From the Economist today:
"Chancellor Angela Merkel and her senior cabinet ministers, including Olaf Scholz, the finance minister, will confer virtually today with the heads of Germany’s three largest carmakers about how to help the country’s most important industry. Led by Herbert Diess, the boss of Volkswagen, along with his counterparts at Daimler and BMW, the firms are lobbying the government to revive demand with a buyers’ premium of several thousand euros for both petrol-powered and electric vehicles. Mrs Merkel and Mr Scholz are unenthusiastic, especially as VW is still planning to pay shareholders a dividend. Opponents of the carmakers’ idea argue that it merely persuades customers to bring forward car purchases, meaning sales will decline next year. Moreover, it will help the better-off disproportionately, while subsidising a technology in decline. Better to raise subsidies for buyers of electric cars, which would incentivise makers to push on with their electrification—and get more carbon-neutral cars onto Germany’s streets."
Future case studies on the decline of the German auto industry will be fascinating. Merkel has for years tried to get BMW, Mercedes, and VW shift to EVs. It will be hard to find an argument for why they did not see the coming disruption sooner and take the necessary steps in earnest.
Is it really disruption when everyone around you sees what is happening and is trying to get you to shift directions or is it simply arrogance mixed with cowardice toward making tough decisions?
