Comment by maxglute

They make cars fine, but their economy isn't.

The counterpoint to that is JP has to sacrifice (shadow subsidize exports) by managing exchange rate, i.e. JP went from 5-6T nominal GDP to 4T just through FX depreciation in last 20 years. They import expensive inputs but fx/account/spreadsheet their way into selling (up until PRC auto) competitive cars, which really domestic JP households pay for by essentially subsidizing exports (i.e. household -> industry transfer) which worked for a while with low / negative interest rates, but that era coming to end last few years ("easy" era with yen carry trade) and now there is CoL crisis especially for imports. Meanwhile PRC auto is eating at their shares.

Germany being stuck with Eurozone/eurobux has much less ability to pull this lever - they can't unilaterally devalue euro. So JP currency manipulation game, which itself is short/medium term trick that broke down with PRC's structurally cheap autos isn't option. If DE could play the FX game same will happen, they can prop up some sales (though long term can't compete with PRC producer prices), in exchange for domestic purchase power tanking.

TLDR if German could do a JP, which they can't, it will result net smaller German economy by essentially having germans subsidize exports and eat buckets of shit via imports, BUT MUCH WORSE THAN JP. JP still "only" 20% export:gdp, DE is 40%. Imagine Germany go from 4.5T GDP to to 2.5T. It would be anniliation.

E: Forgot this is all WHILE JP is still importing cheap RU LNG from Sakhalin2, despite US pressure, and only got US to back off buy also buying some LNG from alaska. Meanwhile US told Germany to jump off a cliff and they did.