The German automotive industry is facing an "existential crisis"

Chinese electric car manufacturers dominate the scene at the IAA in Munich. In China, the long-standing market leader Volkswagen is increasingly losing ground. Two facts that show that the car industry is changing - very quickly. Gloomy times for domestic car manufacturers? Does Germany now have to take its cue from China? And what will become of Tesla? Automotive expert Helmut Becker provides ntv.de with the answers.

ntv.de: Mr. Becker, the car year 2023 was very exciting. What could 2024 be like?

Helmut Becker: 2024 will be even more exciting! What will happen in politics and the economy? Can Germany continue to muddle through the crises on the left and right as before? How can the automotive industry cushion the impact of everything that lies ahead?

These are a lot of unanswered questions ...

Correct, and predictions are, as always, difficult. Nevertheless, despite all the uncertainty, the mainstream of forecasts is cautiously optimistic. I agree with this: weak growth, falling inflation, falling interest rates - after all.

So the new year will also be a difficult one: are you expecting external disruptive factors, perhaps from the political side? There are already elections in Taiwan in January, which could put a strain on relations between the US and China - and then there are the US presidential elections at the end of the year ...

We have had enough disruptive factors since the beginning of the 2020s. They will still be virulent in 2024: war in Ukraine, war in the Middle East, for example. It is impossible to predict whether Taiwan and the presidential election in the USA will add to the series of crises. If China gets serious militarily about Taiwan and Trump wins the US election at the end of the year, anything is conceivable.

What could a US President Donald Trump mean for the global automotive industry?

To put it briefly, succinctly and drastically: a dramatic slump in production, sales and employment. In the end, perhaps even a serious trade war!

So should German companies fear Trump's election?

I think so. Let's remember the "America First" slogan that characterized his last term in office. The German car industry lives 80 percent from exports. Even the primary effect of a disruption in foreign trade with China and the USA is enough to cause a recession. But it would not stop there: The negative secondary effects, i.e. the cascading consequences for European partners and the rest of the world, would cause an existential crisis here. That has to be said so clearly! Also to appreciate once again what politicians have been able to prevent to date despite all the external shocks and burdens.

In general, how do you see the German car manufacturers and suppliers positioned for 2024?

Definitely worse than in 2023. Global competitive pressure is generally increasing. Chinese manufacturers are pushing ever harder into the global market. Prices are falling and so are returns.

What should German industry representatives concentrate on? Where should they focus?

On two things: doing what the Chinese have practiced on a broad front over the last 30 years in electromobility - copying and entering into partnerships with car companies in order to transfer electric platform expertise. On the other hand, they should also keep the topic of combustion engines warm. We still have a head start here, which we need to build on for the age of synthetic fuels, which is sure to come.

Speaking of which, how will the German car sales market develop in 2024?

We are expecting around 2.83 million new registrations in 2023. This is 6.8 percent more than in 2022. As overall economic and growth expectations have deteriorated, the German car market is likely to see only slight growth at best in 2024. The previous registration forecasts are correspondingly close to each other, ranging on average from 2.8 to 2.9 million. So 2024 will not be a sure-fire success.

Let's move away from Germany. China is and will remain the most important car sales market for the entire industry, political tensions or not. Electromobility is very important there. BYD is now the global market leader and is pushing into Europe. Will 2024 be the year of the Chinese car manufacturers?

China currently has around 25 million new cars on the road, two thirds of which are still combustion engines. But China is the global market leader in electric cars and BYD is the global market leader in electrically powered vehicles with 2.5 million - battery-powered cars (BEV) and plug-in hybrids (PHEV) combined. This means that BYD is now bigger than BMW or Mercedes-Benz. Even if you only look at BEVs, BYD has now overtaken e-car pioneer Tesla.

And BYD is moving to Europe ...

That's right. BYD is not an isolated case: at least a dozen Chinese e-car manufacturers want to gain a foothold in the European market. However, it remains to be seen whether this attack will be successful. In the past, car manufacturers from the Middle Kingdom have regularly disappointed in Europe.

Where do you see their strengths?

Chinese car manufacturers have learned extremely quickly - even I was wrong, ashes on my gray head. Their cars are now of high quality and competitive; they offer smaller and cheaper cars for the mass market. But not yet so cheap that we would buy them en masse.

One more prediction: which car company could provide a positive surprise this year - both internationally and nationally?

Internationally, besides BYD, Hyundai in particular. The South Korean manufacturer has been quietly gaining market share. Hyundai is very innovative, also in sales, as the cooperation with Amazon shows. In Europe, I still see Skoda and Seat's electric subsidiary Cupra in a strong position.

And nationally?

Nationally, VW could and must surprise positively - also thanks to Skoda and Cupra.

What about the electric car pioneer Tesla?

It looks as if Tesla's heyday is over. There will be no more growth rates like in the early years, partly because the models are now getting on in years. In general, the Musk Group's model policy is in need of improvement. Only Model 3 and Model Y are really successful. The Cybertruck e-pickup, which has been available in the USA for a few weeks now, is unlikely to be profitable for years. The starting price for the stainless steel monster is simply too high. In this country, the Cybertruck can only be driven with a truck driver's license. That's not really a selling point!

Thomas Badtke spoke to Helmut Becker