German auto market back in play

Published: Wednesday | June 23, 2010 Comments 0

Germany's car industry, the backbone of Europe's largest economy, is booming again.

Fuelled by the huge appetite for German luxury cars in China and the fact that the plunging euro has made European products cheaper abroad, manufacturers say they are shaking off the last of the economic downturn, adding extra shifts and hiring more workers to meet increasing demand.

Mercedes, Volkswagen, BMW and Audi all told The Associated Press this week that order books are full and some plants are operating at full capacity, and that they are bullish on their outlook for the full year.

It's a remarkable turnaround for an industry that last year had to take advantage of a government plan to reduce their workers' hours to avoid large-scale layoffs.

BMW AG says demand started increasing at the beginning of the year and the company has increased its number of temporary workers from 1,500 to 5,000 since January.

"We're currently negotiating with employees to add extra shifts because order books are full," said Marc Hassinger, a spokesman for the Munich company.

BMW's traditional rival, Daimler AG's Mercedes Benz unit, is already operating several plants at capacity production and mandatory summer holidays - introduced during last year's downturn - have been scrapped or shortened. The number of temporary workers has doubled from 900 to 1,800, the company says.

Mercedes, based in Stuttgart, now expects to post an overall double-digit growth figure for the second quarter, partly fuelled by rising demand from China.

"China is already our third most important market and number one for the S-class," spokeswoman Verena Mueller said, referring to Mercedes' flagship cars. Sales from January to May in China grew by 107 percent, she added. Mercedes plans to sell more than 100,000 cars there in 2010, up from 70,000 a year."

- AP

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