2024-07-18 18:07:07
The automotive industry continues to invest in Germany, but that does not necessarily mean more jobs. On the contrary: many companies are expecting job cuts.
According to a survey, numerous jobs are at risk in the German automotive industry. More than half of the companies surveyed in the industry are planning job cuts in Germany, according to a survey of industry executives by the Horváth management consultancy. The main reasons are high cost pressure and new competition, especially from China.
59 percent of the companies surveyed in Germany said they expected to reduce the number of employees in the next five years, and 14 percent even expected a significant reduction. In contrast, only 15 percent expected to increase the number of employees.
The situation was hardly any better in the rest of Western Europe, where 53 percent of those surveyed were planning job cuts. Although companies in Germany and Western Europe continued to invest heavily, new jobs were being created elsewhere.
“Production is increasingly taking place in the regions where the cars are ultimately sold,” says Frank Göller, partner and automotive expert at Horváth, to the German Press Agency. “This is not new, but it has become more pronounced.” The bad experiences of recent years with supply bottlenecks, especially for semiconductors, have not changed this. “This process is accelerating. With the result that jobs are being relocated.”
As a result, staff are being increased almost everywhere in the world – except in Germany and Western Europe. 75 percent of the companies surveyed want to build up capacity in India, 60 percent in China and the same number in Eastern Europe. The signs are also pointing to growth in the rest of Asia, as well as in North and South America.
“New plants are rarely built in Germany,” says Göller. “When new plants are built, they are usually outside Germany. And that is where the job creation takes place.”
Nevertheless, a large proportion of investments continue to flow to Germany. “If you now only look at the companies with headquarters in Germany, it is clear that a quarter of the total investments of all globally active companies still flow here,” says Göller. That is significantly more than in any other region of the world.
But most of the money is going into new products and technologies and the conversion of existing sites to electric drives. “In production, a large amount of investment is being made in the automation of production facilities and digitalization.” The employment balance is correspondingly poor.
“We do not see Germany being reduced to a pure development location,” stresses Göller. “Many companies, especially the large corporations, are still committed to Germany as a location and to the factories here.” However, many of the factories in Germany and Europe are already far from being fully utilized. The cost pressure is correspondingly great, to which many manufacturers are responding with cost-cutting programs and job cuts.
For the study, the Horváth management consultancy interviewed 91 industry executives in individual interviews last quarter, 55 of them from Germany. More than half of those interviewed came from car manufacturers, the rest from suppliers, large dealers and mobility providers. Although the selection is not representative, it is nevertheless meaningful due to the large number, says Göller.