German Chancellor Merz said on Wednesday that he does not object to Chinese automakers taking over struggling German car factories, but he also warned that this is not a long-term solution to the industry's problems.
When asked about the possibility of Chinese companies acquiring German car plants, Merz responded: "It depends on whether each company is willing."
But he added: "I think this is only a stopgap measure, not a solution to our own structural problems."
The German automobile industry is facing numerous challenges, including weak demand in Europe, US tariffs, and fierce competition from China, with employment in the automotive sector continuing to fall.
Due to underutilization of capacity in many German car factories, some have suggested that Chinese manufacturers could use part of the production lines or even fully take over these plants.
Volkswagen CEO Blume said in April that he was willing to let Volkswagen's Chinese partners use its factories. However, the company later sought to quell speculation about related deals.
Merz also accused China of undervaluing the yuan, giving Chinese exports a price advantage in overseas markets: "From the European perspective, we cannot accept in the long term that we have to compete with a partner whose currency is undervalued by 25% to 30%."
"Companies have the right to do anything, but if this problem is not corrected, we will always be at a disadvantage, especially in regards to high imports and subsidized products."
In recent years, Germany's trade deficit with China has widened sharply, with exports declining significantly while imports continue to grow steadily, impacting industries such as machinery manufacturing, chemicals, and automobiles.