Struggling European Automakers Gain Timely Defense Relief-Report

InnovationTransportationStruggling European Automakers Gain Timely Defense Relief-ReportByNeil Winton,Senior Contributor.Forbes contributors publish independent expert analyses and insights. U.K.-based Neil Winton covers the European Auto industry.Follow AuthorApr 21, 2026, 04:10am EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.Chinese brands like Geely's Zeekr are aimed at the European premium market (Photo by Jade GAO / AFP via Getty Images)AFP via Getty ImagesEuropean auto manufacturers are under pressure from stagnating sales, the acclerating threat from China and the unpredictable fallout from the war in the Middle East. But one side effect of global turmoil offers investors some comfort; increased defense spending presents a potentially lucrative lifeline.A report from Germany’s Berenberg Bank said the urgent requirement to increase military spending, as NATO nations respond to President Trump’s criticism that they have relied for too long on U.S. largesse for armaments, finds defense manufacturers short on capacity. At the same time the auto industry is being forced to lay off workers and shut redundant factories.About 50,000 German auto-sector jobs were lost in 2025. Analysts and trade groups predict about 200,000 more jobs could go by 2030. If Germany is suffering so badly, you can expect other European automakers to be hurting even more. In a lifeless market, China’s success with electric vehicles will have serious consequences.Berenberg Bank said Europe’s automotive sector faces chronic overcapacity. “The vast majority of European automotive suppliers have already initiated large-scale restructuring programs, with up to 10% of their workforces potentially affected. Most (manufacturers) are currently operating their European plants at low utilization rates of 60-70% and they earmarked approximately €40 billion ($47 billion) in restructuring and impairment costs for 2025 alone,...