German automakers are losing ground under pressure from Chinese competitors – Politico

German automotive giants Volkswagen, BMW, and Mercedes-Benz are facing their most serious crisis in decades due to the rapid expansion of Chinese electric vehicle manufacturers. Having evolved from students to technology leaders over the years of their partnership, Chinese companies are now producing cheaper and better-equipped electric vehicles, pushing European brands out of the Chinese market. 

The contraction of the Chinese auto market and falling sales have resulted in multibillion-dollar losses for the German auto industry.

Factory workers across Europe are already feeling the full force of the crisis. BMW has announced plans to cut 8,000 jobs, Mercedes-Benz is attempting to extend the workweek without raising wages, and Volkswagen is negotiating the closure of plants and the elimination of up to 100,000 jobs. This situation is placing a significant strain on the German economy and exacerbating political challenges for Chancellor Friedrich Merz’s government.

The expansion of the Chinese auto industry is also gaining momentum within the European Union, where sales of cars from China rose by 63% in the first half of 2026, reaching nearly 10% of the market. It is not only German brands that are feeling the pressure, but also France’s Renault, whose budget brand Dacia is losing market share. Even the European Commission’s imposition of tariffs and attempts by European automakers to form partnerships with Chinese companies have so far failed to halt their loss of global leadership.

Source: Politico.

The German automotive group Mercedes-Benz Group has revised its annual financial forecast downward. The reason for this decision was a noticeable decline in demand for the company’s vehicles in the Chinese market.

The most expensive car declared to the Rada was a Chinese electric vehicle.