German Chancellor Friedrich Merz will open the IAA motor show in Munich on Tuesday, September 9th, as debate rages over the European Union’s target to phase out combustion-engine vehicle sales within a decade.
While the German economy has been plagued with high energy costs and global trade tensions, its flagship auto sector is struggling with fierce competition from Chinese electric vehicle (EV) makers.
Major car firms are working to develop their EV models, but many also want to keep selling combustion-engine cars beyond the EU’s current 2035 deadline. Volkswagen CEO Oliver Blume said on Monday that the target was “not realistic,” while BMW and Mercedes have also cast doubt on the plan. U.S.-European auto giant Stellantis—owner of Jeep, Fiat, and Peugeot—has also called for a new approach to decarbonisation to avoid job losses.
Volkswagen is planning 35,000 layoffs between now and 2030 and taking the unprecedented step of halting production at two of its sites in Germany. Plans for redundancies have been coming thick and fast at Porsche, Audi, and at hundreds of German auto sector suppliers.
In Germany, the auto sector has already shed more than 50,000 jobs over the past year, according to EY. “It’s a miserable situation for the German economy,” car industry expert Ferdinand Dudenhoeffer told AFP.
On the other side of the argument, more than 150 businesses in the EV sector wrote an open letter to European Commission president Ursula von der Leyen on Monday, September 8th, urging her to “not row back” on the 2035 target.
When the IAA winds down on Friday, carmakers are expected to meet with von der Leyen in Brussels to discuss how to save the sector. According to Stellantis’s director for Europe, Jean-Philippe Imparato
We have to move to action quickly, before the end of the year.
