BERLIN, June 5 (Reuters) – German carmakers lost ground to competitors at the ‌start of the year as ‌tariffs, conflict and technological upheaval weighed on sales, according ​to an EY analysis warning of further pressures ahead.

Revenue generated by the world’s major auto groups rose by 2% ‌in the first ⁠quarter, with Japanese and U.S. manufacturers leading the trend, according ⁠to an analysis published on Friday. German carmakers, by contrast, saw a 4% ​decline.

“The entire ​German automotive industry ​is undergoing a ‌profound structural transformation,” EY sector specialist Constantin Gall said, citing losses in key markets like the U.S. and China, costly overcapacity, high software investments and the ‌slow ramp-up of electric ​mobility.

The Iran crisis adds ​to uncertainty, ​with higher fuel prices and ‌inflation expected to dampen ​demand in ​Europe.

This means German carmakers can expect the decline to continue, Gall said, ​adding, “2026 will ‌be another crisis year for the ​automotive industry.”

(Reporting by Rachel More, editing ​by Thomas Seythal)