The German car industry is "shrinking" - The sector has lost about 51,500 jobs in one year
The steady decline in employment in German industry is continuing, with the prized automotive industry leading this negative trend, according to a new study by accounting firm EY (formerly known as Ernst & Young).
According to the data, the industry has lost about 51,500 jobs in a year, accounting for 6.7% of the workforce in the sector. This figure represents almost half of the 114,000 industrial jobs lost in the same period. The phenomenon appears to be accelerating. Since 2019, before the COVID-19 pandemic, about 112,000 jobs have been cut in the German car industry, almost half in the last 12 months alone.
Revenues at German industrial companies fell by 2.1% in the second quarter of 2025, much more than the average decline of 0.3%. Only the electronics industry recorded growth, while car companies contracted by 1.6%.
Exports to the US, Germany's largest single market, fell by around 10%. No signs of improvement are expected in the near future, due to the 15% tariffs imposed by President Donald Trump. But a sharp decline in exports to China is also having a significant impact. Beijing, long Germany's second most profitable market, has fallen to sixth place in the ranking, with an annual contraction of 14% in the last quarter.
“The US and China are currently the source of the main concerns. The Chinese market was particularly attractive to the car industry for a long time, thanks to its large profit margins. But now the situation has changed, especially for foreign manufacturers. Demand is falling sharply and revenues are collapsing,” experts explain.
The EU and China have been locked in a tariff war recently, particularly over cheaper Chinese electric cars. The Asian auto industry has grown rapidly and is increasingly meeting domestic demand.
Large companies have launched cost-cutting programs, and these cuts usually start in Germany, not in factories abroad. “German car companies are reacting logically with a savings campaign. Massive profit declines, excess production capacity and weak export markets are causing major job cuts, especially in Germany, where management, administration and research and development positions are located,” analysts say.
Job losses are expected to continue in the long term, due to restructuring and cost-cutting plans. It also predicts a tougher future for young engineers coming out of school.
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