German carmakers urged to ‘reduce dependencies’ on individual markets

BERLIN

Germany’s foreign minister has warned German carmakers about the risks of being too dependent on individual markets.


Speaking at an international motor show in Munchen on Thursday, Annalena Baerbock said automotive industry is going through a big transformation worldwide, offering both new challenges and opportunities.


"The cards are being reshuffled at the moment. This is also an opportunity to learn from old mistakes and reduce dependencies on individual markets, and become a leader in climate-neutral mobility,” Baerbock said.


“For our country, where the automotive industry accounts for a large share of value creation, this is not just an economic issue, but also a question of security,” she added.


China is currently the most crucial market for German automotive industry, and the country accounts for more than 30% of sales for carmakers like Volkswagen, BMW and Mercedes.


Despite close economic ties between the two countries, political relations have suffered tensions in recent years due to China’s foreign policy moves, disagreements over Taiwan, and human rights issues.


The German government has recently adopted a new strategy toward China, and stressed that Berlin will continue cooperation with Beijing on issues of common interest, but will reduce one-sided dependencies.


The government’s new National Security Strategy described China both as “a partner, competitor and a systemic rival.”