Auto market turmoil takes toll on German carmakers, study says

Volkswagen AG

05/06/2026 06:00

BERLIN, June 5 (Reuters) - German carmakers lost ground to competitors at the start of the year as tariffs, conflict and technological upheaval weighed on sales, according to an EY analysis warning of further pressures ahead.
Revenue generated by the world's major auto groups rose by 2% in the first quarter, with Japanese and U.S. manufacturers leading the trend, according to an analysis published on Friday. German carmakers, by contrast, saw a 4% decline.
"The entire German automotive industry is undergoing a profound structural transformation," EY sector specialist Constantin Gall said, citing losses in key markets like the U.S. and China, costly overcapacity, high software investments and the slow ramp-up of electric mobility.
The Iran crisis adds to uncertainty, with higher fuel prices and inflation expected to dampen demand in Europe.
This means German carmakers can expect the decline to continue, Gall said, adding, "2026 will be another crisis year for the automotive industry."

 (Reporting by Rachel More, editing by Thomas Seythal)
 ((rachel.more@thomsonreuters.com;))