NEXERY whitepaper: three scenarios for German passenger car production to 2032, the impact on suppliers and options from rightsizing to restructuring.
Study lead: Tobias Bock — Managing Partner, NEXERY Munich
The German automotive base is already measurably shrinking: car production 11% below 2019, a further -4% this year, employment -5.8%, and OEMs expanded their headcount programmes again in September 2026 (VW Future Plan 2030: around 50,000 jobs). At the same time, German OEMs' China sales are falling by 20 to 32%, straining export models, development contracts and investment budgets. Suppliers lose disproportionately, and the widely discussed alternatives of robotics, defence and space need sober assessment rather than hope.
German plants built 4,148,836 cars in 2025, 11.0 % fewer than in 2019 (4.66 million); from January to August 2026 output fell another 4 %, although domestic registrations rose 5 %.
Employment in vehicle manufacturing (WZ29) fell to 691,500 by the end of June 2026 (−5.8 %); parts and accessories makers already lost 11.1 % in 2025, vehicle and engine makers only 2.1 %.
VW is cutting more than 35,000 jobs in Germany by 2030 and its “Future Plan 2030” adds around 50,000 worldwide; Audi plans up to 7,500, Porsche 1,900 plus 2,000 fixed-term contracts and another 5,000 by 2035. In China, VW lost 25.9 %, BMW 20.4 %, Mercedes-Benz 28 % and Porsche 32 % (H1 2026).
Stabilisation (S1: 3.94–4.15 million cars), structural downsizing (S2: 3.32–3.73 million) or accelerated loss of production sites (S3: 2.70–3.11 million) – up to 1.45 million fewer vehicles than in 2025.
A portfolio fully tied to German car plants loses 5–15 % (S1), 15–32 % (S2) or 33–51 % (S3) in the model case, because volume and order value per vehicle fall at the same time.
721,400 automotive employees compare with around 105,000 in the defence industry; a shift of just 10 % would equal 69 % additional defence staff. In the liquidity example, EUR 8 million of cash shrinks to EUR 1 million – a EUR 1 million gap to the minimum reserve, EUR 6 million with transformation.
Transfer the scenario ranges to your own customer-product-site portfolio and test 13-week liquidity against rightsizing payouts.
Test capacity, model and supplier decisions against three volume ranges instead of a single plan figure.
See when transformation, rightsizing or restructuring can be financed – including early-warning indicators and the obligations under Sections 15a, 17 and 19 of the German Insolvency Code.
A decision framework with liquidity calculation, stakeholder logic and a 100-day plan for automotive mandates.
Sober suitability criteria for robotics, defence and space instead of hope – with examples from Schaeffler to Porsche SE.
German passenger car production remains well below its pre-crisis level. In 2019, German plants built 4.66 million vehicles; in 2024 the figure was 4.07 million and in 2025 exactly 4,148,836 cars, 11.0% below 2019. The slight recovery from 2024 to 2025 has not continued: from January to August 2026, 2,651,600 vehicles were produced, 4% fewer than in the same period of the previous year. Notably, new registrations in Germany rose by 5% over the same period. A recovery of the home market therefore does not automatically secure the utilisation of German plants.
Employment follows volume with a lag. At the end of June 2026, the WZ29 sector (motor vehicles and parts, establishments with 50 or more employees) counted 691,500 employees, 5.8% fewer than a year earlier. Among manufacturers of parts and accessories (WZ29.3), employment had already fallen by 11.1% in 2025, compared with only 2.1% among vehicle and engine manufacturers (WZ29.1). The supply chain is thus bearing a disproportionate share of the adjustment.
The OEMs expanded their programmes over the course of 2026. On 20 December 2024, Volkswagen agreed to cut more than 35,000 jobs in Germany by 2030 and to reduce technical capacity by 734,000 vehicles; by June 2026, more than 28,000 later departures had been contractually agreed. The Group's "Future Plan 2030", approved on 3 September 2026, adds around 50,000 additional job cuts worldwide, roughly half of them in Germany. Audi plans to cut up to 7,500 jobs in indirect functions by 2029; Porsche around 1,900 jobs by 2029 plus 2,000 expiring fixed-term contracts and a further 5,000 jobs by 2035. Mercedes-Benz has set a technical capacity of 2.2 million vehicles worldwide for 2028, 900,000 of them in Germany, a calculated share of 41%. BMW confirmed a voluntary severance programme on 30 July 2026 with fixed-cost effects from 2027, without naming a headcount figure. The whitepaper explicitly warns against adding up group and brand programmes: technical capacity and actual production are different measures.
China adds further strain. In the first half of 2026, VW Group deliveries there fell by 25.9% to 973,000 vehicles, BMW's by 20.4% to 261,773, Mercedes-Benz's by 28% to 210,245 and Porsche's by 32% to 14,501. Because many of these vehicles are built locally, this does not translate into an equally large drop in exports – but export models, component supplies, development contracts and the groups' investment headroom come under pressure.
NEXERY gives the contraction a clear reference metric: the number of passenger cars built in Germany, base year 2025 with 4,148,836 vehicles. This metric describes the production location regardless of the manufacturer's nationality; revenue, employment and value added may develop differently. The scenarios define end states for 2032 relative to 2025. No constant annual rate of decline is assumed, no probabilities are assigned, and developments between or outside the bands – including growth – remain possible.
Scenario S1, "Stabilisation on a smaller base", assumes 0 to -5%, i.e. 3.94 to 4.15 million cars in 2032 and up to 0.21 million fewer vehicles than in 2025. New models and a more stable European demand secure German plant loading; China remains demanding but does not withdraw further production mandates from Germany on a broad scale. After the initial adjustment phase, production stabilises in 2031/32 close to the 2025 level. OEMs consolidate variants and adjust shifts; job cuts can continue despite almost stable output.
Scenario S2, "Structural downsizing", assumes -10 to -20%, or 3.32 to 3.73 million cars, a reduction of 0.41 to 0.83 million vehicles. Competitive pressure and weaker earnings reduce investment headroom, model and component awards more often go to other regions or suppliers, and even in 2031/32 follow-on contracts only partly replace expiring business. OEMs merge platforms and sites, individual plants lose follow-on models, and consolidation and partial disposals increase.
Scenario S3, "Accelerated loss of production sites", assumes -25 to -35%, i.e. 2.70 to 3.11 million cars and 1.04 to 1.45 million fewer vehicles. Competitive and export losses combine with the withdrawal of production mandates; under financing pressure, follow-on models and viable transitions are missing by 2032. Site sales, conversion and closure become key options, and OEMs concentrate volume on competitive plants.
For the OEMs, the whitepaper derives three modes of steering: in S1 the existing network is selectively improved – shifts and lines adjusted, promising models financed, critical supplier capabilities secured. In S2 capacity and portfolio are concentrated; awards to suppliers must match realistic call-offs and account for adjustment costs. In S3 the viable core is secured, with sale, conversion or closure of sites becoming key options and new owners or industry partners potentially providing a future for individual plants. Defence use can preserve employment and value added at a site even though no more cars are built there. Preserving industrial substance must therefore be distinguished from the size of the automotive sector.
For suppliers, looking at volume alone is not enough. On top of lower vehicle volumes comes a changing order value per vehicle: new powertrains and sourcing decisions change which components a plant buys and which supplier receives them. Then there is the liquidity effect, because tooling, inventories and pre-financed work continue to tie up capital while weaker earnings limit the financing of adjustment. NEXERY therefore models a supplier whose existing portfolio is fully tied to German car plants, at constant prices: revenue index 2032 = 100 × volume share V × order value A. Exports to foreign plants, aftermarket and new business are excluded.
The parameters per scenario: in S1 the volume share remains at 95–100% and the order value per car at 90–95%; the revenue index lands at 85.5–95.0, a decline of 5–15%. In S2 the volume share falls to 80–90% and the order value to 85–95%; the index drops to 68.0–85.5, i.e. 15–32% less revenue. In S3 the volume share is 65–75% and the order value 75–90%; the index is 48.8–67.5, a loss of 33–51%. A worked example makes this tangible: a company with EUR 100 million in revenue, 15% less volume and 10% less order value retains 100 × 0.85 × 0.90 = EUR 76.5 million of existing revenue – a decline of 23.5%. It must adjust its cost base and at the same time assess which part can be economically replaced by new business.
The classification is crucial: this is not a forecast for the entire supplier sector, but a stress test for an exposed portfolio. Customer mix, component portfolio and sourcing shares determine the development of each individual company; those supplying the right new components can grow even against the industry trend. OEM and supplier percentages must not be added together.
Early-warning indicators link the scenarios to decisions. The whitepaper names three levels: market trend and awards, call-offs and earnings, liquidity and measures. Car production is assessed over several months together with exports and model changeovers; for investments, what counts are the secured model and parts awards and their durations per plant and product. If call-offs and prices deviate from the financed plan, contribution margins must be reassessed after concessions, leading to adjustments in shifts, inventories and staffing. A 13-week plan shows the liquidity trough and funding requirement. New markets are financed step by step: a paid pilot, customer approval, an order and a robust ramp-up plan prove market access; projects without sufficient evidence are terminated. Acute liquidity or legal issues require immediate action, while strategic scenario changes should be based on consistent market and order signals, not a single monthly figure.
The same industry scenario can trigger transformation at one company and a need for restructuring at another. The whitepaper distinguishes three options. Transformation means developing new products, customers or markets; it is suitable when capabilities are transferable and the transition is financed until reliable revenues are reached. Rightsizing aligns capacity, costs and organisation with the permanently viable business – suitable when the core remains competitive but a larger market entry is not financeable or strategically sensible. Restructuring and transactions close financing gaps through owner contributions, investors, a sale or formal restructuring proceedings; where grounds for insolvency exist, statutory obligations apply. Rightsizing and transformation can be combined: companies can shrink their automotive business and enter new markets in parallel, provided this is financed.
Which option is realistic is determined by financial strength and time. If transformation is financed, the company can carry development, qualification, ramp-up losses and the restructuring of the legacy business; new markets receive a limited budget with customer and earnings milestones. If funds suffice only for rightsizing, capacity and costs are tailored to secured customer demand; partnerships or a later investor can keep a smaller transformation option open. If funds do not even cover that, capital injection, sale or restructuring take priority, and in the event of illiquidity or over-indebtedness the statutory requirements must be examined without delay.
Rightsizing follows four steps: prove viability – customers and products are assessed by contract duration, contribution margin and capital commitment, because a plant with high utilisation can still be economically weak. Pre-finance the adjustment – personnel measures, relocation and site closures consume liquidity before the full savings take effect; a financing plan must cover the lowest liquidity point and a robust reserve. Adjust capacity bindingly – shifts, machines, floor space and indirect functions must match secured loading. Preserve connectivity – key people, manufacturing know-how and customer access are deliberately retained, because protecting every legacy structure would tie up capital needed for the viable core or new orders.
An illustrative liquidity calculation shows why cash on hand does not yet mean room for manoeuvre: from EUR 8.0 million at the start, EUR 5.0 million remain after EUR 3 million of operating losses, EUR 1.0 million after EUR 4 million of rightsizing payouts, and EUR -4.0 million with a further EUR 5 million for transformation. Against a minimum reserve of EUR 2 million, this leaves a financing gap of EUR 1 million from rightsizing alone and EUR 6 million with transformation. The real decision requires payment-accurate planning with committed credit lines, measure costs, working capital and risk buffers.
Where funds are lacking, insolvency law applies: illiquidity under Section 17 InsO, over-indebtedness under Section 19 InsO and the filing obligation under Section 15a InsO take precedence over strategic restructuring plans; low equity or investment capacity alone does not meet this threshold. Insolvency proceedings do not necessarily lead to liquidation, however – restructuring, sale or partial continuation can preserve industrial substance.
Humanoid robotics, defence and space offer automotive companies different entry points – a concrete customer stands at the beginning of every transformation. Robotics needs actuators, drives, sensors, electronics and contract manufacturing; defence needs vehicle technology, metalworking, drives and qualified system supply; space needs precision components, special bearings, materials and test technology. The whitepaper is clear: these fields can preserve the revenue and industrial employment of individual companies, but full compensation for the automotive decline cannot be inferred from the examples.
Robotics opens a component market for suppliers. Schaeffler is transferring its bearing, gearbox and electric motor expertise as well as mechatronic integration and test technology to robotics; a separate five-year actuator contract with Humanoid is intended to cover more than 50% of demand for wheel-based platforms by 2031. Bosch agreed to manufacture the HMND 01 for the European market, contributing industrialisation, production planning and supply chain management. This option is open to mechatronics, drive and precision specialists as well as contract manufacturers – they need technical customer approvals and a financeable volume profile. Partnerships and supply intentions are not proven revenues; the market ramp-up remains a business risk.
Defence is not a broad safety net. The automotive industry employed around 721,400 people in September 2025, the defence industry a rounded 105,000 in the 2022 data year. If just 10% of automotive employees (72,140) were to move fully into defence jobs, this would equal around 69% additional staff for that industry. Nor is the 2026 defence budget of EUR 108.2 billion – EUR 82.69 billion regular plus EUR 25.51 billion special fund – industry revenue, since it includes personnel, operations and infrastructure. Two cases show concrete pathways: for the VW site in Osnabrück, Volkswagen, the state of Lower Saxony and Aurelius Capital agreed key terms of a possible sale on 7 September 2026; Rafael is to contribute system expertise for defence use, and vehicle production is scheduled to end in summer 2027. DEUTZ is pursuing expansion through the acquisition of military vehicle company FFG, financed among other things by a capital increase approved in August 2026, with closing expected in late 2026 or early 2027. For smaller companies, supplying an established system house is closer to their existing business than developing a complete system themselves.
Space rewards qualified specialist capabilities: Schaeffler Aerospace supplies special bearings and high-precision components, Rheinmetall and ICEYE are planning satellite production in Neuss according to a June 2026 announcement, and Porsche SE took a stake in Stoke Space in September 2026 – an investment, not the conversion of a car factory. According to ESA findings, automotive components require mission-specific qualification evidence; without financed testing and concrete programme access, manufacturing competence does not become a reliable revenue option.
Three conditions must be met together: customer access, technical approval and a financed ramp-up. If customer access is missing or pre-financing takes too long, the core business, a partnership or a sale take priority.
OEMs, suppliers and financiers pursue different goals, yet call-offs, adjustment costs and financing must fit together in one consistent plan. For OEMs this means linking plant and model decisions to realistic volume plans and securing critical suppliers and tooling – a lower part price creates little value if it triggers an unfinanceable gap at the only qualified supplier. Suppliers start from the customer-product-site portfolio and determine, for each unit, secured orders, costs, capital commitment and adjustment payouts; new markets only receive funds if the transition to a viable business remains financed. Financiers need a traceable liquidity trough, robust measures and a clear perspective for the core business; transformation projects additionally require evidence of customers and qualification, and funds can be tied to verifiable progress.
NEXERY's proposal for the first 100 days structures implementation in four phases. Days 1 to 14: create transparency – consolidate 13-week liquidity, customer call-offs and earnings by product and site, review critical suppliers and the legal position; the result is a reliable starting point. Days 15 to 30: calculate three stress cases – transfer the scenarios to the company's own portfolio and determine utilisation, earnings and liquidity trough with and without measures; the result is a set of financeable options. Days 31 to 60: decide on option and financing – specify rightsizing, assess new markets for capabilities, customers and qualification, involve owners, banks or investors; the result is a budget, responsibilities and milestones. Days 61 to 100: start implementation and market proof – adjust capacity, secure the agreed funds, launch paid customer projects and review the impact monthly. Acute liquidity problems and statutory obligations are dealt with immediately, regardless of this sequence.
Six decisions make the strategy concrete: Which volume is secured – follow-on models, contract durations and customer call-offs per site? Which core remains viable – earnings and capital commitment after full adjustment costs? How deep does liquidity fall – financing need until the measures take effect? Which new role can the company fulfil – component, assembly, contract manufacturing, partnership or investment? Who pays for qualification and ramp-up – customer, owner, financier or industrial partner? When is a project stopped or redirected – based on measurable customer, cost, quality and financing milestones?
The whitepaper explicitly states its limits: the scenarios are conditional end states for 2032 without probabilities. It forecasts neither the insolvency of individual companies nor the revenue of new markets. Industrial conversion can preserve German value added even though it shrinks the narrowly defined automotive sector. The analysis serves strategic orientation and does not replace legal, tax, investment or going-concern advice.
In 2025, German plants produced 4,148,836 cars, 11.0% fewer than in 2019 (4.66 million). From January to August 2026, production fell a further 4% to 2,651,600 vehicles, even though new registrations in Germany rose 5% over the same period.
NEXERY defines three conditional scenarios relative to 2025: S1 "Stabilisation on a smaller base" at 0 to -5% (3.94–4.15 million cars), S2 "Structural downsizing" at -10 to -20% (3.32–3.73 million) and S3 "Accelerated loss of production sites" at -25 to -35% (2.70–3.11 million). No probabilities are assigned; the bands are planning ranges for a company's own stress test.
Suppliers lose several times over: through volume, through order value per vehicle and through tied-up liquidity. An existing portfolio fully exposed to German car plants loses 5–15% (S1), 15–32% (S2) or 33–51% (S3) of revenue in the model. Already in 2025, employment at parts and accessories makers fell 11.1%, compared with only 2.1% at vehicle manufacturers.
Volkswagen AG: more than 35,000 jobs in Germany by 2030; the Group's "Future Plan 2030" adds around 50,000 jobs worldwide, roughly half in Germany. Audi: up to 7,500 jobs by 2029. Porsche: around 1,900 jobs plus 2,000 fixed-term contracts by 2029 and a further 5,000 by 2035. Mercedes-Benz and BMW run voluntary programmes without a specific headcount figure; Mercedes plans a 2028 capacity of 900,000 vehicles in Germany. The programmes overlap and must not be added up.
Only selectively. 721,400 automotive employees compare with around 105,000 in the defence industry; a shift of 10% of automotive staff would equal 69% additional defence personnel. The 2026 defence budget of EUR 108.2 billion is not industry revenue. Individual companies can nevertheless build new business through matching capabilities, financed orders and a system partner – examples are the VW Osnabrück site with Aurelius and Rafael, and DEUTZ with FFG.
First create transparency: 13-week liquidity, customer call-offs and earnings per product and site, plus the legal position under Sections 15a, 17 and 19 of the Insolvency Code. Then run the three scenarios against the company's own portfolio and check whether transformation, rightsizing or restructuring can be financed. Within 100 days, decide, secure financing and start paid customer projects. New markets require customer access, technical approval and a financed ramp-up – otherwise the core business, a partnership or a sale take priority.
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