Translated material
“It will be very scary”
The German auto industry is counting on its strength
While in different countries the authorities are taking emergency measures to save national automakers, in the European automobile “forge”, Germany, automakers, on the contrary, are trying to avoid such help. Manufacturers Mercedes and BMW intend to survive through their own competitiveness. This, however, does not mean that the crisis did not affect them. The workshops of auto giants, empty long before the traditional Christmas holidays, have become one of the surest signs of the growing crisis.Today, assembly lines have been stopped, in fact, throughout the entire automotive industry - from the mass auto manufacturer Opel, which has not yet been completely freed from the prospect of bankruptcy, to the exclusive Porsche brand, from the largest automaker in Europe, Volkswagen, to BMW, which until relatively recently was basking in the rays of success. No one can say with certainty whether the coming year will be a time of mass layoffs and shortened work shifts at all these enterprises. The manager of one of the German automobile enterprises admits: “We can only plan a week in advance, this is how the whole industry lives at the moment.” In November, car sales in Germany fell by 18%, and the European average by 26%.
According to the President of the Automobile Union of Germany, Matthias Wissmann, the speed and nature of the decline in which the automobile markets found themselves is unprecedented. The crisis, he notes, is not limited to just one country, but covers “all important (for the German auto industry - Ed. ) markets around the world." Nevertheless, analysts rate the chances of German companies relatively high. The finances of Daimler, Volkswagen and most other European automakers are now significantly more reliable than those of their competitors from the East. Although in terms of innovation they will have to fear competition from Japanese manufacturers and related suppliers.
The consequence of the crisis is that in Germany, and throughout Europe, purchasing a car has never been as attractive as it is now. 40% discounts on a car of a quite decent brand, offered as a “demonstration”, are becoming commonplace. The current period in the life of European car markets has already been given the name “battle for discounts.” It is in reducing market prices that auto dealers compete with each other. Experts note that in this sense, the car trade in Germany today is beginning to have features that are more characteristic of the American market. New cars now leave the gates of car dealerships on average 15% cheaper. Truly collapsed prices for “outdated” cars, those that have already gained followers in the model range. Here the buyer's savings amount to thousands of euros. In addition to all this, there are endless promotions: interest-free lending, attractive “bonuses” in the form, for example, of winter tires or music systems. In this sense, by the way, foreign suppliers are very active. Ford undertakes to carry out free scheduled maintenance for four years, Hyundai and Subaru undertake to pay VAT themselves when selling certain models. And in Germany it is 19%.
But what is great for the buyer is death for the merchant. “There is no one left now who can make money selling a new car,” says Robert Rademacher, president of the German Central Association of Automotive Trades (ZDK), which unites medium and small car dealers. According to ZDK, two out of three dealers expect to end the current year in the red. The prospects for next year also appear very gloomy: the number of new car registrations in Germany will decrease by 10% to 2.8 million vehicles. This, according to ZDK analysis, will be the lowest figure since the reunification of Germany. For comparison, we can cite the following indicator: in 1989, more than 2.8 million cars were registered in the then Federal Republic of Germany alone. During those turbulent times of falling concrete walls, automakers and dealers (as well as representatives of other industries) were anticipating their finest hour in the rapidly emerging East German car market. Today, under the pressure of collapsing demand, they are, as they say, “with their backs against the wall.”
November is still called the “black month” in terms of demand for auto products in Europe. December statistics have not yet been summed up, but everyone understands that there is no chance of improving the indicators. Last month, sales fell by as much as 26%. 932.5 thousand cars were sold, which turned out to be the lowest figure in the last 15 years. Could the situation in the car market be even darker? Philosophical experts recall that this color has more than twenty shades.
The largest collapse of the automobile market in recent weeks among European countries was experienced by tiny Iceland. Traders managed to add as many as 100 cars in November, which is 95% less than in the same period last year. Thus, Iceland came out on top in terms of the level of losses suffered by auto dealers. Things are not much better in Spain - half as many cars were sold there as in November last year. And in the UK and Italy the “minus” was 37 and 30%, respectively.
Against this background, Germany and France, which, apparently, are not without reason considered the “motors of Europe,” lost 18 and 14% in monthly sales volumes in November. The Elysee Palace responded with measures to support demand for cars (not only, of course, its own French production). The state there now issues so-called car owners. recycling bonuses - 1000 euros for each old car scrapped. In Germany, the authorities have taken a different route: buyers of cars with the highest environmental performance are exempt from paying vehicle taxes. Local exporters still pin some hopes on Poland and the Czech Republic, where in November there was even an increase in demand for certain brands compared to last year.
The Spanish auto industry is also going through difficult times. The local manufacturer Seat, part of the Volkswagen concern, was forced to resort to severe cost-saving measures. For a full five months - from February to June 2009 - production is expected to be sharply reduced. Although Seat is already operating at “low speed”, sales levels have decreased by 24% and about 5,300 workers have been sent on leave. Auto experts at different levels repeat the same thing in unison: 2009 will be the most difficult year for the automotive industry since the end of World War II.
One such expert is Professor Ferdinand Dudenheffer from the University of Duisburg-Essen. His forecast of the situation in the auto industry for the coming year fit into just three words, which these days are roaming the headlines of European publications: “It will be very scary.” First of all, the collapse will affect sales of new cars. “In Germany, this figure will remain below 3 million,” Dudenheffer is convinced, “and there were times when 3.8 million cars were sold annually.”
If anyone wins, it will be the producers of cheap brands. “The Romanian Dacia is now in great demand in Germany,” states Mr. Dudenheffer. He also predicts things that may seem like the fruit of an insufficiently balanced imagination. Thus, he believes that Indian exporters will also offer their cars in Germany.
However, given the current “poverty”, the European auto industry still retains quite a bit of “brilliance”. Against the backdrop of falling statistics, reports that in 2009 the auto industry will introduce over 100 new models seem nonsense. The explanation for this is simple: a new model is brought to serial production within four to five years. When prototypes of next year's new products were being put into development and production, the car market knew neither the madness of world oil prices nor the global financial crisis. Accordingly, experts do not expect revolutionary technical changes from new products. In any case, the “second invention of the car,” which Daimler chief Dieter Zetsche recently talked about in connection with the prospects for the production of a hybrid engine using gasoline and electricity, is not yet expected. The only exception would be Toyota Pruis, which, as Ferdinand Dudenheffer defines it, has made a successful “price leap to hybrid technology.” Among the new products of next year, the expert especially recommends paying attention to the Mercedes E-Class due to its new, as he puts it, “design language” and new economic indicators for the brand, as well as the Porsche Panamera - the manufacturers of this brand have finally established themselves outside of their previous niche sports cars.