One of the many problems that the next German government will have to contend with is the struggling car sector. Unfortunately, the sector’s challenges are only likely to intensify given the prospect of sluggish European demand, rising competition from China and US protectionism under Trump. Our base case is that German car output will decline by around 20% over the next decade. This is one among several reasons why we are pessimistic about the country’s long-term growth prospects.
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