Due to the imposition of import tariffs by President Trump, foreign automakers, particularly German ones, are considering the possibility of expanding production within the United States. For Audi, this would mean creating new production capacities.
As it turns out, avoiding tariffs is not the only incentive for moving production from Germany to the U.S. Another important factor is the excessively high labor costs, which create a significant burden for the German automotive industry.
A new study by the consulting company Oliver Wyman has for the first time demonstrated the enormous difference in labor costs between Germany and other countries. This also explains why domestic car production volumes have shrunk by more than a quarter over the last decade, and why this trend is likely to continue.
An analysis of 250 car plants in various countries showed that Germany is the most expensive country for producing new cars. The average labor cost per car, including wages, pension contributions, and other payments, reaches $3,300. Moving production to the U.S. would allow this amount to be more than halved.
However, even American labor costs ($1,340 per car) appear high compared to China, where this figure is only $585. According to the study, in some cases, producing a car in Germany can cost up to $7,800 more than in other countries.
“The question arises of how car production in Germany can even be continued in the future,” stated Fabian Brandt, head of Oliver Wyman in Germany. – “If volumes continue to decline, many mid-tier suppliers will either leave us or cease operations altogether.”
If one ignores the issue of tariffs and focuses solely on minimizing labor costs, there are better options for building new plants than China. The study identified several countries where labor costs are even lower, including Mexico ($305 per car) and Romania ($273).
The absolute leader in workforce affordability is Morocco, where labor costs per car are only $106 – this is less than one-thirtieth of the German figure.