German OEMs & "November rain"...

Nov 2024 - During my worldwide travels & discussions with my international customers, more often I am confronted with the "Dead or Alive" discussion of the German car manufacturers & industry.

Although the global car market is healthy and well, the German car industry, which has been really spoiled for success for decades, is more than struggling. Not since this year, the desaster started already in 2017/2018 when China came into the game of Electric Vehicles, during their "year to year" Billion Dollar Funding program to let their EV industry grow. If there is going to be a tariff war with the #USA and #China, the #German industry and not only the manufacturers also Tier1 and 2 business models are almost dead.

Within a year, the situation in the German car industry has turned more than 180 degrees, like I read it a few days ago - even more - and #Volkswagen, #Northvolt, (insolvent since last week) #ZF, #Schaeffler and #Bosch are the best example for upcoming changes, people have to leave, but why? In 2023, there was still a record sales and profits, growth optimism and big pat on the shoulders everywhere. This year, sales and profits have fallen by double digits and future prospects are almost bleak. Panic is spreading in the Boardrooms of #Volkswagen, #Mercedes, #BMW... but also the flu jumps over to France and Italy - bad news from #Stellantis as well other EU car manufacturers have had to reduce their production. This applies to both electric cars as well as luxury cars with both types of drive. Some factories are only running at lowest capacity. Shifts are being cancelled, entire factories are on the brink of #closure, far sale and mass layoffs have been announced.

Particularly dramatic: the plight of the major car manufacturers is dragging hundreds of small and medium-sized suppliers into death zone. And this despite the fact that drivers' desire for new cars has increased significantly again in recent years.For the first time since the economic #miracle, the German car industry, spoiled by success, is struggling. And this despite the fact that the global car market is healthy and happy. But the engine of the German economy is sputtering - and with it Germany as a location for the car industry.

There are many reasons for the storm over the automotive industry. The complaints about poor location quality are well known. It is a particularly heavy burden on German car manufacturers, who are heavily dependent on exports and exposed to international #competition - especially the major suppliers. The next bang for the car manufacturers is the #Trump administration. There are the growing international tensions and wars as well as the advancing de-globalization through tariffs & isolation. This is not only poison for exports, but also poison for the import of necessary #rawmaterials, which #Germany has ignored to save for decades. Germany has to go all in Electric Vehicle production - time to sell combustion engines is over right now - China has arrived.

#EVs are #unstoppable - otherwise we won't see any major European players in worst case in the #EU market until 2030.