I will usually only build extra naval units with Germany if there is some sort of core to build them around. Be that a surviving cruiser or battleship. If I still have one of these in turn two or three I might build some subs or even a destroyer. Also the casualty rate on the Eastern Front cant be too high, because then I will buy extra land units instead.
So basically, it depends on how well the Allies play and how well my navy holds up. Its a opportunistic investment at best and I never considered it a feasible strategy for Germany really.