Car cooperation

A Well-Oiled Machine

  • Why it matters

    Why it matters

    If German companies do not develop their own e-car technologies, rivals in the U.S. and Asia will come ot dominate the market.

  • Facts

    Facts

    • Volkswagen, BMW and Daimler have said that they will work with Nokia to develop mapping technology.
    • German car makers have fallen behind in battery cell technology.
    • The world market for battery cells is currently dominated by Korean and Chinese companies, and by Tesla in the U.S.
  • Audio

    Audio

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German car companies must cooperate to stay in the race. Source: dpa
German car companies must cooperate to stay in the race. Source: DPA

 

In a sign of the times, the old rivals Volkswagen, BMW and Daimler have said that they will work together with Nokia to develop mapping technology. The three rivals are convinced that they will have to cooperate to prevent Google dominating the digital maps markets.

The move suggests that the German car industry has finally recognized a new truth: It will have to cooperate, rather than compete, if it is to survive.

The kind of challenges facing Germany’s car makers are so large than even a giant such as Volkswagen cannot deal with them alone. Developing expensive future technologies, dealing with European emission regulations or lobbying over the TTIP free-trade treaty with the United States are all areas that demand cooperation.

The companies that compete so hard against each other in the global markets have to find more and more areas of common ground.

Take the example of battery cells. At the moment the concept of electric cars is in its infancy. But it is easy to see that hybrid and electric cars are soon going to be available on a mass scale. The world market for battery cells is currently dominated by Korean and Chinese companies. Tesla will soon enter the market with Gigafabrik. German companies fell out of this race a few years ago. If they don’t get back in, their competitors will soon be able to dictate prices and standards.

If the German car industry is ever going to be a major player in the electric car market in the coming years, it will have to find a common strategy.

In boardrooms across Germany, managers are beginning to realize it was a mistake not to focus on these new technologies. The only way German companies can now re-enter the field is if major car makers work closely with their main German suppliers.

If the German car industry is ever going to be a major player in the electric car market in the coming years, it will have to find a common strategy. There needs to be a coordinated push to build a network of charging stations for electricity and hydrogen fueling stations.

It is clear that automakers cannot rely on the state, the oil industry or ailing power companies to lead the way. At any rate, Daimler, VW and BMW have a responsibility to make sure the electric car market works.

It was Chancellor Angela Merkel who insisted in 2012, in the face of opposition from several other European countries, that high sales projections for electric cars be taken into account in the setting of carbon emissions targets. With more e-cars sold, emissions would be lower and therefore targets could be set higher, she argued.

But since then there has been a boom in heavy, fuel-thirsty SUVs, and the projected levels of e-car sales have not been achieved. Unless action is taken soon, the German car industry and government is likely to be embarrassed over its own targets.

And in Brussels, talks are already moving to the next level. The 2025 emission targets currently in discussion mean it would no longer be viable for most cars to use the internal combustion engine. The industry may be able to band together to delay, postpone and weaken these targets. But it would be much better to work together instead to develop technologies and infrastructure to face the new challenges.

 

To contact the author: fasse@handelsblatt.com

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