European automotive components industry lost nearly 80,000 jobs over the last 18 months, and the worst is yet to come
As dark clouds pile up over the European automotive industry, the components and aftersales market is looking to the future with significant concern.
European automotive suppliers are struggling to keep their heads above water. In 2024, automotive industry suppliers reported that nearly 54,000 jobs were cut, as reported by the European Association of Automotive Suppliers (CLEPA). After the first half of 2025, the toll for the year reached 22,000 jobs, reflecting significant turbulence in the industry.
But the worst is yet to come, according to Ulrik Lorck, communications manager at CLEPA. "It is expected that more supplier plants could shut down than recorded so far," commented Lorck.
In 2025, for the first time, the EU – historically a prominent components exporter – faced an automotive trade deficit in new mobility components, CLEPA warned. This remarkable event was caused largely by a surge in battery imports from China, which have doubled in recent years. It is also part of a broader automotive industry transformation.
For context, just five years ago Europe exported €7 billion ($8.2 billion) more in traditional car parts to China than it imported.
"Factory closures and bankruptcies are no longer distant threats, but a growing reality for Europe's automotive suppliers," Benjamin Krieger, CLEPA secretary general, warned in a September statement.
“Components suppliers have admitted that the market situation is tough. The already very challenging economic environment and market conditions for Bosch Mobility have recently become significantly more demanding,” Trix Boehne, a spokesperson for Bosch, commented.
She explained: "The ongoing transformation of the automotive industry presents the entire sector with major challenges. The demanding transition to sustainable mobility, competitive pressure, and price pressures in our markets have intensified, while at the same time the global automotive market is stagnating and even declining in Europe.”
In addition, Boehne noted that the ramp-up of some future technologies, such as electromobility and autonomous driving, is being significantly delayed, and leading markets are increasingly shifting to other regions, both in terms of production volume and the adoption of new technologies.
"Due to the sharp decline in demand, we have significant overcapacity," Boehne admitted.
A time to adapt
“Despite the hurdles, European suppliers still form a large, system-critical base, generating roughly €250 billion ($293 billion) in value and about three-quarters of a vehicle's content,” commented Sudip Saha, co-founder of Future Market Insights, a marketing research firm.
“Volumes are flat to slightly down, and Europe is growing more slowly than the global market. Electrified vehicles are roughly one in five new sales, with pure BEVs plateauing," Saha said.
The profitability of European automotive components peaked in 2021 and 2022 and has been on a steady downward trajectory since 2023. "OEM margins have fallen, suppliers are squeezed by EV capex, and jobs are being cut in ICE-heavy regions,” he added. “Business was good, now it is structurally tougher.”
Potential closures of some automotive plants in Europe over the next several years could deal a heavy blow to the industry. "Closing several assembly plants would remove significant local volume and hit the tied supplier clusters hardest," Saha admitted. “Larger tier ones will consolidate, and smaller mono-plant suppliers risk exit. Content will shift from engines and exhaust to batteries, e-drives, power electronics, and ADAS."
As Chinese OEMs plan to open new assembly plants in Europe over the next several years, a big question is whether European component suppliers can adapt their businesses to meet their component requirements.
"Chinese brands bring both lost share and new business as they localise sourcing under tariff pressure, but with demanding commercial terms," Saha added. “The aftermarket remains large and slowly growing, with more electronics, diagnostics, and EV-specific service needs.”
Meeting the new demands of Chinese OEMs will become a new battleground for European component suppliers over the next several years.
"Chinese OEMs such as BYD and others are localising production capacity in Europe to mitigate tariffs and be closer to the market. When they produce here, they need a qualified supply chain here," commented Stefano Capurro, executive consultant with Plastic Consult, a Milan-based thinktank.
To some extent, European automotive components suppliers can benefit from rising European defense spending, which will also increase demand for automotive components and spare parts. According to Capurro, this emerging niche represents an outlet that those with the right technical capabilities and organisational structure should consider and approach proactively: medium volumes, better margins, stringent requirements on quality and traceability, and lower exposure to direct low-cost import competition.
"The old model centred on a few 'domestic' OEMs and on low value-added parts is in structural decline, but at the same time new tables are being set – Chinese OEMs producing in Europe, European defence, technical components for EVs and electronic systems – where European moulders can still have a seat, provided they change fast enough," Capurro added.
Logistics providers must be ready
For the logistics providers, the ongoing change will drive several positive developments, commented Andrew Austin, chief quality officer at Priority Freight.
In particular, the company anticipates an increased need for agile, time-critical logistics. As production networks become more interconnected and model cycles shorten, suppliers will rely even more on rapid, reliable transport to protect build schedules, Austin explained.
In addition, the company expects growth in cross-border and multimodal movements. "New production footprints often create longer, more complex routes – making fast, flexible solutions essential to absorb disruption," Austin stated.
Finally, the transition will result in a more resilient and innovative aftermarket. "The parts and service sector remains robust, and as EV adoption grows, we expect sustained demand for responsive logistics to support new component categories," Austin said.
According to Austin, the market overall will be shaped less by plant numbers and more by the speed and certainty with which suppliers can move components through increasingly sophisticated supply chains.
Despite the challenges, the European after-sales market is poised for strong growth in the coming years. Industry forecasts suggest that Europe's automotive aftermarket could grow by around 35% by 2030, driven by an ageing vehicle fleet and the need to service multiple powertrain types, commented David D'Annunzio, global vice president and automotive vertical lead at DP World.
"The average age of vehicles on European roads has risen steadily and now stands at more than 12 years, increasing the need for ongoing servicing and replacement parts. At the same time, new-car prices have continued to rise in recent years, prompting many consumers to keep their vehicles for longer," D'Annunzio added.
DP World expects the pace of technological change to remain one of the biggest forces shaping the sector.
"European OEMs and suppliers are accelerating efforts to modernise their product portfolios, streamline cost structures and strengthen their competitive position in a fast-moving global market," D'Annunzio noted. “As EV technology matures and supply chains adjust, we can expect greater collaboration between manufacturers and logistics partners to improve agility and reduce total cost.”
In turbulent times such as these, effective and resilient logistics is becoming more important than ever. "Our recent research report, ‘Without Logistics: Automotive Edition’, shows that disruption costs the industry approximately $13 billion each year, but investment in resilient logistics can reduce that by 20%," D'Annunzio shared.
"As OEMs balance investment across EV, hybrid and ICE technologies, the need for stable, visible, and cost-effective logistics networks will increase," D'Annunzio concluded. “Collaboration between manufacturers and logistics providers will become even more important as the industry adjusts to new technologies, customer expectations, and competitive pressures.”
Political will is the key
Automotive components manufacturers and logistics providers all agree that the industry's future remains highly uncertain and will largely depend on the direction European policymakers choose.
For instance, Bosch advocates taking concrete steps to protect the industry, based on dialogue between political stakeholders and the automotive industry.
"The existence of many European automotive suppliers is at stake. Given the intense competitive pressure from new players in other parts of the world, challenging economic conditions, and trade barriers, time is of the essence," Boehne said.
“A swift and fundamental revision of CO2 fleet regulations is particularly critical for the success of our industry,” Boehne added, suggesting that Germany and Europe should leverage their expertise in a technology-neutral manner to reduce CO2 emissions.
"Specifically, this means creating a realistic market perspective for plug-in hybrids (PHEVs), range extenders (EREVs), and renewable fuels beyond 2035 to effectively combine European value creation and climate protection," Boehne said.
Furthermore, instruments such as 'local content' requirements for key components are crucial for retaining European components suppliers' expertise in high-tech sectors – from electric drives to semiconductor manufacturing – within Europe, Boehne stated. "This is the only way we can ensure a level playing field for the European automotive supply industry and successfully address the enormous challenges of our time," she added.
The extent to which new entrants, including Chinese OEMs and suppliers, influence the European market will depend on a combination of regulatory, commercial, and consumer factors, DP Worlds' D'Annunzio agreed. "Their impact will ultimately be shaped by how the region approaches industrial competitiveness, technology readiness, and market access in the years ahead," he said.
The European automotive components industry is certainly braced for fundamental changes in the coming years, though there are still too many unknown variables to make any definitive forecasts about what they will look like.
