A profound transformation is underway in the industrial heartland of southwestern Germany. The former engine of the German economy is mired in a crisis that has long since become symbolic of a historical upheaval. Transformation, job cuts, and declining sales are hitting the automotive industry hard. Both Porsche and Mercedes are losing momentum, while southern Germany is groaning under the economic weight of this development.
Turning point at Porsche: A company caught in the maelstrom of the crisis.
The automotive industry is experiencing a dramatic turnaround at Porsche. The sports car manufacturer is reporting a loss of almost one billion euros in the quarter – a historic low point. (bild: 29.10.25) Restructuring costs running into billions, declining demand, and new tariffs are weighing on the results. The company’s transformation is consuming capital, while sales markets in China and the USA are weakening. Instead of high returns, only meager profits remain. This upheaval reflects the disruptions that are affecting the entire group.
The planned job cuts are also hitting the region hard. The company is investing in electromobility, but the crisis is slowing down its implementation. Internal sources say that the current year marks the low point – but it is also intended to be the start of a new turnaround.
Transformation at Mercedes: From glory to disillusionment
Mercedes is also experiencing a downturn. Operating profit is falling by around 70 percent, and sales and revenue are shrinking significantly. (welt: 29.10.25) The automotive industry is under pressure because tariffs and exchange rates are driving up costs. While company management speaks of a planned transformation, observers doubt the pace of change.
In southern Germany, locations such as Sindelfingen and Stuttgart are coming under pressure. Production lines are being streamlined, and supply chains shortened. The automotive industry in southwestern Germany is experiencing a structural shift that is profoundly impacting the economy.
The Southwest at a Crossroads – Hope for Transformation
The Southwest is facing a turning point. For decades, the region was considered a center of technological strength, but now it risks losing that status. Suppliers and engineering firms are suffering, while the relocation of production is gaining momentum. This transformation demands investment, but financial resources are shrinking.
Despite the crisis, there remains hope that this upheaval will also open up new opportunities. Collaborations with tech companies, software solutions, and alternative drive systems could provide new impetus. For this transformation to succeed, the automotive industry needs the courage to innovate and political support. Only then will the Southwest – or rather, Southern Germany – not become a symbol of decline, but the beginning of a new industrial era. (KOB)