d at home and stronger competition from abroad to the cost of punitive and arbitrary new tariffs, on top of preexisting structural challenges like an aging workforce and a slow recovery from COVID.

Total automotive sales in Europe have fallen from a peak of almost 18 million in 2019 to around 13 million in 2025, and some share of that smaller market is increasingly going to new entrants from China, which has its own spare automotive production capacity problem to worry about. And while the US market has always been the most profitable for German car exports, that was before the imposition of new import tariffs, which currently stand at 25 percent but could be subject to change at any time.

Factory closures now seem not just possible but likely, something that would have been unthinkable just a few years ago. Earlier this summer, news emerged that Volkswagen Group is considering closing four of its German factories to prepare for the future. Things have not gotten much better for VW Group in the months since that news broke.

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