Good morning, dear readers,
In the opening speech at the Hanover Fair yesterday evening, Chancellor Olaf Scholz promised to finally put his words into action: “A lot has been left undone in recent years, but we are now catching up.”
Probably none of the listeners in Hanover would have wanted to contradict at least the first part of the sentence structure. For the Federal Chancellor, the topic of catching up also includes an EU free trade agreement with Indonesia, which is this year’s partner country at the Hannover Messe: “I am committed to finally getting this agreement over the finish line.”
Shortly before his departure for Hanover, Indonesia’s President Joko Widodo received our Southeast Asia correspondent Mathias Peer in the capital Jakarta for an interview. Widodo made it clear that the G20 state is wide open to German investors: “We are politically stable and have one of the fastest growing economies in the world. I don’t want German companies to miss this opportunity.”
It is above all the nickel deposits in Indonesia that are electrifying German industry, in the truest sense of the word: the raw material is essential for electric car batteries. The German chemical group BASF is currently examining the construction of a nickel refinery in Indonesia together with the French mining group Eramet.
Who knows, maybe Markus Söder will also be one of the exhibitors at the Hanover Fair next year with his “Blue and White Bavarian Atomic Power Group” – or whatever the construct would be called if the Bavarian Minister President with his in the “Bild am Sunday” enforce the demand raised: Söder wants to be able to continue to operate the nuclear power plants in the Free State under state responsibility. He is asking the federal government to change the Atomic Energy Act. A risk-free claim, because the traffic light will never agree to that.
An aging population, rising wages and new benefits are making care more and more expensive. Residents pay an average of 2411 euros per month out of their own pocket, 278 euros more than at the beginning of 2022. A council of experts convened by the Association of Private Health Insurance (PKV) around health economist Jürgen Wasem wants to cushion the burden of full nursing care insurance.
In contrast to the previous long-term care insurance, full insurance should not be financed via the pay-as-you-go system, in which the contributions are paid out again immediately in order to pay for the benefits. Instead, the experts are calling for funded insurance with old-age provisions. The insurance is also not a voluntary model, as the traffic light coalition wants to examine, but mandatory for everyone. The fees for the insurance should be graded according to age and should be between 39 and 52 euros per month. With this tariff, 90 percent of the care-related costs could be insured.
However, the chances that the traffic light coalition would dare to tackle such a mammoth project are as slim as those of a Bavarian nuclear renaissance. And so the warning of the Paritätischer Gesamtverband applies until further notice: “Anyone who needs care must fear poverty.”
In the past few months, buying a new car has felt like a plunge into poverty. Because a lack of semiconductors and wiring harnesses kept the vehicle supply tight, Volkswagen, Mercedes and BMW were able to push through ever higher prices. According to market research DAT, new cars for German consumers will rise in price by 13 percent to 42,790 euros in 2022 alone. Vehicle prices also reached an all-time high in 2022 in the United States and key other markets. But now there are increasing signs that these are likely to gradually fall again.
A reason: Tesla is forcing its price war on electric cars, which is increasingly affecting all segments and drive types. Only on Friday night did the US manufacturer lower its prices in Germany again by up to 6,000 euros.
In January and February, the list prices of the 60 best-selling cars in Germany have already fallen by around 2,300 euros on average, Ferdinand Dudenhöffer has calculated. The head of the Center Automotive Research (CAR) is certain: “The days of picture book prizes are over. The car business is getting much tougher again.”
This is bad news for the managers and shareholders of the auto companies. A good one, on the other hand, for anyone who has put off buying a new car because of the high prices.
(Photo: IMAGO/SEPA.Media)
He is one of the living entrepreneurial legends of the Federal Republic – and embodies more than half a century of retail experience: Michael Otto, who turned the mail order company founded by his father into a retail group. Otto also managed the transition to e-commerce well after some jitters. In Germany it is enough for a strong number two position behind Amazon.
Otto, who recently turned 80, sat down with our retail expert Florian Kolf for a tour of the past and future of retail. Otto’s three most important messages:
- “The aim must be to revitalize the cities more strongly. For this, many more apartments have to be built again, especially in the inner cities. Offices that are no longer needed because of the home office trend can be converted into apartments, for example.”
- “We actually opened a hypermarket in Hamburg-Eidelstedt at the end of the 1960s. Our logistics manager set it up and it was profitable after just one year. Then we wanted to expand that, but made the mistake of bringing in specialists for department stores.”
- “We don’t want to copy Amazon, we just have a different concept. We offer a more personal service, attach great importance to sustainable products and only allow retailers to our marketplace who comply with environmental and social standards, pay their taxes in Germany and are available for complaints. It is better to develop something good more slowly than to take big steps towards something that we cannot stand behind.”
Unfortunately, colleague Kolf forgot one question: the one about Michael Otto’s relationship with the other famous Otto. After all, the comedian helped the company, which was then known as “Otto Versand Hamburg”, to everlasting comedic fame with his stupid record “Otto versaut Hamburg” in 1981.
I wish you a completely unspoilt start to the week.
Best regards
Your Christian Rickens
Editor-in-Chief Handelsblatt
