Germany should be leading, not trailing, auto sector in future, Merz says

• Reuters

• Published On Sep 9, 2025 at 08:12 PM IST

“We want to shape the transformation of the automotive industry and not chase after it,” Merz said.

“>

Germany should lead the charge in the sector’s push towards electric mobility and not risk falling behind as Asian rivals and trade barriers make it harder for the country’s automakers to compete, Chancellor Friedrich Merz said on Tuesday.

In a speech marking the opening of the IAA Munich auto show, the continent’s biggest, Merz highlighted the auto industry’s relevance for Europe’s largest economy, adding overregulation posed a serious risk.

“We want to shape the transformation of the automotive industry and not chase after it,” Merz said. “And we want to take advantage of the great opportunities that lie in this transformation for the German automotive industry and for Germany as a whole.”

Merz has said he planned to meet with carmakers, suppliers and other stakeholders in the auto industry for a summit addressing challenges in the sector in the next four to six weeks.

Battling a storm of U.S. tariffs, rivalry with China and high costs, Europe’s embattled carmakers are hoping to shift the narrative at this year’s biennial IAA with a host of new model offensives.

The German economy contracted again in the second quarter amid a protracted industrial slowdown, with the conservative chancellor pledging to ramp up investment and improve Germany’s credentials as a business location to revive growth.