German car exports to China plunge by a third in 2025, says economic institute

• Reuters

• Published On Feb 24, 2026 at 05:16 PM IST

The slump comes as German automakers face mounting pressure from US tariffs.

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German car exports to China plunged by roughly a third in 2025, extending a steep decline that has wiped out more than half the sector’s shipments ‌since their 2022 ⁠peak, ⁠according to a study released by the German Economic Institute (IW) on Tuesday.

Exports of cars and parts fell to under 14 billion euros ($16.49 billion) last year, down from nearly 30 billion ⁠euros three years ‌earlier, underscoring the rapid erosion of Germany’s foothold in its ⁠most important foreign market.

Carmakers – which make up Germany’s largest industrial sector – are facing their toughest test in decades, squeezed by higher US import tariffs, weak demand in Europe, a costly transition to electric vehicles and ‌an intensifying price war in China. The IW data comes as Chancellor Friedrich Merz travels ⁠to China for the first time, a closely watched trip expected to shed light on how Europe’s biggest economy seeks to recalibrate ties with its largest trading partner amid mounting competitive and geopolitical strains.