German automakers are sliding toward a cliff and risk taking the whole economy with them. That is a warning given by Helmut Becker, Bayerische Motoren Werke AGs former chief economist.

If the auto industry is to believe to the warning of the of the esteemed economist, would it be high time to say goodbye to Porsche AG, Volkswagen AG, Audi AG, DaimlerChrysler AG, and other German automakers?

The future belongs to Japanese, Korean and Chinese carmakers, Becker writes in an article titled Ausgebremst: Wie die Autoindustrie Deutschland in die Krise Faehrt'’ (Outmaneuvered: How the Auto Industry Is Driving Germany Into Crisis'’).

Some experts in the industry said that it would be wise to heed Beckers warning which is supported by statistics and market analysis.

I turned the last pages in amazement that the industry is still afloat let alone that it accounts for one in seven German jobs, directly and indirectly. Though German carmakers are faring better than their U.S. rivals, that’s not a helpful comparison, wrote Catherine Hickley. The challenge comes from Toyota Motor Corp., which is poised to overtake General Motors Corp. as the world’s top automaker, and Chinese upstarts like Chery Automobile Co. and Geely Automobile Holdings Ltd.

German cars are too big, too costly and too polluting, Becker said. And these factors contribute to the significant sales doldrums afflicting German vehicles. China, meanwhile, is the battleground that will determine who survives, Becker noted. As a fact, the facilities in the territory already produce more cars than those in Germany.

A chapter written by Frank Sieren, the China bureau chief of magazine WirtschaftsWoche, tracks the fall of German automakers from supremacy in the world’s biggest potential market. China has become the nightmare of every German car executive,'’ Sieren said. He envisions that sooner rather than later'’ Germans will order four-door Chinese cars from the discount supermarket chain Aldi Group for 3,499 euros ($4,780). ALDI, short for “ALbrecht Discount, is a Germany-based discount supermarket chain - it is one of the biggest retail chains around the world.

German automakers execs could not put the blame on external forces. The 63-year-old economist from the makers of quality BMW 3.0cs radiator showed catalogs that reflect some errors and missed opportunities over the decades. The catalogs have specifically stressed DaimlerChrysler and Volkswagen.

Some of the factors that contribute to German automakers demise include ego-driven, bungled and tragically costly mergers, ill-advised labor accords on wages and work hours, environmental lack of forethought in missing out on hybrid engines, and an unwise concentration on boy toys for saturated Western markets instead of competing on small, affordable car segments.

How powerful are Asian automakers? This year, the Toyota Motor Corp. has surpassed the General Motors Corp. as the largest automaker worldwide. Last year, the Japanese automaker had 52 factories in 28 countries, Becker said. In comparison, Volkswagen produced vehicles in 18 countries, mostly in Europe. Additionally, the automaker closed its only factory in the United States - a move Becker calls fatal'’ for the entire German industry in that market. Why? Because Toyota’s luxury division Lexus became the bestselling luxury car there.

Brilliance China Automotive Holdings Ltd., BMWs venture partner, is challenging Volkswagen and Adam Opel, GM’ German unit, with its own Zhonghua brand. German newspapers have called it the Mao Mercedes and Cheap BMW.

The industry would not collapse overnight, Becker said. German carmakers might even avert a crisis. If there is no radical change, he noted, as many as 400,000 jobs may be lost - 100,000 from automakers and the rest from suppliers. So Germany needs its auto industry. But does the world need it too?'’ Becker concluded.

About Author

Anthony Fontanelle is a 35-year-old automotive buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop.

Source: ArticleTrader.com

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