German government to give €2 billion stimulus package to struggling auto industry

The German government has agreed to provide its struggling automarket with a €2 billion stimulus to help in its transition to greener engines.

The ruling is due to come into effect next year and will see rollouts to major industry players by 2024.

The funds will also go to help shape the German automarket in line with a number of Industry 4.0 concepts, such as digitalisation of supply chains, 3D printing parts and sharing data between partners.

It will see the government covering 80 of the costs for medium and small-sized startups but only 60% of the costs for larger developers to cover the transition and in making production facilities more environmentally-friendly.

This comes as the second proposed stimulus package for German manufacturers this year, as a previous proposition made by the Ministry of Economics suggested a  €2 billion car bonus scheme.

Saving the car market has become a big issue in Germany, owing to how much of the country's economy is based around the manufacture and sale of vehicles.

BMW cut 6000 jobs in the country back in June in an effort to cut losses caused by the lockdown, which was a big blow to the national automotive industry.

The already-beleagured industry also faced plant closures owing to a slump in sales.

The paper, which was seen by Reuters on Monday said:  "The switch to new products, especially in the field of e-mobility, requires an adjustment of production. Faster innovation cycles demand more flexible production facilities. The cost pressure in production is high."

This comes as a trend across the EU bloc to help the industry recover from the effects of the coronavirus pandemic.

It has been predicted that the coronavirus pandemic could have long-lasting consequences to the automotive industry that could be felt for years to come.

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