The perfect storm for German automotive manufacturers

Germany is f***ed. VW closing three plants, Porsche profits down 40%, Mercedes in trouble, budget deficit for 2025 hitting €13.5bn (due to lower tax revenues).

To stop the tail spin, investment is needed (to fuel innovation in the industries of the future) - but the current coalition is dysfunctional and will likely not agree on sufficient measures.

And then we have the rising popularity of populist far right and left parties, fomenting social division and unrest.

This is an unprecedented perfect storm.

Meanwhile the Chinese and US are rolling out AI-powered humanoid robots* and leading LLMs - as Germany watches from the sidelines.

*Which by the way are already at work in a BMW factory in the US. What’s going to happen when those robots start to arrive in German automotive factories….

And if the works councils block them - how will those manufacturers compete when their cost base is 5x or more higher than international factories staffed by 80% robots?

We need a hard reset. A holistic vision of what this shift means (AI, potential Chinese automotive dominance, populist rebellions).
And a level-headed set of integrated non-partisan policies that drives Germany out of this current maelstrom.

Image: michael-fortsch-4o-2K69J05g-unsplash