Europe's automotive sector faces unprecedented job crisis
According to the latest research and analysis by the European Association of Automotive Suppliers, approximately 86,000 jobs have been lost in this sector since 2020. This represents the highest level of redundancies since the pandemic, indicating worrying signs that the biggest impact on employment may yet be to come.
The Association of Distributors and Producers of Automotive Parts (SDCM) reports that the reasons for this situation include a decline in demand, rising production costs, and delays in investments in new technologies. Forecasts for the creation of 100,000 new jobs in the automotive parts manufacturing sector by 2025 have proven misguided.
Instead, in the first half of 2024 alone, 32,000 job cuts were announced (most notably in Germany), contributing to the total of 86,000 since 2020. During this period, only 29,000 positions were created, including 19,000 in sectors related to electric vehicles.
“These latest figures are a clear wake-up call. The automotive industry, a cornerstone of Europe’s economy, is facing a turning point. To safeguard jobs, accelerate the twin transition, and regain our global competitiveness, we need a regulatory recalibration. This means embracing technology-openness in the CO2 standards, ensuring fair access to in-vehicle data and overall boosting the EU’s economy and competitiveness. Without decisive action, Europe risks losing its leadership in the automotive sector,” warns Benjamin Krieger, Secretary-General of the European Association of Automotive Suppliers (CLEPA).
No money for investments
Profits in the automotive sector are so low that companies cannot support investments crucial for the "green transition." As a result, Europe's competitiveness in the global car market is declining. The European automotive industry has been the foundation of the economy for years, and it is currently facing an unprecedented crisis, which is now being discussed vociferously in the European Parliament.
On 8 October, the European Parliament heatedly debated the ban on selling combustion cars in 2035, repeatedly emphasizing the importance of the automotive industry to the European economy. Many parliamentarians openly stated that this was a bad idea that would harm the domestic automotive sector, paving the way for China. However, no specific solutions to the problem were proposed during the debate, and the room was generally empty, leading to more noise than substantive contributions from MEPs.
One key factor worsening the industry's situation is the decline in demand for traditional combustion cars, exacerbated by rising raw material and energy costs. This demand is not being matched by electric cars, and the European car market is struggling with increasing competition from China.
The EU's ambitious goals for the decarbonisation and digitisation of transport do not align with current actions, and the lack of a coherent strategy to support the industry is causing slow development.
According to SDCM, the European industry needs regulations that promote innovation and support companies in adapting to new market conditions. The sector primarily requires technological openness in CO2 emission regulations and financial support to accelerate digital and ecological transformation.
