VW, Mercedes, BMW Could Become the Next Nokia
Ex-CEO: VW, Mercedes, BMW won't survive to 2030. 4 possible scenarios.
Welcome to Issue #95 of The German Autopreneur.
Former Stellantis CEO Carlos Tavares just made a prediction: Only 5-6 major automakers will survive the next 10-15 years.
His survivor list? Toyota, Hyundai, BYD, Geely. Maybe 1-2 more.Volkswagen, Mercedes, BMW? Missing.
For Tavares, VW symbolizes "Europe's inability to change.”
And he's not alone.
A leading German economist just warned that VW, Mercedes, and BMW won't make it to 2030. Not in their current form, at least.
Sounds dramatic. But worth taking seriously.
So today, let's look at what they're really saying. Are VW, Mercedes, and BMW actually at risk? What could happen to them? And what are the possible scenarios?
What happens to these companies?
Before we panic, let's be clear about something.
We're not talking about bankruptcies.
Volkswagen, Mercedes, and BMW are too big to fail. The names too valuable. Too critical to the economy.
This is about something else. A fundamental transformation.
Nokia still exists today. But it has nothing to do with the mobile phone giant it once was.
That's the kind of change we're talking about. The brand survives. But the core gets replaced.
Three things shift: Ownership. Technology control. Where the profits go.
Two recent examples show how this happens:
What happened to Stellantis:
When Carlos Tavares ran Stellantis, he made a deal with Chinese manufacturer Leapmotor. 20% stake. In return, Stellantis would sell their cars in Europe.
His honest assessment: They'll eventually try to take over Stellantis.
The trap is obvious: You help a competitor enter your market. Give them your distribution network. Your customer relationships. And one day, they might be bigger than you.
What happened to Volvo:
Geely bought Volvo years ago. An established European brand with loyal customers. The brand stayed. But technology and strategy? Controlled from China now.
Why this works for Chinese companies: They skip the hardest part of entering Europe. Building trust takes decades. Creating dealer networks costs billions. Buying an existing brand? Much faster.
So the question isn't: Will these brands disappear?
The question is: Who will own them in 2035? Who controls the technology? Where do the profits go?
Why now?
These warnings aren't random. German automakers face a perfect storm. Two things are hitting at once:
1) Transformation costs billions
New EV platforms. Battery factories. Software development.
2) The money source is drying up
For years, China funded this transformation. High margins. Strong sales. Steady profits.
Not anymore.
Local Chinese brands now hold nearly 70% of China's market. Five years ago, it was just over a third.
Volkswagen, Mercedes, and BMW have lost about half their China market share since 2021.
Here's the problem: China was their most important market. And they can't replace it. The US is going America First. Europe's market is flat.
The result: BMW, Mercedes, and VW made 46% less profit in the first nine months of 2025 compared to 2024.
They need billions for transformation. But the money is disappearing exactly when they need it most.
That's why scenarios that seemed impossible five years ago are now on the table.
4 possible scenarios for 2035
If this trend continues, four scenarios emerge.
None involves bankruptcy. But each means losing something different: ownership, product control, volume, or the brand itself.
Scenario 1: Chinese Ownership
German brands stay visible globally. But control shifts to China.
Chinese investors already own nearly 20% of Mercedes. BAIC holds 9.98%. Li Shufu of Geely holds 9.69%.
The stakes keep growing.
Eventually, the balance tips. Strategic decisions move from Stuttgart and Wolfsburg to Hangzhou and Beijing.
German sites focus on design and final assembly for Europe. The brands survive. But profits and technology control flow to China.
Volvo shows how this works. The brand feels Swedish. But Geely controls the technology and strategy. Most buyers never notice the difference.
MG went the same route with SAIC.
Scenario 2: Brand Licensing
This happens if Europe protects itself with trade barriers.
High tariffs on Chinese cars. Strict regulations. A fortress strategy.
In this scenario, European manufacturers keep building cars at home. Protected markets let them survive in Europe and the US.
But in China and emerging markets? Different story. They can't compete on cost there. So they exit manufacturing entirely.
What they keep: Their brand names.
Audi in China shows how this starts. They launched a sub-brand: "AUDI" in capital letters. No four rings.
SAIC develops almost everything. Platform, batteries, motors, software. Audi provides design and the brand name.
Right now, Audi pays SAIC licensing fees for the technology. And loses massive margin.
The next step: SAIC flips it.
They buy the Audi brand rights for China. Develop the cars. Build them. Sell them. Audi just collects licensing fees.
This could spread fast. India. Southeast Asia. South America. Anywhere legacy manufacturers can't compete on cost.
They become brand management companies. Revenue from licensing. But no cars, no customers, no control.
Economically rational. Strategically, a surrender.
Scenario 3: Luxury Only
Manufacturers withdraw from the volume market. No more fighting BYD for the masses.
Full focus on luxury. Where heritage and status still matter.
Volkswagen Group sells off brands. Shrinks. Keeps only the premium core.
Production drops dramatically. But margins stay high.
This only works under two conditions:
The software transformation succeeds. AND they stay technologically competitive with Tesla and Chinese brands.
The challenge? Low volume means high costs per unit. Harder to fund the R&D needed to stay competitive.
And look at today. Porsche and Mercedes both represent premium. Both are struggling. Premium alone doesn't work if the product falls short.
Scenario 4: Contract Manufacturing
Brands get sold off. The corporation becomes a contract manufacturer.
No longer own cars. Just building for others.
Think Foxconn for Apple. Build the hardware. But the brand and customer relationship belong to someone else.
Customers would be mobility services like Waymo or Baidu. Or tech companies that don't want factories.
They focus on software as the differentiator. Manufacturing? Just a commodity to outsource.
The upside: Factories and production jobs stay. For now. The downside: Value creation and margins disappear.
What's left: A manufacturing operation. Efficient production. Nothing more.
My Take
The good news?
There's a 5th scenario. One that prevents all the others.
The transformation simply succeeds.
German automakers still have the ingredients for success:
Brands. Recognized and valued worldwide.
Capital. VW ranks in the global top 10 for R&D spending. Playing in the same league as US Big Tech.
Talent. German engineers, designers, and developers remain world-class.
The foundation is strong. The resources are there.
What needs to change is mindset. How these companies work. How they make decisions.
From industrial corporations to software-first companies.
And most importantly: Stay humble. Stop fighting China. Learn from them instead. They learned from German engineering for decades.
Tavares warns about the danger. But he also says something else: Technological leadership isn't permanent.
China built its lead in just a few years. It could lose that lead just as fast. If European manufacturers move faster on the next wave of innovation.
The question isn't whether the resources exist.
The question is whether change can happen fast enough.
This 5th scenario is real.
But here's what's certain: German automakers won't look the same in 10 years. Whether transformation succeeds or fails.
The only question left: Will they shape the change? Or let it happen to them?
That’s all for today.
Until next week,
Philipp
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One thing that you don’t discuss here is what happens when AI gets really good at driving cars, much safer than a human, and anywhere and in any conditions. This could mean that the world purchases 80% less cars, and it could happen as soon as within the next 10 years. When it becomes much cheaper to just pay for computer driven rides, and this is just as convenient, or more convenient, given you don’t have to park and walk to your location from your parking place, people are going to buy way less cars.
Personally, I have always enjoyed driving, and have had great stick shift sports cars, but a lot of people are not going to spend the extra money, and a car you drive yourself will be much less safe. Perhaps they will get one car per household instead of two or three. And the computer driven cars will be vastly more utilized, so they will not come close to making up for it.