Labor supply in Germany’s automotive sector to decrease by 6.3 percent by 2035

(MENAFN) According to a recent study conducted by the research institute Prognos, commissioned by the German Association of the Automotive Industry (VDA), labor supply in Germany's automotive sector is projected to decrease by 6.3 percent by the year 2035. This anticipated decline is largely attributed to the ongoing transition to electric vehicles (EVs) and a corresponding drop in demand for workers within the industry. Between 2019 and 2023, the shift towards EVs already resulted in a loss of approximately 46,000 jobs in Germany. If this trend continues, the study warns that the automotive sector could see a further reduction of around 190,000 jobs by 2035, driven by Germany's diminishing competitiveness due to high tax rates and increasing energy costs.

The study underscores the necessity of creating a competitive environment with a favorable political framework to retain as much added value and employment as possible within Germany. It emphasizes the importance of fostering conditions that would enable the generation of new jobs in the country as the automotive landscape evolves. The findings come at a critical time, particularly following Volkswagen's announcement that it plans to shut down at least three factories in Germany and implement significant layoffs, raising concerns throughout the German automotive industry.

The German auto sector, which accounts for a substantial portion of the country’s exports with annual figures reaching approximately USD302.6 billion, is currently facing multifaceted challenges. Inflationary pressures, soaring energy costs, sluggish economic growth in Europe, the rise of far-right politics, and stiff competition from companies like Tesla and Chinese manufacturers have compounded the difficulties for German carmakers. As a result, these companies are under intense pressure to implement cost-cutting measures to remain viable, especially amidst reduced consumer demand for traditional vehicles.

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