VDA Managing Director Bräunig at ACOD Conference in Leipzig: Secure liquidity
VDA: Revival of international markets offers opportunities for suppliers
Frankfurt am Main/Leipzig, 18 February 2010. "The economic prospects for the supply companies have improved slightly following the crisis year of 2009. We expect to see demand rising in the premium segment and a revival of the international markets. However, in addition to strategic orientation on growth markets, in the short term the companies still need to secure liquid funding,” stressed Klaus Bräunig, Managing Director of the German Association of the Automotive Industry (VDA). He was speaking to around 250 participants at the ACOD Conference in Leipzig. The Automotive Cluster Eastern Germany (ACOD) is the umbrella initiative for promoting sustainable development in the automotive industry in the eastern German states. It covers the vehicle manufacturers, suppliers and service providers, research institutes and associations in the five eastern German states – and the VDA as a partner.
Despite the KfW programs and the protection for the credit insurers, we still had to expect that credit will be hard to come by for some supply companies, Bräunig said. The VDA managing director pointed out that in the coming weeks companies would be presenting their results from the business year 2009, and there was no way they would look "at all brilliant,” owing to the worldwide finance and economic crisis and the collapse in demand on the international automotive markets. "If, when ranking the companies, the credit institutes look solely at the weak figures of the last financial year and draw conclusions from that for issuing future loans, the situation will get worse,” Bräunig stressed. He went on to say that instead the VDA was trying to convince the credit institutes that when they assess companies’ future profitability they should pay more attention to capability for innovation: "We should give more weight to future viability and the positive prospects for our industry. The first discussions we have held with banks on this subject make us optimistic that this may succeed,” Bräunig underscored.
The suppliers’ orientation on innovations was a "strategic necessity,” he said, despite all cost pressures, adding that "The German manufacturers will continue to regard themselves as leaders in technology both for traditional powertrains – such as the clean diesel and direct injection gasoline engines – and for alternative powertrains.” And when it comes to quality, safety, comfort and design, the German automotive industry would once again raise its high standards.
Bräunig added that the suppliers could benefit from this trend. "In the crisis year of 2009 we have increased our investments in research and development by 4.4 per cent, to 20.9 billion euro, creating the right conditions for future growth,” Bräunig emphasized. The share of all R+D spending by German industry contributed by the automotive sector had climbed to over 36 per cent. "So the German automotive industry is backing up, both nationally and internationally, its aim to be the leading branch of technology,” the VDA managing director stressed.
For the SMEs in particular, the speed of innovation was one of the decisive factors in competition. Bräunig welcomed the fact that the ACOD regarded this factor "rightly to be of outstanding importance.” With the VDA’s move to Berlin, in just a few days the ACOD office in Ludwigsfelde will be much nearer – instead of 530 kilometers (from Frankfurt am Main), it will be only 30 kilometers away. And this, too, will make cooperation between the VDA and the ACOD even closer. "We will make use of that both in the Cluster’s board, on which the VDA is represented, and further afield. The automotive competencies of vehicle manufacturers and suppliers alike in the eastern German states form an important part of our value-creating structures,” Bräunig said.
