On January 4, 2025, Germany's automotive sector is grappling with significant challenges, particularly affecting Volkswagen, the country's largest car manufacturer. The company has announced plans to close several factories for the first time in its history, following a deal with unions that aims to eliminate over 35,000 jobs and reduce production capacity by nearly a quarter.
The agreement, described as a 'Christmas miracle,' will not lead to immediate layoffs or plant closures but will offer workers options for early retirement and severance by 2030. However, this will result in a reduction of over 700,000 vehicles produced annually.
Other automotive manufacturers and parts suppliers are also preparing for mass layoffs amid the crisis, which is attributed to a combination of factors including the transition to electric vehicles and increased competition from global players such as Tesla and Chinese manufacturers.
Analysts highlight that the cessation of subsidies for electric vehicles in December 2023 and inadequate charging infrastructure are exacerbating the situation, leading to declining sales.
Industry experts emphasize that the future of transportation lies in electric mobility, with China currently leading the global market. They warn that if current trends continue, Germany could see a decrease of 186,000 jobs in the automotive sector by 2035 compared to 2019 levels.
As the industry faces these structural challenges, calls for political action are growing, with demands for reduced bureaucracy and more competitive tax systems. Experts predict that the next few years will be critical for the German automotive industry as it navigates these complex issues.