German automakers are losing momentum as global rivals gain ground, according to a new EY analysis. While major automotive groups worldwide posted a 2% increase in first-quarter revenue, German manufacturers recorded a 4% decline, reflecting growing challenges in key international markets.
Industry experts point to a combination of factors behind the downturn, including trade tariffs, geopolitical tensions, weakening demand in the United States and China, and the rapid pace of technological change. German carmakers are also grappling with high software development costs, excess production capacity, and a slower-than-expected transition to electric vehicles.
The outlook remains challenging as rising fuel prices and inflation, fueled in part by geopolitical uncertainty, threaten consumer demand across Europe. EY warned that the sector’s structural transformation is far from over, with 2026 likely to remain a difficult year for Germany’s automotive industry.
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