German production in August (industry, building construction and energy) dropped four times as much as economists had forecast: 4.3% less than in July (forecast: 1%). This is the largest decline since 2022. The drop in the auto industry is dramatic, at 18.5%. Industry alone dropped 5.6%.
The reason for the collapse of the automotive sector, both in Germany and overall in Europe, is entirely due to the EU decision to ban production of traditional engines by 2035, which has forced automakers to run after China in a losing competition on E-autos, at the same time losing their leading position in the traditional engines, where they disinvested,
Pressures to lift the ban have come from the auto industry and some political factions, including CDU-CSU circles in Germany, who are not convinced that producing tanks could replace cars (at least not entirely). Now it seems that a faction in the Green party is open to the proposition. The state government of Baden-Württemberg, which is severely hit by the automotive crisis (ca. 470,000 workers, over 1,000 suppliers, production of Mercedes-Benz, Porsche and Audi), is going to discuss the issue next week. The Baden-Württemberg government is run by a Green-CDU coalition. The head of the state’s CDU Manuel Hagel, has called on the Greens to change their position and the state Greens candidate for the next state elections, Cem Ödzemir, said he is open to discuss a postponement of the ban. The power of polls...
