Germany's motor industry has warned that employment across Europe's car sector could collapse unless workers, society and politicians accept that "bold decisions" are needed to counter competition from China and other rivals. The warning, from the German Association of the Automotive Industry (VDA), coincides with Volkswagen's preparations to formally propose up to 100,000 job losses, a plan that has already provoked widespread protests. The VDA went so far as to suggest that handing some German car plants over to foreign ownership could be a way of preserving jobs, underlining how severe the pressure on the sector has become.

VDA president Hildegard Müller said "reality has overtaken political goals", warning that not all factories and suppliers could be kept open and that the crisis was affecting the entire European industry. The automotive sector is regarded as the backbone of the German economy, employing an estimated 3 million people directly and indirectly at firms such as Volkswagen, Mercedes and BMW. A recent Boston Consulting report found Europe's production capacity now exceeds demand by more than 5m vehicles a year — equivalent to around 35 production sites — while fewer cars are being bought by the public. Volkswagen's proposed cuts of up to 100,000 jobs by 2030, double the previously planned figure, will go before its supervisory board in Wolfsburg on Thursday, with the union IG Metall calling a day of action at sites including Emden, Zwickau, Hanover and Kassel.