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September 13, 2019

Protecting our German way of life: on the decline of the car industry

It’s really not that hard to see where the car industry is headed - except if you live in Germany and you support you car industry the way you support your football team. There are many tell-tale signs of an industry in decline, the latest being the sudden drop in car companies that can be bothered to attend the industry’s main social event - Frankfurt’s international automobile fair. Tesla did not come. Almost all of the Japanese stayed home, and so did several of the biggest European names. It was probably the last fair of its kind. 

Another tell-tale sign was yesterday's resignation of the head of the German automobile association. FAZ reports that VW and BMW pushed him out, blaming him for losing the plot in the industry’s external representation. The car industry has no clue how to handle the rising number of protests. The fair was accompanied by mass demonstrations all over Frankfurt. Anti-car activists managed to get inside, and challenge the industry chiefs head on. Angela Merkel was trying to drum up support for Germany’s embattled car industry with a speech at the IAA yesterday, but the biggest news were the anti-car activists who asked her to abolish all fuel-driven cars. The activists also set the tone in Germany’s talk shows. But the political establishment does not support them. German motor journalists are industry fan-boys - boys almost exclusively who are part of an exclusive inner circle.

Merkel yesterday promised closer co-ordination between the government and the industry. This is in part a crisis of her own making. It is a crisis of under-investment and lack of strategic direction - which happens when you elevate fiscal surpluses to being the main economic target. The car industry is where you see the combination of public and private under-investment most directly. But it is present in many aspects of German life - from defence policy to investment in artificial intelligence.

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