Many German things are known for quality.
But this doll isn't one of them. It's rather kooky looking with badly set plastic eyes in the oddly shaped 'eye frame' area. He also has quite a large/too large lower face which contributes to an ape-like look that doesn't work well. The hands, rather than toony and large are small and...broom like? All fingers the same length? The 'smile' stitch/fabric is probably just faced away in the photo. Next, look at the tail. Why is it the only fabric that is different from all others?

It's not fuzzy, was it forgotten and tacked on later from factory scraps? What's of note though, is that his head/back spikes ARE properly done/positioned, so it must have been made at or after Sonic 2, where this configuration was confirmed. The last un-quality bit is the uneven match to the seam on the belly dot...this is an easy thing to NOT do, in professional sewing but...here we are.
The tag (inset, top) has the sega logo and "Deutschland" written below it which just means Germany in German. As expected...but yes it proves where this is from.