There is fear of a major industrial decline in Germany, and in terms of job losses, nowhere is the need as great as in the most German of all industries: automobile manufacturing. In the decades since the Second World War, the global reputation of their cars has not only made Germans rich, but also proud. The car is glorified and romanticized by some in a way that does not exist in other countries. The Germans and their favorite industrial product are a very special relationship. But 140 years after the Mannheim engineer Carl Benz registered a patent for his “vehicle with gas engine operation,” fear of the future is eating through the factory halls and open-plan offices in the motherland of automobile manufacturing. 2025 was the year in which the car crisis hit full force. Europe’s largest car company Volkswagen alone is cutting 35,000 jobs in its home country, the world’s largest car supplier Bosch has announced the reduction of 22,000 German jobs, and at ZF there are 14,000 jobs. The dismal series could continue.2025 was terrible for car manufacturersLast year was terrible for car manufacturers. The return of American trade warrior Donald Trump to the White House has created a problem for the important US market, as tariffs are sucking profit margins out of company balance sheets. And in China, the world’s largest car market, BMW and Mercedes have suffered double-digit sales losses. Chinese manufacturers have pushed German companies to the wall in the electric car market. The luxury-class electric models EQS and EQE from Mercedes are practically unsaleable in China; the VW Group delivered a total of 42 percent fewer electric cars there from January to September 2025 than in the previous year. China’s champion BYD has now become the world market leader. 2025 was the first year in which BYD delivered more fully electric vehicles than the American industry pioneer Tesla. Not only dismantling, withdrawal and decline, the previously unthinkable has become imaginable. The luxury brand Porsche, which is badly hit in China and belongs to VW, could withdraw completely from the Chinese market for electric cars and concentrate solely on combustion engine models there. At some point they will probably only be niche products like expensive mechanical watches. The shine of German brands is fading. Audi tried a desperate restart in China in 2025: without the familiar brand logo with the rings on the radiator grille, but with a lot of technology from Chinese partner SAIC. But it’s not just dismantling, withdrawal and decline. There is also optimism, fighting spirit and daring. BMW and Mercedes have launched the largest product offensives in their company history. The one from BMW is spectacular: The Munich-based company has probably invested a double-digit billion sum in its “Neue Klasse” model family; everything has been redesigned, from the central computers on board to the design language of the body. German manufacturers are on the attack. Mercedes has also announced around 40 new models for the next 20 months. After the largely flopped first generation of electric cars with the star on the hood, the manufacturer now wants to prove that it can also keep up with electromobility.More on the topicThe German manufacturers are playing on the attack again – and that’s a good thing! There are even more examples: In the new battery cell factory in Salzgitter, VW is producing the important power storage devices itself for the first time. The company’s own software division Cariad, in turn, wants to make digital technology for partially automated driving, developed together with Bosch, affordable for the mass market this year. Are the new high-tech cars from BMW and Mercedes selling as well as hoped? Will VW and Bosch really achieve the announced breakthrough on the path to self-driving cars? Cost cuts and job cuts are not enough to secure the future of the German auto industry. Above all, this requires technically competitive and desirable products – without new cars there can be no change for the better. 2026 will be an indicator of whether manufacturers can deliver. If that works, then the new year will bring the first step out of the car crisis.
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