UPDATE 2-German car industry urges Merkel to help promote electric cars – Reuters

Posted: Wednesday, February 03, 2016

* Merkel met auto chiefs over incentives for electric cars

* Auto bosses say Germany lags rival countries

* Subsidy is controversial within coalition government

* German economics minister: Incentives decision by March

(Adds comments from Audi labour boss)

By Edward Taylor and Andreas Cremer

FRANKFURT, Feb 3 Germany needs incentives to
boost demand for electric cars if it is to retain its leading
edge as an automotive market, industry bosses said on Wednesday,
a day after a high-level meeting with Chancellor Angela Merkel
ended without a deal on subsidies.

Merkel summoned auto bosses to discuss promoting electric
and hybrid cars following increased political pressures in the
wake of Volkswagen’s admission that it cheated U.S.
emissions tests for diesel-powered cars.

Germany lags markets such as Norway and the Netherlands,
when it comes to subsidies and providing charging points for
electric cars in particular, said the country’s VDA industry
association.

“In its development into a leading market, Germany still has
some catching up to do,” Matthias Wissmann, president of the VDA
said in a statement.

Premium carmaker Audi’s top labour representative echoed the
VDA’s view and called for government action to set up charging
stations for electric cars and help fund sales subsidies.

“Clear messages are important and needed now. Otherwise we
will sleep away the future,” Peter Mosch said.

German economics minister Sigmar Gabriel said the auto
industry and politicians would continue to discuss proposals and
seek to find a solution on incentives by March.

German automakers have for years relied on a recipe of
selling larger, more powerful cars to please autobahn cruising
clients, a strategy which has boosted the profits of its premium
carmakers Daimler, BMW and VW’s Audi.

As a result, Chinese and Japanese rivals including BYD
and Toyota have stolen the march on German
carmakers in terms of sales of zero-emission vehicles.

BMW, Mercedes-Benz and Audi now rank 12th, 14th and 22nd
respectively in terms of global sales of hybrid and electric
vehicles, data from LMC Automotive shows.

Germany is also set to fall far short of its goal to put 1
million electric cars on the roads by 2020, as drivers are
reluctant to switch from more-polluting, but also generally
cheaper, diesel and petrol vehicles.

So far only around 50,000 electric and hybrid cars have been
registered in Germany, Europe’s biggest car market.

In response, German auto bosses and politicians organised a
closed-door summit to discuss measures to help boost the number
of low-polluting cars in the country.

The heads of the three parties in Merkel’s ruling coalition
have considered introducing a subsidy worth up to 5,000 euros
($5,500) for electric car buyers. But Finance Minister Wolfgang
Schaeuble, a senior member of Merkel’s centre-right party, has
spoken against such a move.

Under the proposal being discussed, carmakers may contribute
between 1,500 and 2,000 euros of the incentive, which would be
paid into a common fund, the weekly news magazine Der Spiegel
reported, without citing sources.

This so-called buyers’ premium, combined with other
incentives such as preferential parking and the use of special
lanes, have helped boost sales of electric cars in markets such
as Norway.

While Germany saw deliveries of plug-in and hybrid electric
cars jump 80 percent last year to 23,500, China saw
registrations more than double to 188,000, while U.S.
registrations reached 115,000, according to Stefan Bratzel at
the Center of Automotive Management in Bergisch Gladbach.

Toyota is the biggest seller of hybrid and electric
vehicles, data provided by LMC Automotive shows. It sold 982,968
such vehicles last year, followed by Honda and Lexus which sold
258,127 and 129,578 low-emission cars respectively.

(Additional reporting by Gernot Heller and Jan Schwartz;
Editing by Greg Mahlich and Mark Potter)

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