German car manufacturers, car sellers and drivers are set to take to the streets to protest against a new car price plan that would see a 50 per cent hike for every new model introduced.
The National Car Association (NCA) and car industry body BMW are also organising a mass rally in Germany, to be held on the evening of February 20.
A total of 14,000 cars will be sold in the German market under the new plan, which was first mooted last year.
It would see every new car costing a flat rate of €25,000 (£21,000), with the introduction of new models starting at €40,000.
But some carmakers have warned the new price hike is too steep, with some calling it a betrayal of the car industry’s legacy of safety.
For many, the new pricing system would mean that they would have to drive their cars around the world, rather than just buy them locally, and drive them on the highways, where they would be subject to far higher levels of pollution and carbon emissions.
According to the NCA, more than 100,000 German cars would be affected by the plan, with the carmaker Volkswagen (VW) estimating that it would cost it $1bn in damages from the new scheme alone.
In response to the new prices, the German government is introducing new regulations to limit the number of cars and make them more environmentally friendly.
Currently, the country’s new cars are limited to 40,000 units a year, with a new vehicle that exceeds that limit would be taxed at a 40 per cent rate.
Under the new proposal, this would be increased to 50 per to 60 per cent, with models that exceed this threshold would be exempted from the increased tax rate, but those that do not would be charged a flat €25 fee.
Those vehicles that exceed the 50 per per cent threshold would still be subject of the higher pollution, CO2 emissions and emissions of nitrogen oxides, according to the car company.
With so many car models being priced out of the market, the NCCA and the NHTSA have already warned that the new car plan will have a negative impact on the car manufacturing industry.
“If the NCDU (National Council for the Development of a European Car) wants to increase the number [of cars] that are produced, it will have to find a way of pricing them so that they are affordable,” the NCEA said in a statement.
Car makers have warned that this will only exacerbate the issue of pollution, and the new legislation could force some manufacturers to abandon plans to build new cars.
And with the current cost of fuel, the current price of petrol and diesel would not cover the costs of the new cost of car production, the carmakers argue.
While the government is calling for the car prices to be cut, some have warned of the negative impact the new law could have on the German economy.
“It would put pressure on the state to subsidise other industries,” said NCA chairman Jochen Ziegler.
More: Carmakers will have no choice but to sell their cars in Germany”It is not just the German car industry, it is the entire European car industry.
The whole European car market will be affected,” he added.
On the other side of the argument, many German car makers are pushing for the new regulations not to be implemented at all, arguing that it is unnecessary.
They have argued that the car companies should focus on other areas such as pollution, climate change and energy efficiency.