Job losses mount in German automotive sector as challenge from China intensifies
Automotive industry shed more than 40,000 jobs – 5.8 per cent of its workforce – in first half of year, statistical office says
Germany’s automotive industry shed 42,300 jobs in the year to the end of June, sending employment to its lowest level since 2005 as carmakers grappled with falling profits in China and mounting competition from Chinese brands in Europe, and industry groups warned that worse was yet to come.
With job losses spreading across German industries, the automotive sector was hit the hardest, recording a 5.8 per cent decline in employment, according to data published by the country’s Federal Statistical Office on Friday. Manufacturing as a whole lost 2.7 per cent of its workforce, or 144,100 jobs, over the same period.
The figures came as Volkswagen reported a roughly 30 per cent drop in first-half net profit and Mercedes-Benz cut its annual sales forecast, both citing weak demand in China as a factor. Volkswagen also flagged rising competition from Chinese rivals in Europe.
“We had a very successful business model, focused on dominance in the premium sector, on intercontinental exports, on technological leadership,” said Thomas Puls, senior economist at the German Economic Institute. “Obviously all these pillars are shaking.”