The automotive industry, which has been the driving force behind economic growth in Europe, is showing warning signs. Some predict that more than 10% of the European Union (EU)'s local production could be relocated overseas within the next five years.
According to EU statistics on the 12th (local time), the European automotive industry's sales account for more than 7% of the EU's total Gross Domestic Product (GDP). In terms of employment, 2.6 million people work in automobile manufacturing. This represents about 8.5% of total manufacturing employment in the EU.
Including direct and indirect employment, jobs for 14 million European citizens come from the automotive industry.
The EU has also set a plan to stop selling new internal combustion engine vehicles from 2035 and transition entirely to eco-friendly vehicles such as 100% electric cars.
However, in recent years, electric vehicle sales in Europe have slowed down, and the industry is losing ground in competition against Chinese manufacturers who are aggressively pushing prices and volume.
On the 9th, Mario Draghi, former President of the European Central Bank (ECB), pointed out the "price premium" issue in a "Competitiveness Report" commissioned by the EU. According to the report, as of last year, the cheapest European-made electric vehicle model was 92% more expensive than low-cost internal combustion engine cars. In contrast, the cheapest Chinese electric vehicle model was actually 8% cheaper than internal combustion engine cars.
Former President Draghi warned, "If the automotive sector does not quickly adapt to the new competitive environment, it will shrink at an even faster pace."
In particular, some experts express concern that "more than 10% of the EU's local production could be relocated overseas within the next five years."
Recently, Volkswagen, a symbol of German manufacturing, announced the possibility of closing domestic factories for the first time since its founding, which is a representative example of the reality facing the European automotive industry.
It is also known that Audi's electric vehicle factory in Brussels, Belgium, has no plans to launch new models in the coming years.
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