Three challenges for automotive sector coming from China

It is well-known that Europe is gradually losing its dominance in car manufacturing. In our latest special report, Prospects for the Automotive Industry in the EU and CEE, we go deeper into the underlying reasons and the challenges arising from this trend. As of 2023, seven of the world's fifteen largest car manufacturing countries were still European. Additionally, Slovakia and Czechia hold the top two positions globally in terms of cars produced per capita. However, China has rapidly expanded its production capacities, increasing the number of cars produced by 68% since 2012. In the report, we identify three primary challenges that China presents to European car manufacturers. Firstly, European brands must enhance their competitiveness in the Chinese market, as they have been significantly losing market share in recent years. Secondly, China leads the EV market, necessitating substantial efforts for Europe to catch up. Lastly, China is significantly boosting its export capacity, with 16% of its cars being exported, making it already one of the largest global exporters. There are several ways how Europe can face these issues, some of which are also discussed in the Special report.