Zheng Chunrong, director of the Center for German Studies at Tongji University, told the Global Times on Thursday that Germany"s auto industry has found itself lagging in the digital era and facing fierce global competitors including Chinese producers. Volkswagen plans to close some plants, leading to job losses. To avoid full shutdowns and mass unemployment, Germany urgently needs foreign investment. Specifically, it wants Chinese firms to shift from purely exporting models to its market to localized production, said Zheng, who noted a shift toward a more pragmatic attitude on Chinese investment from a recent trip to Germany.

　　The Merz government"s core aim is to preserve the international competitiveness of Germany"s flagship auto sector. It hopes that a period of pain, investment and transformation will restore the industry"s edge, much as it did after past challenges from Japanese automakers, Zheng noted.

　　In April, VW CEO Blume suggested that Chinese partners might use VW"s German plants, but the group later downplayed expectations of a near-term deal.

　　Similar approaches have also gained support among influential German figures.

　　Volkswagen could secure jobs in Germany if it produces auto models there that it currently develops in China, said Olaf Lies, premier of the German state of Lower Saxony, where Volkswagen is headquartered, stressing that isolating oneself from technological developments originating in China will be "the wrong approach," German news agency DPA reported.

　　According to a press release Volkswagen sent to the Global Times on Thursday, the group said it is streamlining its businesses with ongoing plans to downsize its production capacity from 12 million units a year before the COVID-19 pandemic to 9 million units, amid the impacts of heightened geopolitical tensions, rising costs stemming from tariffs and white-hot competition, among other challenges.