Job losses at European car part suppliers more than doubled in 2024 as the slowdown in the continent’s automotive industry hit the fortunes of its manufacturing supply chain.
Analysis from the European Association of Automotive Suppliers (Clepa) for the Financial Times showed that more than 30,000 jobs had been cut across the industry in 2024, compared to just over 15,000 in 2023.
Job creation has also slowed and there have been more than 58,000 net job losses across the industry in Europe since 2020.
Businesses ranging from French tyremaker Michelin to German manufacturer Bosch announced thousands of job cuts in the past year as sales of new vehicles by European producers have steadily fallen, leaving suppliers with excess capacity and little prospect of a rebound in sales.
While larger companies have cut jobs and closed plants, some smaller businesses have been forced into bankruptcy or filed for insolvency.
“If there is no more growth for European manufacturers, there is also no more growth for their equipment makers,” said Alexandre Marian, a director at consultancy AlixPartners.
According to Clepa, car part suppliers directly employ about 1.7mn people in the EU.
The decline in demand has followed the Covid-19 pandemic, war in Ukraine and the subsequent inflation. These have dented the competitiveness of European industries at a time when Chinese rivals are pushing to increase market share.
“Our estimate is that the little growth that we can have on the European market will be taken by the growth of imports, especially Chinese ones,” said Marc Mortureux, director-general of France’s Automotive & Mobility Industry Platform (PFA) industry body.
While European suppliers were trying to work with local auto groups in China, the big concern was that Chinese brands would eventually assemble vehicles in Europe but with parts from China and other countries, he added.
The relative high cost of EVs and reduction of subsidies for the vehicles in countries such as Germany have capped their widespread uptake, meaning companies investing in these technologies have not seen the demand they expected.
According to Clepa, losses of jobs linked to combustion engines since 2020 far outnumbered those created by the shift to EVs. In a sign of the slowdown in the EV market, 4,680 jobs related to suppliers for battery-run cars were lost in 2024, more than the 4,450 created, Clepa found.
European regulation is also a challenge for parts manufacturers supplying vehicles with conventional engines.
From 2025, the European Commission will tighten rules on carbon emissions for carmakers, while Brussels also plans to bring sales of new combustion engine cars to an end in Europe by 2035.
Laurent Favre, chief executive of French supplier OPMobility, expected the company’s industry-leading fuel tank business to dwindle in Europe as a result.
“We have about 10 factories making fuel tanks in Europe. Obviously, their activity will be impacted,” he said.
Favre and other industry figures have called for a rethink on incoming penalties. Despite Germany slashing EV subsidies in 2023, Chancellor Olaf Scholz said in Brussels recently that the EU needed “incentives” for electric cars and that levies on car emissions should “not affect the financial liquidity” of companies investing in the electric vehicle transition.
German companies that have been forced out of business include seat producer Recaro, luxury car part maker Walter Klein and ae group, which makes light metal die-cast components used in many parts for cars.
Christian Kleinjung, ae’s chief executive, in August said that attempts to restructure had not staved off “the slump in demand from car manufacturers”.
While EV sales are expected to increase, suppliers are preparing for a sustained period of lower growth, with some announcing long-term staff reduction plans. The Clepa figures do not include job losses that have been announced for the years ahead.
Forvia, a maker of dashboards, door panels and exhaust systems, said in February it would cut 10,000 jobs out of its European workforce of over 75,000 by 2028.
In November, Michelin said it would close two French factory making tyres for lorries and vans. The measure, affecting more than 1,200 employees, was due to “structural overcapacity” because of low cost competition in Asia.
Stéphane Destugues, representing the metal workers at France’s CFDT union, criticised car manufacturers for squeezing costs to such an extent in recent years that suppliers cannot survive.
“It doesn’t allow suppliers to invest as much as they should to protect jobs and prepare for the future,” he said.
For those making investments, many are looking beyond Europe. OPMobility has launched a site in Austin, Texas, to serve clients such as Tesla and is opening factories in China.
“We want to stick with our historic clients but we have to look for growth elsewhere. We hardly expect any significant growth in the European automotive sector in the next five years,” Favre added.
