With Trump threatening tariffs, Porsche, BMW look to next German government for way out of crisis
Germany’s auto industry is in crisis. Sales have declined while production costs soared, leaving Volkswagen AG, Mercedes-Benz Group AG and hundreds of parts makers dangerously behind in the transition to electric vehicles.
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Now, with US President Donald Trump threatening tariffs on their cars, executives are banking on the Feb. 23 election to deliver a new German government that will ease their pain.
The stakes couldn’t be higher. Europe’s biggest economy is in the midst of an industrial decline triggered by the ascendancy of advanced Chinese manufacturing and successive crises — from the pandemic to the cut-off of cheap Russian gas. Without fresh stimulus, Germany risks losing tens of thousands of manufacturing jobs to lower-cost nations lobbying aggressively for investments.
“We need an economic turnaround now,” said Hildegard Müller, who heads Germany’s VDA car lobby. The next government, she added, must cut red tape and jumpstart growth to make Germany competitive again.
The outlook for Germany’s auto industry, which represents about 5% of the economy and employs nearly 780,000 people, is bleak. Carmakers are now cutting costs, revamping their product portfolios and swapping out top management after being hit hard by intensifying competition in China and waning demand for EVs in Europe. Sentiment has reached a new low.
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