The whole automotive sector European confirms itself once again in painwith a production decrease of 22% compared to 2019, which highlights a deep crisis which undermines the competitiveness of the entire sector. The automotive sector is hit hard, in particular by the contraction of the electric car market in Europe.
A crisis aggravated by recent moves by major car manufacturers as Volkswagen which is evaluating, for the first time in its history, the closure of factories in Germany and the suspension of the “job guarantee” for approximately 110 thousand employees. A austerity planannounced by the CEO, Oliver Blumewhich aims to cut costs deeply and could cause significant disruption among workers.
The crisis it is also being reflected in stock priceswhich are severely penalising the automotive sector, which is currently the worst performing on the stock exchanges in the Old Continent. Stellantis shows a performance since the beginning of the year of -29.4% against a FTSE MIB index up 13%. Things are not going much better for Volkswagen in Frankfurt, where it has accumulated a loss of over 13% since the beginning of the year. Its compatriot is also down BMW (-18%), while high-end cars such as the Mercedes (-1.7%).
Registrations in Italy and Europe
In August, the Italian car market recorded a significant contraction with 69,121 new registrations, down 13.4% compared to the same month in 2023. This result marks areversal of the trend compared to the growth of the previous monthsbrought by government incentives that now seem to have exhausted their effect. The comparison with the pre-crisis levels of 2019 is even more dramatic, with a reduction of 22.5%.
The positive effect of incentiveswhich had pushed registrations to grow by 15% in June and by 4.7% in July, is now vanished. Even the overall balance of the first eight months of the year, with an increase of 3.8% compared to 2023, fails to fill the gap with pre-crisis levels, still recording a decline of 18.5% compared to 2019. This highlights a structural crisis in the market, with registration levels insufficient to guarantee the replacement of older cars and a consequent increase in the average age of the circulating fleet.
The electric car market is not taking off: after a peak at 8.3% thanks to the incentives in June, the share of electric vehicles is dropped to 3.7% in Augustfar from European standards. This highlights the difficulties of the energy transition in the sector, despite incentive policies.
New car registrations in the EU recorded a modest increase (+0.2%) with mixed results in the region’s four main markets: Italy (+4.7%) and Spain (+3.4%) recorded moderate gains, while the French (-2.3%) and German (-2.1%) markets lost ground.
On the other hand, the used car market continues to maintain good levels of healthconfirming the difficulties in the new car sector. According to 82% of dealers interviewed by the Centro Studi Promotor, the used car market will remain stable or increase in the coming months.
The collapse of Stellantis
Stellantisone of the world’s automotive giants, is facing serious difficulties, both in Europe and in Italy. The group led by CEO Carlos Tavares, did worse than the entire European market which saw sales drop by 24.3%. In August, in France, the Franco-Italian giant recorded a contraction in registrations of -31.7%, with 22,600 vehicles registered. market share of Stellantis it is like this dropped to 26.3%, 2.9 points less than the previous year.
As for car registrations, they were 17,132, 32.4% less than the same month in 2023. Market share fell from 31.8% at 24.8%. In the eight months the group registered 335,883, down 2.1% on the same period last year, with the share falling to 31% against 32.9%.
Volkswagen’s shock decision
In the wake of slowing demand for electric vehicles and nervous European consumers, which are weighing on automakers, Volkswagen announced a decision that shocked investors: the Closure of factories in Germanyin an attempt to obtain deeper cost cutsdealing another blow to the government of Chancellor Olaf Scholz.
Any closure would represent the first in Germany during the company’s 87-year history.
“The economic environment has become even more challenging and new players are investing in Europe,” explained Volkswagen CEO Oliver Blume. “Germany as a corporate location is losing ground in terms of competitiveness,” Blume added. As a result, the company “must now act decisively.”
Union agreement on workplaces at risk
Among the potential measures, the job protection pact until 2029 signed with the unions. The hypotheses would focus on a large vehicle production plant and a components factory.
There German car manufacturer she finds herself forced to to end his agreement employment protection, a job security programme in force since 1994, in order to ensure “the structural adjustments urgently needed for greater competitiveness’ in the short term”.
“The situation is extremely tense and cannot be resolved with simple cost-cutting measures,” said Thomas Schafer, CEO of the VW brand. “That is why we want to start discussions with employee representatives as soon as possible to explore the possibilities for a sustainable restructuring of the brand.”
