German auto industry employment falls to lowest level since 2005, down 42,300 in a year

Record-low employment in German auto industry

Germany's automotive industry employed 691,500 people at the end of the first half of 2026, the lowest figure since comparable records began in 2005, according to the Federal Statistical Office (Destatis). The workforce shrank by 42,300, or 5.8%, within a single year, a steeper decline than in any other large industrial sector. Across all manufacturing, employment fell by 144,100, or 2.7%, to 5.29 million. Despite the contraction, automotive remains Germany's second-largest industrial employer behind mechanical engineering, which had 905,900 employees, down 2.7%.

The job cuts hit parts and accessories suppliers hardest, with employment there falling 7.6%. Vehicle manufacturers themselves lost 6.1% of their workforce. One segment bucked the trend: manufacturers of bodies, superstructures and trailers saw employment rise 10% to 42,800. In Baden-Württemberg, a key auto hub, 196,452 people remained employed in the sector, a drop of 11,344 or 5.5% year-on-year, according to the state statistical office in Fellbach.

Announced cuts not yet in the data

The Destatis figures do not yet include recently announced restructuring plans from Germany's largest carmakers and suppliers. BMW has announced the elimination of about 8,000 jobs worldwide. At the VW Group, which includes Porsche and Audi, management is fighting over roughly doubling an already-running cut of 50,000 positions. Bosch plans to cut up to 22,000 jobs in its supplier operations worldwide, while ZF is eliminating 14,000 in Germany. Mercedes-Benz has already shed thousands of jobs.

Structural pressures mount

EY's industry barometer found that since the pre-pandemic year 2019, the auto industry has lost 16% of its jobs, or 142,400 positions. EY expert Jan Brorhilker expects further cuts.

Viele Unternehmen haben ihren Restrukturierungskurs noch lange nicht abgeschlossen. Angesichts hoher Arbeitskosten, einer schwachen Produktivitätsentwicklung und zunehmenden internationalen Wettbewerbs planen viele Unternehmen, den Stellenabbau in Deutschland sogar weiter zu verschärfen.

Ferdinand Dudenhöffer, an automotive expert, predicts that by 2030 the German auto industry will have shrunk to 500,000 jobs or fewer. He cites cost disadvantages at the domestic site, noting that new production capacity is being built in Hungary, Romania, Spain and Turkey instead. Hyundai recently invested EUR 250 million in its Izmit, Turkey plant to build the new "Ioniq 3" electric vehicle.

Trade headwinds and policy debate

Export-dependent German industry faces mounting global pressure. US President Donald Trump's high tariffs have weakened German exports, while China increasingly manufactures products domestically. Germany's exports to China fell more than 12% in the first half of 2026 to EUR 37 billion, and exports to the US dropped about 6% to EUR 74 billion.

Die Zahlen zeigen, mit welcher Wucht der China-Schock die deutsche Industrie trifft.

VDA president Hildegard Müller called for political action, citing high labor and energy costs, lengthy procedures, bureaucracy and decaying infrastructure as investment barriers.

Alles, was den Standort stärkt, Wachstum schafft und hilft, Beschäftigung zu erhalten, muss in Berlin und auch in Brüssel ganz oben auf der Agenda stehen.

Sebastian Dullien, an economist at the union-affiliated IMK, argued that attempts to improve competitiveness through wage cuts or social benefit reductions miss the point, pointing instead to China's industrial policy as the core challenge. The VDA had warned in May that up to 225,000 jobs could be at risk by 2035.