The European automotive industry’s ongoing crisis is intensifying, with 86,000 jobs lost since 2020.
Situation Could Worsen
According to recent data, the brunt of the downturn has hit Germany hardest, with 50,000 positions disappearing, particularly among subcontractors and parts suppliers.
The industry group CLEPA, representing key automotive suppliers like Sweden’s Autoliv and other major firms, warns that the situation could worsen if policymakers don’t intervene, according to Boosted.
CLEPA highlights a mix of falling demand and rising production costs as primary drivers of the crisis. Europe’s shift toward electric vehicles (EVs) is also proving difficult for many companies that struggle to maintain profit margins amid the costly transition.
Industry-wide, automakers and suppliers are cutting staff, with major German suppliers like ZF and Continental announcing significant layoffs as they try to adapt to economic pressures and a challenging transition to EV production.
Comapanies Struggle
Sweden is also feeling the effects, having lost over 3,000 jobs in its auto sector, as suppliers are forced to make cuts to weather the downturn.
CLEPA's Secretary General Benjamin Krüger states that current conditions are even tougher than during the pandemic's peak, which severely impacted global industries.
The transition to electric vehicles poses both an economic and strategic challenge. According to Krüger, the automotive sector is a major pillar of Europe’s economy, and it now stands at a turning point.
European auto companies must find ways to produce EVs affordably to keep up with market changes, but this transition requires substantial investment in new technology and workforce retraining — an expense many companies are struggling to manage.
CLEPA has called for decisive political action, emphasizing that Europe risks losing its global competitiveness if the situation persists. European automakers are also advocating for stronger support, as they brace for further challenges.
Volkswagen, for example, faces the prospect of its first-ever factory closure in Germany, while BMW argues that the EU’s proposed 2035 ban on combustion engines could increase reliance on Chinese EV technology.
