Frankfurt motor show introduction – Telegraph.co.uk

Both ideas are the result of the motor industry’s fear that young people
aren’t interested in cars any more. The thinking goes that if cars looked
and behaved more like an iPad, the young would perk up and buy them – it’s a
bit desperate.

“Visitors are getting younger and younger,” trills Wissmann. “At the IAA in
2011, the average age of visitors was 35, whereas in the year 2009 it was
36. This is a remarkable fact.”

Is it really?

Fact is, behind the futuristic concepts and electric-car waffle, Europe’s
automotive industry is in a shocking state. Over capacity, recession-hit
sales, a massive north/south divide, unequal wage costs and unfair labour
legislation; these truths are locked up like a lunatic in the attic,
unconfronted for the duration of the show.

In the first six months of this year, there were 6,204,990 new passenger car
registrations in the European Union, 6.6 per cent down on 2012’s equivalent.
With the exception of April, EU new car sales have been down every single
month. June’s figures were the lowest recorded since 1996.

Only the UK market expanded in the first part of the year (up 13.4 per cent),
while Germany was down 4.7 per cent, Italy down 5.5 per cent, France down
8.4 per cent and Spain (from a very low base) fell 0.7 per cent. It’s hell
out there.

One of the few things buoying up the industry, particularly in Germany, is
production for US and far eastern sales. Most analysts will tacitly
acknowledge that Germany’s car makers have had a good decade exporting out
of a low Euro zone. The German car industry also gains from tight labour
laws, which in spite of its high labour costs, make it expensive to lay off
workers and expensive to close domestic factories. As one senior manager
from a non-premium car maker said to me a couple of months ago, “we’ll know
the industry is serious about over capacity when they start closing German
plants.”

German car making also has many years of momentum on its side. According to
ACEA, the European Automobile Manufacturing Association, in 2010 German car
industry directly employed 775,000, far in excess of the next largest
employers, France (220,000), Italy (169,000) and the UK (135,000).

There are, of course, a load more supply jobs associated with car making and
it is here that Germany also has strength in depth. What’s more, it has a
commitment to R&D investment that runs through organisations such as the
Fraunhofer applied research institution.

The Frankfurt show’s organiser estimates that in the next three to four years,
German automotive industry will invest about €12 billion in alternative
propulsion systems, about 40 per cent of all powertrain R&D expenditure.
And it’s that money, rather than a host of glitzy electric runabouts, which
is the commitment to keep on making cars come what may.

So while the UK might be buying lots of cars, it’s struggling to keep up with
the German export-lead success story. The recent announcement of a new
Advanced Propulsion Centre in the UK, funded jointly by the Government and
the automotive industry with £500 million each, is a start. As is the £6
billion’s worth of investment into UK car making businesses in the last two
years, typified by Nissan and Jaguar Land Rover.

However, the UK still lacks the depth of suppliers. It’s a fact that Joe
Greenwell, former chairman of Ford of Britain and now head of the Automotive
Investment Organisation, admits. “Things are relatively healthy for the UK,
but long term we have lessons we need to learn from the German model of
success,” he says. “In recent years there has been a return to understanding
that a flourishing automotive sector is a vital part of the economy. The
Automotive Industrial Strategy is probably the most important development in
the last few years to have come out of the Automotive Council.”

Yet that Automotive Council report, published in June, identified a “weak” UK
supply chain that sources just one third of the parts that go into UK-built
vehicles. The result, it says, is there are about £3 billion of missed
opportunities for the UK supply chain with all the attendant jobs that
implies.

It’s Greenwell’s job to head up an effort to make sure that in the future
those jobs are in the UK. He’s got a war chest of £3 million of Government
funding over the next two years to “put the UK national offer to those
considering investment in the UK. We are trying to resuscitate our tier-one
suppliers as well as repatriate tier-two and three suppliers,” he says.

It’s a £3 million prawn cocktail offensive to underpin the British car
industry. It’s no surprise that Joe will be over in Frankfurt casting an eye
over the state of German car industry this week. As will your Telegraph
Motoring reporting team, here to bring you the new, the bizarre, the
economical and the plain bonkers.

Tune in to tomorrow’s live blog at telegraph.co.uk/motoring
to see what we find.