A strong and strategically backed automotive sector is essential for Europe to compete with other regions. With as much as 75% of vehicle component value produced within Europe, the continent’s automotive supply industry plays a vital role in driving economic growth and sustaining hundreds of thousands of jobs. Yet a study by Roland Berger on European value creation has raised serious concerns and the future of this vital industry is at risk.

The European Commission’s upcoming ‘Automotive Package’, expected on 10 December, is a pivotal moment to deliver decisive measures that strengthen supply chains and competitiveness. Without urgent EU action, the continent could lose its industrial backbone, jeopardising jobs and its leadership in clean mobility and innovation.

Europe currently faces up to a 35% cost disadvantage compared to other regions, driven by rising material, energy, and labour costs, along with stricter regulatory and carbon regimes. If left unaddressed, this could reduce value creation in car parts by 23% and put 350,000 jobs at risk by 2030.

Strategic political action is needed to reverse offshoring and protect manufacturing jobs. This includes technology-neutral CO₂ regulation that supports a range of low-emission solutions such as battery electric vehicles, hydrogen, and sustainable fuels. Local content requirements can help build regional ecosystems through targeted incentives, infrastructure development, and skilled workforce support.

Europe must act swiftly to safeguard its role as a competitive, self-sufficient automotive hub.

Read the full Data Digest here.

Author: Andy Cormack