Werbung
Werbung

VDA President Müller demands a paradigm shift from politics

Reforms instead of regulation and more strategic foresight from politics for a successful transformation: VDA President Müller spoke plainly at the annual press conference. She called for standing up for democratic values. The forecast predicts fewer heavy trucks but more electric cars.

Germany should once again become the engine of Europe, according to the VDA President. (Image: VDA)
Germany should once again become the engine of Europe, according to the VDA President. (Image: VDA)
Werbung
Werbung
Johannes Reichel
von Nadine Bradl

Politics must free itself from the perpetual crisis mode and demonstrate strategic foresight, as demanded by VDA President Hildegard Müller on the occasion of the annual press conference of the automotive association. From her perspective, trade and raw material agreements as well as energy partnerships are crucial for growth and prosperity. She also appealed, against the backdrop of the resurgence of right-wing extremist parties, that it is everyone's responsibility to stand up for democracy and our values. For 2024, the association expects significant growth in domestic production of electric cars.

“We must generate confidence through strategic foresight. The crisis principle and the associated perpetual self-occupation must end. What is needed now are reforms instead of regulation—and less micromanagement," Müller demanded, calling for a paradigm shift in politics.

Strategic Sovereignty

Due to the perpetual crisis mode of recent years, politics has leaned too much into defensive and reactive behaviors – and in doing so has revealed two glaring deficiencies:

“The traffic light coalition fails to develop a self-determined and forward-looking capability to act. Even less does it manage to convey the impression of having a strategy and a clear goal. Overregulation and bureaucracy paralyze growth and innovation. This leads to an increasing loss of trust – among industry and the population,” Müller analyzes.

“'Acting instead of reacting' must be the motto: courage for reforms – towards a strategy that provides orientation and puts the core tasks back at the center. This primarily includes positioning the location to be internationally competitive again, concluding trade and raw material agreements as well as energy partnerships, advancing deregulation, and generating innovation through technology openness. Developments must be regularly measured and evaluated to make adjustments if necessary, ensuring goal attainment. Politics must act again and anticipate challenges in advance: act proactively instead of reacting retrospectively. Only in this way can we manage the power and resources and develop resilience against crises,” emphasizes Müller.

The Location Becomes the Achilles' Heel

“I want this country to become the engine of Europe again, to develop and export innovations and technologies that enable climate-neutral growth worldwide. The problem: what is centrally important for this has become our greatest weakness. A competitive, attractive, globally coveted location is the foundation for growth and prosperity. In the past year, we have not made significant progress in many important areas: not in terms of competitive energy prices, not on the topic of a competitive tax system, not on the topic of reducing bureaucracy. Raw material and energy partnerships were hardly concluded, and there is practically no progress on free trade agreements,” says Müller.

The development is all the more dramatic with regard to the upcoming election year:

If Germany loses, Europe continues to lose economic power, attractiveness, then we lose relevance – in a world where Europe and its economic power are more than ever required to shape and stand up for our values,” warns Müller.

Room for the Economy Secures Room for Political Maneuvering

Therefore, Müller calls for a paradigm shift:

“Reforms instead of regulation. Pragmatism instead of micromanagement. Regulation has a dampening effect when not only the goals but also the instruments are politically predetermined. I am convinced: room for the economy creates and secures the foundation to actually realize ambitious goals. This way, we can master the transformation and simultaneously remain a leading economic nation. We need a modern mix of market-oriented economic policy and shaping industrial policy – especially with a view to international developments. Subsidies, for instance, can be necessary as supportive measures for promoting future technologies or strengthening resilience – keyword: semiconductors or battery factories. At the same time, combating symptoms instead of long-term strategic addressing of the causes of lack of competitiveness is not a long-term transformation strategy.”


Data and Artificial Intelligence

Regarding the European Data and AI Act, Müller cautions:

“If we stick to this mentality and type of policy, we will leave the field to others. We have enormous potential here: our manufacturers and suppliers have all the prerequisites to set the standards and benchmarks worldwide. The crucial thing is also here to find the right balance between necessary regulation and utilization of opportunities. Therefore, we must first utilize and expand our strengths: good qualification – especially within companies, a highly developed industrial landscape, our high level of international experience and networking. This forms a good basis for innovations in this field. Secondly, it must be ensured that the missing or insufficiently capable (digital) infrastructure does not become a limiting factor for our progress in this area. Thirdly, we must have the courage to make development and experimentation possible. Regulation is the second step; it must not be the first one,” says Müller.

In times of uncertainty, confidence is particularly needed:

“We are successful and globally leading – be it in automated driving or circular economy, and we speak too little about it. We can do innovation: It is no coincidence that our companies are internationally in the leading positions for patent applications for future technologies. Success stories are so important for the mood in our country – and they motivate us to take action. For the success of the massive transformation, every individual is needed.”

Müller further explains: “German cars, commercial vehicles, and suppliers enjoy high regard worldwide. Our brands stand for tradition and innovative technology leadership. German car manufacturers and the automotive medium-sized business stand for pioneering spirit, quality, outstanding brands, and decades of experience and success. We will do everything to keep it that way and are making immense investments for this purpose. It is our guiding principle to vigorously drive the path to climate neutrality. We accept our responsibility for the success of the transformation. From 2024 to 2028, manufacturers and suppliers of the German automotive industry will invest around 280 billion euros worldwide in research and development. The focus is on transformation, particularly electromobility including battery technology, autonomous driving, and digitalization. Thus, our manufacturers and suppliers will invest an average of 56 billion euros annually worldwide in research and development during this period – further increasing their R&D expenditures.”

The innovative power of companies is the recipe for success:

“We seize the opportunity to further develop our tradition – and simultaneously be pioneers, with the ambition to shape the long-term future. As the automotive industry, we will act with our strengths – and we want to utilize the strengths of our country and our continent. Because we want to continue the success story here. Therefore, we will not tire of advocating for more competitiveness,” Müller continues.

Showing Responsibility and Attitude

Looking at the increasing populism and extremism in Germany, Müller cautions:

“We all – and I explicitly mean the economy as well – must stand up for our values and our democracy and take responsibility. The leverage is there: around 780,000 people are employed in the companies of the German automotive industry alone. And not only in our businesses but also beyond that, we must encourage people to take a clear stance. The economy must serve as a role model.”

Forecasts 2024 

During the press conference, VDA Chief Economist Dr. Manuel Kallweit also announced the key forecasts for the year 2024:

“For the German market, we expect a decline of one percent to still 2.8 million units in 2024. This is about a quarter less than in the pre-crisis year 2019. We anticipate lower sales of electric passenger cars (minus 9 percent to 635,000 units). While sales of plug-in hybrids (PHEVs) are expected to increase by 5 percent to 185,000 units, we predict a decline of 14 percent to 451,000 units for purely battery-electric vehicles (BEVs)."

The markets in Europe (U27, EFTA & UK; +4 percent) and the USA (+2 percent) are expected to grow slightly more in 2024 compared to the Chinese market (+1 percent) due to the weak prior-year levels. For the global passenger car market, a moderate increase of 2 percent is expected. This would bring the level of 2019 almost within reach again.

For domestic passenger car production, the VDA expects a sideways movement this year (± 0 percent; 4.1 million units). One reason for this is overall economic weakness. A positive development is expected in the domestic production of electric passenger cars, which is likely to continue to rise in 2024.

"We expect a significant increase of 19 percent here (BEVs: +25 percent, PHEVs: ±0 percent). The foreign production of German corporate brands is likely to increase by 4 percent to 10.6 million passenger cars."

Decline in Heavy Commercial Vehicle Exports

Regarding exports, the VDA expects a slight increase of one percent to just over 3.1 million units in 2024. This corresponds to an export ratio of 76 percent.

"For heavy commercial vehicles, we expect a decline of 10 percent for Europe (U27, EFTA & UK) and 5 percent for the USA. In China, we expect growth of 8 percent."

The economic situation in the trailer and body industry was already in decline in 2023. Both overall trailers (-13 percent) and heavy semi-trailers >6t (-18 percent) saw significant decreases. This trend is expected to continue into 2024, albeit with slightly less momentum.

Translated automatically from German.
Werbung

Branchenguide

Werbung