Strange considering that Germany's PMI (Purchasing managers' index) has been recovering this year: https://tradingeconomics.com/germany/manufacturing-pmi
German industrial output falls to 2005 levels as auto sector craters
91–100 of 130 posts
Re: German industrial output falls to 2005 levels as auto sector craters
#92Earlier quoted context omitted.
And that's despite the EU tariffs on Chinese manufacturers.
Then again, Chinese car companies are price dumping on purpose to kill the competition.
Chinese cars are a lot more expensive outside of China than they are inside of China. And the difference is not just tariffs and shipping; they earn a lot more profit per car for exported cars than ones sold internally.
IOW, they're not dumping, they're doing the opposite. I don't know why.
Re: German industrial output falls to 2005 levels as auto sector craters
#93Given that France is also starting to suffer badly, one thing to watch is more and more people demanding a cut to EU budget contributions from these countries. Its like 40 billion EUR worth of net transfers. Could make for explosive politics.
Much to my annoyance, despite this being practically a rounding error (like, 1% or so of GDP), the EU budget contributions absolutely did have this effect in the UK.
Well, the thing is: French budget reforms that the government wants to do is 40 billion EUR, their net contribution is 10 billion. Just going to neutral gets you a 4th of the way there without touching your internal social security. If you cancel contributions that's 25 billion, that's 60% of the way there.
Not saying I agree but this sort of argument will be impossible to counter for centrists with the mounting populist backdrop.
Re: German industrial output falls to 2005 levels as auto sector craters
#94Earlier quoted context omitted.
They seppukued by walking away from cheap RU gas. Cheap RU gas isn't just power, it's cheap industrial feedstock/inputs. Renewable/nuclear does not replace this. So all the wank about their energy policy is distraction. TLDR: Competitive Germany industry needs cheap RU gas. Healthy German economy with 40% trade GDP needs US + PRC, then RoW markets. PRC market going away. Germany "chose" (maybe pressured) into expensi…
Counterpoint: Japan doesn't have cheap feedstocks and makes cars fine.
They make cars fine, but their economy isn't.
The counterpoint to that is JP has to sacrifice (shadow subsidize exports) by managing exchange rate, i.e. JP went from 5-6T nominal GDP to 4T just through FX depreciation in last 20 years. They import expensive inputs but fx/account/spreadsheet their way into selling (up until PRC auto) competitive cars, which really domestic JP households pay for by essentially subsidizing exports (i.e. household -> industry transfer) which worked for a while with low / negative interest rates, but that era coming to end last few years ("easy" era with yen carry trade) and now there is CoL crisis especially for imports. Meanwhile PRC auto is eating at their shares.
Germany being stuck with Eurozone/eurobux has much less ability to pull this lever - they can't unilaterally devalue euro. So JP currency manipulation game, which itself is short/medium term trick that broke down with PRC's structurally cheap autos isn't option. If DE could play the FX game same will happen, they can prop up some sales (though long term can't compete with PRC producer prices), in exchange for domestic purchase power tanking.
TLDR if German could do a JP, which they can't, it will result net smaller German economy by essentially having germans subsidize exports and eat buckets of shit via imports, BUT MUCH WORSE THAN JP. JP still "only" 20% export:gdp, DE is 40%. Imagine Germany go from 4.5T GDP to to 2.5T. It would be anniliation.
E: Forgot this is all WHILE JP is still importing cheap RU LNG from Sakhalin2, despite US pressure, and only got US to back off buy also buying some LNG from alaska. Meanwhile US told Germany to jump off a cliff and they did.
Re: German industrial output falls to 2005 levels as auto sector craters
#95Earlier quoted context omitted.
Much to my annoyance, despite this being practically a rounding error (like, 1% or so of GDP), the EU budget contributions absolutely did have this effect in the UK.
Well, the thing is: French budget reforms that the government wants to do is 40 billion EUR, their net contribution is 10 billion. Just going to neutral gets you a 4th of the way there without touching your internal social security. If you cancel contributions that's 25 billion, that's 60% of the way there. Not saying I agree but this sort of argument will be impossible to counter for centrists with the mounting popu…
Being the French, their tactics will rather be what it always has been: Not reduce their contribution, but vastly increase their received subsidies from the EU. That way, they can let the EU subsidize what they can no longer afford to pay for with their own money. The EU will go along with this because this is the accepted MO of France's EU contributions since forever, and increased spending towards France will increase the EU's overall budget and therefore importance. The only unhappy member states will be Germany and a few unimportant small payer states. But Germany has always gone along with those shenanigans, so no reason to think they won't happily open their wallet again...
Re: German industrial output falls to 2005 levels as auto sector craters
#96Earlier quoted context omitted.
> Even if we assume, for the sake of argument, that Ukraine "was flirting with NATO". Why does that justify an invasion? Why do you think Ukraine or NATO or the US are at fault here? Read up on Cuban missile crisis, it might provide some context. No superpower has the right to impose its will on its neighbours, yet here we are : https://en.wikipedia.org/wiki/United_States_involvement_in_r...
You might want to take your own advice, because Cuba is the opposite of the example you're trying to make. The Cuban missile crisis was about nuclear weapons only. Cuba continued to host Soviet fighters, bombers, missile cruisers and many other conventional weapons until the dissolution of the USSR in 1991 - far, far beyond what any NATO member has seen after the Cold War, let alone potential candidates like Ukraine…
You are right, I should have mentioned Operation Mongoose instead. The missile crisis was the culmination of the conflict, similar to the invasion of Ukraine.
Would the Bay of Pigs invasion had happened if Cuba was not courted by the USSR ?
Re: German industrial output falls to 2005 levels as auto sector craters
#97A story from a german town: We have an 200 year old bridge, which can't be used anymore. It's a small bridge only about 100m long and 5m high i would guess. The state owned railroad wants to replace it. Everybody agrees. Local people are happy. They simple want to build the new one right next to the old one and then take the old one down. But still in spite of everybody agreeing it took 20 years!! to get the permit.…
[dead]
Re: German industrial output falls to 2005 levels as auto sector craters
#98Earlier quoted context omitted.
I guess they're talking about neoliberal, which is completely different from liberal (but overlaps - both liberals and conservatives are neoliberal; actual leftists aren't)
The problem are leftist policies that have completely destroyed any economic dynamism and that have created such high tax burdens that working full-time and trying to advance in your career is basically not worth it for many professionals. I know a lot of people who have either left the country or who have switched to part-time, because doing four days a week gives you 50% more weekend, but only costs you a little bi…
To my knowledge, leftists aren't in power anywhere, so I'm not sure what you're talking about. And if they are in power somewhere, they're certainly not bailing out massive automotive companies.
Re: German industrial output falls to 2005 levels as auto sector craters
#99Why is output falling? Are there other countries taking the market share? Or is there more to it?
Export markets for European cars are cratering. The Chinese and Koreans are taking over with really decent, affordable EVs. And while the likes of VW are producing good EVs, it's at the cost of their ICE vehicles and those losses aren't offset by their EV sales. In general the ICE car market is not just car manufacturers but many thousands of companies all over the place that make parts and components. Quite a few of…
German cars have always been slightly more expensive, but buyers (internal and export) thought this was a good deal because of higher (perceived) value and quality.
Nowadays quality has become an issue, where you could, back in the day, drive your Mercedes for 500.000km over a 30years lifetime, nowadays you are lucky to make it past the factory warranty. Along with quality, repairability, tuneability and parts availability and prices have worsened significantly. So German cars are no longer a safe bet on longevity and low lifetime cost, which is what drives away export customers as well as German private customers.
The only thing that has so far kept the German car industry afloat is tax subsidies towards German corporate customers: If your employer offers you a car as part of your salary, you only pay monthly taxes on a flat 1% of the sales price of the car, and for that, the employer can freely give you the car, maintenance, fuel for private and company use, all included. While the employer pays cheap company leasing rates and discounted gross fuel prices, and can offset all that whole spending against the company tax bill. So overall a good deal for employer and employee, and a huge boon to the German car industry (because practically all company vehicles have to be some German brand for prestige).
However, nowadays, the full tax deduction is only available for plug-in-hybrid and electric cars, ICE vehicles only get half the deduction. And the plug-in-hybrids will soon be classed down to ICE status. All the while German car makers struggle to offer proper electric cars at acceptable prices. All the while their plug-in-hybrids suffer from poor quality and life expectancy, expensive repairs and therefore expensive insurance and low resale value.
This means that German car makers will continue to lose their last reliable customer base.
Re: German industrial output falls to 2005 levels as auto sector craters
#100Earlier quoted context omitted.
Reasons I can think of (as a German) from the top of my head: - Crumbling infrastructure - Decades of missing investments in education and the public sector - no digitization - Unwillingness to move away from ICE vehicles - Slow internet access and slow build out of fiber network - Killing future industries (solar, battery ...) by cutting funding/subsidies early - low wages in European comparison
What makes German cars uncompetitive in the world market are actually high production costs. Which is due to high energy, labour cost and social tax. Combined with a lack of innovation. This is impossible to fix with a state subsidy.
I don't think production cost is the big issue. German cars always were premium-priced compared to what you could get from a Japanese, French or US car maker.
The big problem imho is that due to greed and technical incompetence (especially regarding electronics and software), quality and value have gone down. The high prices are no longer justified, and customers are drawing the logical conclusion.