Germany losing its automotive edge, lobby warns as motor show revs up

Germany is at risk of losing its distinction as a car industry powerhouse, the president of the German Association of the Automotive Industry (VDA), Hildegard Müller, said ahead of the IAA Mobility show in Munich.

Although German manufacturers would survive, Germany as an auto hub would not "without massive reforms," Müller told dpa, as car bosses began gathering in the Bavarian city for the major trade show.

Müller mentioned over-regulation, slow political decisions and the lack of a legal framework for future issues such as artificial intelligence as key issues.

The main point, she said, was that "Germany is dramatically losing its international competitiveness because of the cost structure."

Energy costs in particular are much higher in Germany than in other car manufacturing locations, she pointed out.

The automotive industry has been calling for a temporary state-subsidized electricity price, as it would help prevent battery or semiconductor manufacturers from leaving Germany or choosing not to settle there in the first place.

Such a subsidy has been a topic of much debate in Chancellor Olaf Scholz's governing coalition.

Germany's biggest motor show, IAA Mobility, will be opened by Scholz on Tuesday. The expo brings together car manufacturers, suppliers, tech companies and politicians.

Chinese car manufacturer BYD, by now the world market leader with 1.86 million e-cars sold this year, is presenting itself for the first time at the IAA this year.

BYD is showing six sedan and SUV models that were also on display at the auto show in Shanghai. At the very large stand, BYD Europe boss Michael Shu gave the trade audience an overview of the group's 20-year history on Monday.

Design chief Wolfgang Egger, who used to work for Alfa Romeo and Audi, presented the BYD Seal sedan. It targets buyers of the Tesla Model 3 and German rivals Audi, BMW and Mercedes-Benz.

Sales of the BYD cars in Germany are to start soon.

The cheapest BYD model at the IAA is the Dolphin small car, which is to cost €29,000 ($31,000). The car rental company Sixt wants to integrate 100,000 BYD cars into its fleet in the next five years.

Meanwhile, the Chinese electric car manufacturer Xpeng announced plans to launch its vehicles in Germany next year.

After a few northern European markets, the models are also to be sold here in 2024, said Vice Chairman of the Board of Directors Brian Gu on Monday in Munich.

He said the move into the German market was planned carefully and is a big and strategically very important one for the company.

"Our success in Germany will determine our success in continental Europe," Gu said. According to him, it is still too early to give details on possible sales figures.