The East African victim was left seriously wounded after being shot in Wächtersbach, near Frankfurt, after being fired at from a vehicle in broad daylight.
The victim is said to be in a stable condition after emergency surgery. The shooting took place on Monday afternoon.
In a statement, the prosecutor's office in Frankfurt said a “xenophobic motive has to be taken into consideration”.
While searching for the perpetrator, police said they later found a 55-year-old German man “apparently lifeless” in a vehicle in a neighbouring town. He was later confirmed dead in hospital.
“According to current information, it is likely that this person is the suspected shooter,” police said, adding that his death was not caused by their officers.
News site Spiegel Online said investigators believe the suspect may have killed himself.
It also reported that police found objects which indicated links to the right-wing extremist scene while searching the suspect's home.