German carmakers confident despite trade and diesel worries | Business| Economy and finance news from a German perspective | DW | 03.07.2018
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German carmakers confident despite trade and diesel worries

A lobby group for the German car industry has said it expects car production and new registrations to increase again in 2018. Its optimistic forecast came despite concerns over current trade frictions with the US.

The German Association of the Automotive Industry (VDA) said Tuesday the domestic car industry would grow this year despite the impact of several automakers' involvement in a large-scale emissions-cheating scandal and worries over a widening trade spat with the United States that might see the US president slap higher import tariffs on cars from the European Union.

Following a strong performance in the first six months of the year, the association expects new registrations across Europe's powerhouse to grow by 1 percent to 3.5 million vehicles for the whole of 2018, following a 3.5-percent increase in the previous year.

VDA officials added that German carmakers were on track to globally produce a record of 16.7 million vehicles this year, marking a 1-percent pickup.

Some 76 percent of all cars produced in Germany itself would be exported, the industry group said, with every second car made by German automakers in the US also to be shipped to other nations this year.

The association said it was therefore highly worried about the current trade frictions between the US and the European Union, with US President Donald Trump threatening to slap higher tariffs on imported cars.

VDA President Bernhard Mattes said that should higher duties actually be imposed, "there would have to be an adequate European answer."

Dieselgate revisited

Talking about the effects of the ongoing emissions-cheating scandal, Mattes said the German car industry as a whole had lost much of its credibility because of Dieselgate.

He also admitted that a looming expansion of bans on older diesel cars in polluted German cities had had a severe impact on the car market.

"In the first half of 2018, only a third of all new registrations were diesels," Mattes said in a statement, hastening to add, though, that modern diesel engines were not part of the problem, "but part of the solution."

He also pointed out that the steep decline in diesel car sales should not be seen as good news for climate protection activists as it only meant higher CO2 emissions through stronger sales of gasoline cars.

The slightly higher sale of electric cars plays no significant role in this equation, given its low overall number on German streets.

Watch video 02:50

German diesel bans set to affect businesses

hg/uhe (Reuters, dpa)