Daily Management Review

VW CEO: Automotive industry doesn't need incentives


Car markets are emerging from a major slump due to the pandemic, and there is no need for more funding for the auto industry. This opinion was shared by the president of the Volkswagen Company, Herbert Diess, in an interview with the Financial Times.

"I assume there is no reason to re-stimulate transactions unless there is a second COVID-19 lockdown or a more economic slowdown," said Mr. Diess, who has been a consistent supporter of subsidizing the car industry since the start of the pandemic.

The German authorities refused a large-scale initiative to help the car industry in the wake of the pandemic, as they did during the financial crash of 2008, when EUR 5 billion was allocated to boost new automotive purchases. This year, the government of the country has only decreased VAT and raised incentives for buying new electric vehicles. 

At that, VW 's sales in Western Europe were better than expected in September, growing by more than 10%, with the company selling over 300,000 cars in the region. In the company's biggest market, China, September sales were 1 percent higher than last year. Taking into account these metrics, the German organization is planning to make a profit by the end of 2020. 

A similar view was shared by Ola Källenius, Daimler 's head, that there is no need to stimulate the industry. Daimler's net revenue for the third quarter grew by almost 20 percent to EUR 2.2 billion, while China's Mercedes-Benz revenues grew by 23 percent during the same period. According to Mr. Källenius, these estimates are "almost unbelievable."

source: ft.com