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Mediocre Outcomes Would Suit Europe’s Car Industry Just Fine
The European automotive industry is facing unprecedented turmoil and uncertainty. The threat of Donald Trump’s tariffs on European auto imports looms large, putting traditionally profitable sales in the U.S. at risk. Meanwhile, the electric car revolution has brought new pressure to the market, with Chinese upstart EV makers offering a reported 30% cost advantage.
The situation is dire, with even optimistic forecasts predicting stagnant sales and major profits taking a hit. According to GlobalData, the Western European auto market will struggle in 2025, with only a 0.5% gain expected. This comes after a year of unchanged sales in 2024. In fact, pre-Covid 2019 saw peak sales of 14.3 million, but this has dropped by nearly 3 million every year since.
Other forecasters are just as pessimistic, with BMI predicting a rise in European sales of only 3.8% to 17.0 million in 2025.
The Center for Automotive Management warns that some leading players will go under or be forced into mergers in the coming years, highlighting the need for transformation and innovation within the industry.
In fact, it’s not just a matter of survival – even mediocre outcomes would likely suit Europe’s car industry just fine. With economies weak and car sales still below pre-Covid levels, investors should be pinching themselves to ensure they’re not dreaming of better times ahead.
It seems that European automakers are in the throes of a perfect storm: an unpalatable choice between mergers or bankruptcy, with profits set to take a hit of 20-30% this year alone.
Source: https://www.forbes.com/sites/neilwinton/2025/04/15/mediocre-outcomes-would-suit-europes-car-industry-just-fine/
