Half of Automotive Suppliers Plan to Cut Production

European automotive component manufacturers warn that the continent's competitiveness is deteriorating at a pace that threatens its industrial capacity. According to the latest 'CLEPA Pulse Check', prepared in collaboration with McKinsey, declining profitability, reduced production capacity, and increasing pressure from Chinese imports outline a scenario of structural risk for the sector.

The report reveals that seven out of ten suppliers expect profits below 5%, the minimum necessary to sustain investments in technology, training, and new capabilities.

A third anticipate zero or very low profits, jeopardising employment and the development of future projects. Prospects do not improve in the medium term: by 2026, 70% of companies will remain below this threshold.

The loss of competitiveness is already affecting the industrial footprint in Western Europe. Half of the suppliers plan to cut their production capacity in the region over the next five years, while only 10% expect to expand it. In contrast, companies see greater opportunities in more predictable markets with lower costs, such as North America and Asia.

This pressure is compounded by the advance of Chinese suppliers. 69% of European companies are already competing with products imported from China, 12 points more than in the spring. Three out of four expect this pressure to increase further in the coming months.

Benjamin Krieger, Secretary General of CLEPA, warns that the situation could lead to industrial hollowing out if urgent measures are not taken: reducing electricity costs, less bureaucratic burdens, better financing conditions, and local content policies that retain critical knowledge in Europe.

The sector also calls for a flexible and neutral technological framework that allows for accelerated innovation and decarbonisation without hindering the transition.

"Without decisive action, component manufacturing in Europe risks disappearing," warns Krieger.