Reasons I can think of (as a German) from the top of my head:
- Crumbling infrastructure
- Decades of missing investments in education and the public sector
- no digitization
- Unwillingness to move away from ICE vehicles
- Slow internet access and slow build out of fiber network
- Killing future industries (solar, battery ...) by cutting funding/subsidies early
- low wages in European comparison
I don't think production cost is the big issue. German cars always were premium-priced compared to what you could get from a Japanese, French or US car maker.
The big problem imho is that due to greed and technical incompetence (especially regarding electronics and software), quality and value have gone down. The high prices are no longer justified, and customers are drawing the logical conclusion.
> This is impossible to fix with a state subsidy.
Is it? Because that's definitely how China is doing it:
https://rhg.com/research/chinas-subsidies-are-fueling-involu...
Those are consumer subsidies, they make buying a cheaply produced car cheaper, they don't make producing a car cheaper. Of course you can industrial policy for that as well, if you have the right conditions, cheap industrial inputs, and can eat domestic politics shit, i.e. automate the workforce. But DE probably don't have the domestic politics to automate the workforce nor future access to cheap gas.
So their industrial problem can't be fixed with subsidies, as in subsidies not capable of improving long term DE competitiveness without subsidies. Even if they automate workfroce and remove social benefits, lack of access to cheap industrial feedstock is precluding, i.e can't offset structurally disadvantage of being more expensive producer on input level.
Whenever you hear a German entrepreneur talk about the biggest obstacles they have and are facing, it's never crumbling infrastructure or slow internet. The number one complaint is always excessive bureaucracy and crippling regulations.
> Slow internet access and slow build out of fiber network
We don't have dial-up anymore. High-speed access is not a problem for commercial and industrial sites, and rarely a problem for remote work in residential areas. Despite what some commentators like to imply, you don't need 1 Gbit/s for productive work. 100 Mbit/s is usually fast enough, and if your browsing experience is still slow, it's most likely caused by round-trip delay, not bandwidth.
> low wages in European comparison
That would actually help commercial output and competitive position, not lower it.
At my former company we paid 900€/month for 1Gbit/s, which we required. That's definitely a problem when the same performance is available for ~50€/month a few kilometers over the border (in the Netherlands).
In rural regions workshops output is limited by their internet speed as the can only download that many CAD files from customer per day.
IDK man... the rental market in German cities is "beggars can't be choosers" market and you are very likely ending up with 16Mbit DSL on 2 years contract.
What makes German cars uncompetitive in the world market are actually high production costs. Which is due to high energy, labour cost and social tax. Combined with a lack of innovation. This is impossible to fix with a state subsidy.