The outlook is worrying, many tire companies have closed factories!

Since the beginning of this year, the German automobile industry has experienced unprecedented changes. In 2023, the industry is still immersed in the joy of historic revenue and profit growth, and major companies are confident about the future. However, today, sales and profits have both suffered double-digit declines, the outlook is worrying, and there is uneasiness among corporate management.

Faced with the dual pressures of shrinking demand and lack of orders, the German auto industry has had to take the difficult step of laying off workers in order to survive. Research by the German Chamber of Commerce and Industry reveals that more than half of automobile companies are planning to reduce their employee size, while only 7% expect to increase positions. In addition, more than half of auto parts manufacturers are facing financing problems such as bad debt problems and liquidity bottlenecks.

Recently, the German auto parts giant Bosch Group announced that it will cut as many as 5,500 jobs in the automotive department in the next few years and reduce the working hours and wages of about 10,000 employees. As the world's top auto parts supplier, Bosch Group's layoffs have undoubtedly become another example of the plight of the German auto industry.

At the same time, many German car companies and suppliers have announced layoff plans this month. Schaeffler Group plans to lay off 4,700 people in Europe between 2025 and 2027, of which 2,800 jobs will be lost in Germany, affecting 10 work locations; Ford announced that it will lay off about 4,000 people in Europe by the end of 2027, Cologne, Germany The factory has become the hardest hit area and will cut 2,900 jobs; the Volkswagen Group also said that it has decided to close at least three German factories and significantly lay off employees to reduce costs; ThyssenKrupp plans to lay off 5,000 people by 2030 and another 6,000 People will be transferred to external service providers.

In addition, affected by soaring energy prices and economic downturn, some companies are considering leaving Germany, which poses a new challenge to Germany's status as an automobile manufacturing center. Tire giants Goodyear and Michelin have announced plans to close factories in Germany, with the latter also moving its customer service center to Poland. Muller, chairman of the German Automobile Industry Federation, pointed out that Europe and Germany are gradually losing competitiveness. More and more companies have postponed or canceled investment plans in Germany, and more than one-third of companies plan to shift investment overseas.

Analysts believe that the problems facing the German auto industry are deep-rooted and that the root causes of this crisis come from both domestic and foreign sources. Domestically, the slow pace of electrification transformation is one of the main reasons why the automobile industry is in trouble. Since the German government canceled subsidies for electric vehicles, consumers have become more wait-and-see and electric vehicle sales have continued to decline. As a result, many car companies have slowed down their electrification process. At the same time, corporate management’s decision-making errors in the electrification transformation have also had a significant impact. For example, car companies such as Volkswagen and Mercedes-Benz are too focused on the electric vehicle market and have adopted "pure electric" and "luxury" strategies, ignoring the diversified needs of consumers, resulting in a decline in market share.

On the international front, international tensions such as the Russia-Ukraine conflict have exacerbated industry difficulties. The rise of tariff barriers and protectionism not only restricts automobile exports, but also makes it more difficult to import raw materials. Although the EU's measures to impose tariffs on Chinese electric vehicles are intended to protect local manufacturers, they have actually exacerbated supply chain tensions and damaged the resilience and sustainability of the industrial chain.

With former U.S. President Trump expected to return to the White House, there are widespread concerns about possible trade frictions between the United States and Europe. Economists warn that if Trump imposes additional import tariffs on European cars after taking office, it will further impact Germany's already endangered auto industry. This will not only lead to significant cuts in production lines, but may also trigger a wave of unemployment throughout the supply chain. By then, if German car sales continue to decline sharply, the German auto industry will face a more severe test, and the prospects for Germany's economic recovery will become even bleaker.

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