What makes German cars uncompetitive in the world market are actually high production costs. Which is due to high energy, labour cost and social tax. Combined with a lack of innovation. This is impossible to fix with a state subsidy.
The big problem imho is that due to greed and technical incompetence (especially regarding electronics and software), quality and value have gone down. The high prices are no longer justified, and customers are drawing the logical conclusion.
Is it? Because that's definitely how China is doing it:
https://rhg.com/research/chinas-subsidies-are-fueling-involu...
So their industrial problem can't be fixed with subsidies, as in subsidies not capable of improving long term DE competitiveness without subsidies. Even if they automate workfroce and remove social benefits, lack of access to cheap industrial feedstock is precluding, i.e can't offset structurally disadvantage of being more expensive producer on input level.