00:19 16-12-2025

German car production to 2026: China leads, US shift, jobs at risk

Forecasts show German car plants losing volume into 2026 as production shifts to the US and China dominates. Employment falls; EV incentives lift sales.

German car plants are set to keep losing volume into 2026, according to Ferdinand Dudenhöffer, director of the Center Automotive Research (CAR). A major driver is the shift of parts of production plans to the United States in response to trade barriers and tariff policy, which makes building cars inside Germany less attractive.

Employment is feeling the strain as well. Around 720,000 people currently work at German auto plants, but the figure could fall noticeably below 700,000 in 2026. The projection for 2027 points to about 650,000 employees, underlining a structural realignment rather than a brief downturn.

Even so, the global market is expanding. CAR puts worldwide sales in 2025 at 81.3 million vehicles, the strongest level in eight years, with the possibility of setting a new record by 2027 if China maintains strong momentum.

China remains the industry’s main arena: for 2025, passenger-car sales there reach 24.3 million, while production is set to hit roughly 30 million vehicles—more than a third of global assembly. Europe, by contrast, accounts for only about 15% of worldwide output. The center of gravity has clearly shifted.

At home, Germany’s 2026 sales outlook is cautiously positive: roughly a 2% uptick to nearly 2.9 million, largely thanks to expected incentives for electric cars. Yet the expert’s central message is unequivocal: the sector’s fate will be decided in China, and a produce-in-China-for-China strategy is becoming essential. For brands with global ambitions, treating that priority as optional no longer looks tenable.