Comment by decimalenough
5 hours ago
Many reasons.
1) Ever since the Cold War ended, German companies have been shifting production to cheaper places in Europe, so less and less "German" cars are actually built in Germany and show up as German industrial production.
2) Germany used to sell a lot to China, but Chinese companies are upping their game and shifting to EVs, and Germany is losing Chinese market share as a result.
3) Those same Chinese companies are increasingly selling overseas and starting to kick German butt. I went to an EV car show recently, and while Volkswagen Group had a large presence (VW, Audi, Cupra, etc) and some of their EVs looked pretty good, the prices were consistently 20-50% above the equivalent Chinese models.
A fourth reason that is overlooked is that rubber component prices (if you don't import from Asia) have almost doubled in the Eurozone since 2019. I haven't worked in a company whose products use many rubber components in their supply chain since late 2024 but a single seal, gasket or vibration absorber with a single coating of a wear or friction modifying polymer could have had quoted prices rise from 11,000€ per batch to the neighbourhood of 18,000-20,000€. Smaller price rises have also hit non-imported thermoplastics, fiberglass and plastic textiles, presumably because of structural component lead time and cash flow issues in petrochemicals as a whole.
The German industrial sector might be shy at importing most of their parts from Asian developing countries and China in order to keep friendly relations with their domestic supply chain, keep friendly relations with their domestic political system, reduce IP cloning and keep some semblance of national pride, all of which combine to impact their prices. Also, there may be legal or tax requirements about domestic or EU component origin percentages, but I wouldn't know, since my business was in medical appliances.