In a 30-plus-year career in corporate restructuring, consultant Andreas Rüter has seen it all: the dotcom bust, September 11, the global financial meltdown, the euro crisis, Covid-19. But what’s happening right now in corporate Germany is “unprecedented” and “of a completely different order of magnitude”, says Rüter, the country head of AlixPartners. The federal republic’s all-important automotive sector, chemical industry and engineering sector are all in a slump at the same time.
Easy profits lured German carmakers into doing “more of the same” for years, says Eberhard Weiblen, boss of Porsche Consulting, an advisory firm owned by the eponymous carmaker. But this strategy is now backfiring badly. Homegrown, electric-only marques such as BYD, Nio and Xpeng have wooed Chinese drivers with technologically sophisticated vehicles that, underpinned by subsidies, also sell at far lower prices.