Profit warnings by carmakers including Volkswagen and Stellantis are stoking fears that the European industry will be stuck in a deeper and longer downturn.
At the start of 2024, the sector had expected a return to normal after Covid-19 supply chain disruptions were resolved, with vehicle production forecast to rise more than 2 per cent on the back of pent-up demand. Instead, companies are facing problems on multiple fronts, including intense competition in China, weak European demand and the region’s slowing shift to EVs.
“We’ve all assumed that things would normalise but they are taking a turn for the worse. All of a sudden there is an acceleration in negative factors and the magnitude of the deterioration is big,” said Jefferies analyst Philippe Houchois.