Studio Guest: Andreas Bremer from Germany's Automobile Industry Research Institution

We talk with Andreas Bremer about the situation on the car market. DW-TV: Are car makers a lost cause? Or can the industry be saved? Andreas Bremer: Well, I certainly hope so. There will always be some sort of individual traffic that we will see in the future and I'm almost certain -- almost certain -- that most of the companies we see today will still be around. DW-TV: What needs to be done to prevent the situation from getting worse? Andreas Bremer: Alright, there are several factors that have to come together here. I certainly expect that politics sets parameters that industry can follow and that consumers can trust in. So no quick changes in the next six months or anything, but stay the course, decide on something and then do it. And on the other hand, I really hope that the industry gets back to consumer-oriented research and development when it comes to their cars and away from the industry driven ideas we've seen in the past. DW-TV: Now what is it that led to this crisis in the auto industry? Andreas Bremer: Well, of course, many factors came together. We all know that it started back in the United States. But right now for the automobile industry, it's mainly their overproduction that we've been seeing over the last few years. Management thought that times would get better, but they didn't get better. So now we're stuck with lots of cars that haven't been sold. DW-TV: How did carmakers bring this on themselves--by building bigger and bigger vehicles--even though fuel prices were climbing in recent years. We have a look at how research budgets from German carmakers have steadily risen in recent years. What have they been doing with that money? Why aren't their cars selling anymore? Andreas Bremer: Well, you already pointed it out. They were going for bigger cars, for SUVs, because they allowed you a higher profit margin. Smaller cars don't give you the profit margin that looks good on your balance sheets, so this is what they were going for. Remember a few years ago, we already had the three litre car in Germany, but it got forgotten. And maybe they got greedy, I don't know. DW-TV: Let's focus on Europe for a moment. Which carmakers in Europe are likely to survive. Andreas Bremer: Well, I'm certain VW are going to survive it. They're in very good shape. They can cover every segment you can think of. They have a car there. They're good with the diesel technology, which is fuel efficient and they can improve on that and they're doing it. They're gasoline engines are pretty good. The newly developed ones. So I'm pretty sure we'll see them around. And I'm certainly hoping that Opel gets a chance because the company is in pretty good shape. Opel! Not GM. DW-TV: Speaking of GM, General Motors and Chrysler are both receiving bailouts from the US Government--but many experts say this might not do much more than just extend the misery of the US auto industry? Andreas Bremer: I'm afraid so because we're looking at ten, fifteen years of development that shows us cars today that no one really wants, while now they have to do a turnaround within six months. How are they going to do that? So I'm a bit suspicious that this is not going to work I'm afraid. Interview: Heather DeLisle

DW-World | December 30, 2008

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