Investment activity among medium-sized automotive companies in Germany is increasingly at risk. 80% of companies intend to postpone, relocate, or cancel planned investments in Germany altogether. This is shown by a survey conducted by the VDA among automotive suppliers (Manufacturer Group III) and medium-sized manufacturers of trailers, bodies, and buses (Manufacturer Group II).*

Given subdued business expectations and poor location conditions, medium-sized automotive companies are increasingly holding back on investments in Germany. In the previous survey in May of this year, 75% of companies stated that they were postponing, relocating, or canceling planned investments in Germany altogether. Likewise, the number of investments being relocated abroad has increased, with 28% of companies planning to do so according to the new results (May 2025: 24%). A further 17% are planning to cancel investments. Only 2% of companies stated that they intend to increase investments in Germany in light of the current situation.

VDA President Hildegard Müller: "Because the conditions for Germany and Europe are deteriorating noticeably, decisions are being made daily against Germany and Europe as a business location. The economy, especially industry, has been calling for fundamental reforms for years, but far too little is happening. We as the German automotive industry want to preserve jobs and prosperity here and want to continue manufacturing our products and cars in Germany. But something must be done to achieve this. The German government and the EU Commission must set clear priorities for the international competitiveness of the business location. The industrial location must be at the top of the agenda. Attempts by the EU to isolate the location are the wrong approach for the export-oriented automotive industry and jobs in Germany."

The survey shows that investment activity in Germany is currently being impacted primarily by the sales situation and sales expectations. The low market volume in the German and European automotive market plays a decisive role for around two out of three companies (64%). This is primarily due to the overall economic weakness and the lack of framework conditions for the ramp-up of electromobility. The outlook for the German and European automotive market, in particular, makes expansion investments uneconomical—market growth is taking place elsewhere.

Every second mid-sized automotive company rates its current situation as poor or very poor (49%). In May, this figure was still at 42%. Only 11% of companies consider their situation to be good or very good. This figure was almost twice as high in spring, at 19%. The outlook is also cautious: 20% of companies expect an improvement in their economic situation compared to the previous year. 21% assume that economic development will deteriorate. 59% expect the situation to remain roughly the same.

Excessive bureaucracy remains #1 challenge - lack of orders reaches new survey high

The survey shows that the biggest challenge for medium-sized automotive companies continues to be excessive bureaucracy: 86% of companies say they are heavily or even very heavily burdened by bureaucracy.

Müller: "The escalating bureaucracy is a particular burden on the automotive mid-sized sector. When it comes to bureaucracy, less is more. And to put it bluntly: simply postponing application deadlines or tinkering with regulatory details is not bureaucracy reduction. Automotive mid-sized companies need real relief."

The lack of orders ranks #2 among the biggest challenges currently: 77%—a record high in this survey—say they are severely (35%) or even very severely (41%) affected by it.

Müller: "The ongoing economic stagnation in Germany and the persistently weak development of the automotive market in Europe are increasingly impacting the medium-sized companies in the German automotive industry. Without the called-for economic stimulus and the strengthening of the location's international competitiveness, the situation threatens to deteriorate further."

US tariff policy: More than half fear negative impact on sales and profits

65% of companies report being affected (very severely, severely, or moderately) by US tariffs against numerous states and regions. This is slightly below the expectations from May of this year. At that time, 86% of companies surveyed assumed that US tariffs against numerous states and regions would also affect them. In the current survey, 67% of companies report being burdened by US import tariffs on products from Europe. 31% are also affected by US import tariffs on imports from Mexico, and 9% by US import tariffs on products from Canada. 

Companies reduce employment

One in three companies (32%) reported in the survey that they are suffering from a shortage of skilled workers and labor—roughly the same as in the last survey. This figure is low compared to previous surveys; in spring 2023 it was 85%. The proportion of companies that reported difficulties meeting short- and medium-term skilled labor needs in the current survey is also comparatively low at 27%. These figures are a further alarm signal, as they illustrate that the weak overall economic development, particularly in industry, is increasingly having an impact on the labor market. 61% of the companies surveyed also stated that they are currently reducing employment in Germany (May: 57%). This is the highest figure so far in this VDA survey series. Only 9% are currently increasing employment in Germany.

*The survey was conducted from September 1 to 22. 158 companies participated. This provides the VDA with representative information on the current situation and prospects of the automotive industry. The VDA has been conducting the survey regularly since spring 2020.