Auto industry in crisis: VW demands car purchase bonuses

Is the powerful auto industry, which was slowed down by Corona, receiving government support – and if so, by how much and for which engines? However, environmental organizations criticize this project.

Volkswagen has given advice to the prime ministers of Lower Saxony, Bavaria and Baden-Württemberg on possible car sales bonuses in the Corona crisis pronounced for large-scale funding.

They would campaign for “politicians to provide money for this boost,” says VWBernd Osterloh, head of the works council, in a letter to employees. “We know we are using it to claim tax revenue,” the letter said. “But we also know that this money could be invested wisely for our whole society and therefore could pay off many times over – namely economically, environmentally and socially.”

Bonus model must be verified

The heads of government of the three automotive countries – Stephan Weil (SPD), Markus Söder (CSU) and Winfried Kretschmann (Greens) – want to join forces in the afternoon. During the restart of VW’s main plant in Wolfsburg, Weil had announced that he would consider an imaginable bonus model: “We realize that we need a quick decision.”

VW CEO Herbert Diess calls for “early and powerful action”. Söder told the Süddeutsche Zeitung: “I am in favor of a very comprehensive strategy on how we can help the auto industry.”

VW works council requests

According to the ideas of the VW works council, a financing model should include, among other things, an “impulse bonus” for new car purchases, including leasing, which also applies to modern combustion engines and operates for “a clearly limited period”. It should be as high as the “scrapping bonus” during the 2009 financial crisis and should also cover young used cars up to the age of one.

Osterloh also wants an ‘additional scrap bonus’, available for end-of-life vehicles scrapped in accordance with Euro-3 and Euro-4 emissions standards. In VW’s opinion, German manufacturers should agree that, depending on the amount pledged, public funds “may even double, or at least bear the cost of the change.” In addition, CO2 emissions should be used as an assessment basis for Motor vehicle tax be considered more.

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Criticism of environmental organizations

Environmental protection organizations criticize proposals to subsidize hybrid, gasoline or diesel cars in addition to alternative drive cars. “It is not opportune to promote vehicles whose technology is not turned towards the future”, declared the head of state of Baden-Württemberg BUND, Brigitte Dahlbender. “In fact, there can only be a purchase premium for small, purely electric vehicles.”

Greenpeace traffic expert Benjamin Gehrs recently made similar comments. “When the federal government promotes old drives in the auto industry’s most fundamental upheaval, it is mistaking the accelerator pedal for the brake.” In the midst of the shift to electric mobility, “German manufacturers could be lagging behind in the mobility upturn and Climate protection only catch up if all funds are now used to develop clean mobility solutions. “

The Corona Crisis Drastically Reduces

Söder had said last week that he wanted to sit down with his two colleagues from Hanover and Stuttgart to think about ecological bonus models and give the new generation of engines and cars a chance after the endurance phase.

Automakers have had to shut down factories for several weeks due to corona-induced drop in demand and disruption of supply chains – drastically falling sales are the result. Federal Environment Minister Svenja Schulze (SPD) calls for further aid for automobile industrywhether the funding is focused on climate-friendly vehicles.

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