> But a profit warning by German carmaker BMW late on Tuesday was the latest reminder of the industry’s structural challenges as it struggles with the transition to battery cars, weak sales in China and US import duties.
My gut feeling is that the Chinese are now buying locally made EVs. Other nations are buying Chinese made EVs. Except the Americans, who can't afford anything without paying extra money to their Mad King. (This is generalized, obviously there'll be American or Chinese BMW buyers, but a lot less).
I'm a European with an Audi car, been looking at switching to EV and I can't lie and say BYD doesn't look like more value for the money than the Audi alternatives, so doesn't really surprise me.
1) Ever since the Cold War ended, German companies have been shifting production to cheaper places in Europe, so less and less "German" cars are actually built in Germany and show up as German industrial production.
2) Germany used to sell a lot to China, but Chinese companies are upping their game and shifting to EVs, and Germany is losing Chinese market share as a result.
3) Those same Chinese companies are increasingly selling overseas and starting to kick German butt. I went to an EV car show recently, and while Volkswagen Group had a large presence (VW, Audi, Cupra, etc) and some of their EVs looked pretty good, the prices were consistently 20-50% above the equivalent Chinese models.
A fourth reason that is overlooked is that rubber component prices (if you don't import from Asia) have almost doubled in the Eurozone since 2019. I haven't worked in a company whose products use many rubber components in their supply chain since late 2024 but a single seal, gasket or vibration absorber with a single coating of a wear or friction modifying polymer could have had quoted prices rise from 11,000€ per batch to the neighbourhood of 18,000-20,000€. Smaller price rises have also hit non-imported thermoplastics, fiberglass and plastic textiles, presumably because of structural component lead time and cash flow issues in petrochemicals as a whole.
The German industrial sector might be shy at importing most of their parts from Asian developing countries and China in order to keep friendly relations with their domestic supply chain, keep friendly relations with their domestic political system, reduce IP cloning and keep some semblance of national pride, all of which combine to impact their prices. Also, there may be legal or tax requirements about domestic or EU component origin percentages, but I wouldn't know, since my business was in medical appliances.
Export markets for European cars are cratering. The Chinese and Koreans are taking over with really decent, affordable EVs. And while the likes of VW are producing good EVs, it's at the cost of their ICE vehicles and those losses aren't offset by their EV sales.
In general the ICE car market is not just car manufacturers but many thousands of companies all over the place that make parts and components. Quite a few of those are becoming redundant and quite a few more are facing stiff competition from abroad. Anything to do with components for petrol or diesel engines is going to face year on year declines.
What's currently happening in the market is price parity before incentives, before considering benefits from lower maintenance, and before considering benefits from lower energy cost. An EV is simply becoming the cheaper vehicle to buy. And with all that included, EVs are far cheaper overall. That's not a trend that's ever going to revert. It's only going to get worse and it's going to have some obvious effects.
A lot of this applies to US car manufacturers as well BTW. The current tariffs are distorting the market dynamics. But that's unlikely to last very long. GM and Ford will need to keep up internationally if they want to stay relevant in foreign markets.
Germany is merely ripping off the band-aid right now (or having it ripped off for them). Short term disruptive but it needs to happen at some point.
German cars have always been slightly more expensive, but buyers (internal and export) thought this was a good deal because of higher (perceived) value and quality.
Nowadays quality has become an issue, where you could, back in the day, drive your Mercedes for 500.000km over a 30years lifetime, nowadays you are lucky to make it past the factory warranty. Along with quality, repairability, tuneability and parts availability and prices have worsened significantly. So German cars are no longer a safe bet on longevity and low lifetime cost, which is what drives away export customers as well as German private customers.
The only thing that has so far kept the German car industry afloat is tax subsidies towards German corporate customers: If your employer offers you a car as part of your salary, you only pay monthly taxes on a flat 1% of the sales price of the car, and for that, the employer can freely give you the car, maintenance, fuel for private and company use, all included. While the employer pays cheap company leasing rates and discounted gross fuel prices, and can offset all that whole spending against the company tax bill. So overall a good deal for employer and employee, and a huge boon to the German car industry (because practically all company vehicles have to be some German brand for prestige).
However, nowadays, the full tax deduction is only available for plug-in-hybrid and electric cars, ICE vehicles only get half the deduction. And the plug-in-hybrids will soon be classed down to ICE status. All the while German car makers struggle to offer proper electric cars at acceptable prices. All the while their plug-in-hybrids suffer from poor quality and life expectancy, expensive repairs and therefore expensive insurance and low resale value.
This means that German car makers will continue to lose their last reliable customer base.
Yes. German car makers have been very dependent on the Chinese market to sell their cars too. Now that China is pushing for domestic electric vehicles, German car makers are falling behind.
Whenever you hear a German entrepreneur talk about the biggest obstacles they have and are facing, it's never crumbling infrastructure or slow internet. The number one complaint is always excessive bureaucracy and crippling regulations.
> Slow internet access and slow build out of fiber network
We don't have dial-up anymore. High-speed access is not a problem for commercial and industrial sites, and rarely a problem for remote work in residential areas. Despite what some commentators like to imply, you don't need 1 Gbit/s for productive work. 100 Mbit/s is usually fast enough, and if your browsing experience is still slow, it's most likely caused by round-trip delay, not bandwidth.
> low wages in European comparison
That would actually help commercial output and competitive position, not lower it.
What makes German cars uncompetitive in the world market are actually high production costs. Which is due to high energy, labour cost and social tax. Combined with a lack of innovation. This is impossible to fix with a state subsidy.
Like many traditional car makers they are struggling with the EV question. Presumably they want to switch to EVs, but in a company built on building ICE vehicles that comes with a lot of resistance from inside the company.
All things considered they aren't doing too bad, both Volkswagen and BMW are in the global top 7 EV brands by sales. But BYD is far ahead of everyone else, selling nearly an order of magnitude more EVs than any German brand. Which hurts Germany especially since they used to sell a lot of cars in China, BYD's home turf
Keep in mind that the ICE market is still huge. Even in China 50% of new cars are still ICEs, 30% are Plugin Hybrids and only 20% are BEVs. On the EV market, especially in China, there is a brutal price war going on, with falling profits even for giants like BYD, so trying to milk the ICE market for a little more could give German car makers some air while trying to catch up (which they do if you look at the new Mercedes and BMW models).
Porsche (having the same CEO as Volkswagen) went all-in with EVs too early with offering their bread-and-butter model "Macan" as an EV exclusively, and they had to find out that it's not what their customers what at the moment, so they are currently trying to backpaddle.
Other countries like Poland, Czechia, Slovakia "diversified" by pushing into German automotive supply chain and are sinking along Germany. German automotive was so self confident still 15 years ago that you can see this confidence in drivers of their cars until today on roads worldwide.
Cheap RU gas isn't just power, it's cheap industrial feedstock/inputs. Renewable/nuclear does not replace this. So all the wank about their energy policy is distraction. TLDR:
Competitive Germany industry needs cheap RU gas.
Healthy German economy with 40% trade GDP needs US + PRC, then RoW markets.
PRC market going away.
Germany "chose" (maybe pressured) into expensive US gas to keep US market, because doesn't matter manufacturing cost if you lose biggest future market, and can't manufacture without reliable source of gas. The lockin is DE gets US gas and US market access.
But Germany with expensive US gas = will eventually lose competitiveness in most other markets, so sectors will crater. Double whammy of other (PRC) being more competitive and DE making it self even less competitive.
netsharc|4 months ago
> But a profit warning by German carmaker BMW late on Tuesday was the latest reminder of the industry’s structural challenges as it struggles with the transition to battery cars, weak sales in China and US import duties.
My gut feeling is that the Chinese are now buying locally made EVs. Other nations are buying Chinese made EVs. Except the Americans, who can't afford anything without paying extra money to their Mad King. (This is generalized, obviously there'll be American or Chinese BMW buyers, but a lot less).
Damn, look at that graph of registrations: https://carnewschina.com/2025/10/08/byd-sales-surged-2225-in...
diggan|4 months ago
decimalenough|4 months ago
1) Ever since the Cold War ended, German companies have been shifting production to cheaper places in Europe, so less and less "German" cars are actually built in Germany and show up as German industrial production.
2) Germany used to sell a lot to China, but Chinese companies are upping their game and shifting to EVs, and Germany is losing Chinese market share as a result.
3) Those same Chinese companies are increasingly selling overseas and starting to kick German butt. I went to an EV car show recently, and while Volkswagen Group had a large presence (VW, Audi, Cupra, etc) and some of their EVs looked pretty good, the prices were consistently 20-50% above the equivalent Chinese models.
OgsyedIE|4 months ago
The German industrial sector might be shy at importing most of their parts from Asian developing countries and China in order to keep friendly relations with their domestic supply chain, keep friendly relations with their domestic political system, reduce IP cloning and keep some semblance of national pride, all of which combine to impact their prices. Also, there may be legal or tax requirements about domestic or EU component origin percentages, but I wouldn't know, since my business was in medical appliances.
jillesvangurp|4 months ago
In general the ICE car market is not just car manufacturers but many thousands of companies all over the place that make parts and components. Quite a few of those are becoming redundant and quite a few more are facing stiff competition from abroad. Anything to do with components for petrol or diesel engines is going to face year on year declines.
What's currently happening in the market is price parity before incentives, before considering benefits from lower maintenance, and before considering benefits from lower energy cost. An EV is simply becoming the cheaper vehicle to buy. And with all that included, EVs are far cheaper overall. That's not a trend that's ever going to revert. It's only going to get worse and it's going to have some obvious effects.
A lot of this applies to US car manufacturers as well BTW. The current tariffs are distorting the market dynamics. But that's unlikely to last very long. GM and Ford will need to keep up internationally if they want to stay relevant in foreign markets.
Germany is merely ripping off the band-aid right now (or having it ripped off for them). Short term disruptive but it needs to happen at some point.
holowoodman|4 months ago
Nowadays quality has become an issue, where you could, back in the day, drive your Mercedes for 500.000km over a 30years lifetime, nowadays you are lucky to make it past the factory warranty. Along with quality, repairability, tuneability and parts availability and prices have worsened significantly. So German cars are no longer a safe bet on longevity and low lifetime cost, which is what drives away export customers as well as German private customers.
The only thing that has so far kept the German car industry afloat is tax subsidies towards German corporate customers: If your employer offers you a car as part of your salary, you only pay monthly taxes on a flat 1% of the sales price of the car, and for that, the employer can freely give you the car, maintenance, fuel for private and company use, all included. While the employer pays cheap company leasing rates and discounted gross fuel prices, and can offset all that whole spending against the company tax bill. So overall a good deal for employer and employee, and a huge boon to the German car industry (because practically all company vehicles have to be some German brand for prestige).
However, nowadays, the full tax deduction is only available for plug-in-hybrid and electric cars, ICE vehicles only get half the deduction. And the plug-in-hybrids will soon be classed down to ICE status. All the while German car makers struggle to offer proper electric cars at acceptable prices. All the while their plug-in-hybrids suffer from poor quality and life expectancy, expensive repairs and therefore expensive insurance and low resale value.
This means that German car makers will continue to lose their last reliable customer base.
icetank|4 months ago
ifwinterco|4 months ago
4gotunameagain|4 months ago
[deleted]
h4kor|4 months ago
- Crumbling infrastructure
- Decades of missing investments in education and the public sector
- no digitization
- Unwillingness to move away from ICE vehicles
- Slow internet access and slow build out of fiber network
- Killing future industries (solar, battery ...) by cutting funding/subsidies early
- low wages in European comparison
adwn|4 months ago
> Slow internet access and slow build out of fiber network
We don't have dial-up anymore. High-speed access is not a problem for commercial and industrial sites, and rarely a problem for remote work in residential areas. Despite what some commentators like to imply, you don't need 1 Gbit/s for productive work. 100 Mbit/s is usually fast enough, and if your browsing experience is still slow, it's most likely caused by round-trip delay, not bandwidth.
> low wages in European comparison
That would actually help commercial output and competitive position, not lower it.
Zufriedenheit|4 months ago
wongarsu|4 months ago
All things considered they aren't doing too bad, both Volkswagen and BMW are in the global top 7 EV brands by sales. But BYD is far ahead of everyone else, selling nearly an order of magnitude more EVs than any German brand. Which hurts Germany especially since they used to sell a lot of cars in China, BYD's home turf
jansan|4 months ago
Porsche (having the same CEO as Volkswagen) went all-in with EVs too early with offering their bread-and-butter model "Macan" as an EV exclusively, and they had to find out that it's not what their customers what at the moment, so they are currently trying to backpaddle.
DrProtic|4 months ago
They cut off their main energy supplier and opted for a much more expensive one.
immibis|4 months ago
lifestyleguru|4 months ago
maxglute|4 months ago
Cheap RU gas isn't just power, it's cheap industrial feedstock/inputs. Renewable/nuclear does not replace this. So all the wank about their energy policy is distraction. TLDR:
Competitive Germany industry needs cheap RU gas.
Healthy German economy with 40% trade GDP needs US + PRC, then RoW markets.
PRC market going away.
Germany "chose" (maybe pressured) into expensive US gas to keep US market, because doesn't matter manufacturing cost if you lose biggest future market, and can't manufacture without reliable source of gas. The lockin is DE gets US gas and US market access.
But Germany with expensive US gas = will eventually lose competitiveness in most other markets, so sectors will crater. Double whammy of other (PRC) being more competitive and DE making it self even less competitive.
blargthorwars|4 months ago
qcnguy|4 months ago
pydry|4 months ago