Germany is at risk of losing its status as a powerhouse of the automotive industry, warned Hildegard Mueller, president of the German Association of the Automotive Industry (VDA), ahead of the IAA Mobility fair.
German manufacturers may survive without reforms, but Germany would lose its status as an automotive hub, the association’s head told dpa.
Key problems, according to Mueller, are excessive regulation, slow political decisions, and the lack of a legal framework for issues such as artificial intelligence.
At the forefront, however, is the cost structure, she said, which is dramatically weakening Germany’s international competitiveness. Energy costs, in particular, are significantly higher in Germany than in other major car manufacturers, Mueller specified.
The automotive industry is calling on the government to temporarily subsidize electricity prices to prevent battery and semiconductor manufacturers from leaving Germany and to attract foreign companies to the largest European economy.
Last week, the government announced a tax relief package for companies amounting to 32 billion euros over the next four years, but electricity subsidies are still under discussion.
Chancellor Olaf Scholz will open the IAA Mobility fair on Tuesday, which brings together car manufacturers, suppliers, technology companies, and politicians, dpa notes.
