(Aug 14): Germany’s domestic car-industry workforce has dwindled to the smallest in more than two decades, as manufacturers cut costs amid growing competition from Chinese rivals.

In the year through June, the German auto industry lost more jobs than any other manufacturing category, the Federal Statistics Office reported Friday. The workforce at carmakers including Volkswagen AG, BMW AG and Mercedes-Benz Group AG shrank by 5.8%, or 42,300 employees, more than double the contraction in the broader industrial sector and to the lowest since 2005.

German carmakers are increasingly being strained by tough conditions in China, Chinese competition in global markets and high production costs at home.

VW, BMW and Mercedes all pared back their outlooks in recent weeks after poor showings in China, the world’s biggest car market. VW alone is considering cutting as many as 100,000 jobs in Germany and shuttering some plants.

The automobile industry remains the second-biggest industrial employer in Germany after machine building, which had just over 900,000 workers at the end of June compared with 691,500 in the car sector, according to the statistics office.

While car- and engine-makers and parts suppliers each employed fewer workers, down 6.1% and 7.6% respectively, the workforce at manufacturers of car bodies and trailers expanded by 10%, the data showed.

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