[Jiji Press, Berlin] A period of decline is coming for the German automotive industry. In addition to the rise of China and the slow spread of electric vehicles (EVs), the high tariff policy proposed by U.S. President-elect Trump is likely to be a further blow. A wave of restructuring is sweeping across the industry. On December 20, labor and management at Volkswagen, the largest automaker, agreed to carry out restructuring in Germany by 2030, including reducing annual production by 734,000 vehicles and cutting 35,000 jobs. VW Group has lost market share in the Chinese market, which accounts for one-third of its global sales, to local rivals including electric vehicle maker BYD. As a result, the company has been forced to make cuts to its German factories, where high labor and energy costs mean low profit margins. It also missed the global trend of returning to hybrid vehicles (HVs). “VW is just the tip of the iceberg,” said Ifo Institute for Economic Research director Fuest. Luxury car makers Mercedes-Benz and BMW have also been struggling with poor performance, leading to a downturn in the entire supply chain. In 2024, major parts makers ZF and Bosch, as well as heavy industry giant ThyssenKrupp, announced large-scale personnel cuts. Germany is one of the major countries that is highly dependent on exports, and automobiles and related parts in particular have been the main export drivers of the German economy. However, with the incoming Trump administration in the United States, Germany’s largest export market, introducing protectionist trade policies, there are concerns that this will “deal a major blow to export companies” (German Institute for Economic Research in Cologne). There are also persistent complaints that high electricity prices and complex bureaucratic procedures are making Germany less competitive as an industrial location. However, it is unlikely that the government will come up with a solution until a stable new administration is formed next spring. American companies Tesla and BYD, which are leaders in EVs, are beginning to penetrate the European market, facing a tough situation that will test the German companies’ strength. Published by Jiji Press, Foreign Economy Department, December 29, 2024 at 18:57.
>>1 It’s as if the past of fraudulent diesel has been forgotten That’s probably the cause in the first place. If they had surpassed HV with their amazing technology, things wouldn’t have turned out like this.
Apparently Germany’s economy is really bad and they’re also suffering from bullshit inflation. This is the end of a country that has been trying so hard to maintain fiscal discipline. Well, it’s only natural since they were relying on China and Russia. If Germany dies, the euro will die too, so I wonder what will happen.
Since they can’t win with either gasoline or hybrid cars, they tried to push for EVs by appealing to the more conscious people, but they were beaten by Chinese cars.
Cars cost 2-3 yen per gram; smartphones and PCs cost several hundred yen per gram; medicines cost thousands to millions of yen per gram; weightless IT and AI. I wonder which ones will grow.
Comments