Sales of the German automotive industry fell by 4.7% annually in the first half of the year, dropping to 269.5 billion euros. The Federal Statistical Office of Germany (Destatis) released the sales and export data for the country’s automotive sector for the first half of the year. Accordingly, the sales of the German automotive industry declined by 4.7% in the first half of the year compared to the same period last year, amounting to 269.5 billion euros. This industry had recorded a record nominal sales of 282.6 billion euros in the January-June 2023 period, partly due to rising prices.
Despite the decrease in the first half of 2024, the German automotive industry continued to be the sector with the highest sales, accounting for a quarter (25.2%) of total industrial product sales in Germany. Destatis statement mentioned that the income decline in the automotive industry was evident across all manufacturing sectors. During this period, revenues from car bodies and trailers decreased by 11.6%, vehicle parts and accessories revenues, like gears or bumpers, fell by 5.4%, and revenues from the production of motor vehicles and engines decreased by 4.3%.
EXPORTS FORM 70% OF SALES
Approximately 70% (190 billion euros) of total sales of the German automotive industry in the first half of the year came from exports. This rate marked the highest percentage in the past 15 years. Germany exported 1.7 million cars from January to June, resulting in a revenue of 68.4 billion euros. There was a 0.3% decrease in the number of exports compared to the same period in 2023. Nearly a quarter (22.7%) of the new cars exported from Germany in the first half of the year were completely electric. While there was a 2.5% decrease in the export of electric cars compared to the same period last year, the export of electric cars increased by 113.9% compared to the first half of 2022.
SECOND LARGEST EMPLOYMENT
Destatis also reported that around 773,000 people were employed in the German automotive sector, excluding suppliers, as of June 2024. Employment in the sector decreased by 0.8% compared to 2023. The highest number of employees in the past 15 years in the automotive sector was around 834,000, achieved by the end of the first half of 2019. As of June 2024, approximately 14% of all employees in the German industry worked in the automotive sector, making it the second largest industry in terms of workforce after mechanical engineering, which has 952,000 employees.
CHALLENGES FROM CHINA
German car manufacturers are facing challenges such as inflationary pressures, high energy and labor costs, slow economic growth in Europe, and competition from Chinese car manufacturers, as well as Tesla. The warning by Volkswagen, one of the leading car manufacturers in the country, of the possibility of closing a factory in Germany as part of cost-saving measures on September 2 highlighted the difficulties in the sector. In recent years, the share of Chinese manufacturers in the sales of electric cars in European countries has been rapidly increasing. Sales of low-cost and subsidized electric cars produced in China have been outperforming competitors. Brands like BYD, SAIC, and Geely, along with Tesla and various European companies, produce vehicles in China. The increasing weakening of the German industry, the technological advancement of Chinese companies, and even the surpassing of Germans by Far East companies in renewable energy and automotive sectors, are being debated in Germany as the “China Shock.”