Volkswagen to close factories in Germany

Volkswagen, Europe’s biggest automaker, is planning to shut down factories in Germany and lay off thousands of employees, workers’ representatives said. Germany’s auto industry is faltering in large part because China’s burgeoning electric vehicle sector has outcompeted German carmakers both in China, and, increasingly, in Europe. China is Volkswagen’s biggest market, but sales have declined as local EV companies developed advanced, affordable alternatives.

Chinese carmakers have also started making inroads in Europe’s luxury market, launching SUVs and limousines to compete with BMW, Mercedes, and Rolls Royce, Bloomberg reported. Compounding the industry’s worries, Donald Trump has threatened “substantial tariffs” on vehicles made outside the US: German automakers should be “very worried,” one expert told Deutsche Welle.