German automakers cut jobs as Chinese rivals gain ground in Europe

Germany’s automotive giants have launched an unprecedented wave of cost-cutting measures as Chinese brands rapidly expand their presence in the European market, according to the Financial Times (FT).

Sources cited by the newspaper said that Volkswagen could eliminate up to 100,000 jobs by 2030, equivalent to roughly one-sixth of its workforce. Meanwhile, Mercedes-Benz has scrapped summer bonuses and introduced voluntary redundancy programs, which have already been accepted by 5,500 employees.

The company also estimated that production output could immediately rise by 15% if employees returned to a 40-hour workweek instead of the 35-hour schedule that has been in place for more than three decades.

At the same time, BMW has lowered its profit forecast, citing weaker conditions in the Chinese market and the impact of the conflict involving Iran. The automaker is also preparing to cut up to 10,000 jobs. Since mid-June, BMW shares have fallen by 13%, with investors bracing for further downward revisions from other European carmakers.

According to the outlet, Volkswagen, Mercedes-Benz, Stellantis and Renault all lost market share in May despite a 4% year-on-year increase in new car sales across Europe.

In contrast, the combined market share of Chinese manufacturers, including BYD and Chery, surpassed 10% for the first time.

“Every European player is losing today. This is a highly challenging situation for European automakers because Chinese [carmakers] are progressing [in Europe] at a much faster pace than expected, while [the European carmakers] continue to lose volumes in China and face very adverse conditions in the US, notably due to tariffs,” Thomas Besson, head of automotive research at Kepler Cheuvreux, said.

By Jeyhun Aghazada