BERLIN, Sept. 15 -- Germany's automotive industry continues to cut jobs, with the workforce in the sector declining by 1.6 percent year on year in July, the Federal Statistical Office (Destatis) said on Thursday.

Although the total number of employees in manufacturing has been increasing for seven months, Germany's car industry continued the reduction of its workforce that has already been ongoing since mid-2019, according to Destatis.

"The general decline in employment in the automotive industry is rooted in a renewed decline in employees in the supplier industry," a spokesperson for the industry association VDA told Xinhua. The decline is partly due to the "initial impact of the transformation" to electric drives.

By 2030, almost every second car sold worldwide will be a battery electric vehicle (BEV), according to auditing and consulting services company PwC (Germany). The sector's transformation is "in full swing," PwC said.

Besides the switch from combustion to electric engines, "challenging economic and social developments are likely to play a role," the VDA spokesperson added. These include the COVID-19 pandemic, ongoing supply bottlenecks and high producer prices.

In July, producer prices in Europe's largest economy rose by 37.2 percent year on year. According to Destatis, this is the strongest increase ever. Meanwhile, energy prices more than doubled and continued to be "mainly responsible" for overall price developments.

As a result, German automotive suppliers are already considering relocating production to other countries, according to a recent industry survey. Only 3 percent of suppliers still plan to increase investments in Germany in the future.

Last week, German car interior manufacturer Dr. Schneider filed for insolvency due to exploding prices. The company had "fallen into a liquidity crisis despite intensive cost-cutting measures," Dr. Schneider said last week.

Due to the energy crisis, the situation of medium-sized companies in the automotive industry is becoming "increasingly dramatic," said VDA president Hildegard Mueller.

  - Xinhua