Thursday, January 23, 2025

Expert warns of price war that several car brands can do away with

The price war in the automotive industry is not over. In fact, more price cuts are waiting just around the corner because the car brands need it, says an expert.

As early as January, the world's fourth largest car group announced that several car brands are at risk of closure in the current price war.

And now Thomas Peckruhn, who is deputy chairman of the Central Association of the German Car Trade (ZDK), believes that another blow is on the way. It is good for consumers but bad for the car factories.

– We will experience a price war like never before, says Peckruhn in an interview to the Mobility Writers Association .

The explanation is partly to be found in the fact that the car factories – at least in Europe – need to increase the number of electrified cars. Otherwise, they are hit by EU regulations on emission requirements, which throw off billions of stalls.

READ ALSO: The price of diesel is the lowest since New Year

One of the car brands that is currently set to be hit hardest on the wallet due to the 'lack of' electric cars is Skoda. According to the German newspaper Merkur, the Czech leg of the Volkswagen group must double the electrification of the model program to avoid stalls from the EU.

But other car brands have also read the writing on the wall. And it – that is, the EU's demand – is not necessarily reasonable. In any case, both the Volkswagen Group and BMW will be allowed to pollute more.

– It does not make sense for the industry to pay fines when the framework conditions for the development of the electric car are not yet in place, said Volkswagen Group CEO Oliver Blume when the company presented the annual accounts for 2023.

And his chief colleague at BMW in Munich, Oliver Zipse, is not satisfied with the prospect of the billion-dollar stalls either. The stalls do more harm than good, it says.

– At the end of 2025, the world will find that it is not that easy. And then the pressure on the European car industry will be significant, said Oliver Zipse, when BMW published the accounts for 2023.

READ ALSO: That's why you should attend Denmark's largest car fair

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