The N\u00fcrburgring in the western hills of Germany is the longest permanent race track in the world. It is almost a century old and has hosted many Formula 1 Grand Prix races. The main part of the route is called the Nordschleife. The 20.8 kilometer (12.9 miles) long route is nicknamed the \u201cGreen Hell\u201d \u2013 because of the surrounding forests of the Eifel region and its challenging route.<\/p>\n
All major automobile manufacturers have test centers at the N\u00fcrburgring. In fact, testing cars was an important reason for the track’s construction in 1927. The German automotive industry has used this heritage and the speed limit Autobahn, Germany’s public highway system, to its advantage in advertising and brand building. Brands such as Mercedes-Benz, BMW, Audi and Volkswagen stood for precision technology, performance and reliability. They weren’t just cars – they were cultural icons and the backbone of the German economy.<\/p>\n
The German automotive industry employs over a million people and has long been a barometer of economic health. In 1950, German automobile manufacturers sold around 200,000 vehicles. Today around 14 million copies are sold worldwide. For decades, the formula was simple: first-class technology plus global demand led to success. But the good times are over. Sales are shrinking, jobs are being cut and factories are facing closure. \u201cThe pressure is increasing, the cost savings are enormous,\u201d said a Mercedes employee who did not want to be named. \u201cIt\u2019s all about cost cutting.\u201d<\/p>\n
China was the promised land for years. In the 1980s, China’s political leaders invited Volkswagen (which means "people’s car" in German) to set up joint ventures and build cars in China for the Chinese people. There was a time when Volkswagen’s market share was almost 50%. Other car manufacturers later followed suit. The more China’s economy grew, the larger the country’s car market became. Until a few years ago, German car manufacturers sold one in three cars in China. \u201cIt was a gold rush era,\u201d remembers Beatrix Keim, who spent two decades at VW in China and is now director at CAR, an industry consultancy in Duisburg. "Sell a lot of cars, make a lot of money. There wasn’t much Chinese competition."<\/p>\n
But China had a plan: learn from foreign partners and then lead. In 2009, Beijing passed a law on electric vehicles. \u201cIt wasn\u2019t really climate change,\u201d Keim explained. \u201cIt was about finding a technology where China has a chance to overtake foreigners and where China can thrive.\u201d The German car manufacturers did not expect this, she added. They underestimated the determination of the Chinese leadership and the speed of development. Billions in subsidies and infrastructure later, China is now the world leader in electric vehicles and batteries.<\/p>\n
When you observe the heavy traffic in Chennai, a city in southeastern India, you rarely see a German car. Indian, Japanese and Korean cars dominate the streets of the city, often referred to as the \u201cDetroit of India\u201d because of its many car factories. The BMW plant in Chennai only produces around 80 cars a day, while the car manufacturer’s German flagship produces 1,400. Still, growth is strong \u2013 over 10% annually. \u201cThere is a huge rush on the Indian market,\u201d said plant manager Thomas Dose. \u201cEveryone has the feeling: If we are not in India now, we will miss an opportunity.\u201d<\/p>\n
Beatrix Keim believes that German car manufacturers are striving for change. \u201cThey understand that they have to move faster, come down from their ivory tower and learn,\u201d she said. Meanwhile, the race to build successful electric vehicles is in full swing. In China, local electric vehicle manufacturers are struggling with overcapacity and falling prices. They are also trying to sell their electric vehicles in Europe, with limited success so far. But electric car makers from China and elsewhere are testing their cars at Germany’s Nurburgring, a symbolic turn in a tale of lost dominance. Could German car manufacturers completely miss the boat? \u201cIt can happen,\u201d said Racing Misha Charoudin. \u201cLook at you [Finnish mobile phone maker] Nokia. They were fine. And then suddenly they missed the boat.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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