- The German Autopreneur
- Posts
- Germany's Auto Masterplan: Why We Need China
Germany's Auto Masterplan: Why We Need China
Philipp Raasch
February 07, 2025
Welcome to Issue #53 of The German Autopreneur!
For decades, Germany was the global automotive powerhouse. Home to Mercedes, BMW, Volkswagen, and Porsche, the country defined automotive excellence. But this position is now under serious threat.
German automakers are losing ground to global competitors. The effects are becoming impossible to ignore: plant closures, job cuts, and the relocation of production abroad.
The industry that has been Germany's economic backbone for over a century. Now it faces unprecedented challenges.
In this critical moment, Volkswagen is considering selling German plants to Chinese manufacturers. Public reaction? Outrage and rejection. Yet this could be a strategic opportunity.
Let me explain why Chinese investment might be key to Germany's automotive future
AI-generated image
A Perfect Storm Hits Germany's Auto Industry
The scale is massive. 800,000 people work directly in Germany's automotive sector. Related industries employ another 1.7 million.
No other industry represents German excellence globally like automotive. It's fundamental to the country's identity.
But this foundation is crumbling:
The German Automotive Industry Association projects 140,000 job losses by 2035
VW is cutting 35,000 jobs, reducing plant capacity by 40%
Major suppliers are slashing workforces: Bosch (12,000 jobs), Continental (19,000), ZF (14,000)
Small and medium-sized suppliers are filing for bankruptcy
The supplier industry has lost 50,000 jobs since 2019
Last week brought a dramatic signal. Five rival CEOs joined forces. Bosch, Continental, Mahle, Schaeffler, and ZF Group wrote to Chancellor Olaf Scholz.
Their message? "Those who leave won't come back."
When competitors unite to raise the alarm, you know the situation is critical.
Three forces drive this crisis:
EVs need fewer workers. Electric powertrains require 40% less labor than combustion engines. Battery production? Almost entirely in Asia.
"Build where you sell" is the new rule. Trump's America demands local production through tariffs. China requires it for market access. Latest news: VW explores moving Audi and Porsche production to the US.
Sales are plummeting. VW's China numbers dropped from 4.2 to 3 million vehicles. Mercedes just lost 54% in profits. No recovery in sight.
The result? Germany is losing its automotive leadership. Jobs and value creation are moving abroad.
Now VW considers selling German plants to Chinese manufacturers. Public reaction shows outrage. But this could be exactly what Germany needs.
Chinese automakers want European bases. Their home market is saturated. EU tariffs make local production necessary. BYD builds in Hungary. CATL creates a battery factory in Spain. No doubt Chinese companies will play a key role in Europe's automotive future.
The key question: Why aren't they choosing Germany?
Time for a masterplan.
The German Success Formula
Remember: Germany was the world's automotive powerhouse for decades. A unique ecosystem made it possible:
Manufacturers pushing each other to peak performance
World-class suppliers
Highly qualified workforce
Strong local R&D
Complete value chain within the country
China copied this playbook for EVs. The difference? They've transferred it to the modern age.
Instead of combustion engines: batteries and software. Instead of mechanical: digital excellence. The result? A dynamic ecosystem where companies drive each other forward.
The Masterplan for Germany
Germany's automotive DNA remains powerful. The birthplace of the car. Home to iconic brands. This legacy carries immense value.
The opportunity? Transform Germany into Europe's automotive gateway.
Other nations see this chance. Hungary pushes hard to become Europe's new auto hub. Major investments are flowing to Eastern Europe.
But let's be honest: Anyone serious about European automotive belongs in Germany.
The country offers unique strengths:
Central European location
Decades of automotive expertise
World-class supplier network
Deep engineering talent
The car's historical birthplace
The path is clear. Germany must become the essential base for success in Europe's automotive market.
But getting there requires action:
Attract international manufacturers
Create attractive investment conditions
Connect German and global suppliers
Develop a next-generation automotive ecosystem
Yes, this means welcoming Chinese manufacturers. Not from weakness. As strategy.
The current reality in Germany seems absurd. While countries worldwide court automotive investment - America with subsidies, China with market access - Germany debates whether to allow foreign production at all.
This mindset needs to change. Fast.
The notion that "German automotive" means excluding others is outdated.
Time is pressing. Structural change can't be stopped. But we can shape it.
The choice is simple: watch jobs and expertise leave the country, or actively shape a new future.
Germany has always been strongest when facing change. This is such a moment.
No subsidies needed. Just vision. Direction. Strategy.
Picture this: Germany - Gateway to Europe's automotive market. Birthplace of the automobile, reinvented. The essential location for automotive success in Europe.
That's a masterplan for Germany's future.
That's all for today.
What did you think of today's email? |
Feel free to reply to this email with your thoughts.
Until next week,
ā Philipp
PS: If you find value in this newsletter, please share it with someone who might benefit. Your support helps me continue my independent work for the automotive industry.
