Automakers Likely to Cut Production in Europe and North America in 2025
Automakers in Europe and North America face a bleak future, with several car factories at risk of closure or sale this year, according to a report by research and advisory firm Gartner. The industry is struggling with overcapacity and intense price competition.
Gartner VP Analyst Pedro Pacheco told Reuters that closures or sales are more likely in high-cost countries, where political and societal pressure will be offset by mounting competition. "This is a little bit like a pressure cooker," Pacheco said. "The pressure increases, increases and... that will push the number of automakers to take more pragmatic decisions."
Automakers will likely cut production capacity on the two continents by 2025 as they face emissions targets and tariffs. Meanwhile, China's electric vehicle (EV) dominance is expected to grow due to its edge in software and electrification. Chinese brands could buy plants to overcome trade barriers, or open new factories in lower-cost European countries and free-trade partners like Morocco or Turkey, Gartner predicted.
Fearing disruptions from 2025 European Union CO2 emission rules, the CEO of German auto supplier Bosch, Stefan Hartung, told the publication Auto Motor und Sport that the bloc should abstain from fining companies that fall short of targets. Luc Chatel, chairman of the French car lobby PFA, warned that Europe's auto industry is no longer on track to reach its 2030 and 2035 EV targets. "The risk is that we end up reducing combustion engine vehicle sales to artificially beef up" EV sales, he told Reuters.
