Webasto's Race Against Time: How One German Auto Supplier Is Fighting for Its Life

Jörg Buchheim's rolling suitcase stands ready in the corner. He does not have much time. His flight to the United States is about to depart from Frankfurt Airport, where he plans to visit one of his company's plants. Upon his return, he will head straight to India, where a new facility is being built. The manager has a job that demands a great deal from him – and the stakes could not be higher. He needs to save a German traditional company.

Since the start of 2025, Buchheim has been at the helm of Webasto, a globally active manufacturer of roofs and heating systems for passenger cars and trucks. With 13,000 employees and annual revenue of €4 billion, the company, based in Stockdorf near Munich, ranks among Germany's top 20 automotive suppliers, behind giants such as Bosch and ZF Friedrichshafen. When Buchheim took over, the company was in an existential crisis. The first steps out of it have been made. He says financing is secured through 2028 and that they have room to invest in growth again. But the future is not yet secure.

The same holds true for many other auto suppliers. For years, Germany's core industrial sector has been suffering from declining demand, high costs, and the challenge of somehow transitioning products developed for combustion engines into the world of electric vehicles. The consequences are job cuts, plant closures, and often radical strategic reversals. A recent study found that 54% of companies are in an acute crisis. Little is likely to change in the foreseeable future.

Hildegard Müller, president of the German Association of the Automotive Industry and the sector's top lobbyist, recently darkened her already grim forecasts on job losses, highlighting suppliers as particularly hard hit. She noted that the transition from combustion engines to electromobility is causing them special difficulties. Many components are no longer needed in battery-powered cars. Moreover, smaller companies find the required investments even more challenging than large manufacturers. Bureaucracy and high energy prices also weigh heavily on the sector.

At Webasto, internal miscalculations added to the problems. The company was heavily dependent on the success of German manufacturers in the Chinese market, where interest in foreign cars has collapsed. It also overestimated demand for its electric vehicle charging equipment. The result was heavy losses, causing banks to hesitate on necessary financing. Last September, they agreed with the owning families and the company's customers on a restructuring plan. On that basis, Webasto can celebrate its 125th company anniversary this year with some degree of calm. But Buchheim and his colleagues remain under heightened scrutiny from creditors.

The manager projects confidence, saying customers trust them and banks believe the company can become competitive again. In new business, capacity reduction, and finances, Webasto has so far met all agreed milestones. The company has cut costs by 20%, closing seven locations worldwide and eliminating nearly 1,000 jobs in Germany alone. But saving alone is not enough. Buchheim says it is important to consistently work through priorities.

The main challenge is positioning the company to be sufficiently profitable in the future. Most suppliers are struggling with this. A study published last year by Roland Berger and Lazard put the profit margin of European suppliers at a meager 3.6% – roughly two percentage points lower than in the years before the coronavirus pandemic.

To reach an adequate level, suppliers must focus on promising business areas and abandon others. Webasto sold its loss-making EV charging business – which produced wall boxes and cables – to a financial investor in 2024. Demand for its parking heaters is declining in parallel with combustion engines and will eventually phase out. For electric vehicle heaters, state-subsidized Chinese suppliers dominate. Buchheim therefore plans to concentrate on niches such as agricultural, construction, and military vehicles, as well as motorhomes.

As a German manufacturer, Buchheim says success depends on deploying the company's extensive knowledge and industrializing it. Webasto plans to invest specifically in growth where it has a lead over competitors. That is intended to happen in roof production, by far the company's most important division. The business is highly technological and very demanding, Buchheim notes, allowing them to fully play to their strengths.

Since most markets are likely to stagnate, integrating more technology should significantly increase revenue and margins. Buchheim cites examples such as glass roofs that can open and be darkened with various lighting systems. Webasto is also betting on the increased installation of displays. With the rise of autonomous driving, interest in in-car entertainment is expected to grow significantly – especially outside Europe. Buchheim sees growth in the United States, India, and also China. After revenue in China halved from €1.4 billion to €700 million, the company expects an upward trend. Buchheim proudly reports that Webasto has increased its share among local Chinese automakers. The next step is a joint venture with Chinese glass manufacturer Zhejiang Fujia Technology, from which the company hopes to gain competitive access to China's booming market for fully glazed roofs.

Will all of this be enough for the future? Beyond higher energy and transport costs, the company is not directly affected by current issues such as the blockade of the Strait of Hormuz. But Buchheim warns that there is a risk of rising cost pressure on their own suppliers while end-customer business cools. Internally, communication is essential, and management presents the situation as transparently as possible. But Buchheim acknowledges that they will not be able to completely remove everyone's fear of change.