The European car parts sector has seen over 100,000 job losses in the past two years, with Germany's automotive suppliers particularly affected by a deepening crisis. A survey conducted between May 12 and 24, 2026, revealed that nearly a third of German automotive suppliers expect business conditions to worsen, a reversal from a previous poll in January where only 23% anticipated deterioration. Only 25% now expect an improvement, down from 30% previously. This decline is attributed to the rocky transition to electric vehicles, trade barriers, high costs, and a challenging business environment, which could lead to an estimated 225,000 job losses in the coming years within the German auto industry.
Investment and employment are significantly draining from Germany, with approximately two-thirds of suppliers postponing, moving abroad, or entirely canceling their planned investments in Germany. Asia is the primary beneficiary of these investment shifts, followed by other parts of the European Union and North America. More than half of German companies are cutting jobs domestically, while only 3% are hiring—the lowest rate since comparable data collection began in June 2024. Among those reducing their German workforce, 44% are simultaneously expanding their workforce abroad.
VDA President Hildegard Mueller stated that Germany is experiencing a "crisis as a location for industry," citing excessive bureaucracy, high labor costs, and rigid labor laws as major pressures on small and medium-sized automotive companies. The Middle East conflict has further exacerbated costs, with 46% of surveyed suppliers reporting increased prices for fuel, energy, and components. The automotive industry in Germany is now at its lowest employment point since 2011, and Mueller warned of the political implications of these job losses, noting that the far-right Alternative for Germany (AfD) targets businesses with job insecurity. She criticized EU support packages for failing to adequately address the industry's needs, advocating for market-driven incentives over regulatory obligations.
