Every 48 seconds, a finished car rolls off the assembly line at the Leipzig BMW plant, says the site’s assembly chief Martin Koch. 2025 was a record year, the second in a row. And combustion engines still account for a large part of sales.
The auto industry is in transition, and for many German manufacturers the path is still rocky. BMW is comparatively well positioned. Volkswagen, by contrast, slipped into the red in the third quarter of 2025. Mercedes-Benz AG sold around 2.16 million cars and vans worldwide in 2025—ten percent fewer than the previous year.
Although the VW Group’s sales of pure electric vehicles rose markedly in 2025, the group’s figures were weighed down mainly by sales in the Chinese and North American markets. China’s government pumped a lot of money into domestic automakers like BYD. They focused on electric mobility and hybrid technologies—and overtook German producers in the process.
Brands such as Mercedes-Benz and VW Group’s subsidiaries VW, Audi and Porsche rested too long on the sales of their combustion engines. The shift toward electromobility was initiated too late—or inconsistently; leadership still clings to the combustion engine and, as Mercedes boss Ola Källenius does, loudly rails against European climate targets for the auto industry.
VW, Mercedes and Suppliers Cut Jobs
At the same time, decisions by U.S. President Donald Trump—a hefty tariff increase and the end of government support for electric cars—dampened the success of German manufacturers in North America.
Now the groups want to save. At Mercedes, around 4,000 jobs had already been cut by October 2025. Volkswagen ended car production at its Dresden plant a little over a month ago; production in Osnabrück is set to end in 2027. At all ten German sites of the group, 35,000 jobs are to be cut by 2030.
Other companies in the supply chain are also struggling. Not only Bosch is planning layoffs; the technology group ZF from Friedrichshafen in Baden-Württemberg has announced that it will cut 14,000 jobs by 2028.
The Paris-based auto supplier Valeo announced just a week ago that it planned to close its site in Bad Neustadt an der Saale. The local IG Metall union criticized management in an interview with Bayerischer Rundfunk for not working with the employees to find solutions.
New Purchase Incentive for Electric and Hybrid Cars
Thorsten Donnermeier, the IG Metall representative at VW in Kassel-Baunatal, echoes a similar view when discussing the carmakers. He advocates shortening working hours with full wage compensation instead of job cuts—and aims to raise the utilization of car plants by producing buses and trams for urban transport. This could also reduce the climate-damaging emissions from road traffic.
In the meantime, the federal government has decided on a new incentive for the purchase and lease of an electric or hybrid car, designed to stimulate the market.
