In recent months, there has been an increasing trend among automotive suppliers to shift their investments abroad, according to a survey conducted by the German Association of the Automotive Industry (VDA). The survey revealed that 37 percent of companies surveyed in May were planning to invest abroad, which is the highest figure since January 2023. Additionally, 32 percent of companies want to postpone investments, 13 percent want to cancel planned investments, and only 17 percent of companies said they were sticking to their investment plans. Shockingly, only one percent of companies expressed interest in investing more in Germany.
This development should be seen as both a warning signal and a wake-up call for Berlin, VDA President Hildegard Müller stated. The federal government must take action to strengthen Germany’s international competitiveness as a business location. To attract investments, key factors that need to be addressed include competitive energy prices, fast planning and approval procedures, and a competitive tax system.
The main reason for companies’ low propensity to invest domestically was their low sales expectations and the burden of excessive bureaucracy. A staggering 83 percent of companies cited excessive bureaucracy as the biggest challenge facing Germany. Despite the government’s planned new bureaucracy relief law, 86 percent of automotive suppliers do not expect it to have any effect. This indicates a growing dissatisfaction among companies with the current business environment in Germany.
