German Chancellor Merz: German auto industry will remain key for country's prosperity

German Chancellor Merz: German auto industry will remain key for country's prosperity

German Chancellor Friedrich Merz (CDU) has reiterated the importance of the German auto industry for the country's economic prosperity and employment, during the opening of the IAA trade fair in Munich on September 2, 2025. At the event, Merz praised the industry's innovative strength and called for a clear commitment to the car sector.

The German Association of the Automotive Industry (VDA) has been advocating for better framework conditions, including less bureaucracy, lower taxes, and cheaper energy prices, to support the industry's recovery from the ongoing crisis. VDA President Hildegard Müller emphasized the need for politicians to deliver on these reforms to ensure the industry's continued success [1].

Merz acknowledged the industry's commitment to climate protection and its investments in electric vehicles, but also highlighted the need for flexibility and technological options. He noted that customers are not switching to electric cars as quickly as initially anticipated, making it unrealistic for the industry to sell only electric cars by 2035 [1].

The auto industry has faced challenges due to US import tariffs and fierce competition in the Chinese market, leading to job cuts and market share losses for major manufacturers like BMW, Volkswagen, and Mercedes-Benz. Despite these setbacks, Merz praised the industry's efforts in advancing electric mobility and autonomous driving [1].

Merz's remarks come as Germany grapples with economic challenges, including rising unemployment and growing demands for welfare reform. In a separate interview, Merz pressured the Social Democratic Party (SPD) to consent to cuts in the Bürgergeld unemployment payment system, aiming for 10% savings to lighten the federal budget [2].

The German auto industry's future remains crucial for the country's economic prospects. Merz's call for a clear commitment to the car sector underscores the need for supportive policies to foster growth, employment, and innovation in the sector.

References:
[1] https://www.marketscreener.com/news/auto-industry-wants-better-conditions-a-politicians-must-deliver-ce7d59dfdc8bf726
[2] https://brusselssignal.eu/2025/09/german-chancellor-merz-ups-pressure-on-social-democrats-in-push-for-welfare-cuts/