European car market risks collapse amid Chinese competition and EV switch - 'Action is now required'

Germany's auto sector has issued an urgent warning that tens of thousands of jobs could be at risk across the continent over competition from China and "political goals".

Hildegard Müller, president of the German Association of the Automotive Industry (VDA), has issued a damning statement on the future of the European car sector.

She explained that the VDA and member companies had highlighted the poor conditions for business in Germany and Europe on a global scale.

The president added how the warnings have been acknowledged, but the consequences have "regrettably largely failed to materialise - namely, the necessary change of course".

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Carmakers across the continent have struggled in recent years as a result of strong competition from Chinese brands, which have made serious headway.

Companies like BYD, Jaecoo, Omoda and Chery have all seen registrations soar over the last two to three years with low upfront prices and impressive technology.

Data from the European Automobile Manufacturers' Association (ACEA) shows that BYD has captured 2.1 per cent of the total market share of new European car sales so far this year.

Other Chinese brands are also seeing great success, including the likes of SAIC (2.1 per cent), Geely Group (2.6 per cent), Chery (1.3 per cent) and Leapmotor (0.8 per cent).

These market shares are ahead of other established European and North American brands like Tesla (1.9 per cent) and Jaguar Land Rover (0.5 per cent).

Commenting on the threats faced by European manufacturers, Ms Müller said: "Reality has overtaken political goals and approaches and is increasingly putting jobs at risk.

"The crisis affecting the region as a business location is hitting European industry as a whole. The consequences are visible and palpable every day - and are becoming increasingly dramatic.

"We will not be able to keep all the manufacturing plants belonging to manufacturers and suppliers this way."

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She suggested opening these sites to foreign manufacturers in a bid to help secure jobs, adding that "action is now required".

Reports recently suggested that Volkswagen would look to cut up to 100,000 jobs and cease production at some of its plants in a dramatic cost-cutting push.

VW has struggled in recent years as a result of the competition from China and a delayed transition away from internal combustion engines to electric vehicles.

The German manufacturer, which owns Audi, Skoda, Seat and Cupra, employs more than 650,000 across all of its brands, with fears that thousands of jobs could be lost.

A spokesperson for the iconic marque said it would not "pre-empt the process", noting that many legacy manufacturers were facing pressure from Chinese rivals.

It highlighted that the current business model "no longer works across all brands", including developing cars in Germany, producing them across Europe and exporting globally.

Ms Müller said: "Given the intensifying international competition, there is no realistic alternative to a change of course in Berlin and Brussels.

"Anyone wishing to remain competitive in the long term must lay the groundwork for tomorrow's success today."

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