You know, repeating a falsehood doesn't make it true...
But to make something clear once and for all:
Yes, I think that the best cars in the world are being made in Germany. And so does most of the rest of the world. So what?
And yes, I'm proud of that. And why not? I'm also proud, that the German car makers so far have not much trouble with that whole economical crisis, while others are on the brink of bankruptcy or have already gone over the edge, with the hand of the goverment grabbing them by the collar to prevent the fall.
That is because they make and sell good products. It's as easy as that. So what? What's wrong with being proud of that, huh? Being German, I kinda have a right to be proud of German products, haven't I? And I'm not ashamed to admit it.
The only "German" car maker in trouble is Opel, which is owned by... tadaaa... General Motors, a.k.a. the greatest failure in car history since British Leyland.
But the fact that I like and am proud of what the German car makers produce, doesn't automatically mean I'm always biased and without criticism.
For example: While I think that VW is on a good way, I'm worried about Mercedes-Benz. Their cars are becoming too ugly for my taste and have fallen behind in quality, compared to Audi and BMW. It has gotten better in recent years but the materials used inside, often look worse than in the competing models from Audi or BMW. The current S-Class for example doesn't look and feel as sophisitcated and isn't as well-made, as the current 7-series. And I always preferred the S-Class so far.
The main reason for this, however, is in my eyes the fact, that Daimler is a quoted company with no major owner. The ownership is scattered. There's a permanent danger of the company being taken over by somebody else. That makes them cautious and forces them to put an emphasis on cost effectiveness in areas, where money shouldn't play such an important role -- like for example the interior quality.
Things are different at VW (owned mainly by the Porsche/Piech clan and the state of Lower Saxony) and BMW (owned by the Quandt family), who can follow a much more long-term orientated strategy and have to answer to no one for it. Especially the quality of the cars from the VW group has improved dramatically in the last decade -- corporation-wide, for all brands. Sometimes even too much, as the Skoda example shows.
Compare a Golf III with the current Golf VI and you won't believe that hardly more than 10 years lies between the two cars.
Of course there is a risk for VW, when growing in size. But the risk can be controlled. It is minimal, as long as they keep on making good, desirable cars in high quality, who can still be afforded by most people, and as long as they don't fall in the same traps GM and Toyota have fallen in.
I see no imminent danger for that, though, because the main triggers for those traps in the case of GM and Toyota have been two factors, that so far aren't existent in the VW management: Arrogance and organizational blindness.
VW have always been a brand of the people, despite their excursions into luxury cars, and make the vast majority of their profit with the Polo, the Golf and the Passat. The Beetle is still in the genes of the company and isn't forgotten as the root of their success.
It isn't easy to run a company with so many brands, who seem to compete for the same customers. But as others have already pointed out: They aren't. VW has managed to give each brand an own identity and image, so that an Audi driver won't be considering a VW and a Skoda driver won't consider a Seat.
Seat for example mainly competes with Italian and French car makers, even though the platforms are the same as in the VW models.
But maybe that is hard to grasp for somebody, who doesn't live in Europe, where all those brands are present.
However, the article that started this thread, explains the current problem with Skoda. They have grown into a position, where the Octavia becomes a threat for the Golf and Jetta and the Superb a threat for the Passat. It seems to me, that the strategy that lead to that, doesn't have the approval of the VW management. Maybe it is even against the directive Skoda has been given. Thus the VW management won't allow Skoda to cannibalize VW models (which alone is proof that the VW management has its brands under control and knows what it does).
So it is, as I said at the beginning of this discussion: Skoda was bought by VW to create a competitor against the cheap Korean imports. Skoda survived because VW bought it for that purpose. Skoda grew and blossomed with the help of the VW group and its components and structures. With their current line-up, though, they're threatening to bite the hand that fed them and to me it is completely understandable, that VW has to step in.
Skoda mustn't forget what it was bought for by VW and what its role is in the VW group: Pulling away price-conscious customers, who aren't car enthusiasts, from the Asian competitors. Yes, it's not a glorious job and the prospect of not being allowed to outgrow the predetermined role, must be both frustrating and grievous.
But hey, look on the bright side: Skoda still exists, has been growing and has been given many people work. And that's the most important part, I think.