The record profits of the financial companies in the DAX contrast with the slump in the export-oriented German automotive and chemical industries. US tariffs and growing competition from China are putting increasing pressure on manufacturing companies. As a result, the profits of DAX-listed car companies slumped by 81% or 7 billion euros in the third quarter. This is according to an analysis by the management consultancy firm EY based on the quarterly reports of DAX-listed companies.

Mercedes-Benz saw its earnings plummet by 70%. Volkswagen, Porsche AG, and Continental even accumulated losses totaling 3 billion euros. The automotive industry and chemical companies suffered significant sales losses across North America and Asia. This was only partially offset by growing revenues in the defense sector at Airbus, Rheinmetall, and MTU Aero Engines in Europe.

„After three years of zero or negative growth, the German economy remains in a holding pattern,“ summarizes Henrik Ahlers, head of EY Germany. „Investments are being postponed, and there is little sign of confidence. Nor is there much sign of the hoped-for reforms by the federal government.“

In view of overcapacity in industry and high administrative expenses at headquarters, job cuts are beginning: Overall, the still wealthy DAX companies, which are hoarding around 140 billion euros in cash on their balance sheets, have cut 17,000 jobs, or 0.5% of the total. At Continental, the number of employees was reduced by 3.8% to 95,000, and at Volkswagen by 3% to 633,000. The largest reduction was at Bayer, with a 6% decline to 89,000.

According to EY, automotive companies must manage the coexistence of combustion engines and electric cars while simultaneously building up software expertise. „The massive decline in profits in the automotive industry reflects precisely this upheaval,“ says Jan Brorhilker, Managing Partner of EY's Assurance division. „It is essential for the entire German industry that the restructuring of the automotive industry is successful, because many sectors are closely linked to the automotive sector: when the automotive industry suffers, Germany as a business location suffers. That is exactly what we are experiencing right now.“

In contrast to the collapse of the industry, the financial groups in the DAX are posting record operating profits with EBIT of 12.4 billion euros, „which is remarkable given the difficult economic situation that is ultimately affecting everyone,“ comments Henrik Ahlers, head of EY Germany.

In fact, there are many reasons for this: Allianz, which reported earnings of 4.4 billion euros on Friday, cites high profits in its property and casualty business due to a low level of claims in the third quarter. Munich Re and Hannover Re benefited from low major claims in reinsurance and strong investment income thanks to higher interest rates. Deutsche Bank reports strong investment banking performance, with commercial and private customer business also developing well.

The share of revenue generated by DAX companies in Europe increased significantly in the second quarter of 2025, rising by 3 percentage points to 49% due to US tariffs and increasing competition in North America and Asia-Pacific. The strongest sales growth was recorded by online retailer Zalando, at 27%, due to its acquisition of About You. It is followed by Airbus, Rheinmetall, and MTU Aero Engines, each with growth rates of around 13% – all three companies are at least partially active in the defense industry.