The German automotive industry should become more innovative, according to chancellor Angela Merkel.

“Germany developed the first automobile over 100 years ago. Now we have to see if German industry can produce the car of the 21st century,” she told Bild am Sonntag newspaper.

Merkel said that Germany was an undeniable leader in terms of combustion engines, but other technologies should not be neglected. The government was considering funding engine technology research.

The government is readying a second economic stimulus plan which will provide more support for the auto industry. The first stimulus plan included car sales tax rebates.