General views of the production line at the Mercedes-Benz assembly plant in Rastat, Germany on June 4, 2025.
Florian Wiegand | Getty Images News | Getty Images
The perfect storm of industrial and economic challenges places emphasis on the German automotive sector, abandoning tens of thousands of jobs over a year-long stretch until the end of June.
Over that period, the German auto industry, one of Europe’s largest sectors, has seen employment cuts of nearly 7% of the workforce or around 51,500 positions, according to a new analysis by EY based on data from Destatis, the German Bureau of Statistics.
Overall unemployment across Germany’s industry reached around 114,000 in the 12 months ended June 30th this year, the survey said. The numbers suggest that almost half of the cuts were generated by the automotive sector.
According to a CNBC translation, the report said. The survey flagged 112,000 jobs have been cut in the automotive sector compared to the 2019 period before the Covid-19 pandemic.
Jan Brorhilker, managing partner of Germany’s EY’s assurance division, said in a press release that the employment cuts addressed the difficult situation in the German automotive industry.
According to a CNBC translation, “a significant reduction in employment has become inevitable due to massive declines in profits, overqualification and illness in foreign markets.”
EY’s report also noted that revenue in the sector pulled back 1.6% in the second quarter of 2025 compared to the same period last year. German automotive giant Volkswagen reported a sharp decline in profits for the second quarter, lowering its full-year guidance.
The decline in the automotive sector is particularly lower than the 2.1% loss of revenue facing the German industry as a whole.
Installation struggle
The German automotive industry has long fought against numerous challenges, including tough competition on China’s costs and innovation, and the difficulty of some automakers and analysts getting electric car races due to federal bureaucracy and regulations.
US President Donald Trump’s trade policy adds concern. Germany, in particular its automobile sector, is export oriented and counts the US as one of its biggest markets. There, the “Made in Germany” label has historically been considered a sign of quality.
Recent data from Destatis showed that auto parts and auto parts exports to the US fell 8.6% in the first half of 2025 compared to the same period last year. Automakers have also repeatedly warned of the potential impacts of tariffs and surrounding uncertainty.
The industry may enjoy some relief after details of the US-EU trade agreement emerged earlier this month. Autos are subject to a 15% obligation, but only after the EU makes changes to the law to reduce industrial taxation.
Germany’s overall economy is also a headwind for the automotive sector, with domestic gross annual production falling in both 2023 and 2024. It seems that this year is also off to a slow start. The latest figure for the second quarter saw a 0.3% decline after Europe’s largest economy recorded a 0.3% growth in the first quarter.
Ey’s Brorhilker says EY’s Brorhilker hopes that German automobile exports to both the US and China will be under pressure. The former is affected by tariffs, while the latter is a domestic issue, weakening demand.
“The number of jobs in the industry will continue to decline,” Brorhilker said, as various German industrial giants are currently undergoing restructuring or cost-cutting programs.
