European automakers are experiencing declining profits: Volkswagen, BMW, Mercedes, and Stellantis are reporting worsening results.
Companies’ profitability has dropped from 6–8% to 2–3%, driven by the need for investment in new technologies. Europe’s car production has decreased from 15 million to 12–13 million units per year. Factories in Central and Eastern Europe are operating at higher capacity due to lower costs.
Key challenges include lengthy vehicle development cycles (48 months compared to 16–18 months in China), excessive bureaucracy, and high expenses. Volkswagen plans to shut down three plants but faces resistance from influential labor unions.
The economic downturn is also affecting suppliers like ZF, Continental, and Bosch, who are cutting jobs and closing facilities. Even optimistic projections for 2025 suggest a potential 20% decline in production volumes.
