analysis
The current trends in the car market are set by China and Japan, while German companies are usually lagging behind. But there are also positive impulses – especially for customers.
Be it Volkswagen, Mercedes, BMW or Audi: savings have to be made, and some employees should forego bonuses or salaries. In many places, jobs and even entire plants are at stake. Investors are losing confidence and prices on the stock market are plummeting: this year, car company shares in the DAX fell between twelve and 25 percent.
One reason: dependence on the huge Chinese market is costing the Germans dearly. At the same time, there are no models for the future.
The mass market needs affordable electric cars
Helena Wisbert, Professor of Automotive Economics at Ostfalia University, says: “Success in the future depends very much on whether and when German automobile manufacturers can offer competitive electric cars and hybrid vehicles, especially in the large automobile market of China. And there is The time pressure is particularly great now.”
So far, the Germans have been able to do very good business in China with their luxurious and high-margin combustion engines. This has even slowed down investments in new electric models, say experts. But the Chinese market is weakening; Large, expensive cars are currently less in demand. Instead, small, inexpensive cars are in – electric cars.
Smaller cars are in demand – but they don't pay off
BMW, Mercedes, Volkswagen and Porsche, for example, now have a large number of fully electric and hybrid vehicles up their sleeve. But, says Frank Schwope from the Fachhochschule des Mittelstands: “It is the call for smaller electric vehicles that German manufacturers such as Volkswagen, BMW and Mercedes are not responding to. However, one must not forget that there was no money to be made with these vehicles and is.”
Electric variants are currently still expensive to produce, and smaller cars do not achieve as high sales prices. Experts say that an important cost factor, the battery, still has to be purchased on the international market for a lot of money. The prices there were determined by the Asians.
Chinese car manufacturers as dangerous competition
While the Germans were uncatchable when it came to combustion engines, the Chinese in particular have developed into dangerous competitors when it comes to electric cars – also because of massive government subsidies. “You cannot deny that Chinese manufacturers are market leaders,” says Schwope.
“The Chinese are certainly much stronger, especially when it comes to producing battery cells, especially when it comes to entertainment systems or software stories.” In the Middle Kingdom, the Chinese provider BYD has now replaced the VW Group as market leader.
The car as an entertainment center
Reserving a table in a restaurant from your vehicle using an app, singing karaoke, using the car as a games console with surround sound: examples of changing customer wishes. Cars are no longer just a means of transport, but also serve as a service and even entertainment center.
Car expert Christoph Sturmer also believes that the Germans need to step up their game quickly: “Simply create more exciting, interesting user experiences and allow customers greater ease of use.”
German car manufacturers are behind the times
Preferably a little smaller, but as an electric car it is environmentally friendly, experience-oriented and as cheap as possible: according to market experts, a good offer for the automotive future – and not just in China. According to experts, the German manufacturers seem to have hesitated for a long time in favor of profits.
But a certain momentum can be observed: The VW Group, the BMW Group and the Mercedes-Benz Group, for example, are investing billions of euros in modern electric drives, autonomous driving, their own battery technology and battery production as well as digital offerings.
Watching films while behind the wheel will soon also be available at Mercedes
There are setbacks, but also positive examples: Mercedes Benz can take the next step in highly automated driving, the so-called Level 3. With appropriately equipped cars, drivers will be allowed to carry out other activities in moving traffic up to a speed of 95 kilometers per hour from next year. As long as they stay in the right lane, they can read or watch films behind the wheel. They must be able to intervene immediately when requested.
According to Mercedes, the Federal Motor Transport Authority has granted approval. According to the company, it is the only manufacturer with such approval for series vehicles in Germany. Previously, this form of automated driving was only allowed to be used in traffic jams or at speeds of up to 60 kilometers per hour.
BMW invests in battery production
The BMW Group is expanding its battery production: “We are building five locations on three continents for the sixth generation of our high-voltage batteries,” says the group. Namely in Lower Bavaria, Hungary, China, Mexico and the USA: “This approach secures production even in the event of unforeseen political and economic events.”
VW Group: Cheaper Entry level models from 2026
And something is also happening when it comes to inexpensive entry-level electric models: As a so-called volume provider, the VW Group wants to bring electric cars for less than 25,000 euros onto the market in 2026 and electric cars for less than 20,000 euros in 2027.
Cheaper electric models should inspire the masses and really boost sales. But getting more electric cars on the road would have to happen much faster: because of the stricter CO2 fleet limits that will apply in the EU from next year. From 2025, manufacturers' vehicle fleets in the EU will only be allowed to emit an average of 93.6 grams per vehicle per kilometer driven. That is 15 percent less than currently.
Cheaper electric cars to create CO2 limits?
Industry experts assume that most car manufacturers will breach the stricter limit – because they cannot sell enough electric cars. Car expert Christoph Sturmer says: “You have to bring 25 percent electric cars onto the market, otherwise you will pay high penalties for not meeting these CO2 targets. That's why I assume that next year will be a very good year to buy electric cars cheaply buy.”
Analysts expect a real discount battle next year. The prices for electric cars are already being reduced in order to boost sales – and thus improve the CO2 balance. This will increase in 2025. Good for the environment and consumers. The German car manufacturers, on the other hand, are likely to pay extra for now.
