European trade policy should ensure Asian automotive competitors did not enjoy overwhelming advantages with the European Commission (EC) providing industry support, said German Automotive Industry Association (VDA) president Matthias Wissmann.

This was especially true for a trade policy that would have to have genuine free trade and thus lead to improved market access to the key growth markets. European trade policy should not lead to unilateral advantages for competitors from Asia, but should help the European industry in its global operations. "We just need a level playing field in international competition for everyone," said Wissman.
 
Addressing a conference of German politicians, foreign ambassadors and CEOs from Daimler, Volkswagen and Audi, among others, in Berlin this week, Wissman maintained the domestic automotive sector had fared better than its competitors and gained market share in key growth areas.

The president also claimed the German automaking industry was the only major sector in the country to increase its research and development budgets by more than 4% to nearly EUR21bn (US$29.7bn), particularly with reference to more fuel-efficient cars.

Reduction of CO2 was a key feature of Wissman's speech with the VDA chief noting: ""With CO2 reduction, we are making great strides." And he highlighted that in nine out of 10 vehicle segments, from small cars through to mini-vans and people carriers, German brands in the past year featured lower average CO2 emissions than imported competitor models.

Other environmentally initiatives in the German market were clean diesel, direct-injection engines, hybrid drives and the pure electric option. "The potential [of] our engineers in the efficiency of our vehicles is impressive," said Wissman.

The VDA president also turned his attention to light truck regulation. "It will help neither the environment nor the public when a large truck will be replaced by five smaller vehicles - that would only lead to more traffic, more fuel consumption and higher CO2 emissions and dramatically increase the cost of transport services, " he said.

Electric vehicle stimulus would also be key and Wissman noted the importance of the sector to countries outside Germany, such as Japan, the US and France. "We must also recognise that in major countries outside Germany, electrical mobility is a strategic goal. Now it is essential to ensure that industry and research establishments in Germany here suffer [no] competitive disadvantage."

As the largest market in Europe, Germany has benefited significantly from its scrappage scheme - recording the best result in new registrations since 1992 - but the end of the programme could see a major fall in car purchases.

Data from the Association of International Motor Vehicle Manufacturers (VDIK) shows some 3.8m cars were registered in Germany last year - up 23%.

But with around 215,000 new registrations in December, the overall passenger car market was down 4.7% compared to the same month last year.

Analysts have said the German car market in 2010 will fall sharply after 2009's scrappage-induced boom and could lose a 1m units or more to fall as low as 2.7m units.