Difficult Situation for the Automotive Sector in Europe: Declining Sales, Layoffs, and Factory Closures – Let's Try to Understand What's Happening
The car crisis is starting to take hold. Workers from Stellantis-related plants in Pomigliano, Turin, Cassino, and Melfi will make their voices heard outside the Ministry of Enterprises and Made in Italy, where a meeting will be held with Trasnova, a supplier company linked to the multinational automotive giant. Trasnova recently announced the dismissal of 97 workers.
Meanwhile, Minister Adolfo Urso, in an interview with Il Mattino, reiterated his call for the company led by John Elkann to present a new “Italy Plan” with a clear and detailed timeline. The plan should specify investments planned for each plant, production models, and output levels, along with contracts that safeguard jobs and ensure full collaboration with component suppliers to support their transition to new production models.
“I believe that Pomigliano and Melfi can become competitive hubs, provided Europe finally revises the absurd rules of the Green Deal,” said the head of the Ministry of Enterprises and Made in Italy (MIMIT). Urso has been working for weeks to engage other key European countries to put pressure on the European Commission to reconsider the timeline for phasing out internal combustion engines by 2035.
Which companies are in crisis or have announced plant closures?
- Volkswagen is closing three plants in Germany and announcing tens of thousands of layoffs.
- Audi, Nissan, Ford, Bosch, and Michelin are in the same situation.
- Stellantis has reduced production in France.
Meanwhile, regarding the Italian proposal for the car crisis, “many agree with us, 15 European countries have supported our proposal, as well as the main European industrial associations. I note that even from opposition forces there are signals in the same direction. I expect the trade unions to support us as well. This is the only way to protect jobs,” emphasized Adolfo Urso.
The opposing view of BMW on the car crisis: Here’s why
An opposing voice, however, comes from the German giant BMW, which, unlike its competitors, is reaffirming its goals without mentioning the critical condition of the European market. In fact, the head of BMW expects the company to meet its climate goals for new vehicles next year.
“We have known the 2025 targets since 2019,” stated Oliver Zipse to the industry newspaper Automobilwoche, “we have aligned our model policy accordingly and further increased the efficiency of transmission systems. We see no reason to delay the 2025 CO2 targets.”
What will happen in 2025?
Starting in 2025, the average emissions of new cars sold in the EU must be reduced from 115.1 grams to 93.6 grams per kilometer, a 19% reduction. If car manufacturers fail to comply, they will face fines for emitting too much CO2. BMW’s Zipse argues that it’s not only electric cars that reduce CO2 emissions but also the optimization of traditional combustion engines. “In our company, all aspects are designed for efficiency: brakes, transmission systems, aerodynamics… and e-mobility will remain our strongest growth driver for the coming years.”
Declining interest in cars among young people
While governments and the industry are looking for a pragmatic and shared solution, according to the 7th annual report of the National Sharing Mobility Observatory, there is a generational shift in attitudes toward cars. Young people show a low desire to use a car, whether owned or not, compared to previous generations. On the other hand, the vehicle-sharing sector is growing rapidly.
What are the sector numbers in Italy?
- The sector exceeded 178 million euros in 2022 (+38% compared to 2021).
- In 2022, the Italian connected mobility market reached a total value of 2.5 billion euros, a 16% increase from 2021.
- 13% of this is generated by smart mobility solutions in cities, parking management, and shared mobility.
- Sales of combustion engine cars are declining in favor of electric vehicles, which reached an 18% market share of new car sales in 2023.
- Electric cars in the EU represented 22.3% of new registrations last year.
- In Italy, according to the Ministry of Transport’s data processed by Anfia, electric cars accounted for only 8.6% of total registrations in 2023.
