One in Four European Auto Suppliers Now Expects to Lose Money

A new survey lays bare the structural rot spreading through the continent's component industry

The numbers published this week by CLEPA, the Brussels-based association representing Europe's automotive suppliers, amount to a quiet industrial emergency. Some 24% of suppliers now expect negative profitability in 2026, a sharp rise from 15% in the previous survey, meaning one in four companies supplying parts to Europe's carmakers is bracing for a loss-making year.

The data, compiled with McKinsey from across the supplier base, points to a structural competitiveness deficit that Europe can no longer ignore. The word "structural" is doing considerable work here. This is not a demand trough that a rate cut or a subsidy cycle can resolve. Total EU vehicle output in 2025 ran approximately 20% below 2019 levels, equivalent to a shortfall of roughly 3.1 million units, and overall output is expected to remain broadly flat from 2026 onwards.

The Chinese dimension is sharpening. Some 69% of European suppliers already face competition from Chinese imports, a surge of 12 percentage points since the previous survey, and three in four expect that pressure to intensify further.

The human cost is already visible. The European automotive supply industry announced 50,000 job losses in 2025 alone. Combined with 54,000 cuts recorded in 2024, the total over two years reaches 104,000, set against just 7,000 new positions created.

To navigate what CLEPA describes as a perfect storm of persistent market uncertainty and margin pressure, some 73% of companies have significantly adjusted their product portfolios, pivoting toward adjacent industrial applications as a stopgap to preserve capacity and workforces.

CLEPA's Secretary General Benjamin Krieger was characteristically blunt. Without immediate action on energy costs, red tape and financing conditions, parts manufacturing in Europe risks not restructuring but disappearing entirely.