Alexander Mitsch said he wished the CDU had a leader like new Austrian Chancellor Sebastian Kurz, as he accused Mrs Merkel of dragging the party to the left.
Mr Mitsch, the leader of a right-wing group within Mrs Merkel’s party, criticised her open-door immigration policy and said “new party leadership” was needed.
He told reporters: “Now after this election debacle, in which the CDU had the worst result since 1949… the party leadership is obviously not ready to correct anything.
“That brings us then to the realisation that we need new party leadership.”
Mr Mitsch suggested the CDU could learn from the victory of ÖVP in Austria, led by 31-year-old Sebastian Kurz.
Mr Kurz led an electoral comeback for his party this month by steering to the right on issues of immigration, which were critical for Austrian voters. Mr Mitsch believes this tactic could also work for his party.
He said: “Of course that is a very good model for Germany. We wish we had someone in Germany like Mr Kurz.”
He also slammed his party’s leadership for failing to recognise the importance of immigration to voters and shifting its position too late in the game to show voters their concerns were being heard.
It comes after Mrs Merkel claimed there is no need for her party to change its policies in the wake of a disastrous parliamentary election. She is now in difficult talks to form a new coalition.
Mrs Merkel’s CDU party had its worst parliamentary election result since 1949 in the September poll, as well as experiencing devastating losses in regional votes.
However the German Chancellor has doubled down, claiming: “I do not see what we should do differently.”
The general secretary of the CDU’s Bavarian sister party, the CSU, has made equally oblivious comments, claiming the Austrian election results show “that elections can be won right from the middle” – despite huge gains for the right in both Austria and Germany.
Meanwhile the CDU regional president of Saxony has stepped down after especially disastrous local election results.
Stanislaw Tillich, the region’s president since 2008, will leave office in December after Alternative for Germany (AfD) became the biggest party in Saxony’s regional parliament.
The shock result has prompted significant CDU soul-searching in the region. Mr Tillich has said the challenges for his party should be “passed into younger hands”.
Mr Mitsch said the national leadership could also be passed to a younger candidate – however he did not suggest any specific figure.