CEE Special Report: Prospects of the automotive industry in the EU and in the region

Global motor vehicle production is approaching pre-pandemic levels, but the production of passenger cars has undergone significant changes over the last decade. While passenger car production in Asia (and in China specifically) has significantly increased, it has dropped significantly in Europe (in Germany in particular). Further, the global passenger car market has shifted, with the Asian market now accounting for two-thirds of the market while the European market has decreased to one-fifth. Despite these changes, seven out of the top fifteen passenger car manufacturing countries are still in Europe. European car manufacturers remain among the top companies worldwide in terms of car sales and revenues. However, European carmakers face several challenges, such as local manufacturers losing out on the Chinese market, Chinese domination of the electric vehicle market, and increased focus from Chinese manufacturers on exports. To counter these challenges European carmakers must focus on reducing costs and improving their products, even considering moving production abroad which is already happening in the CEE region. It is also essential to understand how the EU market for electric cars is developing and the potential impact of Donald Trump's tariffs on US imports of cars and parts.