The domestic automotive supply industry is looking anxiously at Germany and the other side of the Atlantic. The crisis in the German car industry, coupled with a real government crisis and the feared punitive tariffs from the US under future President Donald Trump, are weighing on the mood in this important industry.
Well-known representatives in this country include Magna Steyr (Graz), BMW Motoren (Steyr), Pierer Mobility (Wels), AVL List (Graz) and Robert Bosch (Vienna). According to proprietary information, the automotive supply industry recently generated an annual production value of approximately EUR 15 billion and an added value of EUR 7.4 billion.
The sector directly provides 81,700 jobs and indirectly secures almost 200,000 jobs. 900 companies are fully or partially active in the sector. And there hasn’t been any good news from them lately. Staff reductions ranged from market leader Magna to medium-sized companies such as ZKW in Wieselburg.
A showcase factory that politicians like to visit is BMW in Steyr, the world’s largest engine location in Bavaria. But here too there is a crisis at the head office. The bottom line is that the group earned only 476 million euros in the third quarter of this year, which was 83.8 percent less than a year ago. The profit margin in the car industry fell to 2.3 percent.
Suppliers in particular pay well
The supply sector is seen as an above-average paying sector, as is evident from the annual collective labor agreement negotiations in the metal sector. Just a few weeks ago, metal workers completed their KV and received a 4.8 percent increase in salary, which is one percent above progressive inflation. The new minimum wage is 2,518.43 euros. However, employers have left a loophole open: for companies in very difficult situations with high personnel costs, the increase can be reduced by 0.75 percent or 1.5 percent.
The discussion about the future of the combustion engine also played a deep role in politics in Austria; Chancellor Karl Nehammer (ÖVP) has repeatedly spoken out in favor of “technological openness”. A demand that is also postulated by the motoring clubs and the interest group eFuel Alliance Austria.
More and more uncertain factors
In addition to all the uncertainty about the future of engine technology, there is now also the fear of punitive tariffs from the US and tariffs on Chinese electric cars already announced by the EU. “We observe such trends with concern,” Austrian car importers’ spokesman Günther Kerle said recently.
Porsche Holding is doing better than VW
Austria is not only a car supplier, it is also home to the Porsche Holding in Salzburg, the sales channel of the VW Group in Austria and South-East Europe. The holding company achieved a turnover record of 29.4 billion euros in 2023. At 747,700 vehicles, there was a 13.9 percent increase in new car sales compared to 2022, and 212,400 units (up 12 percent) of used cars were sold. The number of employees grew by three percent worldwide; The car dealer employs 35,900 people in 29 countries.
But the Volkswagen Group is also doing well. A large-scale austerity program was announced in mid-September, which could threaten up to 30,000 jobs, German media reported.
Restructuring has been going on for some time at competitor Opel and parent company Stellantis and this also had a direct impact on the Vienna-Aspern transmission location. In mid-July, the former flagship company closed its doors for good. A social plan was implemented for the 300 affected employees and an employment center was established. The last equipment will be handed over to the Vienna Museum on November 26.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
