ohn Vidal in Stuttgart
Sunday 2 April 2017 00.05 BST
For the three young Porsche technicians joshing around in their tea break outside one of the carmaker’s assembly lines in Stuttgart, life seemed good last week. Like all the company’s 20,000 employees, they had just been given a bonus of €9,100 (£7,735); sales and profits were soaring; Porsche was investing €1bn in new models; and, in the sparkling southern German spring sunshine, their future as skilled craftsmen looked secure, well rewarded and full of promise.
“I am optimistic. We make the best cars and we have a good employer,” said one man. “I am young, but I have bought a house and next year I hope to buy a Porsche.”
But elsewhere the mood in Stuttgart, the car capital of Europe where the automobile was born in 1886 and where Porsche, Mercedes-Benz, Bosch and many major auto suppliers have their HQs, is far from confident. All the social, technological and political trends point to a rapid demise of the polluting internal combustion engine, the coming of electric cars and the end to German car dominance.
In the wake of “Dieselgate”, when VW was found to have cheated emission figures, and the arrival on the car scene of digital companies such as Uber, Tesla and Google, all jockeying to introduce driverless and electric cars, the sedate German industry is waking up to the fact that it may be left behind by the US and China and that if it does nothing its cars could soon seem like antisocial relics.
“The industry is at a crossroads. German car companies have had their heads in the sand. They cannot compete with companies like Tesla, or with China, which will determine the future markets for the car. The Chinese market is 23 million cars a year. In Germany it is 3-4 million,” says Christian Hochfeld, director of Berlin-based transport thinktank Agora.
Because Germany sells its cars largely to China, the knock-on effects of what happens there will be huge, he says. “The plan by the Chinese to clean up pollution in their cities by introducing more and more electric cars will drive the global market. They are starting to build cars around batteries and are getting better and better. In a few years, Chinese cities will have quotas for electric cars, progressively closing down the market for petrol or diesels.”
Climate change, too, will force carmakers to go all-electric or, like Toyota, to use hydrogen. “After the Paris climate agreement in 2015 we know that industry has to be decarbonised to meet carbon targets. Either it does something very serious or it will never meet its targets,” he says.