Germany’s auto giants are seeing profits and market share tumble as critics argue they’ve been too slow to embrace electric vehicles and digital transformation. Can the legacy carmakers reverse the downward trend?

Munich

At the Munich Motor Show, Mercedes introduced its new GLC electric SUV, aiming to reverse a significant decline in earnings. Other major German carmakers, including BMW and Volkswagen, are also investing substantial sums in developing new models and adapting to changing global market demands. Industry analysts note that German manufacturers face stiff competition in China and must focus on their traditional strengths of quality, safety, and dependability. The high cost of car production in Germany is prompting discussions about downsizing and potential job losses. Despite the growing emphasis on electric vehicles, experts believe that combustion engines and hybrid vehicles will continue to play a role in the industry, particularly in regions with limited electric infrastructure.

Germany's carmakers look to the future at Munich motor show

Mercedes premiering its GLC electric SUV at the Munich Motor Show. It's hoped the new model will signal a turnaround for the German carmaker, which reported close to a 60% drop in earnings in the first half of this year. Executives say better times are ahead. This year alone we're investing a double digit billion euro amount in our passenger car division. It's a similar story for other German carmakers. BMW and Volkswagen are likewise spending heavily on new models, and not just to imitate the competition. They point out differences between markets. Where China goes a lot into voice control on operations, that is not really true for Europe and not for the US really. There's more about, when you look at the JD Power results, things have to be quality, easy to operate, and make it easier for the consumer. Timo Kronen is a car industry consultant who knows the Chinese market first-hand. He says German producers have to concentrate on their old strengths, quality, safety and dependability. That's because in the world's biggest car market, China, they lag far behind. But that's not all, he says. Globally, there's hardly any place more expensive to build cars than in Germany. Accept the fact that volumes will go down and that we have to reduce the structures that we have to that volume. That means that we have to become smaller, maybe close manufacturing sites. So we have to reduce the structures that we have. That is a sobering outlook for Germany's showcase industry and its 1.2 million workers. Insiders say around 200,000 could lose their jobs in the coming five years. And Kronen isn't riding off traditional engines either. The importance of combustion engines is, in my eyes, underrated. Everyone's speaking about e-mobility, and yes, it is important. But in my eyes, the future is a portfolio. You will have combustion engines in a few areas across Europe, across the US and across Asia. And you will have a strong segment for BEVs, so electric vehicles, and you will have a segment for hybrid vehicles. The internal combustion engine is not dead, and it won't be dead for many, many years. Kronen points to rural areas in places like the US and South America where infrastructure for electric vehicles won't be in place for a long time. And new German EVs now boast some more advanced technologies than competitors, like Tesla. For example, allowing faster recharging.

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Warsaw

Ukraine Invasion

Poland and allies down Russian drones in 'act of aggression'

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Brasilia

Two Brazil Supreme Court justices vote to convict Bolsonaro

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Kathmandu

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Washington

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Doha

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Paris

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Middle East Conflict

Flotilla for Gaza ship struck by drone off Tunisia, organizers say

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Michigan

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Israel targets Hamas leadership in Doha strike

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Chicago

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Oslo

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Multiple fatalities as Nepal police fire on protesters

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Supreme Court allows L.A. immigration stops to continue

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Jerusalem

Palestinian gunmen kill six at Jerusalem bus stop

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Ilan and Asaf Ramon International Airport

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Kyiv

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Lisbon

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Venice

U.S. independent director Jim Jarmusch wins Venice top prize

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Tokyo

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Savannah

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Caracas

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Tel Aviv-Yafo

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Breakdown