# Germany's car industry faces collapse

> Factory closures loom as German automakers struggle with Chinese competition, tariffs, and the EV transition.
- Title: Germany's car industry faces collapse · Ars Technica
- Summary: Factory closures loom as German automakers struggle with Chinese competition, tariffs, and the EV transition. Germany's automotive dominance is crumbling due…
- Keywords: germany, automotive industry, volkswagen group, porsche, mercedes-benz, audi, bmw, factory closures, job losses, electric vehicles, tariffs, ig metall
- Source: Ars Technica — https://arstechnica.com/cars/2026/09/protests-for-germanys-car-industry-as-job-losses-loom
- Published: 2026-09-22T14:40:47+00:00
- Read time: 1 min
- Topics: germany, automotive industry, volkswagen group, porsche, mercedes-benz, audi, bmw, factory closures, job losses, electric vehicles, tariffs, ig metall
## Germany's auto crown slips
German car makers were economic crown jewels for decades, but now face declining demand, Chinese competition, and punitive tariffs that threaten their dominance.
## European car sales collapse
European automotive sales plummeted from 18 million vehicles in 2019 to 13 million in 2025, with Chinese makers capturing growing market share.
## US tariffs hit German exports
New 25 percent import tariffs on US vehicles threaten Germany's most profitable market, with rates subject to change at any time.
## Porsche's EV bet backfires
Porsche built too many electric vehicles and sold too few, causing its profit margin to fall below Skoda's and forcing VW Group to write down 11.5 billion dollars.
## Factory closures now likely
Volkswagen is considering closing four German factories, while Mercedes-Benz warned it might shut one assembly plant and one powertrain plant unless costs drop.

> We have absolutely no time to lose and will therefore significantly step up our performance program.
## Workers protest across industry
Employees at Audi, BMW, Mercedes-Benz, Porsche, VW, and suppliers protested yesterday, demanding corporate leaders take responsibility for jobs and Germany's automotive future.

> We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for jobs.
## Key takeaway

Germany's automotive dominance is crumbling due to weak demand, Chinese competition, US tariffs, and poor EV strategy, forcing major job cuts.