Summary
German manufacturers warn of a severe economic crisis driven by high energy costs, inflation, labor shortages, bureaucratic burdens, and declining demand in key markets like China.
The manufacturing sector, including firms like Volkswagen, Beckhoff Automation, and Ziehl-Abegg, faces stiff competition from China’s booming exports, especially in electric vehicles.
Political instability and inconsistent government policies have worsened the outlook, leading to job loss fears and restructuring.
German manufacturers like Volkswagen slept for decades without innovating.
See GM in 2009
Innovation takes time & money. So companies only spend it if they are forced, either through competition or regulation. VW, BMW, Mercedes did not think they had any competition. And thanks to the auto lobby and car friendly politicians, there was no pressure from regulators.
So, all that money, that could have gone to research went into the pockets of shareholders, like the klatten family for BMW, Qatar Holding or Blackrock for VW.
But I am sure they will find a way to saddle the tax payer with the losses, as is tradition.
We are at the end of the automobile era. The automobile has been a core part of the past 70 years, but its significance to the economy and to transportation is waning.
That’s not what it says in the article. The primary factor here is the booming growth of China’s auto sector and how it is outcompeting European manufacturers. Global auto sales in 2024 are on track to be the highest of all time. BYD now has over 90% market share in China and is expanding its global exports. I’m as anti-car as you can get but the trends are in the opposite direction.
And that is not surprising if you look at the absolutely eye watering lineup they have. Chine heavily invested in these companies silently and gave them the competitive edge. Now they pulled up the curtain and they can provide cara with 200km range for under 15k and cars with 700km range for under 30k they have super high performance models, mpvs, vans, trucks, busses… everything.
And next up… wind turbines.
No, the cars are just going to come from china or india instead.
