VDA demands: Politicians must free themselves from permanent crisis mode

At the annual press conference of the German Association of the Automotive Industry (VDA), its President Hildegard Müller dispensed with the usual diplomatic choice of words and spoke plainly: "We must generate confidence through strategic foresight. The principle of crisis and the associated permanent self-employment must end. We now need reforms instead of regulation - and less micromanagement."

Due to the permanent crisis mode of recent years, politics has become too defensive and reactive - revealing two glaring shortcomings, says Müller. "The traffic lights are failing to develop a self-determined and forward-looking ability to act. It is even less successful in giving the impression of having a strategy and a clear vision. Over-regulation and bureaucracy are paralyzing growth and innovation. This is leading to an increasing loss of trust - among industry and the population."

Müller's call: act instead of react. "Courage to reform - towards a strategy that provides orientation and puts the focus back on core tasks." According to Müller, this includes, above all, making the location internationally competitive again, concluding trade and raw materials agreements as well as energy partnerships, driving forward the reduction of bureaucracy and generating innovative strength through openness to technology.

Müller said confidently: "I want this country to become the engine of Europe again, to develop and export the innovations and technologies that will enable climate-neutral growth worldwide. The problem is that what is of central importance for this has become our greatest weakness. A competitive, attractive and globally sought-after location is the basis for growth and prosperity."

The VDA President is therefore calling for a paradigm shift: "We need a modern mix of market-oriented economic policy and shaping industrial policy - especially in view of international developments. At the same time, fighting symptoms instead of long-term strategic elimination of the causes of a lack of competitiveness is not a long-term transformation strategy."

Müller continues: "The German car companies and the automotive SME sector stand for pioneering spirit, quality, outstanding brands and decades of experience and success. We will do everything we can to ensure that this remains the case and are making huge investments to this end. From 2024 to 2028, manufacturers and suppliers in the German automotive industry will invest around 280 billion euros in research and development worldwide.

VDA Chief Economist Dr. Manuel Kallweit announced the VDA's most important forecasts for 2024 at the press conference. According to these forecasts, the association expects the German market to decline by one percent to 2.8 million units. This is around a quarter less than in the pre-crisis year of 2019 and assumes lower sales of electric cars (down nine percent to 635,000 units). While sales of plug-in hybrids (PHEVs) are expected to rise by five percent to 185,000 units, the association is forecasting a 14 percent drop in sales of purely battery electric vehicles (BEVs) to 451,000 units.

The markets in Europe (U27, EFTA & UK; +4%) and the USA (+2%) are likely to grow slightly faster than the Chinese market (+1%) in 2024 due to the weak previous year's level. The association expects a moderate increase of 2% for the global passenger car market. This would almost reach the 2019 level again.

The VDA expects domestic passenger car production to move sideways this year (±0%; 4.1 million units). One of the reasons for this is the overall economic weakness. Domestic production of electric cars is expected to develop positively, with a significant increase of 19% (BEV: +25%, PHEV: ±0%) in 2024. Foreign production of German Group brands is likely to increase by 4% with the production of 10.6 million passenger cars.

In terms of 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%. For heavy commercial vehicles, a decline of ten percent is expected for Europe (U27, EFTA & UK) and five percent for the USA. Growth of eight percent is expected in China. (aum)