Publications Études de l'Ifri
Frankfurt am Main, Germany - September 17, 2019: World premiere of the luxury car Mercedes-Benz Vision EQS at the Frankfurt Motor Show IAA 2019 (Internationale Automobil Ausstellung

The Car, Achilles' Heel of the German Industry? Etudes de l'Ifri, March 2021

Since 2018, the global automotive market is shrinking. This economic sector is key for Germany whose car producers belong to the Top 15 car producers worldwide. Yet they are running the risk of being downgraded and eventually replaced, against the backdrop of emerging actors in the United States of America (USA) and China.

These competitors benefit from a growing digitization in the mobility sector, disruptive economic models, and the obsolescence of the combustion engine vehicle, which is progressively replaced by less polluting alternatives endorsed by public authorities.

The Chinese-American rivalry impacts on the German carmakers, whose strategy greatly relies on the globalization of production chains. This has led to major success in the past but the threat of a technological decoupling between the USA and China limits German carmakers’ activities as regards their production and exports. The access to the Chinese market counting a little less than 20% of the world population is indispensable for the German car brands which intend to benefit from China’s catch-up effect.

European industrial and political actors plan to invest in promising sectors while seeking to be coherent with the environmental and social objectives. Also, the European Union (EU) spearheaded by the German powerhouse intends to thwart market distortions such as hurdles to market access, the development of technologies, and the compliance with production standards. The developments in the automotive sector challenge the EU’s capacity to act in a unified fashion without however imposing its vision to the industry’s private sector in a top-down manner.


Marie Krpata works as a Research Fellow at the Study Committee on Franco-German Relations (Cerfa) at the French Institute of International Relations – Ifri where she dedicates her research activities to the European Union and the external relations of the Franco-German couple. Before joining the Cerfa she worked in non-governmental and international organizations as well as in consultancies.


This publication is available in French: "L’automobile, talon d’Achille de l’industrie allemande ?" (pdf)


automobile Clean Mobility Economics Energy transition European Recovery Plan future of mobility Green Deal Industrial policy industrial transformation social policy European Union Germany