Many German car manufacturers are currently under pressure, but at the IAA motor show in Munich, the industry is trying to demonstrate pride and confidence – almost as if they wanted to reanimate the old, good times
It started – of course – with a blockade of the free ride, which is actually supposed to be celebrated here again at last. On Friday evening, the BMW subsidiary Mini organized the start of the IAA motor show at Munich’s Karlsplatz, but visitors had to walk the last 150 meters. Last generation activists had glued themselves to the streets. “Nice ideal world here – how much longer?” Was written on one of their banners. Aside from a few aggressive motorists, the protests have remained peaceful and protesters have been on the streets for more than an hour – although police have temporarily arrested 27 protesters elsewhere.
Even at Mini in a closed department store, the party went ahead unimpressed. Even before the official opening of the auto show this week, several manufacturers tried to get the world excited about their products with shows, celebrations, presentations and discussions over the weekend, at least multipliers such as the press, influencers or representatives from politics and authorities. The message of this IAA is to all appearances be: The beautiful ideal world of the auto industry – that is, what the climate protection movement denounces – is intact again.
Just two years ago, when the trade fair took place for the first time after the corona crisis, and for the first time in Munich, it was at least partly a demonstration of insecurity. Do you still need auto shows? After all, the other big shows have largely disappeared in Europe in the wake of the pandemic. Should the car industry continue to focus on petrolheads and other car enthusiasts as a target group, who have been flocking to the exhibition halls in rapidly decreasing numbers every two years for a long time? What was the product of the car manufacturers anyway – shiny carts, nicer, faster, further driving, like all the years? Or mobility for society? Wouldn’t that be the industry’s right answer to the challenge posed by Fridays for Futures (FFF) and other spokesmen in the climate protection movement?
Returning to the old style car show
As a result, the IAA was renamed IAA Mobility, it was supposed to be a mobility show rather than a car show. So bicycle manufacturers, bus operators, air taxi companies and other start-ups for digital mobility were invited. All of them may still come this time, but they play practically no major role on the exhibition areas. The strategy of embracing the environmental movement did not work either. Two years ago, despite an invitation to FFF, the dialogue hardly materialized.
This year the organizing German car manufacturers association VDA tried it with a discussion offer to the last generation. The intended message may have seemed too transparent: that everyone is basically pursuing the same goal, the VDA members with their e-cars and the protest movement with its blockades. The representatives of the last generation gratefully declined the offer to present themselves at the IAA with a stand. After all, on Saturday – at the invitation of Greenpeace – a discussion took place at the Stachus, in which the environmental organizations Greenpeace and BUND, the last generation and the VDA were also represented.
Still, this year’s IAA is largely a car show of the old kind, the only one in Europe that has survived – after all. A few mobility fair fig leaves from the first Munich IAA remain, but they hardly matter anymore. What also remains is that the fair is not limited to a few exhibition halls, but goes out into the city (where the confrontation with the protest movement accordingly remains an issue). Still, the auto industry is preaching to converts more like it used to be this year, rather than trying to win over a more skeptical public to its offerings.
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“We’d rather write a whole new book than another chapter”
This year, however, the local manufacturers have – unmistakably – the need to show more pride and confidence to the outside world. This can be seen, for example, at BMW on Saturday. In an event hall in front of hundreds of guests, Munich’s top dog shows a car that is intended to represent part of its future vehicle range, electric of course, the “New Class”, the name and design borrow from the model generation that BMW turned modern in the 1960s and has made a pioneering manufacturer at times. “We’d rather write a whole new book than another chapter,” says CEO Oliver Zipse. Later he will say that the success of the most recent major motor show in China in spring in Shanghai encouraged him to stick to the format of the major motor show. In the end, this applies to all manufacturers: the magic and fascination of the brilliantly exhibited product should work here again – and not mobility systems and the sober question of how to manage to present yourself as sustainable.
Of course, none of this answers the question of what the truth is about the beautiful, ideal world of the local auto industry, about its pride, its confidence. After all, car production in Germany last year was at the level of 1970 and around a third below the value of the last good years 2017 and 2018 before first problems with adapting to new emission measurement methods, then the supply chain problems in the wake of the corona crisis and the following Weak demand left the plants in this country empty. VW has announced a radical austerity program in recent months and has already cut production shifts in some German plants due to falling demand. Mercedes argues with its dealers.
The costs of switching to electric drives and the digitization of operating systems are weighing on the manufacturers as a whole. In addition, the main market, China, is only growing at a slower pace and political uncertainties and growing local competition there raise the question of how much manufacturers can still rely on China in the coming years. The shares of VW and Mercedes (but not those of BMW) have lost significantly in value over the past year and a half. The confidence conveyed to the outside world at the trade fair may also have the task of pulling business up again. And perhaps to bring back the investors who have become skeptical.
Chinese automakers want to use the IAA as a stepping stone
The performance show of the – above all German – car industry this year also shows an attractive paradox. What makes the fair great is also something that puts the local manufacturers under additional pressure. More than 30 exhibitors from China will be in Munich. The Chinese automotive industry uses the fair as a great platform to push its market entry into Europe. Powerful manufacturers are represented, such as BYD, the Tesla pursuer, or the MG brand of the state-owned company and VW partner SAIC, which sold almost 50,000 electric cars in Europe last year, more than BMW, Audi and Mercedes.
In the rapidly growing e-car business in their home market, Chinese manufacturers have already challenged Western manufacturers, who – with the exception of Tesla – have to fear that they will be marginalized here. Now they want to present themselves in Munich as equals. “China is the largest car market in the world,” warns BMW boss Zipse to remain calm. “Anyone who expects the world’s largest car market not to develop its own industry is wrong.” But a successful car brand does not emerge overnight.
However, the German manufacturers have already recognized the technological competence of the Chinese: In order to be able to offer competitive cars in China, VW recently entered into an expensive pact with the local manufacturer Xpeng, which is to supply the technology for two vehicles – a new Audi is also getting it a platform from SAIC. Mercedes has previously transferred responsibility for the latest Smart models to the major Chinese shareholder Geely. And the future Mini Cooper, which BMW showed at the Munich Stachus this weekend, is also a car from China, whose electric drive platform was largely developed by BMW’s Chinese partner Great Wall.
This article first appeared on Capital.de.