04
NOV
2025
The - still - most important sector of the German economy, the automotive industry, has long been deep in the crisis. The sales of the three major German car companies - Volkswagen, BMW and Mercedes - on the three most important markets worldwide, namely China, the USA and Europe, shrank by a good five percent from January to August 2025. This was contrary to the trend: In total, new registrations in the three major regions increased by more than six percent. This reduced the market share of the German industry giants from 21.7 percent to 19.3 percent. 1] The market share of German corporations fell particularly sharply in China, where it collapsed from 22.6 percent to 16.7 percent in the past two years. The main reason is, according to the head of the Center of Automotive Management in Bergisch Gladbach, Stefan Bratzel, that the German companies have "massively underestimated" "how quickly" Chinese competitors would "bring technically and price-attractive electric car models to the market". 2] Accordingly, Volkswagen's electric car registrations fell by 21 percent, BMW by 37 percent and Mercedes by 58 percent, which grew by a proud 60 percent Chinese electric car market.
The German car locations are now additionally confronted with tariffs of 15 percent on deliveries to the United States. Already from 2014 to 2024, their exports decreased by 26 percent to 3.2 million vehicles.[ 3] The US tariffs now suggest a further shrinkage of German car exports. This weighs heavily, as the USA is the largest export market in the German automotive industry. Among other things, this contributes to the further reduction of jobs in the industry. If around 55,000 jobs have already been lost since 2019 [4], a good 90,000 more would probably be added by 2030, according to a study by the Institute of the German Economy (IW). This would correspond to a job loss of 7.8 percent, states the IW. Meanwhile, economists openly express doubts about what future the industry still has. On Sunday, for example, the president of the Kiel Institute for World Economy (IfW), Moritz Schularick, warned that the industry was also sleeping over "the next revolution" - autonomous driving. He thinks it is possible that the three industry giants Volkswagen, BMW and Mercedes in their current form "will no longer exist at the end of the decade", said Schularick. 5]
The German chemical industry is also suffering from serious structural problems. The industry is particularly burdened by the increased natural gas prices, which are due to the phase-out of the low-cost Russian pipeline gas and the switch to expensive liquefied gas, often imported from the United States. Not least for this reason, German chemical production - not including the pharmaceutical division - shrank by around ten percent from 2021 to 2022 and by a further eleven percent from 2022 to 2023. According to the Association of the Chemical Industry (VCI), it was again five percent below the volume of the previous year's quarter in the second quarter of 2025.[ 6] The utilization of the plants is currently on average at 71 percent and thus painfully noticeably below the profitability threshold, which is calculated at around 82 percent. The industry, it is said, produces "as weak as it was last in 1991". Now there is also the fact that the trade deal that the EU Commission has concluded with the Trump administration makes US deliveries to the EU duty-free and thus allows the US industry to rival the EU competition on the European market. 7] The German chemical companies are pushing against at least the Chinese competition with the help of their own tariffs.
German mechanical engineering has also been severely affected by the crisis. If the industry initially manged to grow again after the collapse of the corona pandemic, this phase ended in 2024 with a first decline in sales and production. According to the Association of German Mechanical and Plant Engineering (VDMA), the production of German mechanical engineering companies already fell by around seven percent in 2024 compared to 2023, price-adjusted. 8] For this year, the association currently assumes a further shrinkage in production by probably a good five percent. 9] In addition, the orders collapse. As the VDMA announced yesterday, Monday, companies in the sector recorded a decrease in domestic contracts of 5 percent in September and in foreign orders by 24 percent compared to the same period last year, with orders from the euro countries only fall by 13 percent, those from non-euro countries by 27 percent. 10] Although it is said that the high declines in September are distorted upwards by special effects, for example by particularly high orders in September 2024. However, all orders in the third quarter were also 6 percent lower than in the previous year.
The VDMA expects an additional heavy burden on the industry due to the recently concluded trade deal between the EU and the USA. This weighs heavily, because the United States was by far the most important sales market of German mechanical manufacturers last year; their total exports worth almost 200 billion euros were exported to the USA worth 27.4 billion euros, exports worth 17.7 billion euros to China, exports worth 13.3 billion euros to France. 11] Already in August, the Trump administration has now, of course, extended the 50 percent tariffs with which it has proven the import of steel to a number of products that contain steel; around 40 percent of all machine exports from the EU are now affected. As the VDMA reports, Washington plans to extand the list of goods to which the 50 percent tariffs are applied before the end of the year; according to the VDMA, 56 percent of all German machine exports will be affected. VDMA President Bertram Kawlath calls the measure - not included in the trade agreement with the EU - an open "foul game" and calls for a response from the EU. 12] Of course, nothing of this can be seen.
[1], [2] Lazar Backowicz, Martin-W. Buchenau, Michael Scheppe, Roman Tyborski: VW, BMW and Mercedes are losing importance globally. handelsblatt.com 09.10.2025.
[3] Julian Olk: By 2030, another 90,000 jobs are threatened. handelsblatt.com 09.09.2025.
[4] This is narrow. Other studies – including suppliers – assume a loss of 112,000 jobs since 2019. Franziska Müller: Job cuts are escalating: This is what the car industry is now demanding from the government. de.euronews.com 08.10.2025.
[5] Valerie Ndoukoun: Schularick sees big German car manufacturers disappear by 2030. handelsblatt.com 03.11.2025.
[6] Bert Fröndhoff: German chemical industry produces as weak as last time in 1991. handelsblatt.com 03.09.2025.
[7] S. to this economic power in decline.
[8] Economic situation and outlook. VDMA, March 2025.
[9], [10] setback in the order books. vdma.eu 03.11.2025.
[11] Holger Paul: "The USA is engaged in a continuous customs foul game". vdma.eu 10/29/2025.