VDA’s New Year Reception – for a new balance between industrial and climate policy
“We expect the European Commission to pursue an industrial policy that deserves the name. We need a new balance between industrial and climate policy. Germany is the only large, traditionally automotive country that has pushed up vehicle production at its sites over the past ten years – to 5.6 million passenger cars in the year 2014,” stressed Matthias Wissmann, President of the German Association of the Automotive Industry (VDA), at the association’s New Year Reception in Berlin.
Speaking to around 500 high-caliber guests from politics, business and academia, including European Commissioner Günther Oettinger, Wissmann came out clearly in favor of increasing Europe’s competitiveness as a business location: “Our vehicles have become ever more climate friendly and environmentally sound. Since 1995, the CO2 output from newly registered passenger cars has come down by 32 per cent. Yet it will not make much sense if in the future we continue to measure climate action only in terms of emissions from new vehicles. We want to build environmentally friendly vehicles – but we have to battle for the right way of doing this, and that includes measures for replacing the fleet, fiscal measures, alternative fuels, the infrastructure and a lot more besides,” Wissmann underscored.
The German automotive industry had “delivered” on the supply side, the VDA president explained, using electric mobility as an example. “Last year German manufacturers introduced 17 new electric series models in the showrooms; and this year twelve more will follow. In an international comparison of providers of electric vehicles, Germany is leading the field with its complete system for electric mobility.” Addressing Brussels, Wissmann emphasized: “A smart policy must provide incentives, it stimulates and challenges. But we also warn against restricting the variety of products from our manufacturers, or simply making decisions on technologies around a green baize table.”
Wissmann drew attention to the difficult situation in Europe. Alongside geopolitical risks – such as those relating to Russia – the speed of reform in some EU Member States left something to be desired, he said. The French economy was still a cause for concern, while the situation in Italy was no better. In addition, the political developments in Greece were nothing to celebrate. “We also view the development of European monetary policy with concern. Some aspects may bring short-term benefit to our industry, but is this not going to make it even more likely that Member States will be liable for one another, and weaken the incentive to implement effective reforms in Southern Europe? Is that really going to promote confidence in our currency?” Wissmann asked.
The fact that these difficult conditions had so far not damaged the health of the German economy was, Wissmann added, due principally to the country’s strong industrial base: “We can thank large corporations and many, many SMEs in particular for the success of German industry. They demonstrate their expertise and flexible commitment day in, day out.” The German automotive industry was the best example of this, the VDA president pointed out. It consistently backed innovation and globalization: “Around the world, the German automotive industry invests almost 30 billion euro in research and development – every year. Germany is the main recipient. What is more, over 60 per cent of German passenger car production now takes place at facilities in other countries, and the figure is rising. This involves not only automotive manufacturers, but also the many suppliers, including numerous small and medium-sized companies. We are successful with this strategy. One car in five now sold anywhere if the world is from a German group brand,” Wissmann stated.
The employees in the automotive industry were also noticing its success: “Today in Germany alone our regular workforce is 23,000 larger than it was one year ago, and the total number of employees is 785,000. This shows that so far rising foreign production has been supporting employment at home. But it also stimulates competition between sites,” Wissmann stressed.
Total employment in Germany was indeed at a record level, Wissmann continued, and tax revenue was pouring in. “But there is no reason to sit back and say ‘it’ll be all right.’ Today we must make Germany fit for the future. That means we need a secure energy supply at competitive prices, and we need to expand digitalization and the traffic infrastructure,” Wissmann said. The advice of the German Council of Economic Experts should be taken seriously. “We need to have another go at deregulation in Germany and Europe,” the VDA president pointed out.
The next spurt of innovation would be the result of connectivity, Wissmann explained. “At the trade shows in Detroit and Las Vegas at the beginning of this year, the German vehicle companies impressively demonstrated the advanced developments in automated driving. It is our manufacturers and suppliers who are currently setting the pace. The connected car will be ‘the next big thing’,” he stated. German vehicle engineers were focused on making vehicles even safer, more efficient and more comfortable. “We want these vehicles to be not only conceived in Germany, but also developed, tested and produced here,” the VDA president emphasized. He also once again expressed his support for the planned free trade agreement (TTIP) between Europe and the US.