BMW taps wind to maintain profit
Carmaker forced to switch power supply given Chancellor Merkel's nuclear 'no'
BMW will harness winds whipping across eastern Germany to secure power and defend profits as costs rise as a result of the country's €550 billion (HK$5.7 trillion) shift away from nuclear energy.
Four wind turbine towers will soon supply almost a quarter of the power used at Bayerische Motoren Werke's Leipzig plant, where the carmaker builds the X1 sport utility vehicle and soon the i3, its first electric car.
Rival Daimler is firing up a power plant at a truck factory, and Volkswagen is reported to be considering a minimum of five new generators.
The reason: the German vehicle industry is seeking to sidestep the effects of a plan by Chancellor Angela Merkel to shut nuclear reactors and boost renewable energy, which has led to higher taxes on power bought from commercial producers.
"Every second German industrial producer either generates its own power or is considering doing so because of Merkel's energy switch," said Sebastian Bolay, an energy policy analyst at DIHK, a manufacturers trade group in Berlin.
"Generating your own power is not only cheaper in most cases; it could also protect you from grid failures."
A 47 per cent rise in a clean-energy surcharge this year could add as much as €254 million to the combined power bills of car manufacturers and parts suppliers in Germany. Since 2006, the surcharge has risen sixfold.
BMW, VW and Daimler, the parent of Mercedes-Benz, are under pressure to control costs as car demand in Europe heads for its sixth consecutive annual decline this year after sales dropped last year to their lowest level in almost two decades.
Car workers in Germany cost an average of €46.75 per hour, while in the neighbouring Czech Republic, where Hyundai Motor produces the i30 hatchback, carmakers pay just €11.85, according to data from researcher Eurostat.
Power for large manufacturers in Germany averaged 10.4 euro cents per kilowatt-hour last year, according to the country's Economy Ministry. That compares with 7.25 euro cents in France and 6.76 in Romania.