Germany's automotive industry, long admired for its production of high-quality internal combustion engine (ICE) vehicles, is grappling with significant challenges as the global market shifts toward electric vehicles (EVs). Major automakers such as Volkswagen, Mercedes-Benz Group, and BMW have recently issued profit warnings, pointing to economic difficulties and reduced demand in China, the largest car market in the world.
In addition to these hurdles, Germany’s automotive giants are confronting the potential for historic job cuts and factory closures, particularly at Volkswagen. The abrupt discontinuation of Germany’s electric car subsidy program at the end of last year and the recent failure to block EU tariffs on Chinese EVs have also raised concerns about the country's declining influence within European policy-making.
This combination of issues has led to fears that Germany's reputation for high-quality manufacturing, symbolised by the 'made in Germany' label, may be fading as the industry transitions away from ICE vehicles.
Rico Luman reveals customers seek concepts beyond traditional quality
Rico Luman, a senior transport and logistics economist at Dutch bank ING, acknowledged the lasting reputation of German quality but warned that the automotive world is rapidly changing. According to PTI reports, he emphasised that customers are increasingly seeking new concepts that go beyond traditional quality, focusing instead on a mix of product innovation, quality, and pricing.
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Luman highlighted the importance of German automakers adapting quickly to the evolving market, particularly in developing tech-heavy components for EVs, such as batteries. He noted that this remains an area where Germany has yet to make significant progress, stressing the need for swift adjustments to maintain the status and relevance that German carmakers have enjoyed for decades.
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