The automotive industry in Germany cuts 51,500 jobs

The steady decline in employment figures in German manufacturing continues, with the country’s flagship automotive industry leading the way, according to a new study by accounting giant EY (formerly Ernst & Young) based on government statistics.

EY recorded the loss of roughly 51,500 jobs in the automotive industry within the span of one year, equal to 6.7% of the sector’s total workforce. This accounts for nearly half of the 114,000 industrial jobs lost in the same period.

The trend also appears to be accelerating: since 2019, before the COVID-19 pandemic, around 112,000 jobs have been eliminated in Germany’s automotive industry, nearly half of them in the past 12 months.

Exports to the United States and China are already falling rapidly, and renewed tariff disputes with both countries are unlikely to help.

The U.S. and China contribute to job losses in the automotive industry.

Sales of German industrial companies fell by 2.1 percent in the second quarter of 2025, far below the overall negative growth of 0.3 percent. Only the electronics industry improved its sales during the quarter, while automotive company revenues dropped by 1.6%.

Exports to the United States, Germany’s single largest market, fell by around 10%. Jan Brohriker of accounting giant EY predicts “no improvement on the horizon,” given President Donald Trump’s introduction of new customs tariffs, slightly higher at 15% for automobiles.

But the sharp decline in exports to China is also hitting the auto industry. China, once Germany’s second most profitable export market, has slipped to sixth place, with a 14% year-on-year decline in the last quarter.

“The United States and China are currently a major source of concern,” said Brohriker.

“The Chinese market has long been particularly attractive for the automotive industry, with very high profit margins. But the situation has changed, especially for foreign car manufacturers: demand is falling drastically and sales are shrinking.”

The EU and China have recently become embroiled in a tariff battle, particularly over cheaper Chinese electric vehicles, while China’s fast-growing auto industry is increasingly meeting domestic demand.

U.S. tariffs put pressure on German carmakers.

Why Germany is at the center of tightening measures

Major companies such as Mercedes-Benz, Volkswagen, Audi, Bosch, Continental, ZF, and Porsche have all launched cost-cutting programs and these reductions often begin in Germany, rather than at production sites abroad.

“German carmakers and parts suppliers are responding logically to the industry’s difficult situation with an effort to cut costs,” says EY’s Brohriker.

“The massive decline in profits, excess production capacity, and weakening export markets make significant job cuts unavoidable, especially in Germany, where management, administration, and research & development positions are concentrated.”

EY predicts that the decline in employment will continue, citing ongoing restructuring and cost-cutting plans that will keep driving layoffs. It also foresees a more challenging future for young people.

“The automotive and mechanical engineering sectors are hiring far fewer young people than in the past,” Mr. Brohriker said. “The job market for young engineers is becoming tougher, and many of them will need to change careers. We will see a rise in unemployment among university graduates something Germany has not experienced in a long time.”

“KORÇA BOOM”