The SPD Group introduces a novel premium for scrap collection.
Before the car summit organized by Minister Habeck, various SPD economic politicians propose multiple immediate measures aimed at reviving the faltering domestic automotive industry. One such proposal is the implementation of a new scrappage incentive for consumers opting to switch from conventional fossil fuel vehicles to electric ones. Consumers trading in their gasoline engines for new electric vehicles would be eligible for a bonus of 6,000 euros, while those purchasing used electric vehicles would receive a bonus of 3,000 euros. According to an SPD statement, "we firmly believe in the future of electric vehicles."
The domestic automotive industry is said to be in a state of crisis, as per the document obtained by "Der Spiegel." To steer it out of this rut and ensure that German cars maintain and strengthen their position in the future market, urgent action is required, states the paper. "Monetary compensation should not be an issue," it adds.
In conjunction with the scrappage incentive, the SPD also advocates for seven additional temporary measures to support the automotive industry. One of these proposals includes the introduction of a "social leasing program" inspired by the French model, providing individuals of low and middle-income with a state subsidy for leasing. Additionally, the promotion of wall boxes, storage devices, and charging stations is planned.
"The car summit should indicate that companies and politics are working together to overcome this current predicament," mentioned Sebastian Roloff, a member of the SPD party executive and economic committee of the Bundestag, to "Der Spiegel." Verena Hubertz, deputy chairwoman of the SPD faction, warned: "German automobiles and VW in particular are the driving force behind our economy. If the engine sputters, we must rectify the issue."
Pressure on Scholz
The paper further highlights the growing concern among the ruling party about the economic situation. By presenting these proposals, the SPD inadvertently puts pressure on their own chancellor, Olaf Scholz, to take more decisive actions to mitigate the impending recession and the challenges faced by the automotive industry. Critics argue that Scholz is insufficiently passionate about addressing the looming economic downturn. Furthermore, some are displeased that Scholz did not organize the car summit himself, instead entrusting it to Habeck.
Other automotive manufacturers, suppliers, the automotive industry association VDA, and the IG Metall trade union have been invited to the meeting. However, the FDP expresses doubts about the event. Christoph Meyer, deputy chairman of the FDP parliamentary group, believes that structural reforms benefiting the entire economy are necessary instead of subsidies targeting a single sector. In his view, swift implementation of the growth initiative would prove more effective in addressing the issues faced by VW, rather than the car summit.
Meyer asserts that the Volkswagen crisis stems from negligent product development and poor management. The issues within VW are also due to an overly bureaucratic organization, constant state intervention, status quo-oriented trade unions, and an encumbered executive team, according to Meyer. He claims that these problems should primarily be addressed by VW itself.
Last week, Volkswagen drew criticism for ending the job security provided by collective bargaining agreements. This means that possible dismissals due to operational reasons can take place from July 2023, unless a solution is found before then. Additionally, Volkswagen does not rule out the possibility of plant closures. Minister Habeck stated on Friday that "most of the challenges will be addressed by Volkswagen itself," but noted that the role of politics in setting appropriate market signals should be examined.
The car summit, led by Minister Habeck, aims to discuss measures to revitalize the domestic automotive industry, including the proposed manufacture of motor vehicles with a focus on electric vehicles. The SPD's proposals for the automotive sector also include the implementation of a new scrappage incentive, encouraging the switch from conventional fuel vehicles to electric ones.
