10:50 02-02-2026

German automotive industry's deep crisis and transformation

The German automotive industry has weathered many tough challenges before, but the current crisis is fundamentally different. This isn't just a temporary downturn—it's a deep market transformation where past advantages no longer hold.

Over recent decades, German brands have repeatedly proven their ability to adapt. Crises in the 1970s, sales slumps, strategic missteps, and even global scandals were overcome through engineering solutions and strong products. Today's situation, however, is distinct. China has shifted from being a sales market to a full-fledged industrial hub that now controls key electric vehicle technologies and sets the pace for the industry's development.

Chinese manufacturers have moved faster in mastering batteries, software, and modular platforms, which form the backbone of the modern car. German companies, long reliant on diesel and petrol technologies, have lost time and are now forced to play catch-up. Additional pressure comes from rising costs, slowing demand in Europe, and growing protectionism in external markets, including the United States.

Statements from the leadership of major corporations clearly illustrate the scale of the problem. Volkswagen has spoken of the need for business restructuring, with plans to close plants and cut tens of thousands of jobs. Mercedes, Audi, and Porsche are taking similar steps. Unlike past crises, there's no obvious product or segment today that could quickly restore the industry to steady growth.