Europe will become a net car importer in 2025

The entry of Chinese-made vehicles is gaining so much ground that the title of major exporter worldwide could be lost, according to Pricewaterhouse

The automotive industry generates a turnover that accounts for 7% of the GDP of the European Union and employs about
14 million people on the continent, 6.1% of all employment. The production lines alone employ 2.6 million workers, who assemble 19 million passenger cars, commercial vehicles and trucks each year, 20% of global production.

Along with the United States and Japan, Europe has been one of the largest exporters, but the rise of Chinese-made vehicles is gaining ground so much that we will soon lose that title and there will be more vehicles that we import than we export. According to a study by
PricewaterhouseCoopers (PwC)will happen in 2025 at the current pace of transformation.

For decades, the strength of European exports, especially in the automotive industry, has been seen as a guarantee of prosperity on the continent. However, manufacturers are now faced with
extremely tough competition of China and brands such as Nio, Lynk & Co or BYD are hurting Europe as the site of the leading auto industry, under mounting pressure and with potentially serious economic consequences.

According to management consultancy PwC, “China is becoming a major exporter of e-cars and, while Chinese manufacturers are increasingly selling BEVs in Europe, both European and American manufacturers are
are increasingly moving their BEV production to China», it says in the text.

Last year, Chinese automakers exported just 35,000 BEVs to Europe; this year there will probably be 66,000. In three years, nearly 800,000 Chinese-made cars could be sold in Europe, of which about 330,000 come from the Chinese factories of European car companies. As a result of this development, Europe could already reach
an import surplus of more than 221,000 vehicles, between combustion engines and electric cars, by 2025”, the PwC study points out that in 2015 Europe still had an export surplus of 1.7 million vehicles.

According to Jörn Neuhausen, Head of Electromobility at PwC Strategy Deutschland, Europe as a location for the automotive industry is under pressure from several sides. “In addition to disrupted supply chains, manufacturers in Europe are particularly concerned about rising energy prices,” he notes.

There is also an active industry policy in the US and other countries to promote specific industries and locate supply chains. Not to mention that
electric cars are rare built really competitively in Europe and that can outperform the Chinese on the market. European manufacturers faced persistent supply problems and mostly relied on expensive BEV models. Chinese manufacturers, for their part, are bringing cheap electric models with new technology and new concepts to Europe. “As a result, we see that no European model is in the top 5 best-selling electric cars worldwide,” said Felix Kuhnert, automotive industry expert at PwC. German car manufacturers in particular increased their market share in China in the first three quarters of this year to 4.1 percent. However, they felt at home
increasing competition from Chinese manufacturersAlthough they have played only a minor role in Europe so far, they could have captured about 5 percent of the European BEV market share by 2030.

The publication of this study coincides with the official visit to China by German Chancellor Olaf Scholz, who, together with
by BMW executives and Volkswagen. Gregor Sebastian of the Mercator Institute for China Studies (MERICS) weighs the risks and opportunities of the China connection for Germany. It’s “complicated, it’s a dangerous gamble.” “Think of Sigmar Gabriel, who traveled to China in 2017 to at least postpone the production quota of electric cars in China,” recalls the visit of the then Social Democratic minister, “Daimler, BMW and Volkswagen were not competitive at the time and they were given more time to improve the range of electric cars. “Such a commitment gave the economy security and the federal government could well afford to crack down on China,” he said.
more than 90 percent of German cars purchased in China are produced locally.

That means there are hardly any German jobs linked to that production, but a few tens of thousands of Chinese jobs, especially in the northeast of the country. Also, China doesn’t make it easy for companies to return profits to Germany, so we see high reinvestments and corporate profits staying there for the most part. On the other hand, it is also true that the share price of companies like Volkswagen would not be what it is if the Chinese market did not exist, so the calculations
are extremely complicated and there is no data to more accurately assess how much of the gains are relevant to Europe as an industrial location. “The Production Model”
Wolfsburg or Stuttgarthaving a world car also sold in China is outdated, more local development is needed”, emphasizes Sebastian, “but I don’t think we should accept China as a global development center”.

Source: La Verdad

Ida

I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.