Germany's embattled carmakers are desperately seeking solutions for their underused plants, with speculations in recent months swirling around the idea that Chinese manufacturers or weapons makers could move in.

Across Europe, carmakers are in trouble due to growing Chinese competition, weak demand and a choppy transition to electric vehicles (EVs), leaving many plants operating way below capacity.

One solution is to open up factories for Chinese manufacturers to produce cars in Europe as they seek to get around EU tariffs on EVs, a step recently taken by Stellantis, which owns Jeep and Fiat.

Chinese brands, including BYD, MG and Chery, are gaining ground in Europe fast and now account for around 9% of the region's overall sales, according to consulting firm Dataforce.

Germany's Volkswagen – Europe's biggest automaker – said in April it is also open to the idea of "partnering" with Chinese manufacturers at its plants.