German auto industry prepares for layoffs due to falling production and demand
German automakers such as Daimler, Mercedes-Benz and Volkswagen are facing falling capacity utilisation and preparing for job cuts as demand in Europe and China weakens.
The German auto industry is on the brink of major changes. Companies such as Daimler, Mercedes-Benz and Volkswagen are preparing to cut staff due to a sharp decline in production rates. According to media reports, the capacity utilisation of the auto industry giants has fallen from 78% to 58% in just a month. In such conditions, Mercedes and Volkswagen may carry out mass layoffs, and Porsche plans not to renew contracts with temporary employees.
The main problems include falling demand in Europe, high costs and the loss of positions in the largest market - China. Chinese manufacturers actively dominate on prices, which led to a decrease in sales of BMW, Mercedes and Volkswagen by 5%, 6% and 20%, respectively, in the first half of 2024.
This situation is causing serious concern in the industry, as companies are looking for ways to adapt to new conditions in order to remain competitive in global markets.
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