German autos sector slashes jobs as economic woes bite
Germany’s auto industry has been facing significant challenges over the past year, with job losses and revenue declines hitting the sector hard. According to a recent analysis by EY, the industry has shed close to 7% of its workforce, totaling around 51,500 job cuts in the 12 months leading up to June 30. Overall, the German industry as a whole has seen around 114,000 job losses during this period, with nearly half of them coming from the auto sector.
The job reductions in the auto industry were a response to the industry’s difficult situation, characterized by massive profit declines, overcapacities, and ailing foreign markets. Jan Brorhilker, managing partner of the assurance division at EY in Germany, emphasized that the job cuts were unavoidable given the current challenges faced by the German auto industry.
In addition to job losses, revenues in the auto sector also took a hit, declining by 1.6% in the second quarter of 2025 compared to the same period the previous year. This decline is slightly less severe than the 2.1% loss in revenues experienced by the overall German industry.
The auto industry in Germany has been grappling with a range of challenges, including intense competition from China, difficulties in the electric vehicle market, and concerns over U.S. trade policies. The sector is heavily reliant on exports, particularly to the U.S., where the “Made in Germany” label has traditionally been a mark of quality.
Recent data has shown a decline in auto exports to the U.S., with auto makers expressing concerns over potential tariffs and trade uncertainty. However, the industry may see some relief following the announcement of details of the U.S.-EU trade agreement, which will subject autos to 15% duties after the EU makes certain legislative changes.
The broader economic environment in Germany has also been a hindrance to the auto sector, with the country’s GDP declining in both 2023 and 2024. The latest figures for the second quarter of this year indicated a 0.3% decrease in GDP, signaling a slow start to the year.
Looking ahead, EY’s Brorhilker predicts continued pressure on German auto exports to the U.S. and China, with tariffs and weakening demand posing challenges. As industrial giants in Germany undergo restructuring and cost reduction programs, the number of industry jobs is expected to continue declining.
Overall, the German auto industry is facing a “polycrisis” of challenges that are putting significant pressure on the sector. It remains to be seen how the industry will navigate these difficulties and adapt to a rapidly changing global landscape.
