The Chancellor said achieving the goal of 65 percent green electricity by 2023 is “questionable” in light of the industry’s decline. Merkel made the comments during a speech at the International Motor Show in Frankfurt this week where the number of participating companies fell by a quarter from last year, in a sign of the industry’s failings. Some large manufacturers such as Toyota or Fiat did not attend.
But Merkel admitted to the depleted room: “The automotive industry is a very important industry for the economic success of our country.
During her visit she was faced with outraged climate activists who held signs up with the words “climate killer”.
In a feeble attempt to revive the sector she promised the government would “cooperate very closely” with the industry.
But as government and the sector attempt to collaborate, the European Union is causing tension.
Benhard Mattes, President of the German Association of the Automotive Industry called for the emissions limits imposed by the EU last year not to be tightened any further.
His plea came amid warnings from a German economics minister that “every second job” in the car industry is in the firing line.
The auto industry is under pressure to ditch diesel and switch to electric vehicles, with the German government pledging to put one million e-cars on the road by 2020.
It is estimated there are six million electric vehicles in operation worldwide and the market is growing by 40 percent every year.
Germany lags behind with around 100,000 electric cars, according to latest figures.
Earlier this year car expert Ferdinand Dudenhöffer said the industry is approaching crisis mode.
He warned how 12 of the world’s 15 largest auto markets are showing declining sales, and anticipated sales of new cars worldwide will drop by just over five percent, to 79.5 million.
Mr Dudenhöffer, head of the research institute CAR of the University of Duisburg, compared this to how sales fell by 3.6 percent after the Lehman bankruptcy in 2008.
He said: “The decline was not that significant even in the global financial crisis of 2008 and 2009.”
Mr Dudenhöffer said the biggest threat facing the auto industry is the US-China trade war, with both nations locked in a bitter tit-for-tat trade spat that has left investors around the world on edge.