The gap between suppliers and automobile manufacturers in Germany has grown over the past year. Overall, the German automotive industry was able to boost sales by 23 percent to a record value of 506.2 billion euros, according to a recent study by the consulting firm Ernst
According to EY, the number of employees in the auto industry fell in 2022 for the fourth time in a row. It fell by 1.5 percent from 786,000 to 774,000. While employment at manufacturers rose slightly by one percent, it fell by six percent at suppliers.
“While the car manufacturers are currently earning well despite the crisis, many suppliers have their backs to the wall,” said the head of the mobility division for Western Europe at EY, Constantin Gall, according to the announcement. Automakers are taking battery and electric motor production into their own hands, partnering with battery companies and relying less on their veteran suppliers, Gall said. On top of that, there is a bitter dispute about conditions, delivery quantities and price adjustments. “In view of the transformation towards electric mobility, a distribution battle has broken out between manufacturers and suppliers, in which the suppliers often have the worse cards,” said Gall.
Manufacture of e-cars less labour-intensive
Despite the recent positive earnings trend, cuts are currently being made across the board in the German auto industry, said EY industry consultant Peter Fuss. For the current year, he expects, at best, a stable employment trend at manufacturers and further job cuts at suppliers. The need for investment is enormous, at the same time the companies are doing everything they can to continue to generate high margins. According to Fuss, only a profitable business creates sufficient financial leeway to invest in new technologies and products.
The production of electric cars is less labour-intensive. The electric drive will prevail and replace the combustion engine. “This will inevitably lead to lower employment in Germany,” said Fuss.
