The German automotive industry is a sector of great economic importance both at national level and in the context of international competition. Its markets are set to undergo significant change over the next 20 years. Sales markets for private cars in industrialised countries are shrinking, whilst those in emerging economies will continue to grow, and new market opportunities are opening up worldwide for innovative mobility concepts. At the same time, climate protection and rising prices for fossil fuels necessitate more efficient vehicles and a shift towards non-fossil fuel-powered drivetrains. The TAB report analyses the German automotive industry’s potential to shape the transformation of global markets and to introduce new mobility concepts. It describes possible diversification strategies regarding powertrains, materials and vehicle concepts, as well as the industry’s evolution from a pure product supplier to a provider of mobility services. Based on three international market development scenarios, the consequences for national value creation and employment in the sector are assessed. Opportunities and challenges for the German automotive industry are described, particularly with regard to market strategies, the development of alternative powertrains and the introduction of innovative mobility concepts. Building on this, strategic options for the industry and policy options for establishing a regulatory framework are derived in order to preserve the sector’s economic potential and meet the far-reaching challenges – including those of an environmental and social nature.