Brazen lobbyist Matthias Wissmann also claimed Britain would lose ITS factories after Brexit.
He said keeping the European Union (EU) together must be his country”s “priority” even if it costs hundreds of thousands of ordinary Germans their livelihoods.
His remarks are a major U-turn from his initial reaction to Britain”s decision to leave the bloc, when he warned Mrs Merkel to ensure tariff free access to the UK market no matter what.
But since then the German leader has been on a concerted campaign to bring the country”s top industrialists around to her way of thinking, insisting they should prioritise Brussels” future over their own.
And today her efforts bore their first fruit, as Mr Wissmann indicated he would be happy to cut off Germany”s biggest export market for cars in order to keep the rest of the EU together.
In a thinly-veiled attack, the lobbyist compared the future facing the UK industry to that of automobile makers in Italy, whose production has shrunk to just a quarter of its former size in recent years.
He said: “The UK is an important market for us but the EU market is much more important. If the EU were to fall apart, that would be a lot worse for our industry.”
Insisting Germany”s priority must be “to keep the EU27 together”, he added: “If the UK doesn”t want to suffer the same fate as Italy”s car industry, it must be concerned to retain full access to the single market.”
Official figures show in 2014 Germany sold 14 per cent of the cars it made to the UK, with a value of £21.1billion (€23.3bn), making Britain by far its biggest export market in Europe, and its second biggest in the world.
In contrast, it exported around £45billion (€50bn) worth of cars to the whole of the rest of the EU in the same period.
But despite Europe”s shrinking economy and the chaotic and uncertain future of the euro currency, Mr Wissmann insisted manufacturers would still rather base themselves in the EU rather than Britain after Brexit.
He said: “If there”s a “hard Brexit” then we will see a shift to central and south-eastern Europe.
“The longer the period of uncertainty lasts, the longer people will be reluctant to invest.”
He cited Slovakia and Poland as potential destinations for manufacturers, saying they are “very attractive, have low labour costs, and are part of the EU”.
The remarks, delivered this week, could not be further removed from Mr Wissmann”s concerned reaction in the immediate aftermath of the Brexit vote.
Back then, he said: “Every possible measure must be undertaken to enable the continued free movement of goods and services between the UK and the other EU countries.
“Following British departure from the EU, it will be in nobody’s interest to make the international flow of goods more expensive by erecting customs barriers between Britain and the European continent.”