The shift in auto buying preferences and the American tariffs is making this situation worse
The German auto industry is moving downwards and it seems that over the past year, the industry has shed more than 51,000 jobs, equating to nearly 7 percent of the total workforce in the German auto manufacturing segment. The automotive market is one of many being affected by the latest US tariffs, as well as the weakened exports to China which was the biggest customer for German made automotive.
Accounting powerhouse EY, formerly known as Ernst & Young, reported through a new study based on government statistics that Germany lost roughly 51,500 jobs in the span of one year. The auto industry made up nearly half of the 114,000 total jobs lost during the same time period.
Not only this, the worrying trend has only gotten speedier since 2019 and the COVID-19 global pandemic: around 112,000 total automobile industry jobs have been lost in Germany, and almost half of them in the last year.
This phenomenon is mainly due to the weakened exports to China and the US. The latter, Germany’s largest single market, dipped by around 10 per cent, and the introduction of slightly higher tariffs means the issue will only get more exacerbated for Germany. China, Germany’s long-standing second most lucrative market, also took a significant hit, experiencing a 14 per cent decline in the last quarter.
Demand for foreign auto manufacturers is dropping rapidly, over-staffing is prevalent and turnover is rapidly collapsing.
China’s rapidly growing car industry is also steadily eclipsing Germany’s long-praised automobiles: with cheaper and more eco-friendly electric cars, China is increasingly covering more of its own demand.
Not only this, major auto manufacturing powerhouses such as Mercedes-Benz, Volkswagen, Audi, Bosch, Continental, ZF, and Porsche have all cut costs, and oftentimes, the restrictions hit the hardest in Germany.
Rising energy costs also contribute to the mass layoffs. Additionally, BMW, Mercedes-Benz, and Volkswagen all reported significant profit declines during the first six months of 2025
