Germany's situation as an industrial country currently looks bleak – especially in the automotive industry. According to the latest EY study, approximately 51,000 jobs were liquidated there during the year. 500 jobs.
A new report by the “Handelsblatt” newspaper shows that Volkswagen is currently struggling with the problem of low production capacity utilization in its four key factories. Facing US tariffs, chip dependence and growing competitive pressure from Chinese manufacturers situation of German car manufacturersit got much worse.
Meanwhile, the latest study by the CAR Bochum research institute shows that the dynamics in China does not weaken — and the country has become an unrivaled leader in car production.
According to CAR data, based on information from manufacturers' associations and manufacturers themselves, almost 21 million passenger cars were produced in China between January and September – almost two million more than in the same period last year.
Much of this momentum is due to strong growth in electric car production. Every third vehicle produced in China has a purely electric drive – this is a 45% increase. more than in the same period last year.
Electric cars are therefore the biggest driver of Chinese dynamics. If we add plug-in hybrids and passenger cars with the so-called range extenders in which the electric motor is supplemented by an internal combustion engine, even every second vehicle produced in the People's Republic of China has such an alternative drive system.
China is on its way to becoming the Eldorado of manufacturing
However, the rapid growth in China also has its dark side for the local market. More than 100 Chinese manufacturers are vying for customer favor and are locked in a fierce battle, using drastic price discounts and tricks such as self-registration. In this case, new vehicles are registered in the name of the dealer itself so that they can then be declared as used cars and sold at a discount. In addition, there is a huge excess of production capacity.
There is also growing pressure from the state on car manufacturers: at the end of the year, the state scrappage bonus program expires, which has so far withdrawn 12 million used cars from traffic, thus stimulating buyers' consumption. In 2026, tax breaks for electric and plug-in hybrid cars will be halved. As a result, car sales in China fell in October for the first time in eight months.
Despite this, Ferdinand Dudenhoffer, director of the CAR Bochum research institute, does not see a reversal of the trend. An automotive market expert says that:
China is on its way to becoming the El Dorado of electric car production.
According to CAR's assessment, the fact that battery vehicle production is likely to continue to grow in the coming year is primarily due to two factors. Firstly, the Volkswagen group with its VW and Audi brands clearly focuses on the local market. Thanks to the “In China for China” strategy, new models such as the Audi E5 or the VW ID.Unyx 08 are produced locally. This means “the end of car exports from Germany to China” for the VW brand.
A challenge for Germany
International manufacturers are already the main drivers of electric car production in China. According to CAR, BYD and Geely had the advantage, producing 1.6 thousand and 836 thousand respectively. vehicles. However, Tesla is right behind them, producing 603,000. BEVs at its factory in Shanghai – about half of the US automaker's total production.
On the other hand, according to CAR, already 20 percent electric cars produced in China are exported. Already in 2024, China will become the largest car exporter in the world. The price war on the domestic market has prompted manufacturers to export even more intensively – especially in the electric car segment.
This strategy was successful. This year, the number of new registrations of Chinese manufacturers in Germany has doubled over the year. Brands like BYD were even more successful in the UK and South America.
Car show at BYD in Hangzhou, ChinaCFOTO/Future Publishing via Getty Images / Contributor / Getty Images
The preferred export directions present a similar picture. Between January and September 218 thousand. vehicles with an alternative drive system went to Belgium, then to Great Britain and Brazil.
CAR states that China is becoming a global center for electric car production. “Nowhere else is electric car production greater. Nowhere else in the world is there greater production capacity for lithium-ion batteries.” Therefore, this country poses an increasing challenge to the “automotive power of Germany”.
For comparison: according to CAR, approximately 4.1 million passenger cars will be produced in Germany this year – only less than 17 percent. more than in 2020. This is 1 million vehicles less than at the turn of the millennium. Germany has fallen in the ranking of countries in terms of car production, while China seems to be heading only upwards.
I’m Ashley Davis as an editor, I’m committed to upholding the highest standards of integrity and accuracy in every piece we publish. My work is driven by curiosity, a passion for truth, and a belief that journalism plays a crucial role in shaping public discourse. I strive to tell stories that not only inform but also inspire action and conversation.
