German Auto Industry Group Rejects Trump's Talk of Unfair Trade -- Update
January 25 2017 - 3:19PM
Dow Jones News
By William Boston
BERLIN -- The German auto industry is pushing back against
accusations from U.S. President Donald Trump that automotive trade
between the two countries is unfairly tipped in Germany's
favor.
Matthias Wissmann, a former German government official who is
now president of the German Association of the Automotive Industry,
rebutted Mr. Trump's depiction of German-American auto trade and
also warned against putting up barriers that would weaken the North
American Free Trade Agreement. German auto makers have factories in
Mexico that benefit from Nafta.
"Protectionism has never lastingly solved any economic problems
in the world," Mr. Wissmann said in a speech Wednesday evening at
the group's annual New Year's reception in Berlin. "Should it come
to restrictions in the Nafta region, the U.S. economy would be the
first to take a considerable hit."
Mr. Wissmann also pointed to the U.K.'s decision to leave the
European Union and the EU's single market as a major risk for
German auto makers. The U.K. is the largest export market for
German car makers, accounting for 800,000 vehicles last year. He
called on Brussels to do everything possible to ensure that there
is continued free trade in goods and services between the U.K. and
the EU.
The German auto industry is vexed by the new U.S. president's
combativeness. Mr. Trump recently singled out BMW AG, Daimler AG
and Volkswagen AG, threatening to impose a 35% border tax on German
automotive products that are shipped to the U.S. from Mexico to
force the companies to build more cars north of the border.
Mr. Trump has said that while Daimler's Mercedes-Benz luxury
cars are a common sight in U.S. cities, few Chevrolets can be seen
on the streets in Germany.
Ford Motor Co. and General Motors Co. once dominated the German
auto industry, prompting Adolf Hitler to create Volkswagen as a
German mass-market competitor to the U.S. car makers. Today, Ford
and GM, through its Opel subsidiary, are still among the largest
car makers in Germany and Europe. GM recently stopped selling
Chevrolet models in Europe as part of a restructuring, instead
focusing on Opel models.
German Transport Minister Alexander Dobrindt, speaking at the
event, dismissed Mr. Trump's take on trade and the paucity of
Chevrolets on German roads. "That's the economy," he said,
eliciting applause. "That's industry. That's competition. And
that's what we want, ladies and gentlemen."
Mr. Wissmann said the balance of automotive trade was only part
of the picture. GM and Ford have manufactured in Germany for
decades and their share of the German auto market is in the double
digits, he said. By comparison, German auto makers combined held a
7.6% share of the U.S. light-vehicle market last year, down from 8%
in 2015.
The U.S. is the second-largest export market for German auto
makers, Mr. Wissmann said. But he added that German auto companies
and their suppliers have greatly expanded production in the U.S.
over the past few years and export more than half of their
U.S.-made vehicles, including to Europe.
Mr. Wissmann said German manufacturers had increased their U.S.
automotive output fourfold over the past seven years to 850,000
vehicles in 2016. German car makers and suppliers directly employ
110,000 people in the U.S., he said.
"German manufacturers have significantly increased the number of
their factories in the U.S.," Mr. Wissmann said. "This shows clear
commitment to the U.S. as a manufacturing location."
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
January 25, 2017 15:04 ET (20:04 GMT)
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