The European auto industry is facing major challenges due to China’s growing dominance in the electric vehicle market, which will lead to a shakeup and potential revenue losses.
So says the study conducted by Allianz Tradewhich concludes that it is necessary to face these challenges by adapting to the supplier base, satisfying the changing needs of customers and promoting competition in the electric vehicle market.
He Allianz Business Report also warns that the European car industry faces arMassive organization and a potential loss. in revenue due to changes taking place in the vehicle market, driven by China’s growing share of the electric vehicle segment.
In fact, he estimates that the European automobile industry could will be reduced by 24,000 million euros per yearand associated supply chain industries could be reduced by an additional €21 billion.
The report highlights several factors, such as the shift towards a less car-centric society, China’s leadership in electric vehiclesfewer components in electric vehicles and a European ban on new internal combustion vehicles from 2035.
This is something that is especially important for Europe for several reasons. On the one hand, the automotive sector is the largest industrial sector in Europe, representing 10% of the manufacturing industry in general. In addition, it has a great impact on upstream industries such as metallurgy, plastics, and electronics.
Furthermore, 80% of cars sold in Europe are assembled locally in the European automotive industry. And, as if that were not enough, exports generate a significant trade surplus for the European economy, which has fluctuated between 70,000 and 110,000 million euros per year In the last decade.
The electric vehicle grows at a good pace
The shift towards electric vehicles is transforming the European automotive industry, says an Allianz Trade report highlighting that in 2022 sales of alternative energy vehicles reached a record 4.4 million units, rrepresenting 47% of all new vehicle registrations in Europe.
In fact, battery electric vehicles (BEVs) led this growth, with a 28% sales increase and representing 12% of all new vehicle registrations.
And with a planned ban on internal combustion engines by 2035, the auto industry is in the midst of a total shakeup, grappling with changes to its supply chain, changing customer demands, competition from new entrants and the evolution of a market less focused on automobiles.