German cars face the “fate of Nokia” amid Chinese dominance of the market
The German auto industry is facing a stifling crisis, with weak demand, rising trade tensions and competition Chinese, which exacerbated the pressure on the citadel of the European automobile industry.
And today, Thursday, it joined "Porsche" to "BMW" and"Mercedes-Benz" In announcing their weak sales in China, attracting local competitors, led by… "BYD" and"Xiaomi"buyers of their cheaper electric cars.
German manufacturers are currently reducing their production, and laying off tens of thousands of jobs.
While the German government announced on Thursday a new support package worth $3 billion for electric cars, companies are still complaining of administrative complexities and high energy costs in the country. They are scheduled to meet with Chancellor Friedrich Merz later in the day to discuss ways out of the crisis.
Jens Suedekum, economics professor and advisor to German Finance Minister Lars Klingbeil, said: "The German manufacturing sector, especially Automotive industry, a perfect storm". He added: "Our market shares in China are declining sharply, and unlike in 2024, the US market is no longer an available alternative."
The specter of recession has begun to loom over the manufacturing sector, which has contributed for decades to the success of the export-oriented German economy. The automotive sector, which employs more than 700,000 people in the country, has lost nearly 55,000 jobs over the past two years.
These cuts have raised fears of "Nokia moment"in reference to the rapid decline witnessed by the once-dominant smartphone maker. In the first half of 2025 alone, the combined profits of German automakers fell by more than a third compared to the previous year, according to the company. "Ernst & Young"
Benjamin Krieger, Secretary General of the European Automobile Manufacturers Association, said that this crisis "It’s not just about factory closures, it’s about the social fabric of industry, its societies, and Europe’s technological sovereignty".
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