Thousands of EU automotive positions get declared in danger
Date
9/18/2024 8:16:31 AM
(MENAFN) The European automotive sector is grappling with a significant crisis as major manufacturers confront plant closures due to challenges in adapting to the electric vehicle (EV) transition, alongside slowing demand and increasing competition. A recent analysis by Bloomberg, based on data from Just Auto, reveals alarming statistics: nearly one-third of major passenger car plants operated by industry giants such as BMW, Mercedes-Benz, Stellantis, Renault, and Volkswagen were underutilized last year. These manufacturers produced fewer than half the vehicles their facilities were designed to handle.
Current annual car sales in Europe are approximately 3 million units below pre-pandemic levels, leading to underfilled factories and threatening thousands of jobs across the continent. The report emphasizes that the impending closures raise concerns about a prolonged economic downturn for the region, especially as it struggles to compete with key players like the United States and China.
Matthias Schmidt, an independent automotive analyst based in Hamburg, highlighted the intense competition in a shrinking market, stating, “More carmakers are fighting for pieces of a smaller pie.” He noted that certain production plants are likely to face closure in the near future.
In a significant development, Volkswagen announced last week that it is contemplating factory closures in Germany for the first time in its nearly nine-decade history, citing difficulties in transitioning away from fossil fuels. Similarly, BMW has flagged concerns about weak demand in China, warning that this could further impact sales and profitability.
The challenges confronting European automakers have been exacerbated in recent years by soaring energy prices and labor shortages, both of which have contributed to rising operational costs. As the industry navigates these hurdles, the potential for job losses looms large, prompting urgent discussions about the future of automotive manufacturing in Europe.
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