European carmakers could be forced to close up to 8 plants due to falling demand and increasing competition from Chinese companies such as BYD, Bloomberg reports.
Average capacity utilization on the continent is just 55%, with plants operating at less than 75% becoming unprofitable. Stellantis is in the worst position, with its European plants, including those producing Alfa Romeo cars, operating at just 45%. According to experts, Chinese brands will capture approximately 5% of the European market this year, and this figure could reach 10% by 2030.
“In the coming years, European automakers will lose from 1 to 2 vehicles (in units sold)“, said Fabian Piatek, managing director of consulting firm AlixPartners.
It is noted that the process of closing factories in Europe is extremely complex and associated with high costs. AlixPartners estimates that closing a large plant with 10,000 employees costs €1.5 billion and takes up to 3 years due to the need for negotiations with unions.
European manufacturers are being forced to cut thousands of jobs and reduce production volumes as demand has not returned to pre-COVID-19 levels. Volkswagen and Stellantis have already shut down several plants amid weak sales, which barely grew in Europe last year.
In May, the French newspaper Le Monde reported that China’s auto industry had taken a leading position globally thanks to the development of electric and hybrid vehicles. According to the newspaper, in 2009, China became the world's largest automobile market, and in 2024, the number of Chinese cars sold reached 31 million, exceeding the combined volumes of the US and the EU. While previously Chinese cars were produced only for the local population, in 2023 China became the world's largest car exporter, overtaking Germany and Japan.