Increased Competition from China

China has emerged as a major player in the global automotive industry, with many domestic brands such as Geely, BYD, and Great Wall gaining popularity worldwide. These brands have been able to offer high-quality vehicles at competitive prices, which has put pressure on German automakers to reduce their prices and improve their quality.

However, many German manufacturers have struggled to adapt to this new reality, with some failing to innovate and improve their products quickly enough. This has led to a decline in brand loyalty and sales, particularly in China.