A memorable year of crisis: "Auto industry is licking its corona wounds"

The coronavirus pandemic and its accompanying circumstances will have the automotive industry in a stranglehold in 2020: car dealerships will remain closed, production is idle, sales are falling, sales and profits too. Auto expert Becker speaks of profound cuts, but also praises the managers of the industry in the ntv interview – and names winners and losers.

ntv.de: Mr. Becker, the past year was anything but boring. The dominant topic worldwide was the coronavirus pandemic with all its effects on people, society, and the economy: curfews, contact restrictions, lockdowns – how has the international automotive industry fared in this environment?

Helmut Becker: Extremely bad, even worse than during the 2009 financial crisis. There are two reasons. At first, the global markets were booming, this time they had been in a downturn since spring 2019, albeit without any drama. In addition, the global economic rescue programs at that time offered a certain security for better times again – this time it was completely different, for customers and car manufacturers, absolutely new and devoid of any experience. Accordingly, caution and restraint were on both sides.

Are there differences between the individual markets?

There are, and very large ones! In general, one can say: the more rigorously the lockdown at the country level, the faster the markets have recovered from the corona shock. To put it diplomatically: non-authoritarian, democratically structured systems like ours in Germany were clearly at a disadvantage compared to countries like China. The second largest economy in the world was rigorously shut down – with success, as you can now see. In the USA and Europe, on the other hand, they are fighting with the second wave and a third is feared.

What was the toughest turning point for the German automotive industry?

From my point of view, these were the closings of the sales rooms in the trade: If you are not allowed to open the shop, you cannot sell anything. It's as simple as that. But the slump in exports due to the parallel dramatic decline in all major export markets represented a serious turning point. As a reminder: 70 percent of the German auto industry lives from exports.

How is the pandemic reflected in the number of new registrations? In Germany, for example?

In the end, only 3.5 million cars are likely to be produced in this country in 2020 and 2.6 million will be exported. That is around a quarter less than in 2019.

What about in Europe and the two largest sales markets, China and the USA?

Depending on when the easing measures began, the markets have recovered at different speeds, but losses compared to 2019 remain everywhere. Globally, a fifth or almost 20 million fewer cars will have been built in 2020 than in 2019. China comes off the best with a decline of around ten percent or 2.0 million cars fewer. In the USA it is around 15 percent or around three million fewer cars, in Europe around 30 percent or three million.

Many car manufacturers and suppliers reacted to the Corona crisis with short-time work, production standstills and job cuts. By the end of September, 30,000 jobs in the industry in this country had been lost. Was that unavoidable, was it ultimately the right step?

It speaks for the high level of trust and mutual consideration between company management and the workforce that so far it has remained at just under 30,000 or around four percent of the total number of employees in the industry. So companies kept their workforce in anticipation of better times. And that, although the transformation of part of the combustion engine value added into electromobility, in which, as is well known, 40 percent of the added value is structurally lost, put an additional burden. Here the contribution of Labor Minister Hubertus Heil from the SPD must be mentioned explicitly: Without the generous extension of the reference times for the short-time work allowance, the companies would not have made it. Then the situation in the industry would be much more dramatic.

But isn't the industry taking it easy, or is it even trying to correct old mistakes? Key point: sleepy structural change …

I have to vehemently disagree! The German auto industry slept through nothing. There is no other automotive industry in the world that could hold a candle to it in terms of breadth and depth of expertise. In electromobility, it is a leader with plug-in technology. Tesla likes to build better batteries. But Tesla sells nearly 500,000 electric cars a year, with no profit. The German combustion engine colleagues 17 million – and very profitable.

With your decades of industry experience: Where is the German automotive industry now?

She is in the process of licking the wounds of the Corona crisis and positioning herself wider than ever before. When Tesla boss Elon Musk builds factories in Germany and looks for merger partners, the location and company can't be that bad.

In retrospect, it is well known that you are always smarter: If you were a CEO in the automotive industry – would you have done something differently during the Corona crisis?

No nothing! By contrast, before 2020. I would have wasted less money on robotic cars and invested more in developing green synthetic fuels. Because: 1.6 billion combustion vehicles around the world cannot be operated electrically. So the burner stays.

You mentioned the drop in sales: Which manufacturers were hit particularly hard in 2020?

The brands and manufacturers whose traditional customers from trade and industry suffered the most from Corona were hit hardest. I'll only mention the brands, the companies behind them should be known: Alfa Romeo, Smart, Dacia, Mazda Opel, Ford, Land Rover, Suzuki, Honda, Jaguar, Peugeot.

German brands are missing?

Yes. As is well known, Daimler passed Smart on to its major shareholder Geely.

In the pandemic, however, there are also companies and corporations that are benefiting from the corona crisis. Is Tesla such a winner?

At first glance, clearly yes: Tesla is the only manufacturer in Germany that was able to achieve a sales increase of almost 40 percent compared to 2019. However, the market share has so far only been 0.6 percent. In the field of e-cars, however, the share recently fell to below six percent. This is where the emerging competition is making itself felt.

And at second glance?

At second glance, no more: Tesla's revenues have so far come exclusively from the sale of CO2 pollution certificates to the combustion engine manufacturers, who can use these rights to lower the average values ​​of their fleets in order to meet fines Avoid Brussels. This source is slowly but surely drying up, the better the traditional carmakers get with their combustion engines and, above all, with their plug-in hybrid cars.

In retrospect: will 2020 go down in history as a game changer year for the auto industry?

Definitely yes! The rules of the game Everyone has understood, with a few exceptions, that the age of fossil combustion in gasoline or diesel engines is coming to an end – yes, it must come to an end. Climate change cannot be overlooked. If we want to stop it, we have to leave today's fossil resources – coal, oil, natural gas – where they are: in the ground. And instead use the resources to operate internal combustion engines that are already available today: water, green electricity, CO2 from the air. The economically and socially most sensible method of ensuring mobility for as many people as possible means using synthetic fuels for the existing combustion fleets.

In a nutshell: Your conclusion for the 2020 auto year in three words …

It continues beyond the horizon! (laughs)

Thomas Badtke spoke to Helmut Becker