The Future of Germany's Automotive Industry: Challenges and Survival Strategies 1

Abstract

Germany's automotive sector, long a global leader in engineering excellence, faces unprecedented challenges in the 2020s. This paper provides a comprehensive analysis of the structural crises threatening German automakers, incorporating the latest industry data from Deloitte (2024), VDA (2024), and Global Data (2024). We examine four critical pressure points: (1) the lagging transition to electric vehicles (EVs), (2) rising competition from Chinese automakers, (3) geopolitical and trade uncertainties, and (4) technological deficits in software and autonomous driving. The study highlights how these challenges are interconnected, creating a domino effect that could destabilize Germany's entire automotive ecosystem-from OEMs (original equipment manufacturers) to small suppliers. Using scenario analysis, we evaluate potential futures for the industry, ranging from recovery to systemic collapse. Finally, we propose a strategic roadmap for German automakers, emphasizing accelerated EV development, supply chain resilience, and policy advocacy. Without urgent action, Germany risks losing its automotive dominance, with severe consequences for its economy and labor market (European Commission, 2023).

Keywords: automotive industry, carmakers, Germany. EV, VW, Batteries, survival strategies