Germany’s automotive industry could lose at least 200,000 jobs by the end of the decade, a new study by Roland Berger has suggested.
According to to the study, Germany’s automotive reset: From model of global success to painful consolidation, employment at German vehicle manufacturers and suppliers could fall from around 692,000 in 2025 to approximately 490,000 by 2030, as manufacturers and suppliers respond to lower production volumes, excess capacity and higher costs.
The projected reduction includes around 90,000 direct jobs, 95,000 indirect positions and 15,000 management roles. Further job losses could occur if efforts to remain internationally competitive are not accelerated, it added.
Production capacity
Production capacity in Germany is currently around 6.4 million vehicles a year, while production fell from 5.9 million vehicles in 2015 to approximately 4.2 million in 2025.
“To produce profitably, a plant needs a capacity utilisation of 75% to 80%,” commented Felix Mogge, partner at Roland Berger. “Many German sites are far from that.
“We have capacity for more than six million vehicles, but are only building just over four million. That means, mathematically speaking, we have at least five production plants too many. Therefore, there is no way around adjusting capacity.”
As well as capacity issues, Roland Berger also highlighted cost disadvantages in the German automotive market, compared to other markets such as China.
It estimates Chinese manufacturers have an overall manufacturing cost advantage of around 30%, in areas such as batteries, electric drives, materials and labour.
“Although German manufacturers have caught up technologically with the world’s leading manufacturers, a price difference of around 30% can no longer be compensated for by brand strength alone,” Mogge added.
Turnaround time
Elsewhere, the consultancy said German manufacturers also need to reduce vehicle development times. Chinese manufacturers can develop new vehicles in as little as 24 months, while German manufacturers often require 48 months or more.
“The German automotive industry must develop and produce its vehicles significantly faster,” added Sebastian Gundermann, partner at Roland Berger. “On the other hand, policymakers must actively support the changes in the sector. For example, innovation clusters that promote technological development or a skills development initiative for employees are conceivable.” Read more here.
