A picture of the EU car industry

2012 was a tough year for the EU car industry. The chief of one major car-maker said that the industry as a whole probably lost €5 billion in Europe in 2012 and that a solution had to be found to achieve profits.

The perennial problem of surplus production capacity in Europe (15% in 2012) is allied to a mature (roughly flat since 2001) domestic market and buyers facing austerity.

However, the EU car production industry has a long history and still leads world production (26% market share) though others, like China (24%), are growing fast. It is one of the EU’s most successful export industries, generating a large, positive trade balance, mostly from more expensive cars. The main competitors are Japan, the US and South Korea.

Car plants are spread throughout the EU – Germany, France, Italy and the UK have most – satisfying 85% of EU car purchases. Local customer preferences, high extra-EU transport costs relative to cars’ low profit margins, along with a 10% import tariff rate are reasons for the ‘high’ level of 85%.

Along with sub-component suppliers and after-sales services, the industry is a major R&D investor, employer – including many SMEs -and generator of state taxes. It is global, networked and integrated.

Read the complete briefing here.

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