German industrial output falls to 2005 levels as auto sector craters

Original Article ↗ Hacker News Discussion ↗

Causes of Germany’s Industrial Decline

  • Multiple commenters link the downturn to loss of cheap Russian pipeline gas, which raised energy and feedstock costs and undermined competitiveness in energy‑intensive industry.
  • Others stress structural issues: underinvestment in infrastructure and education, slow digitization, high energy and labor costs, excessive bureaucracy, and “crippling regulations.”
  • Some point to long‑term offshoring within Europe: more production moved to cheaper countries (Poland, Czechia, Slovakia), so less value now shows up as German output.
  • Germany’s high export share (~40% of GDP vs ~20% in China, per thread) is seen as making it uniquely exposed to global demand shifts and geopolitical shocks.

Auto Sector: EV Transition, Competition, and Pricing

  • German carmakers are depicted as slow and internally resistant in shifting from ICE to EVs; EV offerings are seen as late, expensive, and often low value relative to Chinese rivals.
  • Commenters describe Chinese EVs (e.g. BYD) as significantly cheaper and better equipped, even after EU tariffs; some European buyers say they now perceive more value in Chinese brands than in domestic premium marques.
  • Debate on “dumping”:
    • One side claims Chinese firms are price‑dumping abroad to kill competition.
    • Another notes export prices are higher than domestic Chinese prices, suggesting profits on exports and intense price war inside China instead.
  • Several argue German brands lost their traditional advantage: quality, durability, repairability, and interior “luxury” are said to have declined while prices stayed premium.

Energy Policy and Green vs Nuclear

  • Strong disagreement over whether “green policies” or specifically the nuclear phase‑out is to blame.
  • One camp: cutting nuclear and relying on Russian gas was a strategic error; with gas gone, industry is exposed and electricity/inputs are too expensive.
  • Another camp: dependence on any gas (Russian or US LNG) is the real sovereignty problem; long‑term answer must be renewables (and possibly nuclear).
  • There is extended argument over whether anti‑nuclear politics were driven by domestic environmentalism alone or also aligned with Russian interests.

Regulation, Bureaucracy, and “Can‑Do” Culture

  • Several anecdotes highlight extreme delays and costs for basic infrastructure (e.g. a small bridge taking 20+ years to permit and build, with huge cost overruns).
  • Environmental and species‑protection procedures (e.g. multiyear studies for hamsters) are cited as examples of how projects get bogged down.
  • Some blame an overgrown bureaucracy that creates a culture of risk aversion and excuses; others say the deeper issue is lack of urgency and political will to push projects through even within existing rules.

Political Legacy and Public Sector

  • A sizable subthread blames past leadership for: nuclear shutdown, deepening gas dependence, lack of structural reforms, letting infrastructure decay, and expanding public administration.
  • Others counter that newer leaders are performing even worse and that criticism of earlier governments was long marginalized by media narratives.
  • There is concern that a growing, expensive public sector is now propping up the economy while burdening the productive base.

EU, Trade, and Wider European Context

  • Commenters note similar strains in France and predict rising pressure to cut net EU budget contributions from struggling core countries, with potential for “explosive” intra‑EU politics.
  • Some argue EU budget flows are small in macro terms (~1% of GDP) but politically potent, as seen in the UK.
  • The shift of global auto demand toward EVs and the rise of Chinese and Korean manufacturers are seen as structural headwinds not only for Germany, but also for other Western carmakers.