Studio guest: Andreas Bremer

Our studio guest on this topic and other developments in the auto market is Andreas Bremer. He is head of the Institute for Automobile Market Research in Essen. DW-TV: Mr. Bremer would you like to own a Lamborghini? Andreas Bremer: Own? Probably not. Drive? Definitely. DW-TV: Like most of us. But we mere mortals here in the car-driving world, have been on a shopping spree lately, you know I am talking about the "cash for clunkers" program in the United States as well as Europe. And it has, it has been a boom for car industry in the near term. But if we look now, the projections for sales here in Europe are not very good. Next year we are supposed to see an even more dramatic decrease in sales, we're not expecting growth, positive growth until 2013. Would you say the "cash for clunkers" program has hurt the car industry in the mid- to long-term? Andreas Bremer: Actually, I don't really think so. I think, I think, it did what it had to do. It bought us time, it bought the dealerships time, it gave them the opportunity to sell off their stock, because they had lots of cars in stock that they needed to get rid of. And it helped the manufacturers to rethink some of their program line-ups. Which is why we are going to see a lot small segment cars entering the market pretty soon. I mean within the next two or three weeks, ahh years. DW-TV: Years. Let's pick on these car dealerships for a second, there are predictions that up 50 percent of all car dealerships in Germany could go out of business by next year. Do you believe that? Andreas Bremer: No. DW-TV: Why not? Andreas Bremer: I was afraid you were going to ask that. DW-TV: The optimist here. Andreas Bremer: Yeah, I really don't expect that. We will probably see some dealerships go out of business because their line-ups of brands and models is not up-to-date. But that's a natural process. It's not due to the "cash for clunkers" program. It's simply due to that they have the wrong models they are selling. And if their manufactureres don't come around with new financing schemes that allow them to sell their cars at a reasonable price without rebates that are horrendous, um, then those dealerships will have a problem. DW-TV: What's going to happen right, if we want to get consumers to come back into the showroom, and buy our car, you are going to have to offer to some type of rebate, can the car manufacturers afford that right now? Andreas Bremer: They don't have a choice. I mean, can they afford it? Probably not. But again, they don't have a choice, you have to make the numbers now. You have to secure your market share and ensure that your dealers sell those cars because otherwise you're back, you're stuck back in the problem we had earlier of overproduction. You can't be producing cars and not sell them. So on either end you are going to have to cut down. You have to cut down production to the level consumers are actually asking for it. And your dealerships have to be selling it. The partnership has to be improved on that end. DW-TV: That's one point, but you are also going to have to produce cars that people are going to want to buy. What do car manufacturers have to do now to get people back into the showrooms? Andreas Bremer: Small-sized cars, hybrid engines are the two main factors right now. Everybody is down-sizing when it comes to, when you are talking about the next car. It's not necessarily the smaller car, but it's the smaller engine we're talking about. A lot of times it's also the smaller model, but it's primarily the smaller engine with lower consumption. DW-TV: Why aren't you talking about electric cars? Because that has been of course a big buzzword. Andreas Bremer: For next ten years. DW-TV: For the next ten years? Andreas Bremer: Yes. DW-TV: So we're talking about basically, small, fuel-efficient cars in the mid-term? Andreas Bremer: Hybrid if you want. DW-TV: Hybrids? And you think that will help to pull the car industry out of this crisis? Andreas Bremer: Yes, it'll certainly help. DW-TV: Let's hope the optimist in you is speaking the truth. Mr Bremer, thank you very much. (Interview: Brent Goff)

DW-World | September 8, 2009

Tags:. .optimist. .necessarily. .afford. .primarily. .brands