Has the country that invented the car fallen behind on tech?

The relief was palpable from Berlin to Munich when Germany – announced its latest GDP figures.

After months of gloom, modest growth of 0.4pc in the first quarter was heralded as a sign Europe’s largest economy might weather the global slowdown better than most experts predict.

For the first time in six months, Germany is growing again, and the figures follow last week’s announcement that exports rose unexpectedly by 1.5pc in March.

That such lean figures are seen as something to celebrate is a clear indication of how Europe’s industrial powerhouse has slowed – and behind the numbers lurk unpalatable truths.

That there is any growth is down to the service sector and a construction boom fuelled by housing shortages.

Mercedes-Benz EQC (Image: Mercedes-Benz)

Mercedes-Benz EQC (Image: Mercedes-Benz)

The manufacturing sector that is the engine of the German economy, in particular its fabled car industry, is in trouble. Automotive orders fell 5.3pc in the first quarter. In mechanical engineering, the outlook is more bleak, with orders down 7.3pc.

But its growth strategy is built around industrial exports, and that has left it exposed. The car industry – the jewel in Germany’s economic crown – has been through a torrid time since the emissions scandal in 2015, when Volkswagen admitted it had installed software in millions of cars to help cheat emissions tests.

This year EU regulators accused BMW, Mercedes-Benz owner Daimler and VW of colluding to block the development and introduction of clean air technology, raising the spectre of multi-billion euro fines.

Already facing expensive recalls, carmakers have run into the growing wave of diesel bans as cities struggle to bring air quality within EU limits. In Germany alone, Berlin, Hamburg, Munich, Stuttgart and Frankfurt have outlawed older diesel cars.

VW announced investment in a new battery cell production plant this week but German carmakers lag far behind US and Chinese rivals in battery technology. The country that invented the car is rapidly falling behind.

Read more: Stuff

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