Germany to support engine-design work by car industry

Germany is to inject government funding into engine-design work in the car industry, Chancellor Angela Merkel said in an interview with dpa. She spoke as the industry, a key German exporter, scales back production amid plunging worldwide sales.

Germany invented the first cars a century ago. Now we are in a fresh competition to see if German industry can build the 21st century car, Merkel, who has a doctorate in physics, told the newspaper. She said German carmakers had to try harder to innovate.

Germany had the unchallenged technical leadership in internal combustion engines which are still needed. But other technologies should not be neglected. Using research projects, we are going to give some extra impetus here to saving the climate.

She said moves last year to stimulate new car sales by tax rebates would be followed this week by more moves to alter car taxes.

Matthias Wissmann, chief executive of the automobile industry federation VDA, speaking to the weekly Auto Motor und Sport, said layoffs in the industry, which has already been shedding casual labor, were possible. Germany's auto industry employs 750,000, of whom 330,000 work for components manufacturers.

Wissmann said orders were currently 11 percent lower than one year ago, the lowest level since the 1980s.

Wendelin Wiedeking, chief executive of sports car maker Porsche, said in a letter to employees which was quoted by the weekly Automobilwoche: We have a stony path ahead of us and we don't know how long it will be.But he suggested sales of the company's sports cars and premium sports utility vehicles would stabilize in late summer.

Source: Transportweekly