German auto industry in the crisis: Asians overtake VW, BMW and Co.

German auto industry in the crisis: Asians overtake VW, BMW and Co.

The German automotive industry is under enormous pressure because leading manufacturers from Asia, especially from China, are continuously gaining ground. According to a current analysis by EY, which examines the services of the 20 leading automobile manufacturers worldwide, German carmakers VW, BMW and Mercedes have recorded a decline in sales of 2.3% in the first quarter of 2025. While VW was able to achieve a small increase in sales, BMW and Mercedes had to accept significant declines. The win of the three German manufacturers even fell by 33%, which underlines the continuing difficulties in the industry. The Ostsee Zeitung reports that the US manufacturers also had to struggle with a decline in sales of 2.9% and a loss of almost a third of their profit.

Asian manufacturers, led by companies such as BYD and Geely, were able to increase their sales by almost 15% and their profit by impressive 66%. Five of the six most profitable automobile manufacturers worldwide now come from Asia. With a return return of 9.3%, BMW has the best placement among European manufacturers, but only ends up in third place, as the analysis also emphasizes from machine market. Despite these positive figures for Asian manufacturers, EY expert Constantin Gall does not see a trend reversal in sight. Rather, he warns that the existence of some western manufacturers could be endangered if the profits continue to drop.

challenges for the German car manufacturers

The established German automobile manufacturers fight with a variety of challenges. A weak economy, high costs and a slow ride of electromobility are increasing strongly for the industry. It is also pointed out to break the Chinese market in favor of local manufacturers, which further tightens the situation. The US tariffs of 25% on auto imports that have existed since April 2023 could lead to considerable financial losses.

In the course of these developments, Volkswagen plans to reduce a significant part of his staff in Germany by 2030, which illustrates the uncertainties in the industry. Gall calls for a complete realignment of the western car companies in order to be able to survive in global competition. Important measures include faster vehicle developments, faster decisions and consistent digitization.

technological trends in the automotive industry

The automotive industry is in a profound change. The increasing relevance of artificial intelligence (AI) plays a crucial role, especially when it comes to autonomous vehicles and digital equipment. In addition, the concept of the "software defined vehicle" is growing, which is gaining in importance for both manufacturers and consumers. Statista reports that the demand for electric cars in Europe decreased in 2024, while sales in China, driven by manufacturers such as BYD, have increased significantly. These developments tighten competitive pressure to the German manufacturers who are increasingly losing market shares in China.