Auto industry: Why car manufacturers and suppliers have difficulties

Dark clouds hang over the auto industry in Germany. Both the manufacturers and their suppliers are under great pressure. Many react and work on the costs – also with job cuts. The latest example: Auto supplier giant Bosch. The Group from Gerlingen near Stuttgart announced on Thursday that he wanted to dismantle 13,000 additional positions. Above all, the German locations of the Mobility supplier are affected.

One reason for questions and answers on the situation of the car manufacturers and their suppliers in Germany.

What is the situation with the car manufacturers?

Whether Volkswagen, Mercedes -Benz, BMW, Porsche or Audi: All recently – sometimes violent – records. The manufacturers have to deal with a whole series of problems. Most of them control with savings programs, among other things. In the future, these should polish up the results, but initially burden them, for example due to costs for severance payments.

And what about the suppliers?

Not really better, on the contrary. Suppliers such as Bosch or ZF also have to save vigorously. Simplified it can be said: If the manufacturers produce fewer cars, fewer parts are also needed that the suppliers can contribute. And manufacturers who are under cost pressure are likely to occur accordingly hard in price negotiations.

The situation was hard for some suppliers, IG Metall boss Christiane Benner recently said. “Cost pressure and high investment costs for transformation in the event of a lack of income bring many to the brink of the existence shortage,” said Benner.

“If someone is in the crisis, they are the suppliers,” said the car expert Schwope from the Berlin University of Applied Sciences recently. It looks much darker for suppliers than with manufacturers. The suppliers had scored terrifyingly weak profit spans in recent years

What are the reasons for the difficulties?

There are some. Sales difficulties for the manufacturers on the important Chinese market, for example, because the money is no longer as relaxed with the customers as before. Or because native manufacturers put pressure on there with significantly cheaper prices. Or because a lot of money was put into e-mobility, but the rout is significantly more slow than originally assumed.

“The German manufacturers have overslept the trend towards electromobility,” says Schwope. In the Chinese market in particular, they hardly have the taste of young people or modern car buyers. Even when driving autonomous, the Germans are currently not competitive.

What does that mean for Germany?

The auto industry is one of the most important industries for economic output in the country. For example, when Mercedes coughs, Stuttgart has flu, says in the region of the car manufacturer from Baden-Württemberg. And as long as the auto industry has cough, it also falls flat as a locomotive for the German economy.