Overview
- Automakers reported second-quarter results on Monday that showed big profit falls and sharply weaker China sales, prompting immediate cost measures and restructuring.
- Companies are moving production and cutting capacity, with announced plans that include plant closures, shifts to lower-cost sites in Hungary and tens of thousands of planned job cuts.
- Industry critics say the crisis is partly self-inflicted because years of high dividends and a premium pricing strategy left firms underinvested in affordable electric cars and software.
- Regulatory pressure from the EU's 2035 combustion ban requires billions more for EV platforms, batteries and software at a time when margins are shrinking, increasing near-term cash needs.
- The squeeze reflects a deeper shift: Chinese makers have built cheaper, locally tailored EVs and software strength, which has cost German brands market share in China and pressured Europe production and jobs.