Is the auto industry facing a great cull?
Bad news from Germany’s auto sector has become almost routine. Just last week, Kiekert, one of the world’s best-known makers of locking systems, filed for insolvency, while Bosch announced plans to cut 13,000 jobs in Germany alone. The bottom, it seems, is far from reached.
Tier 2 and 3 suppliers under pressure
The supply chain is not just about headline names like Bosch, ZF, Continental, Mahle, or Schaeffler. It is built on a dense network of smaller Tier-2, 3, and 4 suppliers, companies less visible but no less vital. Kiekert, headquartered in Heiligenhaus near Wuppertal, is a prime example. With 4,500 employees, the company has been part of China’s Lingyun Industrial Group for more than a decade. Now, after nearly 170 years in business and more than two billion locking systems produced, accounting for over 20 percent global market share, Kiekert has entered insolvency. Management blames its Chinese parent and unpaid sums in the hundreds of millions.
A growing list of collapses
Kiekert is not alone. In mid-2024, aluminium casting specialist AE Group filed for self-administered insolvency; by late 2025, production at Gerstungen and Nentershausen will cease, with 650 jobs lost.
More recently, Huber Automotive from Mühlhausen (Baden-Württemberg) and Wolfsburg-based MVI Group GmbH also went under. Both focused on software and IT solutions and both suffered from the slowdown in EV demand.
Even industry giants are feeling the strain. ZF Friedrichshafen, a system-critical supplier for gearboxes at BMW and Volkswagen, recently switched CEOs, Holger Klein out, Mathias Miedreich in, as it braces for mass job cuts. Bosch, the world’s largest automotive supplier, is also tightening the belt, targeting more than €2 billion in annual savings by 2030. That will mean thousands of jobs; in Germany alone, 13,000 are now on the line. Across the group, Bosch employs 400,000 people in 60 countries, including nearly 87,000 in development. Porsche, meanwhile, quietly exited its German battery joint venture, Cellforce.
Structural weaknesses exposed
The reasons for the insolvency wave are complex. Yes, demand is subdued, global conditions are harsh, and China and the U.S. markets are difficult. But Germany also carries one of the world’s highest labor cost burdens. That affects not only OEMs like Audi, BMW, Mercedes, VW, Porsche, Ford, and Opel, but equally their suppliers, whose wage levels exceed those in most of Europe, and often dwarf costs in Asia, South America, or even the U.S.
According to an EY study, more than 51,000 automotive jobs have already been lost in Germany this year, the sharpest decline in any industry. Compared with 2019, the last pre-COVID year, that figure climbs to 245,000 jobs—around 4.3 percent.
Global headwinds, limited relief
International trade tensions add fuel to the fire. The U.S. has reduced, but not eliminated, tariffs. As VDA president Hildegard Müller notes: “The U.S. retroactively lowered tariffs on EU passenger cars and parts to 15 percent from August 1, under the EU agreement. But even these 15 percent tariffs, and 25 percent for commercial vehicles, remain a significant burden for our industry. On top of that, steel and aluminum duties weigh heavily.”
In other words, the tariff cuts provide some relief but do not solve the structural crisis. For many German suppliers already fighting high costs, weak demand, and the slow shift to electrification, the outlook remains grim.
