BERLIN — The pressure on Germany’s once-dominant automotive supply sector is intensifying, as a wave of inexpensive Chinese components upends long-established industrial hierarchies and deepens the crisis confronting Europe’s largest manufacturing economy.
For years, German suppliers — names like Bosch, ZF Friedrichshafen and Continental — relied on strong demand from automakers such as Volkswagen, BMW and Mercedes-Benz. But as domestic carmakers struggle with weakening global sales and rising costs linked to the shift to electric vehicles, the buffer that once protected thousands of mid-sized suppliers has eroded.
Since 2018, roughly 120,000 automotive jobs have vanished in Germany. Now, analysts warn, the disruption is accelerating.
A Flood of Low-Cost Chinese Parts
U.S. news agency Bloomberg reported that Chinese manufacturers are shipping components into Germany at unprecedented speed.
“Chinese auto parts are pouring into the German market in incredible quantities,” said Andreas Bohnert, works council chairman of supplier PWO. The pace, he added, underscores how effectively Chinese firms have expanded their production and export strategies.
Imports of electric systems, forged components and transmissions have surged. A new study by the German Economic Institute (IW Köln), prepared for the Foreign Office, found that imports of Chinese transmissions rose 182 percent in the second quarter of 2025, nearly tripling year-on-year.
According to IW economist Jürgen Matthes, Germany has become a “diversion market” as Chinese companies redirect exports away from a United States increasingly sealed by tariffs and geopolitical tension.
An Industry Already Under Strain
German suppliers report shrinking margins, declining order volumes and growing supply-chain fragility as they navigate the EV transition and long-term production downturns. A survey by the European Association of Automotive Suppliers (Clepa) shows that 69 percent of European suppliers now compete directly with Chinese imports, a 12-point jump since early 2025.
“Without decisive action, parts production in Europe could disappear altogether,” warned Clepa Secretary General Benjamin Krieger. He called for rapid reforms, including lower energy costs, streamlined regulations and stronger financing channels — along with targeted measures to preserve industrial know-how in Europe.
Prices That Undercut Production Costs
Chinese competitors are increasingly entering product ranges long dominated by German firms, according to Boris Schwürz, works council chairman at Mahle. Offers submitted to major German automakers sometimes fall “well below production costs,” he said.
Bosch employee representative Frank Sell noted that comparable Chinese products are now 20 to 30 percent cheaper— a level of discount that many German manufacturers cannot match.
Layoffs Signal a Structural Shift
The consequences are already visible:
– Bosch plans to cut 13,000 additional automotive jobs by 2030, on top of 9,000 already announced.
– ZF Friedrichshafen expects to eliminate 11,000 to 14,000 positions in Germany by 2028.
– Continental has spun off its supplier division entirely; the new company, Aumovio, debuted on the stock market this fall.
Industry analyst Ferdinand Dudenhöffer warns that German automotive employment could fall to 500,000 workers by 2030, down from roughly 780,000 today, unless competitiveness improves dramatically.
A Challenge to Europe’s “Industrial Heart”
China was once a growth engine for the German auto sector. Today it is rapidly becoming its fiercest challenger — reshaping global supply chains and placing Europe’s industrial backbone under unprecedented strain.
Whether Germany can adapt, analysts say, may determine not only the fate of its auto suppliers, but the trajectory of Europe’s manufacturing power in a world increasingly defined by geopolitical rivalry and shifting technological leadership. (zai)
Photo: Mercedes Benz