German Car Industry Cuts 51,500 Jobs In One Year

Germany’s auto sector, long considered the backbone of its industrial economy, has been hit by a sharp downturn, shedding 51,500 jobs in just one year, according to a study by accounting firm EY based on official statistics. The cuts, representing 6.7% of the workforce, account for nearly half of all 114,000 industrial job losses recorded across the country in the same period. Since 2019, before the COVID-19 pandemic, around 112,000 carmaking jobs have been lost in Germany, with almost half of those cuts occurring in the past year alone. The report underlined that the crisis is accelerating as global demand weakens and trade tensions deepen with major partners.

Export Decline And Tariff Pressures

The study highlighted that exports to the United States, Germany’s single largest market, fell by 10% in the last quarter after new tariffs were introduced by the Trump administration, raising duties on cars to 15%. Exports to China, once the second most lucrative destination for German vehicles, recorded an even sharper 14% year-on-year decline, dropping China to sixth place among Germany’s auto markets. EY’s Jan Brohriker said, “The U.S. and China are currently the cause of major concerns. The Chinese market was particularly attractive for a long time with very high margins, but demand has collapsed and turnover is shrinking rapidly.” He added that China’s domestic car industry is increasingly meeting its own demand, reducing space for foreign brands. Ongoing EU-China disputes over electric vehicle tariffs have added further strain, cutting into profitability and export competitiveness.

Company Responses And Cost-Cutting Measures

Major German automakers, including Volkswagen, Mercedes-Benz, Audi, Bosch, Continental, ZF, and Porsche, have already embarked on aggressive cost-cutting programs in response to shrinking revenues. These measures, concentrated in Germany, have targeted jobs in management, research and development, and administration rather than overseas production lines. EY’s analysis noted that turnover in the auto sector fell by 1.6% in the second quarter of 2025, compared with a 2.1% overall dip for German industry. Only the electronics sector managed to post growth. Brohriker described the layoffs as “unavoidable” given massive profit reductions, excess production capacity, and weakening export markets.

Impact On Future Workforce

Beyond immediate job cuts, the report forecast long-term consequences for Germany’s industrial labor market. Engineering graduates are expected to face worsening conditions, with fewer entry-level opportunities in carmaking and machine engineering. “The labor market for young engineers is getting uncomfortable,” Brohriker warned, predicting rising unemployment among university graduates — a phenomenon not seen in Germany for decades. EY stressed that restructuring and cost-saving drives are likely to continue, prolonging the decline in employment within the sector.