Matthias Wissmann: Innovations are the key to success

Mobility is facing critical changes worldwide. At one time, it seemed that there was an inexhaustible supply of crude oil and that our planet was indestructible. Today we know better. The German automotive industry has therefore opted for sustainable technologies with the aim of protecting mobility as a “fundamental right”.

The importance of sustainability is particularly apparent during times of crisis. Current problems, such as a short­age in raw materials and the progression of climate change, are all clear signs that the economies will not be able to continue to operate as they did in the 19th and 20th century as they are reaching their limits. To­­day, sus­­tainable economic management strategies are being de­­veloped to continue to secure prosperity. If we look back in history, it is clear that people were affected by similar crises in the past, but they discovered ways of overcom­ing them. Carl von Carlowitz was the first to formulate guidelines in favour of sustainable economic management in 1713. The crisis scenario of his time was the clear­ing of Saxony’s forests, which got out of hand. Back then, the ore mines and smelteries of the Ore Moun­­tains required a large amount of wood. Carlowitz drew up some guidelines in support of sustainable forest man­­agement, which set out to prevent a full clear-cutting of forests without having any adverse effects on the econ­omy. He believed it was neces­­sary for every human being to respect and care for na­­ture as well as its raw materials. It is thanks to his hard work that today Germany is posi­tioned as one of the countries with the highest pro­­por­tion of forest land in Europe. This concept, which was first conjured up for the forestry sector during the 18th cen­tury, is being acknowl­edged in the 21st century and car­­ried forward to new sectors. There­fore sustain­ability is recognized as a starting point for a range of objectives. Long-lasting stable societies can be accomplished by link­ing together ecological, economic and social aims. The in­­sight which has been gained is that environmental protec­tion will only be actively imple­mented in our globalised world if the economy achieves sustain­able success at the same time.

The industry and the automotive sector are particularly challenged with devising sustainable strategies when faced with the rise in raw material prices as well as cli­­mate change. It is necessary that we resort to using oil a lot less in the long run. For this reason, we are in­­tensively dealing with the question of what sustainable mo­­bility will look like in the future and how it can be achieved. In this context, the automotive industry pursues three ob­­jec­tives: environment and climate protection, economic com­­petitiveness and social responsibility. In order to achieve these objectives, the automotive industry firstly is devel­­oping alternative drive technol­ogies. The aim is to drasti­­cally lower our vehicles’ fuel consumption. A lower or no fuel consumption equates to active environmental protec­tion as CO2 emissions are avoided as a consequence. On the other hand, sustainability on an economic basis means economising so that companies stay ahead of global competition. And finally, the automotive industry is aware of its social re­­sponsibility. It seeks to maintain a high level of employment at Germany’s in­­dustrial sites.

The automotive industry places emphasis on high invest­ments in research and development (R&D). German manu­facturers and suppliers spent 23.5 billion euros on re­­search and development in 2012 alone – an increase of nearly six per cent compared with the previous year. Ac­­cord­ing to the „Stifterverband für die Deutsche Wissen­schaft“ (Donors’ Association for the Promotion of Sciences and Humani­ties in Germany), the German industry as a whole spent 66.6 billion euros on R&D in 2012. This means that over a third of the research achievements came from the auto­­motive industry. Consequently, we are the number one driver of research in Germany.

However, it is not yet certain what type of drive will pre­vail in the future. This all depends on the future battery price for electric cars as well as on the development of electricity and petrol prices. As these factors are difficult to calculate, companies are pursuing various technol­­o­g­ical options. Therefore, companies are directing their efforts towards a multifaceted strategy in order to mini­­mise the risk of unprofitable investments. Under the motto “Save, Add and Replace” research is being carried out in parallel on various drive types. This will ensure that we invest in the drive technology that will ultimately catch on.

It is certain, however, that conventional drive types such as petrol and diesel engines will continue to play an im­­portant role in the foreseeable future. According to esti­mates, at least 80 per cent of all vehicles used in 2020 will be powered by combustion engines. Hence we are also carrying out research on efficient combustion engines in order to cut down on CO2 emissions in the short term. Our manufacturers and suppliers have already made tremen­dous progress by introducing innovations such as down­­sizing and direct injection systems.

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Diane Kruger and Joshua Jackson test a fuel cell: off to the desert – the B class F-CELL serves as a source of water.

We are taking a giant step into the future with the develop­­ment of electric mobility. By the end of this year, German car manufacturers will introduce 16 series models of electric vehicles to the market. But we have only just embarked on this development. There still remains con­­siderable scope for innovation with respect to battery charging stations and battery storage sizes. At the mo­­ment, customers are still faced with the extra burden of battery costs upon purchasing, compared with cars pow­­ered by conventional motors. Policy makers are called on to take appropriate measures in order to settle these differences. Compensation for the disadvantages suffered by users of company cars with an electric motor is the first step. Further possibilities include special depre­­ciation allowances for electric cars, access to bus lanes or parking benefits in city centres. The battery charging infrastructure must also be optimised.

The achievements already made with regard to the cut-back of CO2 emissions demanded significant financial commitment from manufacturers and suppliers. Sustain­­able economic success is essential in order to cover the R&D costs. For only if we achieve economic success, the funding necessary for research will be available to us.

This is why the German automotive industry attempted to tackle the new markets early on. In addition to the tradi­tional
automotive markets in North America, Japan and Western Eu­­rope, our manufacturers and suppliers today are also active in emerging markets such as Brazil, Russia, India and China. Therefore, the German automotive in­­dus­try is seizing the opportunities presented in the growth regions.

The international success is predominantly supported by our strength in the premium segment. Around 80 per cent of premium cars sold across the globe origin­ate from German car brands. Germany as a business location is currently benefiting from this unique selling point to a special degree, because only with this high share in the premium segment and an international focus, it has been and still is possible for Germany to maintain a very high level of employment. Despite the shrinking Western European home market, 2013 saw a rise by more than 10,000 workers in Germany, resulting in a total of around 760,000 employees.

The automotive industry is facing up to the challenges of the 21st century. To also ensure future success, we are sticking to our sustainable objectives. For us, economic success and technological, environmentally-friendly in­­novations go hand in hand.

The author studied law, economics and political science in Tübingen and Bonn. In 1993, he was Federal Minister for Re­­search and Technology; from 1993 to 1998, he was Federal Minister of Trans­­port. From 1976 to 2007, he was a member of the German parliament. Mr. Wissmann has been president of the German Asso­­ciation of the Automotive Industry and vice-president of the Federation of German Industries since 2007.