SME Day 2025: Automotive industry sees bleak future in Bonn!

SME Day 2025: Automotive industry sees bleak future in Bonn!

The 25th SME Day of the Association of the Automotive Industry (VDA) opened on May 21, 2025 in Bonn. The conference under the theme “Perspectives of Automotive Value Creation” attracts numerous representatives from business, science and politics. In her opening speech, VDA President Hildegard Müller emphasized the challenges facing the industry, including international location competition, geopolitical uncertainties, protectionism and the transformation towards climate-neutral mobility. The relevance of medium-sized automotive companies for the German economy is highlighted by Gitta Connemann, Parliamentary State Secretary, in her keynote speech.

A recent survey of 136 automotive suppliers shows alarming results: 42% of companies rate their situation as bad or very bad, while 39% rate the situation as neutral and only 19% as good or very good. In the next 12 months, 31% expect it to improve, while 26% expect it to get worse. Over 63% of those surveyed trust that the new federal government will improve location conditions in Germany.

Investment plans in decline

Despite these hopes, 76% of companies plan to postpone, relocate or cancel their investments in Germany. What is particularly worrying is that 24% are considering relocating to other countries (EU, Asia, North America) and 20% would like to cancel investments entirely. Only 1% intend to increase investments in Germany.

There are many reasons for the reticent investment activity. 58% of companies cite the sales situation and expectations as the main reason, followed by the cost situation in Germany (16%) and the financing conditions (15%). In the last three months, 40% of companies conducted loan negotiations, with 69% reporting restrictive behavior from banks. These developments shed critical light on the support the sector needs in the current market situation.

Bureaucracy and a lack of skilled workers as inhibiting factors

In addition, 88% of companies feel heavily burdened by bureaucracy. Problems in the road infrastructure also have a negative impact on 42% of those surveyed. The challenge of the skills situation also remains: 31% of companies suffer from skills and labor shortages, and 57% plan to reduce their employment, which represents a more negative forecast compared to previous surveys.

The survey, conducted from May 5 to 15, also reveals that two out of three companies (65.5%) see the current order situation as a major or very major challenge. Weak overall economic development and the European car market are contributing to uncertainty in the industry. While the high order backlogs of the past have largely been worked through, it is primarily inefficient political conditions that are putting a strain on companies. Müller therefore calls for effective measures, including competitive energy prices, reductions in bureaucracy, infrastructure investments and combating the shortage of skilled workers.

Overall, there is a clear call for politicians to more actively support small and medium-sized automotive companies in order to meet the challenges of the future. The industry's meager investment intentions and concerns require urgent and sustainable solutions to ensure competitiveness and strengthen Germany as a business location.

For further information on the topics and discussions at the SME Day, visit the website VDA and Vision Mobility.