Up to 500,000 jobs at risk

The essentials in five sentences

Since 2019 one in six jobs in the German car industry has disappeared, and the pace has lately more than tripled.^[3][26]

Depending on the study, a further 125,000 to 200,000 direct posts at manufacturers and suppliers will go by the early 2030s.^[5][6]

On German data, every industrial post cut costs its region around one to two further posts in the long run. With those knock-on jobs, 250,000 to 500,000 jobs are in the firing line.^[16][35]

The regions affected are thereby short of up to around 21 billion euros of net purchasing power every year, at the baker’s, at the car dealership, in the restaurant and in the trades.

It does not hit the whole of Germany equally, but 116 car districts with full force, and with them their municipal budgets.^[12]

1. What has already been lost

At the end of June 2026 the German car industry still employed 691,500 people, the fewest since comparable statistics began in 2005.^[1] Within a single year 42,300 posts disappeared, a fall of 5.8 per cent. No other large industrial sector with more than 200,000 employees is losing jobs so fast.^[1] Since 2019 the loss adds up to around 142,400 jobs. One job in six has gone.^[3]

It hits the suppliers hardest. Among makers of parts and accessories, employment fell by 7.6 per cent within a year.^[1] Since 2019 almost one post in four there has disappeared.^[2] And the pace is picking up: between 2019 and 2024 around 12,000 jobs a year were lost on average, and since 2024 it has been around 41,000 a year.^[26][1]

Source: Federal Statistical Office.^[1]

2. Why this is not a dip

Anyone hoping for the next recovery is misreading the situation. The causes are structural, and they reinforce one another:

China is falling away. In the second quarter of 2026 sales of BMW and Mercedes-Benz in China slumped by around 30 per cent each, and at the VW group by more than a third.^[10][27][28] The three groups’ combined operating profit fell by 19 per cent in the first half of 2026 to 13 billion euros.^[11] EY does not expect exports to China to come back; markets such as India or South America cannot come close to closing the gap.^[2]

Production is moving away. In 2014, 5.6 million cars came off the line in Germany; in 2024 it was just under 4.1 million.^[12]

The drivetrain is changing. An electric car needs fewer parts and less work than a combustion car. That hits the suppliers above all.^[5] Around 235,000 people still work in activities around the combustion engine.^[12]

The location is too expensive. According to the VDA, new jobs from the transformation are increasingly arising abroad, because conditions in Germany are no longer good enough.^[5]

The suppliers are buckling. From the beginning of 2024 to the middle of 2026, 333 insolvency proceedings were opened at car suppliers. Between 2023 and 2025 around 35,800 jobs were lost at suppliers, about 13 per cent.^[9]

3. What is still to come: the forecasts

All the serious analyses point in the same direction. They differ only in how fast and how deep the cut will be.

The VDA calculates using data of the Federal Employment Agency for all businesses in the sector (around 958,000 employees in 2019 and around 911,000 in 2023); its figures for job cuts are therefore not directly comparable with the Destatis values, which count only businesses with 50 or more employees.^[25]

Notably, the VDA has already revised its own 2024 forecast upwards by 35,000 posts. The cuts are running faster than even the industry expected.^[5] Roland Berger breaks the cuts down by function: around 90,000 direct posts, 95,000 in indirect functions and 15,000 in management; the plants are only around 60 per cent utilised.^[6]

The problem is not primarily the electric car, but the competitiveness of the location.

4. Who is cutting right now

The announcements span several years and cannot be added together. What has already actually been lost is shown by the statistics: across the whole of industry around 124,000 posts were lost in 2025, around 50,000 of them in the car industry.^[15] These figures are the visible tip. What they do not show are the people whose work depends on those posts.

5. The second and third waves

When a plant shrinks, the damage does not stop at the factory gate. Research distinguishes three waves:^[19]

Even the official figure of 691,500 employees is pitched too low: it covers only businesses with 50 or more employees within the sector. Tyre manufacturers and other suppliers outside the car industry are missing.^[1] Counting the whole value chain, around 3.2 million people in employment in Germany depend on the automotive economy.^[12]

How many knock-on jobs depend on an industrial job is well researched:

For every job on the line, at least one further job disappears from the region in the long run, more likely one and a half.

6. The calculation: up to 500,000

Combining the forecasts for direct cuts with the multipliers from the research gives three scenarios. This is a calculation of our own based on the studies cited, not an official forecast. The factors are assumptions by the author within the range that German research shows in the long run.^{[5][6][16][35]}

Purchasing power: net income lost at 2,500 to 3,500 euros net per month per post, before unemployment benefit and other transfers.

7. The money is missing locally

A skilled car worker who loses their job does not necessarily become unemployed. But they almost always earn less, and permanently so. A large study using German administrative data shows that income losses after job loss are large, lasting and almost twice as high in downturns, above all because those affected move to worse-paying employers.^[20]

The DIW shows the range: anyone who changes both occupation and sector after a mass redundancy from production earns around 30 per cent less in daily wages in their first new job. Anyone staying in a production occupation in industry loses around 2 per cent, and anyone moving in a production occupation into the service sector around 6 per cent.^[21]

This is exactly where the explosive force lies. Industrial wages are among the highest in the country. Every euro missing there is missing at the car dealer, in the restaurant, at the sports club and for the builder who no longer builds the family home. Bochum shows it: new jobs arose on the former Opel site, but many cannot match the pay of a skilled car worker.^[17]

8. Where it strikes

The crisis does not hit Germany evenly. According to IW Consult, 116 of 400 districts and district-free cities are particularly shaped by the automotive economy. Almost 859,000 production-related employees of the automotive economy work there, almost three quarters of all those nationwide. Their share of all employees there is 8.4 per cent, against only 3.4 per cent nationwide.^[12] In 36 of these districts particularly many jobs depend on the combustion engine; Salzgitter, the Saarpfalz district, Bamberg and the district of Kassel are at the top.^[12]

Baden-Württemberg: the complete car cluster counted around 480,000 employees in 2022. In the progressive scenario of the Land study, with a rapid ramp-up of electric mobility, up to 66,000 posts go by 2030 and up to 154,500 by 2040. The Land government stresses that these are scenarios and not forecasts.^[23][33]

Eastern Germany: one industrial job in four, a quarter of a million, depends directly or indirectly on the vehicle and supplier industry, according to a study commissioned by IG Metall.^[24] Around the VW plant in Zwickau, around 20,000 posts at suppliers are at stake, according to an estimate by the Saxon automotive suppliers’ network.^[36]

Other Länder: in 2025 employment in the car industry fell by 8 per cent in North Rhine-Westphalia, by 11 per cent in Saarland and by 20 per cent in Schleswig-Holstein.^[2]

On top of this come municipal finances. In Stuttgart trade tax revenue fell from 1.3 billion euros in 2024 to around 730 million euros in 2025; taz attributes this to the crisis at Mercedes and Porsche, while the city speaks of a drastic economic downturn.^[22][31] In Rastatt, the site of a Mercedes plant, revenue was still above 100 million euros in 2024; for 2026 the city has most recently reckoned on only around 300,000 euros.^[22][34] When the largest taxpayer falls away, it hits day-care centres, swimming pools, roads and clubs, that is all citizens, not only car workers.

9. What cushions the situation and why that is not enough

Mobility: according to the study by Gathmann and colleagues, those under 50 in the regions affected lose no employment, because they are mobile; those over 50 are hit permanently.^[16] For the region that is cold comfort: anyone who moves away takes their purchasing power with them.

Structural change: from 1975 to 2019, 1.53 million lost production jobs in industry were matched by 1.03 million new production-related jobs in the service sector, around 68 per cent.^[21]

Social systems: unemployment benefit, severance payments and partial retirement delay the collapse in purchasing power by a few years. They do not prevent it.

Demography: many posts disappear through retirements. That spares the individual, but not the region: the post does not come back, and the next generation lacks the well-paid industrial job.

10. What follows from this

The figures allow only one conclusion: the crisis in the car industry is not a sectoral question. It is a question of regions, of municipal finances and of small and medium-sized business. Anyone deciding today about the budget, energy prices or CO₂ rules is deciding about these jobs too.

Count honestly: the federal government and the Länder should report, alongside the direct posts, the knock-on jobs and the losses of purchasing power by region, not just corporate figures.

Make the location competitive: energy, levies and bureaucracy decide whether the new jobs of the transformation arise in Germany or abroad.^[5]

Recalculate the 2035 regulation: on the VDA’s calculation, around 50,000 jobs depend on how the CO₂ fleet rules are designed.^[5]

Focus on the 116 car districts: an early warning system, help for medium-sized suppliers, retraining and targeted investment attraction, before the second and third waves reach the regions.

Outlook: part 2 of this series quantifies the tax shortfalls for the federal government, the Länder and the municipalities and the pressure to save that follows from them. Part 3 shows the 116 car districts on the map, with populations and catchment areas.

Andreas W. HerbCEO MBG Group, Paderborn