The FT has details how Germany's car subsidies are helping Eastern European car factories:
- A Hyundai plant in the Czech Republic used to export 20 cars per month to Germany. In March, it exported more than 2,000. The factory is hiring 500 workers to cope with the surge in demand.
- Dacia (a Romanian subsidiary of Renault) sold 25,500 cars in Germany in 2008. German orders received during Q1 are already more than the 2008 total.
- Skoda (VW's Czech subsidiary) has seen monthly German-bound sales double to 11,000 in February (March data is unavailble, but probably much better than February).
- Fiat's Polish plant exported 47,417 cars in March, compared to 38,000 in March 2008 (no country breakdown is given)
Those are highly impressive numbers, large enough to have macroeonomic significance:
- Assume 500,000 additional cars are imported in 2009, at an average price of 10,000 €. That's 5 bn €.
- 5 bn € equals 0.2 % of Germany's GDP (though of course the cars do not increase Germany's GDP, as they are produced abroad; instead, they reduce Germany's current account surplus; incidentally, 5 bn € is also the total amount spent by the German government on the subsidy, i.e. government debt will also go up by 0.2 % of GDP).
- Let's assume the Czech Republic supplies 30 %. That's 1.5 bn €, a bit more than 1 % of GDP (though some components are imported, lowering the net effect on GDP).
Though of course next year, when there's no more subsidy, Eastern Europe's car exports to Germany will crash completely...
Output Gap Idiocy; Shaky Accounting EU and US Style
vor 4 Stunden