Recent data point to the imminent collapse of one of the pillars of the European economy

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Afrasianet - For decades, the automotive industry has been known as a traditional pillar of European economies, contributing high proportions to GDP, forming a constant part of the economic career of countries and contributing to income stability and thus social classes.


But now that the balance is completely tilted in China's favor, all previous European gains are in jeopardy.


According to a Financial Times report, job losses at European auto parts suppliers more than doubled in 2024 as a slowdown in the continent's automotive industry weighed on the fortunes of its manufacturing supply chain.


According to the report, an analysis from the European Automobile Suppliers Association showed that more than 30,000 jobs across the industry were cut in 2024, compared to more than 15,000 jobs in 2023.


Gradual collapse in the Strip


As job creation slowed, there were more than 58,000 net job losses across industry in Europe, the largest since 2020.


Companies ranging from French tire maker Michelin to German manufacturer Bosch announced thousands of jobs last year that were cut as sales of new cars by European producers steadily fell, leaving suppliers with a surplus of energy and little prospect of a sales recovery.


While larger companies have cut jobs and closed production lines, some smaller firms have been forced into bankruptcy or filed for bankruptcy.


Alexander Marian, director of consulting firm Alex Partners, said: "If there is no more growth for European manufacturers, there will also be no more growth for their equipment makers."


According to an analysis from the European Automobile Suppliers Association, automotive parts suppliers directly employ about 1.7 million people in the EU.


Falling demand following the Covid-19 pandemic, the war in Ukraine and subsequent inflation have weighed on the competitiveness of European industries at a time when rival Chinese firms are seeking to increase market share.


According to an analysis from the European Automobile Suppliers Association, job losses associated with combustion engines since 2020 far exceed those created by switching to electric vehicles.


In a sign of the slowdown in the electric vehicle market, 4,680 jobs linked to suppliers of battery-powered cars were lost in 2024, more than 4,450 jobs created, according to an analysis from the European Automobile Suppliers Association.


European regulations European regulations also pose a challenge for parts manufacturers who supply cars with conventional engines. Starting in 2025, the European Commission will tighten rules on carbon emissions for carmakers, while Brussels also plans to end sales of new combustion engine cars in Europe by 2035.


Laurent Favre, chief executive of French supplier OP Mobility, predicted that Europe's industry-leading fuel tank business would dwindle as a result: "There are about 10 plants manufacturing fuel tanks in Europe. Obviously, its activity will be affected."


The German companies forced out include seat producer Recaro, luxury car parts maker Walter Klein, and AI, which makes lightweight metal components used in many car parts.


AA Chief Executive Christian Kleinjung said in August that attempts at restructuring had not prevented "a slump in demand from automakers."


While electric vehicle sales are expected to increase, suppliers are bracing for a sustained period of low growth, with some announcing long-term plans to cut employees. Forvia, a company that makes dashboards, door panels and exhaust systems, said in February it would cut 10,000 jobs from its more than 75,000 European workforce by 2028.


In November, Michelin said it would close two French factories manufacturing truck and van tyres.

 

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