700 guests at the VDA’s New Year reception in Berlin – R&D investments increased despite crisis

Wissmann: German automotive industry starts the year 2010 with confidence and aims to increase market shares

Berlin/Frankfurt am Main, 20 January 2010. "The German automotive industry is starting the year 2010 with confidence. In the crisis year 2009 this industry fared better than its competitors and increased its market shares on major growth markets. We were the only major branch of industry in Germany to raise its investments in research and development, by over 4 percent to almost 21 billion euro. A large proportion of this funding flows into the development of economical powertrains and environmentally friendly technologies. We will maintain our high level of R&D investment. These are the best conditions for continuing to expand our position on the global markets and gaining market shares in the future with new and attractive models,” 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” classic car center.

The German Government was well represented – by the Foreign Minister and Vice-Chancellor Dr. Guido Westerwelle, Economics Minister Rainer Brüderle, who gave a welcoming address, Transport Minister Dr. Peter Ramsauer, and the Chancellor’s senior economics advisor Dr. Jens Weidmann, along with numerous State Secretaries – as was the German Bundestag. More than 80 members of the Bundestag accepted the invitation to attend, including the Vice-President of the Bundestag, Dr. Hermann Otto Solms (FDP); Arnold Vaatz, Deputy Chairman of the CDU/CSU Parliamentary Group; Hubertus Heil, Deputy Chairman of the SPD Parliamentary Group; and Kerstin Andreae, economic policy spokesperson of the Alliance ’90/The Greens Parliamentary Group.

The guests also included ambassadors from 16 countries, for example Argentina, Brazil, Indonesia, Japan, the USA and Russia, and members of the VDA’s Managing Board VDA Vice-president Dr. Dieter Zetsche, Chairman of the Board of Management at Daimler AG; VDA Vice-president Dr. Jürgen Geissinger, chairman of the managing board of the Schaeffler Group; Franz Fehrenbach, chairman of the Board of Management of Robert Bosch GmbH; Hans-Georg Härter, Chief Executive Officer of the ZF Group; Prof. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG; Rupert Stadler, Chairman of the Board of Management at Audi AG; Bernhard Mattes, Chairman, Ford of Germany; Tobias Hagenmeyer, President of the GETRAG Corporate Group; Arndt G. Kirchhoff, CEO of Kirchhoff Automotive; Ulrich Schöpker, Chairman of the Management Board at Schmitz Cargobull AG; and Gerti Moll-Möhrstedt, managing partner of Akkumulatorenfabrik Moll GmbH & Co. KG.

Wissmann underscored, "When it comes to reducing CO2, we are making huge strides forward.” In Germany the rate of CO2 reduction in newly registered passenger cars in the year 2007 was 1.7 per cent, but in 2008 it had already climbed to 3 per cent – and in 2009 rate of reduction was a whole 6.5 per cent. "Last year, in nine out of ten vehicle segments – from minis and the compact and medium segments to the luxury segment, off-road vehicles and sports cars, plus minivans and compact vans – newly registered vehicles from German groups had, on average, lower CO2 emissions than imported vehicles,” Wissmann said. "For a long time now premium quality and sustainability have not been a contradiction – instead they need and complement each other.”

"We are not putting all our eggs in one basket – even if electric mobility is currently a major focus,” Wissmann emphasized. Instead, the German automotive industry is consistently pursuing its "broad-based strategy.” This includes optimization of the classical powertrains clean diesel and direct-injection gasoline engine, the hybrid powertrain – ranging from the mild hybrid to the plug-in – fuel cells and the "fully electric powertrain.” He added that more contributions to reducing CO2 can be expected from second generation biofuels and lightweight vehicle construction. "There are still impressive potentials that our engineers can exploit in raising the efficiency of our vehicles and the percentage improvements are in the double-digit range,” Wissmann stated. At the same time, he said, this key industry would continue to raise its high standards in quality, safety and comfort, and remain at the forefront of design developments.

The VDA president requested that policy-makers implement the objectives agreed in the coalition agreement rapidly and in full: "Politicians have spoken out clearly in favor of affordable mobility. To us this means that driving must not be allowed to become more expensive,” Wissmann stressed. He welcomed the improvement in the taxation of year-old cars sold on by the makers’ employees, which was on the agenda just a few weeks ago: "This means that the employees in our companies will no longer be at a tax disadvantage compared to private customers buying a car.” And for the suppliers, who generate three quarters of the automotive value-added and are currently suffering under especially great pressure from the restrictive loan policies of the banks, the coalition agreement offers points that should be exploited. "The suppliers are facing difficult conditions in any case,” Wissmann said. "Together with the politicians and the loans sector, we must ensure we have the necessary conditions for financing the healthy companies.”

Wissmann added that investment in federal transport routes must continue at a high level, with all the income from the truck toll – as far as possible – flowing into the urgently needed maintenance and expansion of the road network. Concerning the CO2 Regulation for light commercial vehicles planned by the European Commission, Brussels had to recognize that a van could not be compared with a passenger car: "In the case of commercial vehicles, the point is not – as with passenger cars – solely the distance traveled, but the weight of the load transported and the volume per kilometer. It is not going to help either the environment or ordinary citizens if a large van is replaced by five smaller vehicles – that would only lead to more traffic, higher fuel consumption and greater CO2 emissions, and would make the transportation of the goods vastly more expensive,” Wissmann emphasized, pointing out that the commercial vehicle industry in particular was in the most difficult economic situation it had ever faced. It would therefore not make any sense to add to the problems by "casting stones in the path” of the companies. At the IAA Commercial Vehicles, which open its doors in Hanover in September, the industry was going to have a glittering display of innovations and present new logistical solutions including improvements in the aerodynamics of commercial vehicles, thus generating additional potential for bringing down CO2 emissions.

The German automotive industry fully expects "important impetus for promoting innovation in Germany” from the summit meeting with Chancellor Merkel planned for early this year, which will focus principally on electric mobility. "We also have to recognize that electric mobility is a strategic goal in other important countries. Now the crucial point is that Germany should not be put at a competitive disadvantage as a location for industry and research,” Wissmann said, in view of the promotion policies in Japan, the USA and France. He pointed out that well-placed research promotion had a huge multiplier effect: "Four billion euro of tax benefits for research creates twelve billion euro of additional value-added in Germany.”

Wissmann also called on politicians for support in European and global issues: "The new Commission in Brussels must promote an industry-friendly Europe that offers opportunities to production in the EU in the coming decade in view of the tougher international competition between different locations, and thus prepares the way for future growth.” He went on to say that this applied in particular to a trade policy that had to bring about genuine free trade and thus to improved access to the important growth markets. European trade policy must not lead to unilateral advantages for competitors from Asia, he said, but must support European industry in its global activities. "We need fair overall conditions for everyone, particularly in international competition,” Wissmann said.