German Automakers are Heading for a Fall Warns Becker

German automakers are sliding toward a cliff andsupermarket chain Aldi Group for 3,499 euros
risk taking the whole economy with them. That is($4,780). ALDI, short for "ALbrecht Discount," is a
a warning given by Helmut Becker, BayerischeGermany-based discount supermarket chain - it is
Motoren Werke AG's former chief economist.one of the biggest retail chains around the world.
If the auto industry is to believe to the warningGerman automakers' execs could not put the
of the of the esteemed economist, would it beblame on external forces. The 63-year-old
high time to say goodbye to Porsche AG,economist from the makers of quality BMW 3.0cs
Volkswagen AG, Audi AG, DaimlerChrysler AG,radiator showed catalogs that reflect some errors
and other German automakers?and missed opportunities over the decades. The
The future belongs to Japanese, Korean andcatalogs have specifically stressed DaimlerChrysler
Chinese carmakers, Becker writes in an articleand Volkswagen.
titled "Ausgebremst: Wie die AutoindustrieSome of the factors that contribute to German
Deutschland in die Krise Faehrt'' ("Outmaneuvered:automakers' demise include ego-driven, bungled
How the Auto Industry Is Driving Germany Intoand tragically costly mergers, ill-advised labor
Crisis'').accords on wages and work hours, environmental
Some experts in the industry said that it would belack of forethought in missing out on hybrid
wise to heed Becker's warning which is supportedengines, and an unwise concentration on boy toys
by statistics and market analysis.for saturated Western markets instead of
"I turned the last pages in amazement that thecompeting on small, affordable car segments.
industry is still afloat let alone that it accounts forHow powerful are Asian automakers? This year,
one in seven German jobs, directly and indirectly.the Toyota Motor Corp. has surpassed the
Though German carmakers are faring better thanGeneral Motors Corp. as the largest automaker
their U.S. rivals, that's not a helpful comparison,"worldwide. Last year, the Japanese automaker
wrote Catherine Hickley. "The challenge comeshad 52 factories in 28 countries, Becker said. In
from Toyota Motor Corp., which is poised tocomparison, Volkswagen produced vehicles in 18
overtake General Motors Corp. as the world's topcountries, mostly in Europe. Additionally, the
automaker, and Chinese upstarts like Cheryautomaker closed its only factory in the United
Automobile Co. and Geely Automobile HoldingsStates - a move Becker calls "fatal'' for the entire
Ltd."German industry in that market. Why? Because
German cars are too big, too costly and tooToyota's luxury division Lexus became the
polluting, Becker said. And these factors contributebestselling luxury car there.
to the significant sales doldrums afflicting GermanBrilliance China Automotive Holdings Ltd., BMW's
vehicles. China, meanwhile, is the battleground thatventure partner, is challenging Volkswagen and
will determine who survives, Becker noted. As aAdam Opel, GM' German unit, with its own
fact, the facilities in the territory already produceZhonghua brand. German newspapers have called
more cars than those in Germany.it the "Mao Mercedes" and "Cheap BMW."
A chapter written by Frank Sieren, the ChinaThe industry would not collapse overnight, Becker
bureau chief of magazine WirtschaftsWoche,said. German carmakers might even avert a crisis.
tracks the fall of German automakers fromIf there is no radical change, he noted, as many
supremacy in the world's biggest potential market.as 400,000 jobs may be lost - 100,000 from
China has become "the nightmare of everyautomakers and the rest from suppliers. "So
German car executive,'' Sieren said. He envisionsGermany needs its auto industry. But does the
that "sooner rather than later'' Germans will orderworld need it too?'' Becker concluded.
four-door Chinese cars from the discount