Cloud 9fin Distressed Diaries — Will US tariffs drive a German auto slowdown, or will there be a U-turn?
Jul 30, 2025
In this discussion, Hendrik Hauke, a restructuring partner at Willkie, and Florian Bruder from DLA Piper, dive into the impact of US tariffs on Germany's automotive market. They analyze the pressures on manufacturers amidst a shift to electric vehicles and how rising interest rates complicate matters. Additionally, they explore intriguing possibilities for auto suppliers to pivot towards the defense industry and discuss innovative financing solutions like private credit to navigate the industry's restructuring challenges.
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Tariffs Impact Complex Supply Chains
- The international supply chains mean US tariffs significantly impact the German car industry.
- These tariffs cause uncertainty, delaying crucial strategic production decisions across countries.
Chinese EVs Undercut German Prices
- Chinese EVs are priced roughly 30% lower due to cheaper access to battery technology.
- German automakers have yet to find effective strategies to compete with China's cost advantage.
Collaborate to Solve Liquidity Crisis
- The sector needs broad collaboration from financiers, companies, shareholders, and OEMs to solve liquidity and restructuring issues.
- Developing group structures that pool better businesses can attract investors and improve cash generation.