Germany’s automobile industry is facing one of its toughest phases in recent years, with 51,500 jobs lost in just 12 months—almost 7% of its workforce. The figures, revealed in a new EY study using Germany’s official statistics, show that nearly half of all industrial job losses in the country came from the car sector alone.
Exports take a major hit
The downturn is driven largely by falling exports to the United States and China, two of Germany’s most important car markets. Industrial turnover across Germany fell 2.1% in Q2 2025, compared to a much smaller 0.3% dip across all industries.
While electronics showed resilience, carmakers recorded a 1.6% revenue drop. Exports to the US, Germany’s largest market, plunged by 10% following Washington’s decision to raise tariffs on cars to 15%. Meanwhile, sales to China dropped 14%, as local production increasingly replaces imported German cars.
EY analyst Jan Brohriker warned: “Improvement is not in sight. The US and China are currently the cause of major concerns. The Chinese market, once extremely attractive, is now collapsing for foreign brands.”
Automakers cut costs, jobs at home
In response, German auto giants including Mercedes-Benz, Volkswagen, Audi, Porsche, Bosch, Continental, and ZF have launched sweeping restructuring plans. These programs focus on cost-cutting, shutting excess production capacity, and reducing domestic jobs.
Even Belgium has reportedly stepped in, negotiating with Audi to safeguard some jobs, highlighting the crisis’s European scale.
Young engineers face a shrinking job market
The slump is especially troubling for young engineers and graduates. EY’s report suggests the industry and machine engineering sectors are hiring far fewer entry-level professionals compared to past years.
Brohriker cautioned that “rising unemployment among graduates is becoming a real risk,” as many new engineers may be forced to rethink their careers.
