Some in and around the industry are already imagining a future without Volkswagen, at least as it exists today
seems unlikely. In 2022 Volkswagen was the world’s largest carmaker by revenue, giving it plenty of cash to support its biggest brand. On July 27th it reported that sales rose by a healthy 18% in the first half of 2023, year on year, to €156bn .Yet disaster is no longer inconceivable. German industrialists are feeling real angst about the future. In July an index of business confidence from Ifo Institute, a think-tank, fell for the third consecutive month.
. “It’s an operating system of sorts,” explains Oliver Falck, who runs the Ifo Centre for Industrial Organisation and New Technologies. “Important parts of the German economy and its institutions rely on it,” he says. The car industry is also central to Germany’s much-vaunted social model. One important element is regional equality. Car factories were often built in otherwise economically weak areas, of which Wolfsburg is the prime example. The sector shores up many of these regions. According to one recent study, 48 of Germany’s 400 cities and counties are heavily dependent on jobs in the car industry. Wolfsburg leads the pack: 47% of the city’s workers toil in the sector.
Harder to measure, but no less profound, would be the psychological effects of a diminished German car industry. The reputation of German industry and its engineering prowess, already knocked by Volkswagen’s “” emissions-cheating scandal of 2015, would take another hit.