Germany’s automotive sector has seen a sharp decline in employment, cutting around 51,500 jobs over the year to June 2025, according to data from Destatis and analysis by EY. This reduction represents nearly 7% of the workforce and accounts for almost half of the 114,000 total industrial job losses across the country during this period.
“No other industrial sector has recorded such a strong reduction in employment,” the EY report stated, highlighting that the industry has shed about 112,000 jobs compared to pre-pandemic levels in 2019.
“Massive profit declines, overcapacities, and ailing foreign markets make a marked reduction of jobs impossible to avoid,” Jan Brorhilker, managing partner at EY Germany, stated.
Revenues in the sector fell 1.6% in the second quarter of 2025, with leading manufacturer Volkswagen reporting a significant drop in profits and lowering its full-year forecast. While the decline is less severe than the 2.1% fall across German industry as a whole, it signals ongoing difficulties.
Germany’s automotive companies face strong competition from Chinese manufacturers, challenges adapting to electric vehicle trends, and regulatory hurdles. Trade tensions, particularly with the United States—a key export market—have further exacerbated the situation.
Destatis data showed an 8.6% fall in car and parts exports to the U.S. in the first half of 2025 compared to the previous year.
A recent U.S.-EU trade deal offers some relief by setting a 15% tariff on autos, but only after the EU reduces its industrial levies. However, the wider German economy is also struggling, with GDP shrinking by 0.3% in the second quarter following minimal growth earlier in the year.
Brorhilker expects continued pressure on exports due to tariffs and weakening demand, especially in China. “The number of industry jobs will keep falling,” he said, as restructuring and cost-cutting efforts persist.