China overtakes EU in car exports

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Car and automotive parts exports from the EU to China fell by 34 percent to 16 billion euros last year. Since 2022, exports have thus more than halved. At the same time, imports from China in this area rose by eight percent to 22 billion euros. A surplus in the double-digit billions has thus become a deficit within a few years. This is according to a study by the auditing and consulting firm EY.

This development is also evident for Germany: In 2025, China was only the sixth most important export country for German manufacturers. Although exports were still above imports, the gap is narrowing. Since the record year 2022, exports to the People's Republic have more than halved: from around 30 billion to 13.6 billion. In the same period, car imports from China rose by two-thirds to 7.4 billion euros. “If the respective trends continue, imports and exports could balance each other out in 2026,” the analysis states.

Expert: Competition will intensify further

According to EY expert Constantin Gall, Chinese car manufacturers are currently facing tough competition in Germany. Volkswagen, Mercedes-Benz, BMW, and their brands have so far successfully defended their market shares against them. However, the Chinese have achieved remarkable successes in other European markets. “In 2026, we will see a further intensification of competition. The pressure on Germany as a car manufacturing location will therefore continue to increase,” Gall predicts.

Important context: According to EY, car parts also include e-car batteries. This market is dominated by suppliers from China. In addition, German car manufacturers and suppliers also have plants in the People's Republic. They produce there for the local market but also export vehicles and parts to Europe. This applies, for example, to models of the BMW brand Mini or the SUV Cupra Tavascan from the Volkswagen Group. Mercedes-Benz also assembles Smart brand vehicles together with its major shareholder Geely entirely in Xi'an, China, and then exports them.

Tens of thousands of jobs lost

The crisis in the industry and increasing competition had already affected business last year. According to the report, the German automotive industry's revenue fell by 1.6 percent to almost 528 billion euros in 2025. Manufacturers and suppliers reported significant profit declines in some cases. According to EY, data from the Federal Statistical Office, the Federal Employment Agency, and the EU statistics office Eurostat were evaluated for the study.

Employment also declined significantly: the number of jobs shrank by 6.2 percent, or nearly 50,000, to around 725,000 – the lowest level in 14 years. There are a number of job reduction programs in the automotive industry that will continue for some time. Jobs are being cut at Mercedes-Benz, the Volkswagen Group and its associated brands, as well as at suppliers such as Bosch, Aumovio, ZF Friedrichshafen, and Mahle, among others.

Suppliers particularly under pressure

The supplier industry in particular is increasingly coming under pressure compared to manufacturers. Revenue fell by four percent in 2025, and employment by a good tenth. Since 2019, almost every fourth job in this sector has been eliminated – a total of around 73,000 jobs. Gall sees an accelerated structural change. The downward trend has recently intensified, he explained.

According to EY, the causes for the tense situation are diverse. In addition to growing competitive pressure from China and weakening export markets, demand is primarily burdened by the weak economic cycle, geopolitical crises, and high new car prices. At the same time, the slow increase in sales of e-cars is causing further problems: many companies have made high investments without the expected sales figures materializing so far. In addition, disadvantages of the German location, such as high costs and bureaucracy, are contributing factors.

(mfz)