German Auto Industry Faces Major Restructuring, Eyes Chinese Carmakers to Take Over Local Plants

Hildegard Müller, President of the German Association of the Automotive Industry (VDA), warned that automotive manufacturing bases in Germany and Europe face severe threats due to high energy prices, excessive taxation, heavy social security burdens, and bureaucratic red tape—all of which continue to erode the region’s industrial competitiveness. In June, Volkswagen Group announced plans to cut up to 100,000 jobs and is evaluating the closure of four plants in Germany, directly affecting over 45,000 positions. Major automakers like Mercedes-Benz and BMW are also implementing cost-cutting measures, pushing the entire European auto industry into a historic phase of restructuring. Against this backdrop, Müller called for an open attitude toward foreign automakers—particularly Chinese manufacturers—interested in investing in and establishing production facilities in Germany. She argued that if German plants inevitably need new ownership, it would be better to bring in Chinese automakers with investment willingness and production capacity needs than to let these facilities sit idle, thereby preserving some jobs and maintaining industrial capabilities. In recent years, Chinese automakers have accelerated their expansion of production capacity in Europe: BYD’s plant in Hungary is scheduled to begin operations in the fourth quarter of 2024 with an annual capacity of 300,000 vehicles; Chery has taken over Nissan’s former Barcelona factory through a partnership with Spain’s EV Motors; and Leapmotor’s joint production line with Stellantis in Zaragoza, Spain, is expected to start operations in October 2024. During the same period, the market share of Chinese brands in Europe has surged from 0.5% in 2021 to nearly 10% by spring 2026.