German rubber manufacturers see chance to reverse years of industry decline

FRANKFURT, Germany—The ongoing decline in Germany's rubber industry can be reversed if competitive conditions are restored in the country and the European Union, sector association WDK has asserted.

German tire and rubber product manufacturers are "loyal to their locations and willing to make local investments," WDK President Michael Klein stated in a March 6 release.

According to Klein, the sector continues to invest "a high proportion" of its value creation in R&D and could "hold its own against increasingly tough international competition if the playing field was level."

An important initial task for the next German government, he emphasized, was therefore to ensure that competitive conditions for EU companies "do not deteriorate further."

Klein added that the changing political landscape, both in Germany and at the EU level, could offer an opportunity to "reverse the ongoing decline of the rubber industry in Germany."

"To achieve this, every possible avenue for reducing bureaucracy must be exploited," he said, calling for EU support through standardizing and eliminating regulatory reporting obligations.

He also called for greater involvement of medium-sized industrial companies in economic policy summits, lower taxation on corporate profits, and improved access to corporate financing.

Klein's statement came in the wake of poor results delivered by the German rubber manufacturing industry in 2024.

Production fell 4.3 percent year-on-year overall to 1.1 million metric tons, reflecting a 4.3-percent decline in tire production to 450,000 tons and a 4.4-percent decline in general rubber to 650,000 tons.

This marked the third year in a row that domestic production declined in Germany by more than 4 percent year-on-year, Klein pointed out, adding that volumes are "now a quarter lower than they were 10 years ago."

"Further cuts will be difficult to avoid this year, as more than one-fifth of companies in the sector are planning to relocate production abroad," according to the WDK's latest member survey.

Overall industry sales dropped to €11.3 billion ($12.3 billion), down 1.1 percent compared to 2023, though combined investment by both tire and general rubber segments increased 1.4 percent to €740 million ($803 million).

WDK's figures also show that employment dropped 4.4 percent year-on-year across the industry, with tires seeing a 2.1-percent decline to 18,400 people and general rubber down by 5.3 percent to 44,600 people.

At 76.6 percent, the overall utilization rate was down 1.2 percent compared to last year: reflecting a mixed trend of improvement in the tire sector and decline in general rubber goods.

Tire industry capacity utilization grew 8.1 percent over 2023 to 79.3 percent, while general rubber goods utilization rates fell 9.0 percent to 73.9 percent, according to the WDK data.