Is the world witnessing the end of the 'Made in Germany' supremacy?

'Al-Eqtisadiah' from Riyadh

Tuesday, 7 July 2026, 21:7 | 1 minute read

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German industry faces unprecedented challenges, raising questions about the future of its industrial model that has been associated for decades with the slogan 'Made in Germany', amid increasing economic pressures and a slowdown in industrial performance.

The automotive sector is at the heart of these challenges, employing around 780,000 people and contributing about 5% of GDP and over 15% of German exports, making it one of the most important pillars of the country's economy.

German car companies are facing a decline in profits, amid reports of restructuring plans that may include closing some factories and cutting thousands of jobs, due to falling demand in key markets and intensifying global competition.

The International Monetary Fund also expects the German economy to record one of the weakest growth rates among advanced economies during 2026, reflecting continued pressure on Europe's largest economy.

Experts attribute this decline to three main factors: high energy and production costs, ongoing bureaucratic challenges and slow digital transformation, in addition to accelerating competition from Chinese electric car companies that have strengthened their presence in global markets.

Despite the challenges, observers believe that Germany has a strong industrial base and long experience in overcoming crises, making the current period a test of its ability to restructure its industrial sector and enhance its competitiveness amid rapid global changes.

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