Europe’s car sector must undergo big changes to stay competitive, says Germany’s automotive lobby leader Hildegard Müller. She warns that more job cuts and plant closures are likely as manufacturers like Volkswagen Group and Stellantis cope with rising costs and foreign competition.
Rising Pressure on European Automakers
Müller highlighted that the European auto industry struggles with expensive energy, high labour costs, and heavy bureaucracy. These factors have left European carmakers at a disadvantage compared to rivals abroad. The growing presence of Chinese carmakers in Europe adds to this pressure.
- Volkswagen Group is expected to discuss doubling job cuts and closing factories in Germany on July 9.
- Manufacturing electric vehicles remains costly in the region.
- European automakers face tough competition from brands like Leapmotor, MG, and Chery, which are expanding local production.
Calls for Restructuring and Factory Sharing
Müller says restructuring is unavoidable to secure the industry’s future. Not all current production sites can remain open, requiring strategic cuts and efficiency measures. To protect jobs, she proposes allowing foreign carmakers to use European factories.
- Sharing production facilities could maintain jobs and strengthen supply chains.
- Europe’s Industrial Accelerator Act aims to reward local vehicle production with Made-in-Europe incentives.
Uncertain Future with Needed Reforms
The sector faces an urgent need for reform to avoid further decline. Müller warns that these changes will affect workers’ expectations and conditions. The full impact on jobs and factories is yet to be confirmed but is expected to be significant.
Why This Matters
Europe’s auto industry is vital for the continent’s economy. The expected restructuring signals a shift to a leaner, more competitive sector. How well the industry adapts will shape jobs, investment, and innovation in Europe’s automotive future.
Source: autonews.com