Automobile Industry: Medium-Sized Enterprises Look Pessimistically Towards 2025

For every second company in the automotive SME sector in Germany (50%), the current economic year has fallen short of expectations; another 19% see their already poor expectations confirmed. This is one of the results of a recent survey that the VDA has been conducting regularly since spring 2020 among automotive suppliers (Manufacturer Group III) and medium-sized manufacturers of trailers, bodies, and buses (Manufacturer Group II). Only 5% of companies were able to exceed their expectations, and for a quarter of the companies, the year turned out to be as good as expected.

Outlook Clouded

The outlook is also clouded: For 2025, only 17% of the surveyed companies expect an improvement compared to this year. Around one in two companies (45%) assumes that the situation will remain roughly unchanged. And four out of ten companies (38%) expect their economic development to even worsen.

Order backlogs of the past cleared

The increasingly problematic issue for the automotive medium-sized businesses is the order situation, which two out of three companies (65.5%) state as a major or very major challenge. This shows that the weak overall economic development and the currently weak development of the European car market are increasingly affecting the automotive medium-sized businesses. The large order backlogs of the past have been completely cleared.

VDA President Hildegard Müller: "The supplier industry and especially the numerous medium-sized companies are a central factor for a successful transformation of the German automotive industry. However, the weak demand combined with the local conditions is becoming increasingly toxic for the medium-sized industrial companies. That is why it is now all the more important that political framework conditions support them—rather than burden them additionally. The fact is: supplier companies are internationally competitive with their products, but for many companies, the location is currently not."

The VDA states that politics must finally address the causes of the problems. Specifically, this means competitive energy prices, consistent reduction of bureaucracy, infrastructure investments, measures against the shortage of skilled workers, as well as international trade and raw material agreements that must be concluded promptly and on a large scale. In addition, suppliers have recently been confronted with significantly more difficult access to bank financing, according to the VDA President.

"Banks can improve the situation if they take a more differentiated view of the automotive sector. There are many successful transformation models among suppliers," emphasizes Müller.