European FVL market faces AI regulation, tariffs and Chinese competition

The Association of European Vehicle Logistics (ECG) used its 2025 General Assembly and Spring Congress in Cascais to confront ongoing uncertainty across the finished vehicle sector. In a press conference, ECG leaders told Automotive Logistics that the market outlook is pessimistic but realistic, due to geopolitical uncertainty, inflation, trade barriers, tariffs, and competition with China.

European automotive market outlook and industry confidence

As mentioned in our previous coverage, experts including Justin Cox, director of global production at GlobalData, delivered a relatively pessimistic market outlook for the European automotive market, expecting around 1.7% contraction within the year, and suggesting a need for LSPs to reassess capacity, resource allocation and long-term investment models.

Wolfgang Göbel, president of the ECG echoes this during the ECG press conference: “The realistic output is more continued flat market. We lost around 5 million cars in production, so the export will not move in the near future, and in the domestic markets I don’t see a huge recovery. We will stay more or less stable and flat. That means our members have to adapt to the situation and adapt capacities.”

To help its members with this, ECG has developed business intelligence reports, forecasting tools and good practice methodologies for its member groups.

“There’s more pressure from purchasing of our members, which we are able to help them with, through our toolbox and efficiency tools and we are continuing to develop things like standardisation and automation,” he says.

But wider trends in the global market are also putting significant pressure on the European FVL market.

Chinese competition in the European FVL landscape

On top of a flat market outlook, imports are expected to increase due to Chinese OEMs coming into Europe that offer greater competitiveness than European OEMs. The ECG reaffirmed its support for open and rules-based global trade, rather than de-risking and decoupling strategies.

As a result, the association has formed an agreement with the Chinese Association of Finished Vehicle Logistics (CALA) to boost future collaboration with members.

The ECG’s goal is to ensure shared standards, avoid disruption, and facilitate market access as Chinese OEMs expand their presence in Europe.

“When Chinese OEMs come to Europe and they are already familiar with our standards, it’s a benefit for everybody,” he says.

The association is cautiously optimistic about the growing Chinese competition, and sees opportunity in the increasing Chinese presence in the continent, rather than a threat to the existing FVL market.

Highlighting that Chinese OEMs will need collaboration from European FVL firms through the example of SAIC’s Anji Logistics, Göbel explains that many Chinese firms have vessels to access the European market, but limited modes of transport within the continent.

“We have Anji, they are a member, but they have vessels, as you know, like BYD has vessels, but they have 10 trucks for the moment and no compound in Europe,” he says. He adds that the ECG has had talks with them to arrange potential collaboration on this.

Mark Hindley, vice-president, ECG agrees that Chinese OEMs don’t currently have the infrastructure on the group to present a real threat to European FVL firms. “I think they want to move really quickly, and they don't have time to create their own supply chains. They need to rely on the existing structures and facilities. That's where our members can make some good ways forward.”

Hindley also believes that the Chinese automakers, despite their vertical logistics approach in having their own vessels, will need to collaborate with shipping firms that operate in Europe to deliver vehicles to the market.

“Chinese OEMs often have their own vessels, that’s their strategy, they want to have the efficiency of very big vessels, but those very big vessels don’t fit into many [European] ports,” he says. “For them to create the infrastructure is difficult because you have to have deep water ports. And I can speak specifically about the UK, where there are only really two ports that can handle these vessels. So actually, they need to work with us to find access to the market."

AI, digitalisation and regulation

AI, data analytics and automation can be used as near-term tools to streamline vehicle logistics, compound operations and capacity planning, with use cases in the ECG’s working groups including AI-assisted document handling, predictive truck dispatching, and compound space optimisation.

“What we need to do is try to find a way to make things, if we can, a little bit more predictable, a little bite more stable,” says Hindley, “and maybe that’s where AI can help us with better planning and forecasting.”

Göbel agrees, adding that the integration of AI needs to be standardised in order to see results. “It’s a promising tool to be more efficient and to get the redundancies out,” he says.

However, the development of AI across the sector is constrained by data fragmentation, proprietary platforms and competitive risk concerns, and increasingly stringent regulations, particularly in Europe, may be hindering its uptake. Andreea Serbu, senior manager of external affairs at ECG, says the policy and regulatory environment is affecting a lot of the association’s members.

The EU AI Act, brought in by the European Commission, will regulate AI as much as possible, but can hinder development, according to Serbu. She says that at the beginning of the year, there were discussions in Brussels about the automotive strategy in light of this. “How can we ensure that European competitiveness is back on track while we are facing competition from the outside? And at the same time. we are trying to become the cleanest continent in the world,” she says.

Serbu adds that the ECG is aiming to bring more awareness towards policymakers and regulators about AI usage in the industry, including FVL, which she says is “sometimes perhaps forgotten, or not visible”.

The ECG Academy and Digitalisation Working Group also plan to expand their support for members experimenting with AI, particularly in operations such as yard planning, dispatch allocation and back-office administration.

While trade risks and flat volumes dominate the near-term outlook, the ECG positioned itself as a platform for strategic response, through policy engagement, digital capability, and global partnership.

The European FVL’s outlook does not only depend on trucks, trains and vessels, but for ECG, it’s about how the sector adapts, collaborates, and innovates under pressure.