Former VW executive warns China's rise threatens German Mittelstand
Jochen Sengpiel argues that Germany's record trade deficit and rising Chinese EV market share signal a broader industrial crisis. He advocates for a vertical AI strategy and stricter joint-venture rules to protect European manufacturers.
Jochen Sengpiel, former chief marketing officer at Volkswagen, contends that China views its current economic ascent as a return to global dominance following the "Century of Humiliation". He notes that China's five-year plans, publicly available since 1953, explicitly target strategic industries including machinery, metallurgy, and industrial AI. Germany faces a record trade deficit of 108 billion euros on a 12-month rolling basis, with auto imports from China surging. Chinese electric vehicle market share in Europe has risen from 11% to 16%, while China has installed 345,000 industrial robots compared to just 24,000 in Germany.
Sengpiel warns that the automotive sector is merely the first visible domino, predicting that the next shock will hit the German Mittelstand, particularly in machinery and robotics. He criticizes German industry for waiting too long to respond, citing a VDMA survey where 61% of members now find it difficult to assess their economic outlook, up from 37% two years ago. He argues that current measures, such as hybrid car tariffs, are insufficient. Instead, Sengpiel advocates for a "vertical AI" strategy that leverages Germany's deep industrial data, rather than competing in "horizontal AI" where the United States leads. He also proposes recruiting 100,000 skilled workers annually and implementing strict joint-venture rules for Chinese manufacturers entering Europe, mirroring restrictions imposed on German firms in China during the 1980s and 2000s.