German manufacturers warn of the sector’s ‘formidable crash’

Ms Beckhoff says that carmakers and the wider German manufacturing sector need to increase their competitiveness. “I really do think that productivity is something we have to take really seriously,” she says.

“The wealth we enjoy here in most parts of Germany and Europe, we can’t take it for granted.”

German manufacturers that require low-cost margins may struggle, says Mr Ley, but he believes there is hope for high-quality products with innovative features that rely on world-class engineering and intellectual property.

Dr Klaus Günter Deutsch, head of industrial and economic policy research at the Federation of German Industries (BDI), believes “much will depend on whether we are able to pull the innovation levels much faster, better and more consistently across Europe”.

There is no doubt that job losses and restructuring on their home soil will be a painful process for German manufacturers such as Volkswagen, and chemicals firm BASF, which has also warned of cuts.

However, Mr Beckhoff believes this reality check may be healthy in the longer term. “I think it is good for German industry that Volkswagen is running into some problems because it will increase motivation,” he says.

“It’s finally understood that we really have to do something. What is it that Winston Churchill said? Never waste a good crisis!”