Auto suppliers are slowing down investments: Alarming for the industry!

Auto suppliers are slowing down investments: Alarming for the industry!

German auto suppliers are slowing down their investments in response to persistently weak economic data and global uncertainty. A current survey by the Association of the Automotive Industry (VDA) shows that 76 percent of the suppliers surveyed want to postpone their planned investments in Germany, relocate them abroad or even cancel them completely. This increased value represents a significant increase compared to previous surveys in February 2025 and October 2024.

In February 2025, only 14 percent of companies stated that they would completely cancel investments; Now it is already 20 percent, which underlines the worrying development. At the same time, the willingness to shift investments abroad has decreased. Only 24 percent of companies are now considering this step, compared to 29 percent three months earlier.

Alarming situation of suppliers

VDA President Hildegard Müller describes the current figures as alarming and calls on politicians to take urgent measures to stabilize the situation. There are many reasons for the investment brake. 58 percent of companies say that weak sales expectations in Europe are the main factor. In addition, 16 percent fear high production costs in Germany and 15 percent have problems with difficult financing conditions. The reluctance of their main banks is also worrying, as 69 percent of companies report that lending is restricted.

The VDA study surveyed 136 companies by mid-May, mostly from medium-sized automotive companies, including suppliers and manufacturers of trailers, bodies and buses. The pressure on suppliers is considerable: 42 percent of those surveyed rate the current situation as bad. This has a direct impact on expectations for the coming months, with only 31 percent expecting conditions to improve while 26 percent expect conditions to deteriorate further.

Outlook for the coming months

The general forecasts point to an uncertain future when it comes to automotive suppliers' investment strategies. These developments are particularly worrying as the German automotive industry has traditionally had a strong influence on economic stability. In view of the worsening situation, experts and political representatives are calling for quick action in order not to endanger the future of the industry.