufacturing industry with the necessary funding.
"Now we need all players - the politicians, banks and industry - to take their responsibility seriously and do a good job. Only then will we have a chance that the current crisis will not last for a longer period of time, and instead the economic slump will already bottom out in the second half of the year," Wissmann emphasized.
He went on to say that the VDA, an umbrella organization of over 600 companies with a total turnover of around 290 billion euro, was also a "successful business enterprise" organizing the world's most important trade fair for passenger cars - the IAA Cars in Frankfurt - and the most important trade fair for commercial vehicles - the IAA Commercial Vehicles in Hanover. But above all, the VDA sees itself as an association that has to articulate the interests of its members convincingly in dealings with policy-makers. "Since the year 2000 the VDA has been legally headquartered in the federal capital Berlin, where it has an office (previously in Berlin's Schmargendorf district but recently moved to the central Gendarmenmarkt). Now the VDA's Managing Board has decided to improve the Association's political and strategic presence and relocate the Association's business office from Frankfurt am Main to Berlin. This means another challenge that we will have to master in the coming twelve months," Wissmann said.