According to a recent study by accounting firm EY based on data from the Federal Statistical Office (Destatis), Germany’s automotive sector, which has long been seen as the backbone of the country’s economy, is going through an unprecedented crisis. It has lost about 51,500 jobs in the past year. This number is almost 7% of the total workforce in the industry and is almost half of the 114,000 industrial jobs that were lost across the country during the same time period, from June 2024 to June 2025.
The drop is a sign of the industry’s problems getting worse very quickly. Since 2019, about 112,000 jobs in carmaking have been lost, with almost half of those jobs lost in the last 12 months alone. EY’s study shows that German car companies and parts makers are dealing with rising pressures by cutting costs aggressively, such as laying off managers, administrators, and researchers and developers, which are all jobs that are more common in Germany than anywhere else.
Weakening global demand and trade barriers are at the center of this chaos. Exports to important markets like the US and China have dropped sharply, and the situation has gotten worse because of rising tariff disputes under President Donald Trump’s administration. In the first half of 2025, shipments of cars and auto parts to the U.S. fell by 8.6% compared to the same time last year. This is because low-cost Chinese electric vehicle makers have taken market share and made price wars worse.
The big players are feeling the pressure the most. Bosch, a major supplier, recently said it would cut 22,000 jobs in Germany as part of the largest redundancy program in its history. This is a lot more than what was first thought. Volkswagen, Mercedes-Benz, and Ford are also restructuring their businesses in similar ways, as plant closures, fewer shifts, and underutilized capacity are all problems. In 2023, for example, German car factories were only using a little over two-thirds of their capacity, and some were only using 30%.
The effects go beyond the layoffs that happen right away. EY says that job losses will continue because of ongoing restructuring and fewer export opportunities. They also say that it will be harder for young engineers to find work in the field. Since 2019, the overall downturn in industry has caused the loss of almost 250,000 jobs in all manufacturing sectors, with the auto sector being hit the hardest. In the second quarter of 2025, German industrial companies’ sales fell 2.1%, which was more than the overall economy’s decline.
As the industry deals with these problems, more and more people are calling for the government to step in, but political gridlock and global uncertainties don’t help much. The once-powerful German auto industry is now at a crossroads. To ensure its future, it must balance new ideas in electric vehicles and eco-friendly practices with harsh economic realities.
