Automotive Manufacturing in Eastern Germany Sees Modest Growth

The automotive industry continues to play a vital role in the economy of eastern Germany, providing employment for thousands across the region. After a challenging period in 2024, recent figures indicate a slight recovery in vehicle production for 2025.

According to data from the German Association of the Automotive Industry (VDA), automotive plants in the eastern states produced 720,100 vehicles by the end of October, surpassing the previous year's total of 709,600 within the same period. This improvement, though modest, aligns with the overall national trend in automotive manufacturing.

Eastern Germany is home to several major automotive production sites. Notable among them is the Volkswagen plant in Zwickau, which employs approximately 8,500 people and specializes exclusively in electric vehicle manufacturing. Other prominent facilities include Porsche and BMW factories in Leipzig and Opel's plant in Eisenach, each contributing to the region's diverse automotive landscape. Opel's Eisenach facility focuses on a range of powertrains, including hybrids and fully electric vehicles.

The region distinguishes itself with a particularly high share of electric vehicle production, exceeding 50 percent of output in the eastern states. This significant focus on electrification is expected to foster future growth opportunities as the automotive sector continues to evolve toward sustainability and innovation.

Despite the positive trend in vehicle assembly, the auto parts supply sector, particularly in the state of Thuringia, faces ongoing difficulties. Industry associations report that a majority of suppliers in the region have experienced declining sales, with investment activity at its lowest level in years. The subdued demand for vehicles, uncertainties regarding the pace and direction of the electric mobility transition, structural competition issues, and international tensions are cited as primary challenges confronting suppliers.

Survey data reveals that only 11 percent of Thuringian automotive suppliers reported higher revenues, and just 9 percent noted an increase in employment. Representatives from sectoral organizations point to recent adjustments in European electric mobility strategies, particularly the inclusion of plug-in hybrid models, as a positive development that may provide some relief to the struggling supply industry.

While the recovery in automobile production offers a measure of optimism for eastern Germany's manufacturing sector, the ongoing transformation toward electric mobility and the associated impacts on suppliers highlight the need for continued adaptation. The high concentration of electric vehicle production is expected to position the region for future growth, provided that challenges within the supply chain are addressed and broader market conditions stabilize.