Protests for Germany's car industry as job losses loom

Germany's automotive industry is under pressure on several fronts at once, and this week the strain turned into open protest. Workers at Audi, BMW, Mercedes-Benz, Porsche, Volkswagen and their suppliers demonstrated on Monday, a day before Mercedes-Benz warned its employees that plant closures may be unavoidable.

A shrinking market and new competitors

Total automotive sales in Europe have fallen from a peak of almost 18 million vehicles in 2019 to around 13 million in 2025, and an increasing share of that smaller market is going to new entrants from China, which itself has spare production capacity to worry about. Germany's car makers also face declining demand at home, an aging workforce and a slow recovery from COVID.

The US has long been the most profitable export market for German cars, but that was before new import tariffs. Those currently stand at 25 percent and, according to the source, could be subject to change at any time.

Volkswagen's writedown and Porsche's troubles

Factory closures now look not just possible but likely. Earlier this summer, Volkswagen Group was reported to be considering closing four of its German plants. This week the group wrote down $11.5 billion (€10 billion), of which $6.9 billion (€6 billion) came from its 75 percent stake in Porsche.

Porsche, owned by VW Group since 2008 after its own failed takeover bid, had long delivered significant profits. But sales in China have slowed, and like many manufacturers it bet too heavily too soon on electric vehicles: its EVs are competent, but it builds too many and sells too few, and its profit margin has fallen below Skoda's.

"I had hoped that the measures agreed in 2024 would already be sufficient. Unfortunately, that has not been the case. We have absolutely no time to lose and will therefore significantly step up our performance program," VW brand head Thomas Schaefer told a staff meeting.

Mercedes-Benz's warning and the union's response

Mercedes-Benz became the latest manufacturer to tell workers it might have to close "one German assembly plant and one German powertrain plant" unless it can save costs. IG Metall, the union that led the protests, is pressing management to take responsibility. "We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for jobs," said IG Metall head Christiane Benner.