End of an Era of Leadership: Why Volkswagen, II. from. Wu and Mercedes are losing ground The German auto industry is experiencing a structural crisis: high costs, competition with China and an expensive transition to electric vehicles are undermining the position of leading concerns. The main causes of the crisis: high costs. Expensive labor, energy and logistics reduce the competitiveness of German factories. According to the VDA, 67% of the car companies report, move abroad or cancel investments in Germany. The loss of the Chinese market. BYD, Geely and other manufacturers are developing new models faster and competing in technology. sales b. from. Wu in China fell 22% in the first nine months of 2026. Expensive transition to electric vehicles. Volkswagen is loaded with excess capacity - more than 500 thousand cars a year. The group's profitability in the first half of the year was 3.8%, with a target of 9% by 2030. The company plans to invest 135 billion euros by 2031. Doubt crisis. In the first half of 2025, there were 29 major bankruptcies in the German auto components sector. Schaefer announced that it would eliminate 3,460 jobs and close five plants. Tariffs will not solve the problem. Restrictions on Chinese electric cars will not eliminate the technological gap and high production costs. German organizations retain strong brands and engineering skills, but the old leadership model no longer works. The risk for investors is that the current low stock valuations may not reflect a temporary slowdown, but a long-term decline in earnings.

End of an Era of Leadership: Why Volkswagen, II. from. Wu and Mercedes are losing ground The German auto industry is experiencing a structural crisis: high costs, competition with China and an expensive transition to electric vehicles are undermining the position of leading concerns. The main causes of the crisis: high costs. Expensive labor, energy and logistics reduce the competitiveness of German factories. According to the VDA, 67% of the car companies report, move abroad or cancel investments in Germany. The loss of the Chinese market. BYD, Geely and other manufacturers are developing new models faster and competing in technology. sales b. from. Wu in China fell 22% in the first nine months of 2026. Expensive transition to electric vehicles. Volkswagen is loaded with excess capacity - more than 500 thousand cars a year. The group's profitability in the first half of the year was 3.8%, with a target of 9% by 2030. The company plans to invest 135 billion euros by 2031. Doubt crisis. In the first half of 2025, there were 29 major bankruptcies in the German auto components sector. Schaefer announced that it would eliminate 3,460 jobs and close five plants. Tariffs will not solve the problem. Restrictions on Chinese electric cars will not eliminate the technological gap and high production costs. German organizations retain strong brands and engineering skills, but the old leadership model no longer works. The risk for investors is that the current low stock valuations may not reflect a temporary slowdown, but a long-term decline in earnings.