Wolfsburg's budget in crisis: trade tax collapses dramatically!

Wolfsburg's budget in crisis: trade tax collapses dramatically!

The auto industry is currently on the rocks, especially in Wolfsburg, where the development of trade tax revenue is becoming more worrying with each new quarter. As NDR reports, the city is suffering from the declining profits of the Volkswagen Group and its suppliers, which is having a fatal impact on the city's budget.

In 2024, trade tax revenue for Wolfsburg collapsed by a shocking 40 percent to just 151 million euros. The city has already pulled the ripcord and is planning austerity budgets for 2024 and 2025, with savings of at least five million euros. Material costs and personnel are particularly affected. And the outlook for 2025 points to further decline.

The situation at Volkswagen

The Volkswagen Group has revised its operating profits downwards by 5.1 billion euros. A change in strategy at Porsche, high conversion costs and weak sales figures at Audi and Porsche are the main reasons for this negative development. This also means that the order books in Wolfsburg are full, but the plants in Hanover, Emden and Osnabrück are underutilized, as CEO Blume reported after a recent summit.

Volkswagen's actual tax expense is also alarming. In 2024, 1,276 million euros were allocated to the domestic market and 4,582 million euros to foreign countries, for a total of 5,858 million euros - a significant decrease compared to 2023. This makes the situation even more precarious for the municipalities, especially for Wolfsburg, which is heavily dependent on income from trade tax.

The impact on cities

The prevailing difficulties are not just limited to Wolfsburg. As part of a broader discussion about the crisis in the automotive industry, other cities such as Munich, Stuttgart and Ingolstadt are also suffering from a decline in trade tax revenue. According to Volksstimme, the treasurers in these cities also have to intervene in the planning and make savings.

• München: erwartet 2025 Einnahmen in Höhe von 3,6 Milliarden Euro trotz Rückgängen.
• Stuttgart: Rückgang der Gewerbesteuer von 1,6 Milliarden Euro (2023) auf geschätzte 850 Millionen Euro (2025).
• Ingolstadt: Rückgang von 70 Millionen Euro auf 55 Millionen Euro erwartet.

The situation on the car market remains unclear, and experts warn about the long-term consequences of the decline. René Geißler, co-author of a study at the Wildau University of Technology, emphasizes that the economic pressure on the communities will increase because the demands in these car cities are higher and the resulting budget crises are subjectively increased.

The automotive industry is under pressure, and cities closely tied to this industry are experiencing an unprecedented challenge in their financial planning. Previously a safe place, the economic climate for Wolfsburg and its neighboring cities could cool down significantly in the coming years.