The abolition of the company car privilege is essential for the survival of the German automotive industry. Technology consultant Thomas R. Köhler analyzes why large company cars ensure the development of compact e-cars.
The bill for the Greens is simple: “9-euro ticket” instead of a company car regulation. Admittedly, waiving the so-called privilege around the company car would raise 3-5 billion euros, with estimated annual costs of around 10 billion euros. However, the side effects would be enormous, and that equally for tradespeople as well as for the German automotive industry and its employees.
3 main reasons why the company car regulation is not a “privilege” but is essential for the survival of the German automotive industry:
Now save articles for later in “Pocket”.
Let’s call the child by its name: In Germany, the German premium manufacturers Audi, BMW and Mercedes make their living from commercial registrations to a not inconsiderable extent. According to the latest figures from the CAR Center Automotive Research, almost 40% of premium registrations are operational. And it is only with these premium vehicles that money is really made.
Only these can be produced economically in Germany. If the demand for premium vehicles falls, this will have a dramatic effect on the number of employees at manufacturers and suppliers in the medium term. Mercedes, for example, has announced that it intends to phase out the A and B classes, despite the fact that it has already partially relocated production to Hungary and bought engines and individual models from Renault. It cannot be denied: high-quality company cars have a direct effect on value creation and employment in the German automotive industry.
By the way: Because company cars are typically leased vehicles, there is a “trickle down effect”: After about three years, they end up on the market as affordable used cars and are often bought by private customers who could not have afforded a comparable new car. The same applies to the approximately 400,000 rental cars from German car rental companies, most of which are on the market after six to twelve months.
In 2022, the automotive industry will be under pressure in several ways: in the supply chains strained by the pandemic, in electromobility and in terms of competition.
The supply chains have still not fully recovered. Hundreds of thousands of vehicles could not be built. Short-time work and temporary plant closures despite record demand were and are direct effects of the pandemic that are burdening companies. The switch to the provider of electromobility, which is necessary for future viability and climate protection, is still a feat of strength, because according to the EU decision in 2035 only electric vehicles can be registered as passenger cars.
To make matters worse, Chinese automakers are just beginning to penetrate European markets. And in contrast to previous initiatives, their offers are now good and enough and many thousands of euros cheaper than comparable cars from domestic production.
Anyone who throws a spanner in the works in this sensitive phase endangers Germany’s key industry and thus not only more than 800,000 jobs at manufacturers and suppliers (according to the BMWi) but also many jobs “around the clock”, from the truck driver at the forwarding company who delivers the new cars to the snack bar at the factory gate. Experts assume that for every job there are 2-3 more that indirectly depend on the car.
Only 11% of all motor vehicles in Germany are registered to a commercial owner. But if you only think of ministers and directors in black limos when they think of official cars, you only see half the picture. Because cars are essential for field workers, service technicians, nursing services and of course the trades.
Because nobody talks about it: If you use your private car for the routes you drive on duty, you simply pay extra. The amounts that can be reimbursed for tax purposes are far from covering the costs.
As a result, field work becomes uneconomical. At current fuel prices even impossible for many. And in the end, the care, the home visit, or – Attention Greens! – the installation and maintenance of the solar system or heat pump is more expensive or not carried out at all. The much-lamented shortage of skilled workers can also be dealt with if, as suggested, one turns the tax screw in the high-tax country and thus further discourages those who “pull the cart”.
By the way: The supposed “privilege” is rarely one for those affected. After all, the “gross list price” is taxable – at 1% every month (discounts are currently still available for electric vehicles and combustion engines). It is often forgotten that the distance to the place of work is also taxable. Home office is of no interest to anyone in the financial administration, at least when it comes to income from company car taxation.
Abolishing the company car regulation would be a classic case of short-sightedness in politics with negative consequences for employees and companies. Looking at the secondary and tertiary consequences, pulling the plug on the German auto industry would be an own goal for the economy as a whole.
