03/29/2020 04:29
(Act. 29.03.2020 04:29)
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Archive picture car industry – VW plant Wolfsburg
© APA (dpa)
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Industry expert Ferdinand Dudenhöffer believes that the Corona crisis will result in the loss of more than 100,000 jobs in the German auto industry. Demand is expected to plummet 15 percent this year, and after the experience of the financial market crisis, the catch-up process will take more than ten years, the professor wrote in a study.
Overnight capacities of 1.3 to 1.7 million vehicles exist in the German plants. Short-time work allowance only bridges short periods. No company can maintain unused production capacity for years. That is why 100,000 of the 830,000 jobs currently being employed by car manufacturers and suppliers in Germany are at risk – “under optimistic assumptions,” wrote Dudenhöffer.
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Car production in Germany had dropped from 5.1 to 4.7 million vehicles last year. The economic researcher expects a decline in sales of 15 percent in Germany, 20 percent in China, 25 percent in France and the USA and 30 percent in Italy this year. Production in Germany should “shrink to 3.8 million vehicles with an optimistic forecast. Under a pessimistic scenario, we only expect 3.4 million vehicles.”
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“The reason is not problems in the supply chains, but clearly the lack of demand,” emphasized Dudenhöffer: The auto industry has “a serious, long-term problem with demand.” Economic growth after the 2009 debt crash suggests that the US would need at least ten years to catch up with 2019. In Europe, too, there is little to suggest a growth boom after the corona crisis: “In the past, the opposite was true of the major crises in Europe.” To stimulate demand, Dudenhöffer suggested suspending VAT or a negative VAT.
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