German auto industry faces deepening crisis as VW, Bosch and others slash jobs

Tens of thousands more could disappear by 2030, in an industry that employs more than 700,000 people.

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Germany’s auto industry is facing one of its toughest periods in decades, as shrinking demand, rising costs and mounting competition from Chinese electric vehicle (EV) makers push companies into sweeping restructuring and job cuts.

As per Bloomberg, Volkswagen AG is scaling back production, while Robert Bosch GmbH plans to eliminate around 13,000 jobs — or roughly 3 per cent of its global workforce — as weak EV demand and slowing sales ripple through Europe’s largest economy.

The pressure is spreading across the sector. Continental, Schaeffler and ZF Friedrichshafen are also slashing jobs, while VW, Porsche AG and Ford Motor Co. have reduced staff and output to offset sluggish sales and new tariffs imposed by US President Donald Trump. The latest duties on heavy trucks announced on Friday hit shares of Daimler Truck and VW’s Traton.Massive layoffs in Germany

According to Germany’s automotive trade body, VDA, the sector has already shed about 55,000 jobs over the past two years. Tens of thousands more could disappear by 2030, in an industry that employs more than 700,000 people.

“The announcement of significant layoffs at Bosch is still only the beginning of a major industrial restructuring in Germany,” said Marcel Fratzscher, President of the DIW German Institute for Research. “We will see many more layoffs and also bankruptcies in the coming years.”

The crisis has cast doubts over Chancellor Friedrich Merz’s pledge to revitalise the economy, which is projected to grow just 0.2 per cent this year after two years of contraction. Industry leaders warn that high labour and energy costs, coupled with bureaucratic hurdles, are eroding competitiveness. Volkswagen has temporarily halted production at two EV factories amid weak demand, while Porsche issued its fourth profit warning this year and scaled back its EV plans. Ford has also announced another 1,000 job cuts at its Cologne plant. China’s BYD Co. and other Asian automakers are tightening their grip on the global EV market with affordable, feature-rich models. Meanwhile, German suppliers face mounting pressure from carmakers to lower prices, even as input costs rise.

Volkswagen alone plans to cut 35,000 jobs in Germany by the end of the decade. Analysts say these moves reflect a structural crisis in the country’s manufacturing heartland — one that could reshape Europe’s automotive landscape in the years ahead.