Analysis: The Politics Of Germany’s Auto Industry

The German automotive industry has long played a key role in the country’s prosperity. It employs hundreds of thousands and enjoys cozy relationships with politicians.

But the COVID-19 crisis threw a wrench in the works. What’s next? The prosperous German auto industry has long been lagging when it comes to innovating new automotive technologies. Then came the COVID-19 pandemic. Now, the industry is turning to decision-makers for help. But just how far will policymakers go to help the car companies?

Arguing that the COVID-19 pandemic has hit them hard, the auto industry is demanding the postponement of stricter CO2 limits and a purchase premium for new vehicles. They maintain that nothing less than the prosperity of the whole country is at stake. But is Germany’s success really dependent on the auto industry? And how much blame does industrial policy bear for the failures of the automotive companies?

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