China’s carmakers have every reason to smile© Provided by DW – South Africa.
A sense of crisis is spreading in the German economy as order books look thinner and consumer purchasing power dwindles amid rising inflation.
The country’s car manufacturers are also facing headwinds but theirs are magnified by rising structural problems in the once-powerful industry. The transition to electric mobility and autonomous driving is causing higher costs, while the necessary funds, still coming mostly from sales of combustion engine vehicles, are increasingly uncertain, not to mention politically undesirable.
Company figures for the first half of 2023 were satisfying for the likes of Volkswagen, Mercedes Benz, and BMW. All of them reported increased revenues and higher profits. But their outlooks for the resr of the year have disappointed the expectations of investors and shareholders. Inflation and rising interest rates are having a dampening effect, and new vehicles are in less demand.