German automakers saw revenues decline 4% in the first quarter of 2026. The global automotive market grew 2% during the same period, led by Japanese and U.S. manufacturers.
An EY analysis reported by Reuters attributes the German slump to tariffs, geopolitical conflicts, and technological shifts. The industry faces a profound structural transformation involving costly overcapacity and a slow transition to electric mobility. German carmakers are also losing market share in key regions, including the U.S. and China.
EY specialists warn that these pressures will persist throughout the year. The firm forecasts that 2026 will be a crisis year for the German automotive sector.