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ECONOMY

BMW expands greentech cooperation with Toyota

Japan's Toyota and Germany's BMW on Thursday said they were deepening ties on developing fuel-cell technology and vehicle batteries as the auto giants push into the green market.

BMW expands greentech cooperation with Toyota
Photo: DPA

The automakers said they reached binding agreements on several strategies which also include the possible joint development of a mid-sized sports vehicle, with a feasibility study expected to be completed by the year’s end.

“Toyota and the BMW Group are seizing this unique chance to lead the industry towards the future of mobility,” Herbert Diess, a member of BMW’s management board, said in Tokyo. “By doing so we will play a central role in defining tomorrow’s vehicles.”

The agreement would also see the pair work together on developing lightweight vehicle bodies and next-generation vehicle batteries. The development of fuel-cell systems has a target completion date of 2020, they said.

“The companies are convinced that fuel cell technology is one of the solutions necessary to achieve zero emissions,” said a joint statement.

Under an earlier deal, the German automaker agreed to provide diesel engines for Toyota, a major player in environmentally friendly vehicles, as the Japanese firm looks to boost sales in Europe, where more than half of passenger cars are diesel powered.

Demand for lower-emission diesel vehicles is forecast to grow, with further technological advances in the field seen as crucial due to toughening emissions standards.

AFP/mry

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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