German Auto Industry in Crisis: Over 70% of Firms Slash Domestic Investment, Jobs Hit 13-Year Low

The German Association of the Automotive Industry (VDA) has warned that the country faces the risk of its automotive sector being "hollowed out." A recent survey shows that 72% of small and medium-sized enterprises in the automotive supply chain plan to reduce investments in Germany, with 28% shifting their focus overseas. Nearly two-thirds of these companies cut domestic jobs last year, and 87% attributed this to a competitive disadvantage. Hit by declining orders, intensifying global competition, and pressure from the transition to electric vehicles, major players such as Volkswagen, Mercedes-Benz, and Bosch have all announced large-scale layoffs. According to German government data, employment in the automotive sector has fallen to its lowest level since 2011. VDA President Müller stressed that job losses not only damage the economy but also threaten social and political stability, urging the EU to replace mandatory electrification policies with market-based incentives and grant automakers greater flexibility in their transition.