These are the findings of a new study by FalkenSteg, a consulting company specializing in crisis cases. No other industry has seen a comparable increase in the bankruptcy rate, according to an article by the Swiss Neue Zürcher Zeitung.
Jonas Eckhardt, a partner at FalkenSteg, commented on the reasons for the increase in bankruptcies: “Many companies are simply running out of strength. The most affected are small and medium-sized companies that sell several car brands at once: they often lack premium brands that provide high margins and stable demand”.
The extent to which the problems have become deeper is also evident from the way bankruptcy now looks, Eckhardt notes for Neue Zürcher Zeitung. In the past, the affected car dealerships were most often bought out by competitors. Today, however, there are often no willing buyers at all: many regions have already been “closed” by large dealer groups. “Then they don’t sell them. Then they just close down,” Eckhardt stated.
Often bankrupt “automobile houses with a history” that have been firmly established in the market for decades, the Swiss publication’s article noted. “This collapse is part of a big and rather grim picture. Few know its details as well as Prof. Stefan Reindl. Every year, the Institute for Automotive Economics under his leadership in Geislingen, together with the research company Deutsche Automobil Treuhand (DAT), prepares a report on the mood and financial situation of the car business. The latest findings are disappointing: in 2024, the profitability of German car dealerships has declined significantly,” says Neue Zürcher Zeitung.
In 2025 it got even worse: “Debt loads have accumulated due to uncertainty in demand, price and stock risks as well as the costs of environmental transformation,” says Reindl. And the future outlook is bleak, too: sales will remain “unstable” and discussions about subsidies, charging network infrastructure and emissions regulations create uncertainty for trade planning.
Finally, the weak economy is causing customers to delay purchases and banks to delay loans. By contrast, car dealerships need to invest: in new technology, IT, and personnel, Prof. Reidl concludes disappointingly.
