Declining Production and Demand

The German car industry is currently facing a significant decline in production and demand, with factories operating well below capacity. For instance, Volkswagen's Wolfsburg plant, capable of producing 870,000 cars annually, managed only 490,000 in 2023. This drop reflects a broader trend in Europe, where car sales have been decreasing since 2017, primarily driven by changing consumer preferences and economic pressures, including the pandemic and energy crisis. The challenges are compounded by consumers holding onto vehicles longer, resulting in reduced new car purchases across the continent.