When your success becomes your weakness

I never thought I’d see this in my lifetime: German cars are struggling.

From the time I was a boy, cars made in Germany represented the pinnacle of automotive success. Mercedes. BMW. Porsche. Audi. As a student walking around London, those sleek shapes and muscular haunches were painfully aspirational. I could not wait to earn enough to have one.

Audi’s famous Vorsprung durch Technik never landed merely as an advertising slogan. A German car was a synonym for engineering supremacy. Germany had built an industrial cathedral around the internal combustion engine.

But now parts of the roof are coming down.

I knew the threat was real during a recent leaders’ gathering I was curating. Over dinner, Kenyan CEOs were discussing getting Chinese electric-vehicle SUVs in place of their usual German/British/Japanese preferences. Why? Because they were super-surprised and super-impressed by the quality on show; and because prices are less than half those of the traditional brands. Also, an EV can be charged from their home solar system, cutting out fuel bills.

In 2026, German car production is down by around a sixth from 2019. Volkswagen is set to lay off up to 100,000 workers, reportedly the largest restructuring in automotive history, and employees may be forced to have pay frozen all the way to 2030. Even top brand Porsche is struggling. When I last wrote about it a decade ago, it had the world’s highest profit per vehicle. In 2025, it had an operating margin of just 1.1%. Porsche is now deliberately preparing for a lower-volume future.

What’s going on? 

Germany became particularly good at a particular conception of the automobile: mechanical engineering, precision manufacturing, combustion engines, driving dynamics, prestige badges, beautifully calibrated hardware. For decades, that kind of car provided intense driving pleasure to generations of enthusiasts, this one included.

But now the car itself has changed. Increasingly, competitive advantage lies in battery, software, connectivity, digital interfaces, sensors, and data. The Chinese moved extraordinarily fast in this new world. They did not have Germany’s long history in automobiles, but that history began mattering less and less.

It’s not that the Germans were asleep. They invested heavily in electric vehicles and software. But they were trying to reinvent themselves while still carrying the enormous weight of what had made them successful: factories, suppliers, dealer networks, skill sets, and systems all built for the old game.

And that right there is the problem. Success today is itself a trap that springs tomorrow. When something has worked brilliantly for decades, you do not own it; it begins to own you.

This isn’t just about German cars; it’s about any successful business or industry. If you are doing very well as a company, you probably have superior products, capabilities, practices, and networks. Something everyone knows you’re very good at. And that’s what should frighten you.

What was your greatest achievement will become your history; but it could also eat your future, if someone somewhere is busy redesigning your business model from scratch. This wider lesson is uncomfortable: success can make you less adaptable, not more. Over time, structures, habits, and beliefs become harder to question, particularly if they worked so well.

The real danger is not that competitors will copy what made you successful; it is that they will not need to care.

German cars are not finished, not by a long shot. Their history and knowledge will not be for nothing; all those decades of engineering excellence, manufacturing discipline, brand power, and accumulated know-how do not simply evaporate. Those assets matter, and reinvention will occur. But they will return to the new fray chastened.

So business leaders, please don’t confuse your current strengths with permanence. Keep your eyes peeled for the next source of advantage. Ask yourself this key question: what would you build if you were starting from scratch today? That there is your alternative new business. Start building while the current one is still doing well. Get worried early. Invest early. Don’t wait until the decline is undeniable.

THE SIGNAL IN THE NOISE

Past achievements deserve respect, not obedience

 

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