“A financial crisis could develop in about three years,” said Jochen Siebert, managing director of consultancy JSC Automotive Consulting in Shanghai. China could soon become a major trouble spot for automakers and their suppliers.

There are financial institutions and ratings agencies that consider such a scenario to be a possibility next year, he told the Automobilwoche Congress on Nov. 21.

German companies committed to China should respond by making their capacity as flexible as possible there.

Siebert considers the hiring of more temporary workers or the establishment of work-time accounts as appropriate courses of action. German firms used work-time accounts to contain unemployment during the 2008-2009 financial crisis. The scheme allows a company to reduce employees’ working weeks during downturns. The hours saved accrue in an account and can be used during booms without adjusting wages.

“This will be very important over the next five years,” he said.

He said China is at a crossroads that will determine whether it develops into a rich country or stumbles into the so-called middle-income trap that ensnared Brazil 50 years ago.

That means a country has reached a point where it can no longer compete with low-wage locations but where the economy has not managed to join the leaders in innovation.

Here is what the situation would mean for the premium segment: In a scenario similar to the one in Brazil, the number of vehicles would initially grow from the current figure of more than 400,000 vehicles to nearly 800,000 by the year 2019. But the number would then fall to about 200,000 units by 2050.

If China were to develop into a rich country, the increase over the next few years would turn out to be weaker. But the number would continually grow to about 1.1 million vehicles in the segment by 2050.