The automotive industry sector in Europe is undergoing an unprecedented transformation, with many emerging strategic initiatives to shape its future. European subcontractors, key players in this ecosystem, are mobilizing to face the challenges imposed by the energy transition, environmental regulations, and intense international competition. As jobs are threatened, they seek to ensure competitiveness while adapting their business models. The decisions made today will outline the contours of the automotive industry of tomorrow, directly impacting the very structure of the European market.
The European automotive industry is at a crucial turning point, seeking to adapt its strategies in the face of energy, digital, and ecological transitions. The subcontractors are in search of structural solutions to energize their activity on the continent. While manufacturers focus on eliminating the risks of penalties related to the sale of clean vehicles, suppliers are facing a drastic drop in employment, with 54,000 jobs lost in 2024. In an environment where factory closures and social plans are multiplying, these players advocate for a locally based approach to avoid becoming mere “screwdriver factories”. The idea is to ensure that components are manufactured locally to enhance competitiveness. Finally, European leaders are urged to slow down certain regulations to allow for fair competition in the face of the rise of Chinese and American competition.
Automotive Subcontractors: A Changing Market
In the face of current challenges, the automotive subcontractors in Europe are forced to reshape their strategies. Among these challenges, the pressure to produce more environmentally friendly vehicles has become predominant. The regulations imposed by the European Union cause palpable tension among manufacturers, threatened with heavy penalties if they fail to meet the targets. To stand out, these subcontractors must adapt and work closely with manufacturers to build a sustainable automotive ecosystem.
Strategies to Overcome Economic Challenges
With the alarming announcement of the destruction of 54,000 jobs in the sector, subcontractors must arm themselves with solid plans to support their economic future. As the energy transition intensifies, integrating local content seems to be a viable solution. Christophe Périllat and Patrick Koller, respective leaders of Valeo and Forvia, have expressed concern over the threat posed by the excessive importation of Asian components. This risks turning European factories into mere “screwdriver factories,” where the majority of parts are only assembled without adding real value. Jean-Louis Pech, head of the national federation of automotive suppliers, strongly advocates for this, emphasizing the importance of maintaining genuinely local production. Discover the measures being considered by these European leaders.
Industrial and Political Initiatives
On the strategic side, initiatives abound. The support plan for the automotive sector, orchestrated by the French ministers, promises a powerful shift towards transformation by 2030. This plan, coupled with ongoing discussions in Brussels about establishing a minimum of “local content,” underscores Europe’s determination to strengthen its industrial competitiveness and to close the growing gap with China. With measures like these, the sector hopes to see a reduction in the competitiveness gap that has widened by 25 points according to recent studies. See more details on French initiatives.
