German industry's steady decline in employment figures continues, with the country's prized automobile industry leading the pack, according to a new study from accounting giants EY (formerly known as Ernst & Young) based on data from the government's statistics office. 

EY recorded roughly 51,500 lost car industry jobs in the space of a year, equating to 6.7% of the sector's total workforce. This made up almost half of the 114,000 industrial jobs lost in the same time period.

The phenomenon also appears to be accelerating: Since 2019, before the COVID-19 pandemic, roughly 112,000 carmaking jobs have been lost in Germany — almost half of them in the past 12 months.

The US and China both contributing to car industry job cuts 

The turnover of German industrial companies dipped by 2.1% in the second quarter of 2025, much more than the 0.3% negative growth overall. Only the electronics industry improved turnover in the quarter, car companies' revenues dipped by 1.6%. 

Exports to the US, Germany's largest single market, dipped by around 10%, with EY's Jan Brohriker predicting that "improvement is not in sight" given President Donald Trump's introduction of new, slightly higher tariffs — at 15% for cars. 

But a sharp dip in exports to China is also impacting the car industry. Long Germany's second most lucrative export market, China has slipped to sixth in the rankings, with a 14% year-on-year dip in the last quarter.

"The US and China are currently the cause of major concerns," Brohriker said. "The Chinese market was particularly attractive to the automobile industry for a long time, with very large margins. But in the meantime the wind has turned, particularly for foreign carmakers: demand is dropping drastically and turnover is collapsing." 

The EU and China have been engaged in a tariff battle of their own recently, particularly over China's cheaper electric cars, and the rapidly growing Chinese car industry is covering more and more of domestic demand itself. 

Why Germany's at the center of the belt-tightening

Major firms including Mercedes-Benz, Volkswagen, Audi, Bosch, Continental, ZF, and Porsche have all launched cost-cutting programs — and often these cutbacks start close to home in Germany, not at foreign production facilities.

"Germany car companies and components manufacturers are reacting logically to the industry's difficult situation with a savings drive," EY's Brohriker said. "Massive profit reductions, excess production capacity and weakening export markets are making considerable job cuts unavoidable — particuarly in Germany, where management, administration and R&D jobs are based." 

EY forecast that the falling job numbers would likely prove an ongoing trend, citing ongoing restructuring and cost reduction plans that would continue to lead to layoffs. It also forecast a more difficult future for budding young engineers leaving school or university. 

"The car industry and machine engineering sector is hiring considerably fewer young people than in years past," Brohriker said. "The labor market for young engineers is getting uncomfortable, many will have to reorient themselves. We will see rising unemployment among university graduates, which Germany hasn't experienced for a long time." 

Edited by: Wesley Dockery