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How e-cars are accelerating deindustrialization in Germany


Figures show that the mobility change from combustion engines to electricity is costing Germany a lot of jobs. But this is not only due to the electric cars.

Figures show that the mobility change from combustion engines to electricity is costing Germany a lot of jobs.

But this is not only due to the electric cars.

Munich - For decades, the development and production of automobiles in Germany ensured prosperity.

With the approaching end of the combustion engine, this seems to be a thing of the past.

Figures from the Ifo Institute make it clear how serious the situation is at the heart of Germany's industrial economy.

As Oliver Falck, head of the Industrial Economics and New Technologies division, describes, around 9 percent of manufacturing jobs have been lost in car production since 2013.

The reduction in jobs within almost ten years is gradual and is based on several causes.

"We are currently seeing a deindustrialization of the automotive industry, which is being brought about by the transition to e-mobility," says economist Falck, naming one of the biggest.

Industrial location Germany is increasingly relocating jobs abroad

Another number makes it clear why the debate about the imminent phasing out of combustion engines in Europe is playing an important role: Around 447,000 employees were involved in the development and production of combustion technology in 2019 - and the trend is falling.

This also affects the rate of short-time work and thus the state budget: The number of short-time workers in Germany rose to 220,000 in February 2023, which means an increase of 9 percent according to the Ifo Institute.

The industrial sector with 161,000 employees is particularly affected, with the auto industry accounting for around 4.9 percent of jobs.

A study by the auditing company PwC at the end of 2022 came to the thesis that in just a few years more cars will be imported into Europe and Germany than exported abroad.

In the past, this would have been unthinkable for Germany as an industrial location.

The predicted change is mainly due to the fact that the production of e-cars is increasingly taking place in countries where the production conditions are more favorable.

These are both German car models and those from Asian suppliers, for example, which are then shipped to Germany.

Electric car boom: creeping end of Germany's core competence

However, the fact that combustion engine technology, as the core competence of German engineering, is being reduced further and further does not necessarily mean more unemployment.

Falck explains in the press release: "Part of the loss is already being and could be compensated for even more in the future by battery production, software services or digital business models." For comparison, an interesting number that illustrates this development: In the IT area According to the report, the number of employees has increased by almost 50 percent since 2013.

What we are currently experiencing in Germany: The car manufacturers are not only producing models with purely electric drives, but also continue to produce vehicles with combustion engines.

"With the dismantling of these double structures, the reduction in employment in production will continue to accelerate in the coming years," explains Falck.

No wonder, then, that a number of voices are opposed to moving away from petrol and diesel engines.

Auto industry Germany relocates jobs to the USA and China

Another important point in the job cuts in local car production is the changed geopolitical environment.

On the one hand, due to the massive investments in renewable energies (“Inflation Reduction Act”), the USA is also attracting German companies to the United States.

On the other hand, according to the Ifo, German car manufacturers are now producing “significantly more vehicles than in Germany” in China.

In a radically changed competitive environment, this makes it clear that the auto industry has lost ground as a factor of stability in this country compared to before.

A large part of industrial product management has been and is being outsourced to the USA and China - two markets in which the sales potential is also significantly greater.

What is (also) still putting pressure on Germany and Europe as an automotive location in the medium term: the dependencies against the background of the growing confrontation between these major powers on a geopolitical level.


Source: merkur

All news articles on 2023-03-27

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