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Is the German automotive industry going down the drain?
Economist & Photographer / No. 72
P: Good morning, Economist.
E: Good morning, Photographer.
P: What product do people from abroad think of when they think of Germany?
P: Then, people currently look sceptical of Germany. You can read many stories these days about the German car industry being in trouble. Does the German automotive industry still have a future, Economist?
E: How can I know?
P: Some facts, please.
E: If you look at the moment, you might get the impression that cars made in Germany are on the slide. In June, production shrank by 3.5 per cent compared with the previous month, weighing on the country's overall industrial production, which declined by 1.5 per cent. But that is just an economic snapshot.
P: What about long-term trends?
E: There is a well-known trend towards electric cars. It is sometimes said that German carmakers have missed that trend. But it wouldn't be the first time Germany can quickly catch up.
P: How is German car production doing at the moment?
E: Pretty good. Significantly more cars were built in Germany in the first half of this year than in the same period last year. From the beginning of January to the end of June, 2.2 million units rolled off the assembly lines. This means an increase of 32 per cent compared to the first half of 2022. And the proportion of electric cars is also steadily increasing. However...
P: I am still all ears.
E: The car manufacturers in Germany have not yet been able to reach the production figures from before the coronavirus pandemic. The figures for the first half of this year are ten per cent below those of the first half of 2019.
P: It seems that nothing can be said clearly.
E: Maybe one thing.
P: Now it's getting exciting.
E: Since the employment record during the boom in 2018, the number of employees in the German automotive industry has shrunk by 59,600 people. There are fewer employees every year. On average, over the past year, 774,300 people were employed in German factories of the manufacturers of motor vehicles and motor vehicle parts.
P: That's not good news.
E: On the one hand. Especially since all forecasts assume that employment figures will continue to fall, also because the so-called vertical integration of electric cars is lower, which requires less staff.
P: On the other hand?
E: On the other hand, Germany's economy is becoming less and less dependent on the development of its automotive industry. It would not be the downfall of the German economy if the car industry could no longer catch up with the electric future.
P: Small comfort.
< silence >
P: In times of environmental awareness, the attractiveness of large cities and car sharing, I would assume that the number of cars on Germany’s roads is decreasing.
E: You guessed wrong. It is steadily rising. There are currently 48.8 million registered cars in Germany. More than ever before.
P: There's none from me.
E: Neither from me. Have a nice day, Photographer.
P: You too, Economist.