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The Weakness of the German Car Industry and its Sectoral and Global Impacts

Author

Listed:
  • João Leal
  • Robert Lehmann
  • Bertrand Marc
  • Timo Wollmershäuser
  • Przemyslaw Wozniak

Abstract

Industrial production in the German car industry dropped by 9.4% in the third quarter 2018 mainly due to problems with the implementation of the new Worldwide Harmonized Light-Duty Vehicles Test Procedure (WLTP). As the car producing industry is the most important sector for the German economy and is deeply integrated into international value-added chains, this policy report presents estimated sectoral and global impacts due to this sharp drop. The most affected sectors are fabricated metals and rubber and plastic products, both in Germany and its main partners, that deliver intermediate inputs (for example, the Czech Republic). From a global perspective, the largest effect on gross domestic product (GDP) is – with -0.75% – estimated for Germany. On top, the three most affected countries are the Czech Republic (-0.21%), Hungary (-0.20%) and Slovakia (-0.18%).

Suggested Citation

  • João Leal & Robert Lehmann & Bertrand Marc & Timo Wollmershäuser & Przemyslaw Wozniak, 2019. "The Weakness of the German Car Industry and its Sectoral and Global Impacts," EconPol Policy Brief 18, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:econpb:_18
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    File URL: https://www.ifo.de/DocDL/EconPol_Policy_Brief_18_German_Car_Industry.pdf
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    References listed on IDEAS

    as
    1. Bart Los & Marcel P. Timmer & Gaaitzen J. de Vries, 2016. "Tracing Value-Added and Double Counting in Gross Exports: Comment," American Economic Review, American Economic Association, vol. 106(7), pages 1958-1966, July.
    2. Nils Jannsen & Manuel Kallweit, 2018. "Auswirkungen des neuen WLTP-Prüfverfahrens [Effects of the new WLTP test procedure]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 98(11), pages 831-832, November.
    3. Timo Wollmershäuser & Marcell Göttert & Christian Grimme & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Sebastian Link & Wolfgang Nierhaus & Ann-Christin Rathje & Magnus Reif & Radek Šauer &, 2018. "ifo Economic Forecast Winter 2018: Germany’s Economy Cools Down," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(24), pages 28-82, December.
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