Germany considers ways to help Volkswagen: economy minister

Frankfurt. The German government is studying how to help Volkswagen, said this Thursday the Minister of Economy and German Vice Chancellor, Robert Habeck, when asked about the threat of workforce cuts at the country’s largest automaker.

Volkswagen announced this month that it needed to significantly cut costs at its namesake brand in Germany, citing high costs, low productivity and fierce competition.

“VW is vitally important for Germany,” Habeck told reporters. The minister will visit a VW plant in the city of Emden on Friday.

Car sales in the EU hit the lowest level in 3 years and electric cars fell 44%

Sales of new cars in the European Union fell 18.3 percent in August to their lowest level in three years, dragged down by double-digit losses in the main markets, Germany, France and Italy, according to data from the European automobile industry body published on Thursday.

Sales of all-electric cars plunged 43.9 percent in August, falling for the fourth consecutive month, while the bloc’s largest electric vehicle markets, Germany and France, recorded drops of 68.8 and 33.1 percent, respectively, the European Automobile Association reported. Automobile Manufacturers (ACEA, for its French acronym).

Car sales in Europe have fallen well below pre-Covid-19 levels, and manufacturers such as Volkswagen warn that the trend may not change in the near future.

Electric vehicle sales growth has also slowed, in part due to diverging policies on green incentives, while regulators have imposed heavy tariffs to try to keep out cheap Chinese EVs.

Sales of battery and plug-in electric cars fell 43.9 and 22.3 percent, respectively, in August, while those of hybrid-electric cars rose 6.6 percent to reach a market share of 31.3 percent.

Registrations of Volkswagen, Stellantis and Renault, the three largest European manufacturers, fell 14.8, 29.5 and 13.9 percent, respectively.

Electric vehicle maker Tesla’s sales fell 43.2 percent, and China’s SAIC Motor fell 27.5 percent.

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The market share of hybrid electric cars has increased in the EU in recent months, as buyers see them as an affordable compromise between combustion and electric cars.

To give a new boost to the electric vehicle market, Germany agreed in September to a tax deduction of up to 40 percent for companies selling electric cars, after ending a subsidy program last year aimed at accelerating the ecological transition.

However, Transport & Environment said this week that battery electric cars sold in the bloc will reach a total market share of between 20 and 24 percent in 2025, mainly due to lower sales prices.