Economy Minister Peter Altmaier set out the key points of the programme, which would come into effect from January 1 and stay in place until 2024.

In June, Chancellor Angela Merkel’s conservatives and their Social Democrat coalition partners agreed to provide financial support to boost investment in the car parts sector.

Many suppliers are under pressure to modernize as their products and operations are still centred on combustion engines.

But moving towards cleaner, electric models has been made difficult by the coronavirus pandemic, which has hit demand for cars and dragged Germany’s powerful auto industry into crisis.

The government’s support plan for parts suppliers is said to focus on investment in three areas: new plants, digital and automated technologies, and the environment.

“The transition to new products, especially in e-mobility, requires an adjustment in production,” a statement says. “Faster innovation cycles demand more flexible production facilities. The cost pressure in production is high.”