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4w ago

German Automakers Struggle as US Tariffs and Global Rivals Intensify Pressure

Volkswagen, BMW, and Mercedes-Benz face declining revenues, weak electric vehicle demand, and a 25% US import tariff, threatening their largest export market.

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Overview

  • German automakers saw a 2.8% revenue decline in 2024, underperforming global competitors who averaged a 1.6% increase.
  • High investments in electric mobility have not delivered expected returns due to weaker-than-anticipated demand for EVs.
  • The recently announced 25% US tariff on auto imports is expected to significantly impact German manufacturers, whose largest export market is the US.
  • Internal challenges, including software failures, product recalls, and restructuring costs, have further strained profitability.
  • Analysts warn that cost-cutting measures, including layoffs, are insufficient, and German automakers must focus on strategic realignment to regain competitiveness.