German auto companies are now going through a series of challenges that will shake up the industry – mainly the electrification and autonomous vehicles are the new businesses that will separate the winners and losers by 2025. Although some German auto markers embrace the future, some are starting to show concern about President Trump and his recent comments about luxury cars from Europe and the potential for tariffs, 25% is the number he throws around. Right now, with a demographic implosion and budget challenges, Europe does not need a trade war.
Trump seems to have a problem with Angela Merkel, no one knows exactly what is driving the mutual anger.
The CEO of VW Group, which owns Porsche, Audi and Seat, said in an interview that German auto makers do rely on the US market, especially given the recent slowdown in China. Free trade, and trade wars are phrases that Mr Trump has embraced and with his cold tone toward the German Leader, Angela Merkel, the 25 percent tariff on every car import from Europe could be a threat that shocks Europe into panic mode during trade talks with the US.
However, the Audi Chairman Bram Schot was not as fearful of the Trump threats as he said that he did not see anything to worry about. Mr Harald Kruger, CEO of BMW said that BMW will work with Diamler Benz in a strategic alliance in the autonomous driving space.
Most German firms say that their business model is built on free trade, especially when BMW is the subject. Mr Kruger has made it clear that 2019 is challenging and BMW welcomes the risks involved. When asked about Trump and tariffs, Mr Kruger made it clear that BMW has built a state-of-the-art factory in South Carolina and that it supports trade but is at the same time flexible when challenges in trade arise.