EU vehicle sector witnesses ‘horror fall’
Date
10/6/2024 8:25:00 AM
(MENAFN) The European Union's automotive sector is grappling with significant challenges, experiencing its toughest months since the COVID-19 pandemic, according to a report from the German tabloid Bild. Industry expert Ferdinand Dudenhoeffer, founder and former director of the Center for Automotive Research (CAR), has highlighted a concerning trend: car sales within the European Union have dropped by 200,000 vehicles in the first eight months of 2024 compared to the same timeframe last year, with projections indicating that the situation is likely to worsen.
Dudenhoeffer pointed out that sales of electric vehicles (EVs) have also taken a hit, declining by 8.3 percent year-on-year, equating to 140,000 fewer electric cars sold by the end of August. He noted that key markets, such as Germany and Italy, have shown a slight decrease in sales during this period, reinforcing the sentiment that the outlook for the industry is bleak.
As manufacturers seek to mitigate their financial losses, they are resorting to price increases. Dudenhoeffer reported that the 20 most popular gasoline-powered car models have already seen price hikes of approximately 10 percent. He cautioned that the upcoming months would pose even greater difficulties for the industry, predicting a decline that could surpass the challenges faced during the height of the pandemic. Germany, in particular, is expected to bear the brunt of this downturn, with recovery not anticipated until 2026.
The gravity of the situation is underscored by recent announcements from Volkswagen, the European Union’s largest car manufacturer, which has indicated that it may need to consider plant closures or layoffs in Germany for the first time in its 87-year history. The company also revealed plans to terminate its employment security program, which had previously aimed to protect jobs from cuts until at least 2029.
With mounting pressures from declining sales and rising costs, the future of the European Union car industry remains uncertain. As manufacturers navigate this turbulent landscape, the potential for long-term repercussions on employment and production capabilities looms large, raising concerns about the sector’s ability to recover in the near future.
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