European Auto Suppliers Warn of Profit Crunch, Plan Cuts to Western Europe Capacity
Industry leaders warn that policy relief on energy costs is needed to avoid a hollowed supplier base.
Overview
- The latest CLEPA–McKinsey Pulse Check reports seven in ten suppliers expect margins below the 5% level needed to sustain investment.
- One third foresee zero or very low profits, raising risks for employment and the viability of future projects.
- Half of firms plan to reduce production capacity in Western Europe within five years, while only 10% expect to expand.
- Sixty-nine percent already face competition from Chinese imports, up 12 points since spring, and most anticipate further pressure.
- CLEPA calls for lower electricity prices, streamlined bureaucracy, improved financing and local-content policies to retain capabilities in Europe.