The fear of a renewed flare-up of the trade conflict between the USA and China sent economically sensitive automotive stocks down across Europe on Monday. The corresponding auto sector index lost more than 5 percent, but only fell back to the level at the end of April. In this country, the shares of the Daimler stock market chart fell below the bottom of the leading German index Dax by around 7 percent to 29.31 euros. The shares on the Bayerische Motoren Werke AG stock market chart show were down by more than 5 percent, while the stocks on the Volkswagen stock market chart show recently lost around 4 percent.
Traders point to a recent tightening of rhetoric by US President Donald Trump towards China regarding the coronavirus crisis. This has raised concerns about a renewed boiling up of the trade dispute. US punitive tariffs on cars from the European Union are likely to hit the industry hard.
In addition, the dispute over a car purchase premium continues in Germany. A scrapping premium like 2009 is desired by the industry, but is by no means in a dry cloth.
This Tuesday, Chancellor Angela Merkel (CDU) wants to discuss with the manufacturers at the car summit in the Chancellery about a possible premium and the conditions for it. How does the most important branch of German industry, which represents 800,000 jobs and ten percent of domestic economic output, get going again?
The decision for or against a car purchase premium should be made as quickly as possible, the industry agrees. “As soon as possible,” the automotive industry needs clarity as to whether demand can be boosted with government aid, said VW CEO Herbert Diess.
Jürgen Karpinski, President of the Central Association of the Automotive Industry (ZDK), reminded of the buzz around the 6000 euro purchase premiums for electric cars at the beginning of the year: those interested had waited and delayed purchases for months. VW works council chief Bernd Osterloh demanded a purchase premium for electric, petrol and diesel cars. And not only for new cars, but also for young used ones.
He agrees with the car dealer, who fears that tens of thousands of vehicles in his yards would otherwise become worthless overnight. A bonus should “also include modern vehicles with internal combustion engines,” said VW board member Ralf Brandstätter. Only broad-based aids support demand and production, warned the President of the VDA, Hildegard Müller. And Daimler CEO Ola Källenius also wants a blanket solution, as simple as possible and for all segments.
The head of the so-called economic methods, Lars Feld, told the “Business Insider” very clearly what he thought of it: “Nothing. There are already premiums for electric cars. Promoting cars with an internal combustion engine is not a priority in terms of climate protection. ” A purchase bonus also doesn’t help against interrupted supply chains. The Kiel Institute for the World Economy (IfW) and the Institute for Economic Research Halle (IWH) also reject the premium. Professor Stefan Koorths from the IfW said in the ARD “Phoenix Round” that such small-scale state interventions were also wrong in terms of regulatory policy: “Scrapping premium here, VAT reduction there, and the third party gets a consumption voucher.” It is also obscene to spend money to destroy goods.
