Employment in Germany’s vital automotive sector has plummeted to its lowest level in over a decade, following the elimination of tens of thousands of jobs, according to new data from the Federal Statistical Office.
The industry, which includes vehicle manufacturers and parts suppliers, recorded 721,400 employees at the end of September. This marks the lowest workforce figure since mid-2011, when the sector employed 718,000 people.
A Sharp Decline
The data released on Thursday paints a grim picture for Europe’s largest economy. Compared to a year earlier, the automotive sector has shed 48,700 jobs, representing a significant 6.3% decline. This is the steepest drop recorded in any major industrial sector with a workforce exceeding 200,000.
By comparison, the broader manufacturing sector fared slightly better but still faced contraction. Total manufacturing employment stood at 5.43 million at the end of September—a decrease of 120,300 jobs, or 2.2%, year-on-year.
“The prolonged recession in industry is clearly reflected in employment trends,” noted Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.
Despite the downturn, the car industry retains its position as Germany’s second-largest manufacturing employer. It trails only mechanical engineering, which currently employs approximately 934,200 people.
Multiple Headwinds
German manufacturers are currently navigating a “perfect storm” of economic challenges:
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Trade Tensions: High U.S. tariffs continue to pressure exports.
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Competition: The rapid rise of Chinese electric vehicle (EV) makers is eroding market share.
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Supply Chain Issues: Most recently, chip supply difficulties have plagued production due to an ongoing dispute involving semiconductor manufacturer Nexperia.
A Glimmer of Hope?
Despite the structural challenges, there are signs of stabilizing sentiment. A survey conducted earlier this month by the Ifo Institute found that the mood within the German automotive industry improved noticeably in October.
The sector’s business climate index rose to minus 12.9 points, a significant recovery from the minus 21.3 points recorded in September. While the road ahead remains difficult, this uptick suggests that industry leaders see potential for stabilization.
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