Comment by Zufriedenheit 6 hours ago
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.
> This is impossible to fix with a state subsidy.
Is it? Because that's definitely how China is doing it:
https://rhg.com/research/chinas-subsidies-are-fueling-involu...
Those are consumer subsidies, they make buying a cheaply produced car cheaper, they don't make producing a car cheaper. Of course you can industrial policy for that as well, if you have the right conditions, cheap industrial inputs, and can eat domestic politics shit, i.e. automate the workforce. But DE probably don't have the domestic politics to automate the workforce nor future access to cheap gas.
So their industrial problem can't be fixed with subsidies, as in subsidies not capable of improving long term DE competitiveness without subsidies. Even if they automate workfroce and remove social benefits, lack of access to cheap industrial feedstock is precluding, i.e can't offset structurally disadvantage of being more expensive producer on input level.
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.