Thursday, February 6, 2025

50 percent more car companies will go bankrupt by 2025

2024 was a bloodbath for and in the automotive industry. There is no sign that it has stopped. On the contrary, the number of bankruptcies is feared to increase by 50 percent.

We need to improve so that 2025 doesn't become a bloody year. At least when we look back on it through the eyes of the automotive industry.

Because when 2025 turns into 2026, 50 percent more companies in the automotive industry will have gone bankrupt. That is, when compared to 2025.

This is shown by an analysis from the consulting firm Falkensteg.

According to the analysis, the number of bankruptcies in large German companies with a turnover of over ten million euros rose from 279 to 364 cases last year. The majority of these – namely 56 bankruptcies – came from the automotive industry alone.

Even the very large companies, where turnover is counted in billions of euros, will not go bankrupt. For example, Volkswagen's CFO himself has warned that the car brand could run out of money within a couple of years to three if the trend is not reversed.

The majority of bankruptcies also come on top of a dull increase. Compared to 2023, there were a whopping 65 percent more bankruptcies in the automotive industry last year. This means that almost one in six companies that collapsed in Germany last year was part of the automotive world.

"Larger insolvency cases, such as those of the WKW Group with 600 million euros in sales or Eissmann with half a billion euros in sales, were rare in the past," Jonas Eckhardt, car expert at Falkensteg, tells Automobilwoche .

In the past, car manufacturers would have insisted on keeping such large suppliers alive. But now there is no money for such support and rescue plans anymore.

A frightening example of the new situation is the story of Recaro Automotive's German branch. The more than 100-year-old company, which specialized in car cabins, was on the verge of bankruptcy. Only at the last moment was the entire business saved by an Italian investor.

The disastrous situation at Recaro meant that Ineos, which owns a third of Mercedes' Formula 1 team, had to cease production in the fall of 2024.

One place where clarification has not yet been found is at BBS. The rim manufacturer has had a hard life in recent years. And in October 2024, it filed for the fifth insolvency declaration in just a few years. At the same time, all employees were dismissed.

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