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Car industry to slash more jobs in 2020

Car industry to slash more jobs in 2020

BERLIN: Germany’s VDA automobile association said on Wednesday that it excepted global car sales to fall by 5% this year, the steepest drop since the world financial crisis a decade ago, adding that the crisis would force companies to cut more jobs in 2020.

“Utilization is going down, temporary work contracts are not being renewed, short-time employment with state aid is going up,” VDA President Bernhard Mattes said, adding that the number of permanent staff at car factories was likely to fall further.

“For 2019, we already expect a drop (in employment) on the year, this trend will worsen in 2020,” Mattes said. He said that the German auto industry is facing three challenges.

“First, the decline of the economic situation in the worldwide automotive industry – with effects on capacities, production, exports and employment. Second, the huge uncertainties concerning trade policies between the U.S. and China and the U.S. and Europe. The Brexit comes on top of this. Third, electromobility and digitalization. In both sectors, companies are making enormous investments in advance and have to shape the process of structural change at a time of declining volumes,” reads the statement issued by VDA.

Apart from adapting its capacity, the German automotive industry is pursuing a strategy of innovation: the e-model offensive mounted by the German manufacturers is now in full swing.

By 2023 German companies will have tripled their portfolio of e-models from 50 models today to more than 150 models. By 2024, moreover, they will have invested 50 billion euros in electromobility; on top of this come investments of 25 billion euros in digitalization.

Between January and October, the number of new car registrations rose by 55 percent to over 86,000 vehicles. In October this figure more than doubled (+121 percent) to almost 12,000 units while the market share due to e-vehicles climbed to 75 percent – in comparison with 61 percent in the same month of the previous year.