European Automotive Suppliers Face 350,000 Job Losses as Commission Prepares Policy Response

Europe's automotive supply industry confronts an existential crisis as component manufacturers face cost disadvantages reaching 35% compared to Asian competitors, with 350,000 jobs at risk by decade's end without decisive policy intervention, according to research published by CLEPA, the European automotive suppliers association.

A Roland Berger study commissioned by the Brussels-based trade body warns that European value creation in automotive components could decline 23% by 2030 through combined effects of powertrain transition and offshore value migration. The automotive supply sector, representing 75% of vehicle component value manufactured in Europe and employing 1.7 million workers directly, confronts mounting structural pressures from rising material, energy, and labour costs alongside stricter regulatory frameworks.

Analysis across 36 automotive component categories reveals persistent cost disadvantages between 15% and 35% relative to best-cost production hubs in Asia and proximate manufacturing centres. European suppliers compete against jurisdictions where complete supply chains benefit from substantial public subsidies, reduced carbon compliance costs, and less stringent environmental requirements.

CLEPA Secretary General Benjamin Krieger characterised the situation as a decisive battle for industrial sovereignty, noting suppliers remain committed to investment and innovation but cannot sustain operations on an uneven playing field. The association urges the European Commission's automotive package, scheduled for announcement on 10 December, to incorporate robust measures including local content requirements retaining value within European borders.

For battery electric vehicles, domestic component sourcing remains comparable to internal combustion vehicles at 83%, yet regional value creation proves lower, averaging 70% excluding batteries, as broader supply chains maintain dependencies on external inputs. Value creation peaks for chassis, exterior, and interior systems whilst declining toward powertrain proximity, falling to approximately 50% for electrical and electronic systems across both powertrains.

The Commission faces pressure from German Chancellor Friedrich Merz and industry stakeholders to provide regulatory flexibility on 2035 combustion engine phase-out targets whilst strengthening competitive positioning against Chinese manufacturers.