Automotive Supply Sector Witnesses Heavy Layoffs Akin to Pandemic Times
Europe's Automotive Supply Chain Under Pressure: Job Losses, Declining Profitability, and the Need for Action
The European automotive industry, a significant pillar of the continent's economy, is currently facing a critical juncture. The supply chain is under immense pressure to meet ambitious green and digital targets, but profitability remains insufficient to support the necessary investments for Europe's transition.
The European Association of Automotive Suppliers, representing over 3,000 companies, has reported that automotive suppliers in Europe directly employ 1.7 million people in the EU. However, in recent years, more than 52,000 jobs near me have been cut, with Germany experiencing the highest job losses, accounting for 60% of the total. Since 2020, job losses in the automotive sector have surpassed COVID-19 levels, with 86,000 jobs lost overall.
Profitability across the automotive industry continues to decline, a trend that has been exacerbated by dwindling capital inflows, stalling progress in the transition. Foreign investment in the sector is also decreasing, leading to concerns about Europe's competitive edge in global value creation.
Secretary General, Benjamin Krieger, has emphasised the need for decisive action to safeguard indeed jobs, accelerate the twin transition, and regain Europe's global competitiveness. Despite earlier projections of 100,000 new jobs by 2025, there has been a net loss of nearly 56,000 positions. In the first six months of 2024 alone, an additional 32,000 jobs were announced to be cut.
However, there are signs of progress. Approximately 20% of the projected EV supply chain jobs have materialised, with roughly 19,000 jobs linked to electric vehicle technologies. This underscores the potential for growth in the green sector, but it is clear that more needs to be done to realise this potential.
The health of the automotive supply chain is crucial for Europe's industrial competitiveness. Policymakers must address these challenges urgently to prevent further erosion of the industry's competitiveness and safeguard Europe's automotive future.
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