Volkswagen’s troubles reflect a deeper issue of deindustrialisation haunting Germany, exacerbated by rising energy costs from the Ukraine conflict and competition from Chinese automakers. Martin Wansleben, a key industry leader, warns that clear signs of this troubling trend are emerging, highlighting the vulnerability of Germany’s industrial sector.
Volkswagen’s challenges are a stark reflection of Germany’s gradual deindustrialisation. The energy crisis sparked by Russia’s invasion of Ukraine in 2022 has driven prices upward, while the economic slowdown in China, Germany’s leading trading partner, compounds the issue. Furthermore, Chinese automakers present significant competition to Volkswagen, heightening concerns over the future of Germany’s industrial strength. Martin Wansleben, the head of the German chamber of trade and industry, expressed this sentiment, observing, “The signs of deindustrialisation are becoming clearer.”
Germany, once a titan of industrial prowess, faces a shadowy threat of deindustrialisation, fueled by geopolitical instability and fierce international competition. The invasion of Ukraine disrupted energy supplies and sent prices soaring, intensifying the country’s economic challenges. Meanwhile, diminishing growth in China, combined with the rise of competitive forces from within Asia, particularly the automotive sector, raises serious alarms about Germany’s manufacturing future.
Volkswagen’s difficulties serve as a warning bell for Germany’s industrial landscape, now more precarious than ever. The intertwining crises of energy prices and international competition foreshadow potential declines in manufacturing and economic stability. As voices like Martin Wansleben caution, the realities of deindustrialisation are becoming increasingly evident, casting uncertainty over Germany’s once-solid economic foundation.
Original Source: www.economist.com
