14:33 17 October 2026
European automotive companies have too many factories, no enough tech
Europe’s automakers are losing ground to Chinese competitors after underinvesting in electric vehicles, software, and production technology while protecting combustion-engine businesses. Chinese exhibitors make up half of the Paris Motor Show, while European manufacturers account for 40%. Chinese brands represent 10% of new cars registered in Europe, including 16% of battery-electric and 26% of plug-in hybrid sales. European automakers are cutting investment by 20%, and German manufacturers have lost market share. Allianz Trade recommends reducing excess factory capacity, consolidating vehicle platforms, partnering on costly technologies, and focusing on strengths such as battery design, software, semiconductors, recycling, and autonomous transport.
Many European plants operated at only 60% capacity in 2023, and restoring 2021 EBITDA margins could require cutting capacity by 20–25%.
