Bloomberg: Thousands of EU automotive jobs could be in jeopardy
Major European car manufacturers are facing challenges with factory utilization as demand for electric vehicles declines. Read Full Article at RT.com
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A significant portion of the primary car manufacturing facilities in the region is running at reduced capacity, with around a third operating at less than half their potential output, based on a study.
European auto manufacturers are encountering additional plant shutdowns as they grapple with adapting to the electric vehicle shift while facing decreased demand and intensified competition, according to a Bloomberg report on Wednesday.
Bloomberg's analysis of Just Auto's data revealed that nearly one-third of the principal passenger car factories belonging to the top five automakers — BMW, Mercedes-Benz, Stellantis, Renault, and VW — were underused last year. It was found that these automotive titans were producing less than half the volume of vehicles their facilities are designed to handle.
The annual car sales in Europe remain about 3 million units below the levels seen before the pandemic, resulting in underused factories and jeopardizing thousands of jobs.
The possibility of plant closures is heightening worries that the area may be sliding into an extended economic slump, having already fallen behind major competitors like the United States and China.
"More carmakers are fighting for pieces of a smaller pie," stated Matthias Schmidt, an independent auto analyst located near Hamburg. He cautioned Bloomberg, "Some production plants definitely will have to go."
VW recently disclosed its contemplation of shutting down some of its German factories for the first time in nearly 90 years as it faces challenges in the shift from fossil fuels.
BMW has also expressed concern over weak demand in China, which poses an additional risk to their sales and profits.
Simultaneously, the risk of factory shutdowns has escalated due to soaring energy prices and labor shortages, which have increased labor costs.
"Failure to turn things around would deal a blow to the region's economy," Bloomberg noted, highlighting the auto sector's critical contribution to the EU’s GDP at over 7% and providing over 13 million jobs.
Auto assembly plants play a central role in communities, supporting numerous nearby businesses, ranging from parts suppliers and transport firms to local eateries that serve plant employees.
Shuttering these facilities is typically seen as a last resort in a region where unions and political entities strongly influence corporate decisions, Bloomberg concluded.
Fabian Brandt, an industry specialist with consultancy firm Oliver Wyman, remarked, "There’s massive consolidation pressure for auto plants in Europe." He claimed, "Inefficient factories will be evaluated, and there will be other kinds of plants that shut down."
Ramin Sohrabi for TROIB News
European auto manufacturers are encountering additional plant shutdowns as they grapple with adapting to the electric vehicle shift while facing decreased demand and intensified competition, according to a Bloomberg report on Wednesday.
Bloomberg's analysis of Just Auto's data revealed that nearly one-third of the principal passenger car factories belonging to the top five automakers — BMW, Mercedes-Benz, Stellantis, Renault, and VW — were underused last year. It was found that these automotive titans were producing less than half the volume of vehicles their facilities are designed to handle.
The annual car sales in Europe remain about 3 million units below the levels seen before the pandemic, resulting in underused factories and jeopardizing thousands of jobs.
The possibility of plant closures is heightening worries that the area may be sliding into an extended economic slump, having already fallen behind major competitors like the United States and China.
"More carmakers are fighting for pieces of a smaller pie," stated Matthias Schmidt, an independent auto analyst located near Hamburg. He cautioned Bloomberg, "Some production plants definitely will have to go."
VW recently disclosed its contemplation of shutting down some of its German factories for the first time in nearly 90 years as it faces challenges in the shift from fossil fuels.
BMW has also expressed concern over weak demand in China, which poses an additional risk to their sales and profits.
Simultaneously, the risk of factory shutdowns has escalated due to soaring energy prices and labor shortages, which have increased labor costs.
"Failure to turn things around would deal a blow to the region's economy," Bloomberg noted, highlighting the auto sector's critical contribution to the EU’s GDP at over 7% and providing over 13 million jobs.
Auto assembly plants play a central role in communities, supporting numerous nearby businesses, ranging from parts suppliers and transport firms to local eateries that serve plant employees.
Shuttering these facilities is typically seen as a last resort in a region where unions and political entities strongly influence corporate decisions, Bloomberg concluded.
Fabian Brandt, an industry specialist with consultancy firm Oliver Wyman, remarked, "There’s massive consolidation pressure for auto plants in Europe." He claimed, "Inefficient factories will be evaluated, and there will be other kinds of plants that shut down."
Ramin Sohrabi for TROIB News
