It is a bit more complicated than that. Car manufacturing is one of the major industries, if not the major industry in Germany. Combustion engines require more parts and there is many supply companies, that are extremely specialized on these kind of parts. A company that is producing nothing but parts like inlet valves or pistons for combustion engines will probably go under.

Now that is normal and that is what a market economy is supposed to do. Also companies that have looked ahead strategically have been diversifying their products and branched into new products, where they can use their existing expertise too. But many companies just used their power to lobby against change, now being unprepared for it.

This is why conservatism, especially when it focuses on maintaining established industries and companies while blocking off new industries and companies is deadly to a countries economy in the long run. But they can’t and don’t want to see this, as they only think a year or two ahead, and not two decades.