{"id":100702,"date":"2026-02-24T07:02:58","date_gmt":"2026-02-24T10:02:58","guid":{"rendered":"https:\/\/automotive.einnews.com\/article\/895033604"},"modified":"2026-02-24T07:02:58","modified_gmt":"2026-02-24T10:02:58","slug":"germany-automobile-district-faces-crisis-due-to-surge-in-chinese-evs","status":"publish","type":"post","link":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/2026\/02\/24\/germany-automobile-district-faces-crisis-due-to-surge-in-chinese-evs\/","title":{"rendered":"Germany: Automobile District Faces Crisis Due To Surge In Chinese EVs"},"content":{"rendered":"
\"Baden-W\u00fcrttemberg\"<\/a><\/div>\n

Dostech, a small supplier of sealant technology in Germany\u2019s industry-rich Baden-W\u00fcrttemberg region, shifted focus in 2018 when a surge in automotive enquiries prompted it to embark on a major electric transport project.<\/p>\n

The move initially paid off, fuelling rapid growth and enabling the company to buy the building that now houses its headquarters in Moessingen, south of Stuttgart. But it also exposed them to Germany\u2019s carmakers, which are now mired in crisis.<\/p>\n

\u201cThis area is shaky,\u201d director and co-founder Steffen Braun told Reuters. \u201cIt is no longer as stable, and it\u2019s hard to make investments.\u201d The firm has had to cut staff, and auto-related revenues have fallen.<\/p>\n

Such pressures are mirrored across Baden-W\u00fcrttemberg, which holds an election on March 8 and where the economy has become the top concern of voters.<\/p>\n

The state is home to Mercedes and Porsche, car brands that were for decades synonymous with German manufacturing excellence. But intense competition \u2013 particularly from China \u2013 an uneven shift to EVs and rising costs have rocked the sector.<\/p>\n

Falling demand in the auto supply chain is squeezing hundreds of smaller manufacturers and threatening job security and municipal services.<\/p>\n

Although Chancellor Friedrich Merz\u2019s conservative party is still likely to win the election, the economic worries and a sense of lost regional pride are providing fertile ground for the far-right AfD\u2019s narratives.<\/p>\n

Tough Exports<\/strong><\/h3>\n

Once a leader, Baden-W\u00fcrttemberg is more exposed than most to the structural change sweeping through German industry.<\/p>\n

The state is Germany\u2019s top exporting region, accounting for 15.5% of national exports, and manufacturing accounts for 38.1% of the state\u2019s gross value added, compared with 28.5% nationwide.<\/p>\n

Baden-W\u00fcrttemberg\u2019s economy shrank by 0.4% in 2024, more than the 0.2% decline in Germany as a whole and while the country returned to modest growth last year, the state is expected to have contracted again.<\/p>\n

Adding to the difficulties<\/a>, U.S. tariffs, which have upended world trade, have hit hardest in export-oriented states with a large automotive footprint, said Ifo economist Robert Lehmann.<\/p>\n

\u201cBaden-W\u00fcrttemberg is a classic example,\u201d he said.<\/p>\n

Trouble In Labour Market<\/strong><\/h3>\n

Signs of distress are building.<\/p>\n

Insolvency proceedings in Baden-W\u00fcrttemberg rose for a second year to 2,445 in 2024, up 30% and the highest since 2010, according to the state statistics office. A third consecutive rise is likely.<\/p>\n

Cornelius Pleser, managing director of Pleser KG, a valuation and asset-disposition firm, said demand for his services has jumped in Baden-W\u00fcrttemberg, his home state.<\/p>\n

\u201cTen years ago, there was significantly more capital in the market, and in insolvency proceedings, investors or successors were often found,\u201d he said, adding that the number of companies with no viable succession is now \u201calarmingly high.\u201d<\/p>\n

A wave of restructuring has spread through Baden-W\u00fcrttemberg\u2019s industrial belt.<\/p>\n

\u201cThere is a domino effect,\u201d said Matthias Bianchi, public affairs lead of the DMB, which represents Germany\u2019s bedrock small- and medium-sized firms. \u201cThis crisis in the lead industries slowly trickles down.\u201d<\/p>\n

Unemployment in Baden-W\u00fcrttemberg remains below the national average, but the rate climbed to 4.8% in January 2026 from 3.9% in January 2023.<\/p>\n

Economists say the state\u2019s unemployment has not risen more because of labour hoarding, where companies hold on to staff<\/a> even as demand weakens for fear of future shortages.<\/p>\n

\u201cThe employees I\u2019ve trained here are irreplaceable. If they leave tomorrow, I can\u2019t replace them the day after\u2014impossible,\u201d Braun from Dostech said.<\/p>\n

But for him, staffing still brings headaches. Once he decides to move a person into a new role, the process can become what he called an \u201codyssey\u201d of paperwork, shifting contacts at the authorities and long waits for approval.<\/p>\n

Although the rise in unemployment is so far modest, Hanno Kempermann, economist and managing director of IW Consult, said other indicators point to a weakening labour market. Job openings in Baden-W\u00fcrttemberg have fallen by 30% compared with 2022, he said, and companies plan to cut 14,000 automotive jobs by 2030.<\/p>\n

\u201cThe situation is very tense,\u201d said Barbara Resch, head of the IG Metall trade union in Baden-W\u00fcrttemberg. \u201cSuppliers invested a lot in electromobility and now demand isn\u2019t coming, and at some point they simply run out of air financially.\u201d<\/p>\n

The main union at companies such as Mercedes MBGn.DE and Volkswagen, IG Metall, is working to protect jobs by securing agreements for shorter working hours.<\/p>\n

\u201cRight now it\u2019s hitting everyone: apprenticeship positions are being reduced, and highly qualified people are also at serious risk,\u201d Resch said.<\/p>\n

Asymmetric Economic Landscape<\/strong><\/h3>\n

While the automotive sector is in a deep structural crisis and export-dependent industrial companies are struggling, other parts of the economy are growing strongly, said Bianca Schmitz, founding director of the Hidden Champions Institute at ESMT Berlin.<\/p>\n

\u201cIt\u2019s an asymmetry you find here,\u201d she said, pointing to fast-growing companies in automation and robotics, medtech, and software and IT.<\/p>\n

The state accounts for more than a quarter of Germany\u2019s total research-and-development spending, underscoring how heavily the southwest\u2019s economic model leans on innovation-intensive industry and applied research. R&D investment is about 5.7% of state GDP \u2013 almost twice the national average.<\/p>\n

(with inputs from Reuters)<\/em><\/p>\n

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… 2018 when a surge in automotive<\/span> enquiries prompted it to … exposed them to Germany\u00e2\u0080\u0099s carmakers<\/span>, which are now mired … oriented states with a large automotive<\/span> footprint, said Ifo economist … Asymmetric Economic Landscape While the automotive<\/span> sector is in a deep …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-100702","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/100702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/comments?post=100702"}],"version-history":[{"count":0,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/100702\/revisions"}],"wp:attachment":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/media?parent=100702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/categories?post=100702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/tags?post=100702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}