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Market trends: Planet Germany

Who do you think this quote comes from? “There are so many egomaniacs in the German automotive industry who would sooner put pseudo race cars onto the road than take a leading role in developing new environmentally-friendly technologies.” Greenpeace perhaps? In fact it comes from Helmut Becker, former chief economist at BMW – a man who is in a position to know.

It is his contribution to a fierce debate raging across Europe. On one side is the powerful German car industry, specialists in high performance models, and on the other side are the French and Italian manufacturers who make lots of small and/or diesel models. The (German) EU industry commissioner has argued for different CO2 limits for different sizes of car, saying that large cars should not be penalised (although many people assumed that penalising large cars was the whole point of CO2 limits).

Meanwhile the Italians are saying there is no way their low CO2 models will be used to get the German industry off the hook via a Europe-wide CO2 average.

So it has all the makings of a classic Euro-squabble, with rational debate being drowned out by the sound of grinding axes.

Let’s take a step back and examine whether Helmut Becker’s comments hold water. Certainly, the German industry does sometimes appear to be operating in a bubble where point-scoring against each other takes precedence.

The average power output of models from the big three (Audi, BMW and Mercedes) now exceeds 175bhp, while average CO2 output exceeds 180g/km.

Indeed the average CO2 output of Mercedes and Audi is still going up – only BMW, with its efficient new engines and regenerative braking technology, is already on the right path.

Certainly, if you look at recent product launches you would not guess that emissions were the top priority. In the last year or so, we have had the 2.5-tonne Mercedes GL, the almost-as-large Audi Q7, the 420bhp BMW M3 and the usual plethora of AMG derivatives.

Over the past 20 years, the German car industry has done fantastically well at swimming with the tide: buyers wanted more power, more quality and more prestige – all the things that Germany did best. In that time, German carmakers were contemptuous of volume manufacturers asking for hand-outs from their national governments, saying that market forces should prevail.

Now that the tide is flowing in the direction of lower environmental impact, it appears to be Germany’s turn to ask for protection.

Are the bosses egomaniacs? They certainly need to come out of their performance-oriented comfort zone.

The world is changing – can Audi, BMW and Mercedes change quickly enough to keep up?

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