Job losses at European automotive half suppliers greater than doubled in 2024 because the slowdown within the continent’s automotive {industry} hit the fortunes of its manufacturing provide chain.
Evaluation from the European Affiliation of Automotive Suppliers (Clepa) for the Monetary Occasions confirmed that greater than 30,000 jobs had been reduce throughout the {industry} in 2024, in comparison with simply over 15,000 in 2023.
Job creation has additionally slowed and there have been greater than 58,000 internet job losses throughout the {industry} in Europe since 2020.
Companies starting from French tyremaker Michelin to German producer Bosch introduced 1000’s of job cuts up to now 12 months as gross sales of latest automobiles by European producers have steadily fallen, leaving suppliers with extra capability and little prospect of a rebound in gross sales.
Whereas bigger corporations have reduce jobs and closed vegetation, some smaller companies have been pressured out of business or filed for insolvency.
“If there is no more growth for European manufacturers, there is also no more growth for their equipment makers,” mentioned Alexandre Marian, a director at consultancy AlixPartners.
In keeping with Clepa, automotive half suppliers instantly make use of about 1.7mn folks within the EU.
The decline in demand has adopted the Covid-19 pandemic, warfare in Ukraine and the following inflation. These have dented the competitiveness of European industries at a time when Chinese language rivals are pushing to extend market share.
“Our estimate is that the little growth that we can have on the European market will be taken by the growth of imports, especially Chinese ones,” mentioned Marc Mortureux, director-general of France’s Automotive & Mobility Trade Platform (PFA) {industry} physique.
Whereas European suppliers had been making an attempt to work with native auto teams in China, the massive concern was that Chinese language manufacturers would ultimately assemble automobiles in Europe however with components from China and different nations, he added.
The relative excessive value of EVs and discount of subsidies for the automobiles in nations akin to Germany have capped their widespread uptake, which means corporations investing in these applied sciences haven’t seen the demand they anticipated.
In keeping with Clepa, losses of jobs linked to combustion engines since 2020 far outnumbered these created by the shift to EVs. In an indication of the slowdown within the EV market, 4,680 jobs associated to suppliers for battery-run automobiles had been misplaced in 2024, greater than the 4,450 created, Clepa discovered.
European regulation can also be a problem for components producers supplying automobiles with typical engines.
From 2025, the European Fee will tighten guidelines on carbon emissions for carmakers, whereas Brussels additionally plans to convey gross sales of latest combustion engine automobiles to an finish in Europe by 2035.
Laurent Favre, chief government of French provider OPMobility, anticipated the corporate’s industry-leading gasoline tank enterprise to dwindle in Europe in consequence.
“We have about 10 factories making fuel tanks in Europe. Obviously, their activity will be impacted,” he mentioned.
Favre and different {industry} figures have referred to as for a rethink on incoming penalties. Regardless of Germany slashing EV subsidies in 2023, Chancellor Olaf Scholz mentioned in Brussels not too long ago that the EU wanted “incentives” for electrical automobiles and that levies on automotive emissions ought to “not affect the financial liquidity” of corporations investing within the electrical car transition.
German corporations which were pressured out of enterprise embrace seat producer Recaro, luxurious automotive half maker Walter Klein and ae group, which makes mild metallic die-cast parts utilized in many components for automobiles.
Christian Kleinjung, ae’s chief government, in August mentioned that makes an attempt to restructure had not staved off “the slump in demand from car manufacturers”.
Whereas EV gross sales are anticipated to extend, suppliers are getting ready for a sustained interval of decrease progress, with some saying long-term workers discount plans. The Clepa figures don’t embrace job losses which were introduced for the years forward.
Forvia, a maker of dashboards, door panels and exhaust methods, mentioned in February it could reduce 10,000 jobs out of its European workforce of over 75,000 by 2028.
In November, Michelin mentioned it could shut two French manufacturing facility making tyres for lorries and vans. The measure, affecting greater than 1,200 staff, was as a consequence of “structural overcapacity” due to low value competitors in Asia.
Stéphane Destugues, representing the metallic staff at France’s CFDT union, criticised automotive producers for squeezing prices to such an extent in recent times that suppliers can’t survive.
“It doesn’t allow suppliers to invest as much as they should to protect jobs and prepare for the future,” he mentioned.
For these making investments, many are wanting past Europe. OPMobility has launched a website in Austin, Texas, to serve shoppers akin to Tesla and is opening factories in China.
“We want to stick with our historic clients but we have to look for growth elsewhere. We hardly expect any significant growth in the European automotive sector in the next five years,” Favre added.
