German Auto Industry Needs More State Support, Minister Says

Germany’s struggling auto industry needs more government aid including a purchasing bonus for less-polluting combustion-engine cars, according to Transport Minister Andreas Scheuer.

The number of electric vehicles available is limited and there are combustion cars on the market that are relatively clean in terms of air pollution, Scheuer said Tuesday in an interview with DLF radio.

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“We are talking about a key German technology and many, many jobs and families depend on it,” Scheuer said ahead of talks between government officials, regional leaders and auto executives on the future of the industry later on Tuesday.

Chancellor Angela Merkel’s ruling coalition is divided over the need for a purchasing incentive for combustion cars, with Scheuer’s party — the Bavaria-based CSU — arguing in favor and others insisting that the focus should be on promoting electric vehicles. Merkel last week said that she’s aware of the CSU’s position but sees no need to expand the government’s stimulus package for the time being.

Germany has already sought to lift car sales by introducing purchasing subsidies of as much as 9,000 euros ($10,600) per electric vehicle.

Scheuer said more government support is needed to help carmakers and parts suppliers cope with the fallout from the coronavirus pandemic.

“All the aid that we have provided so far, such as wage support and much more, is having a positive effect but this crisis will be with us for a long time,” he said. “When Germany’s car industry is in crisis then that also has an impact on the rest of Europe, also in terms of competitiveness with the U.S. and Asia.”

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