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„Made in Germany“ once meant something in the world. Originally introduced in Great Britain at the end of the 19th century as protection against supposedly cheap and inferior imports from Germany, the designation of origin was considered the epitome of German craftsmanship for decades. Goods from Germany were highly valued worldwide for their quality and durability. But the former trademark is cracking; there is a worm in it: literally, the Made in Germany.
One industry after another is hitting a brick wall. A „toxic cocktail“ of poor conditions is causing more and more industrial companies to leave Germany or close down altogether. High energy costs, exorbitant electricity prices, CO2Price, excessive bureaucracy, supply chain legislation, lack of skilled workers, dilapidated infrastructure, compulsory memberships, gender quotas, fantasies of a four-day week – the catalogue of horrors for companies is getting longer and longer.
This is particularly evident in the automotive industry, especially with the switch to e-mobility. In line with green climate ideology, the Bundestag passed the Climate Protection Act in 2019, which was tightened again in 2021. According to this, greenhouse gas emissions are to be reduced by 65% by 2030 compared to 1990 levels. In doing so, the German government is following EU guidelines. To achieve these goals, the government is focusing primarily on e-mobility. Billions have been invested in charging infrastructure, and the industry has spent tens of billions of euros on the development and manufacture of electric cars. Unfortunately, however, Germans prefer to continue driving combustion engines, so sales of electric cars are stagnating. Without government incentives to buy, there will be no sales of electric cars and, consequently, no achievement of climate targets.
If Germans are to buy electric cars despite this, then price is the only way to do so. Consequently, German car manufacturers invested in China and began building electric cars in Asia so that they could offer them at competitive prices in Europe, including Germany. However, on 4 October 2024, the EU decided to introduce punitive tariffs on cars produced in China. The EU Commission may set tariffs of up to 35.3 % for cars from the Middle Kingdom. From 1 November 2024, for example, tariffs of 7.8% will be levied on Teslas, 17.0% on BYD vehicles and 18.8% on Geely vehicles – according to the plan. Cars from the Volkswagen Group, on the other hand, will be subject to an import duty of 21.3 %. This is also likely to apply to BMW and Mercedes electric cars produced in China.
What does this mean for German car manufacturers?
- Electric vehicles are mainly manufactured in China. These will become significantly more expensive for German customers due to import duties from 1 November. The switch from a combustion engine to an electric car will thus become even less attractive than it already was. Minister Habeck's green climate targets are likely to burst like an overripe watermelon.
- Electric cars from German manufacturers will become disproportionately more expensive, as the tariffs are higher than those on Teslas or vehicles from Chinese manufacturers. Who would then still consider buying an electric car from VW, Mercedes or BMW?
- China has already announced tariffs on European cars in response. This will primarily affect Mercedes, Porsche and BMW cars, i.e. the luxury segment. These cars come from Germany. However, if Chinese tariffs are imposed on German luxury cars, they are likely to be difficult to sell in China. This will be a turning point for German car manufacturers, which is why Mercedes and Co. did everything they could to prevent tariffs on Chinese electric cars, but as we know, they failed.
Although the German government voted against the introduction of tariffs, it was unable to prevail against the other EU member states. These countries, led by France, were more concerned with protecting their own automotive industries than showing solidarity with Germany. This reveals once again that in the EU, it's every man for himself. Germany, the EU's largest net contributor, is being led by the nose through the Brussels circus.
There is therefore reason to fear that sales of German luxury cars in China will plummet dramatically. Unfortunately, China is the most important sales market for German luxury cars. Mercedes and Co. now only produce around 10% of their cars for the German market. Factory closures, model rationalisation, further insolvencies of suppliers and hundreds of thousands of unemployed people are likely to be the result. From a German perspective, imposing tariffs on Chinese cars is like turning the other cheek and asking to be hit. So much for the automotive industry.
The solar industry fared no better. Germany was a technological leader, but today manufacturing takes place in China. SolarWorld, a global player, went bankrupt in 2017. The last remaining producer in this country, Meyer-Burger, is ending its production in Saxony and gradually leaving Germany. The federal government stands lethargically on the sidelines and watches idly. Mechanical engineering, the chemical industry, the steel industry – the list of entire industries that are gradually turning their backs on Germany could go on and on.
In the ZDF documentary „Made in Germany – am Ende?“ (Made in Germany – the end?), which was broadcast on 3 October 2024, Moritz Schafstein, CEO of Mannesmann – another former German corporation of international renown – appeared. The reporter spoke to him about a toolbox sold by Mannesmann. It currently costs €120 and is manufactured entirely in China. When asked how much it would cost if it were manufactured in Germany, he replied: €700. This illustrates the whole dilemma facing German industry. Sensible manufacturing at marketable prices is simply no longer feasible in Germany. The deindustrialisation of Germany is in full swing, whether Economics Minister Habeck wants to admit it or not. And neither the German government nor the EU have any idea how industrial activity can still be possible in this country.
What our country lacks is a spirit of optimism! Who is going to pull us out of this mess? This government?
Now it's time to roll up our sleeves again
We increase the gross national product
Yes, yes, yes, now it's time to roll up our sleeves again.
The band Geier Sturzflug sang it in 1983. The older ones among our readers will remember it. The song is more relevant today than ever. Especially since the band name fits our cover picture so well 😀.
What we need is a A complete overhaul of Germany! First and foremost, this requires political will. One could, for example, review the federal budget and cut everything that is not absolutely necessary for Germany. That is what any debt counsellor would recommend. Perhaps the Peruvians should pay for their much-cited cycle paths themselves (€20 million). Promoting energy efficiency in public buildings in Montenegro (€82.9 million). Or the digital reform of the healthcare system in Uzbekistan (€53.7 million). All of this can be done – if you can afford it. But we can't right now. We have more examples of how German taxpayers' money is making the whole world happy. here reported.
Perhaps it will take courage to launch an economic stimulus package on an unprecedented scale. Perhaps the debt brake will have to be suspended for this purpose. This would require the creation of conditions that make economic activity worthwhile for key technologies. Then we can bring the economy back on board – instead of driving it out of the country – and create a Pact for the Future of Germany Perhaps we need something like a Marshall Plan 2.0? This would also give employees new prospects, making hard work worthwhile again. Then there would be no need to reactivate pensioners and bring millions of migrants into the country as „skilled workers“. Then, yes, then „Made in Germany“ could once again become a byword for innovation and quality.
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