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German car sales plummet to lowest level in nearly three decades

New registrations of cars on German roads plunged in March to the lowest in almost three decades, official data showed Friday, as restrictions to slow the spread of the coronavirus inflicted a heavy blow.

German car sales plummet to lowest level in nearly three decades
The A4 in Dresden, completely carless on Sunday. Photo: DPA

Sales tumbled 38 percent year-on-year to just over 215,100 according to data from the KBA vehicle licensing authority.

“Necessary health policy measures, like the massive limits on public life, closure of car dealerships and limited ability to work in the licensing  offices” had braked the car trade, the VDA carmakers' federation said.

READ ALSO: Bundestag approves historic coronavirus rescue package

Domestic demand fell 30 percent, while foreign orders were down 37 percent.

In a quarterly comparison, sales in January-March were down 20 percent year-on-year.

“April is likely to be even more catastrophic,” analysts from consultancy EY predicted.

Jobs at risk

In European virus epicentre Italy, where lockdown restrictions are even harsher than in Germany, transport ministry figures released Thursday showed sales collapsing by more than 85 percent year-on-year in March.

At just over 28,300 cars registered, Italian sales were “at a level comparable with the early 1960s, when mass car ownership in our country was just getting started,” experts at car industry research centre Promotor commented.

“Forecasts for the coming months call for similar or even worse falls until the crisis is over,” they added.

In Germany, “even if the acute crisis were overcome in summer, the economic  and social consequences — massive increase in unemployment, plunges in  income, bankruptcies — will continue to squeeze demand strongly,” EY predicted.

Ratings agency Moody's expects the global auto market to contract 14 percent in 2020.

Up to 100,000 of the roughly 800,000 jobs in Germany's massive auto sector could be at risk, according to recent estimate from University of St. Gallen expert Ferdinand Dudenhoeffer.

Weathering the storm

To weather the impact of the coronavirus restrictions, major manufacturers like Volkswagen, Mercedes-Benz parent Daimler and BMW have closed factories and placed tens of thousands of workers on government-funded shorter hours schemes.

“Circumstances as serious as this can threaten the existence of even a large company,” BMW boss Oliver Zipse said in an interview circulated to staff.

“We have already introduced large-scale measures, in particular to secure our liquidity,” Zipse added, calling the steps an “absolute priority” but without going into details.

High-end competitor Daimler, which builds Mercedes-Benz cars, said Thursday it had agreed a new 12 billion credit line with banks, “increasing its financial flexibility”.

A hint at the pressure on carmakers came from Volkswagen boss Herbert Diess last week, when he said virus-imposed shutdowns were costing the sprawling 12-brand giant up to €2 billion per week.

READ ALSO: Germany bets on tried-and-tested tool for coronavirus jobs crisis

Chancellor Angela Merkel said this week that restrictions on public life would be extended to at least April 19, including a ban on gatherings of more than two people and the closure of many businesses such as restaurants.

Meanwhile the Robert Koch Institute (RKI) responsible for disease control said Friday the measures were beginning to slow the spread of the virus.

“We are seeing that the spread of the virus is getting slower… it's working,” said RKI president Lothar Wieler, stressing that restrictions on public life “need to be maintained” and it was too early to claim victory.

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HEALTH

EXPLAINED: The new rules around getting a sick note over the phone in Germany

Due to high Covid infection numbers throughout the summer, it’s now possible to get a sick note from a doctor over the phone again for some illnesses. Here’s what you need to know.

EXPLAINED: The new rules around getting a sick note over the phone in Germany

What’s happened?

In spring 2020, German authorities changed the law so that people with a mild upper respiratory tract illness, such as the common cold, were able to get an incapacity to work certificate or AU-Bescheinigung by simply calling and speaking to their GP.

The rule was extended several times and finally reversed on June 1st this year due to falling infection figures. Since then people have had to go back to the practice – or do a video call if the doctor’s office has that system in place – to get a sick note.

Now, due to a decision by the Joint Federal Committee, the regulation has been reintroduced and patients can call their GP again for a sick note.

Can I get a sick note over the phone for any illness?

No. As before, the regulation only applies to patients suffering from a mild upper respiratory tract illness. Though Covid has not explicitly been named in the announcement, it seems that it is intended to be covered by the regulation.

If the doctor is convinced that the patient is unfit for work after a telephone consultation, then they can issue a sick note for up to seven days.

READ ALSO: EXPLAINED: The changes around doctor’s notes in Germany you should know

If the symptoms persist after seven days, the certificate can be extended once more for another week.

Why now?

According to the Chairman of the G-BA, Josef Hecken, the regulation has been introduced now as a response to rising Covid numbers and in anticipation of the cold and flu season in the coming months: “We want to avoid full waiting rooms in doctors’ offices and the emergence of new infection chains,” he said.

The telephone sick leave rule is a simple, proven and uniform nationwide solution for that, he said. The rule is also necessary because video consultation hours are not yet available everywhere.

What else should I know?

The health insurer DAK is calling for telephone sick leave in the case of light respiratory diseases to be made possible on a permanent basis in Germany. DAK’s CEO Andreas Storm said that this should “not always be up for debate, because it has proven itself.” 

READ ALSO: Everything you need to know about making a doctor’s appointment in Germany

The social association VdK also welcomed the reintroduction of the rule. The VdK’s President Verena Bentele said that the regulation would help to protect high-risk groups in particular from potential infections.

What are the rules to know about sick notes in Germany?

Germany has a strict system in place. If you are sick, you need to give your employer a Krankmeldung (notification of sickness) before the start of work on the first day (of your illness).

However, you also need to hand in a Krankschreibung (doctor’s note) on the fourth day of your illness. Some employments contracts, however, require you to submit a sick not earlier than the fourth day so check with your boss or HR on that point. 

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