EU automotive suppliers cut 54k jobs in "difficult year”

Etterbeek, Belgium – The European automotive industry experienced a ‘difficult year’ in 2024, marked by a decline in demand and lower production, according to industry association CLEPA*.

In a 15 Jan industry digest, CLEPA said car production continued to be 20% or 3 million units below pre-pandemic levels.

Furthermore, high energy prices and overall inflation since 2020 have eroded Europe’s competitive edge against China and North America, it added.

According to the industry association, the automotive supplier industry announced a “record” 54,000 jobs cuts during the year.

The cuts, noted CLEPA, will mostly be carried out in the next two to five years, surpassing the cuts announced during both the Covid-19 pandemic years of 2020 and 2021 combined.

Since 2019, CLEPA said, automotive suppliers have announced a total of 145,000 job cuts, while only 51,000 new jobs have been created.

Furthermore, the association said investment in electric vehicle projects, such as in electro-mobility components or batteries, has plummeted with many projects either “postponed, downsized or cancelled entirely.”

CLEPA said investments in electric vehicle components across the EU sharply declined in 2024 after five years of "steady growth".

From 2020 to 2022, direct investments in EV components surged, with capital investment peaking at an estimated €18.15 billion in 2022.

EV-related investments remained strong in 2023 but plummeted to €5.64 billion in 2024 – the lowest level since 2019.

The downturn was linked to a "weaker-than-expected demand" for electric vehicles, which has had a significant impact on investment decisions.

In terms of profitability, CLEPA said over two-thirds of automotive suppliers have reported margins "below the level needed to sustain crucial investments in new technologies and production modernisation."

Citing the latest survey by McKinsey and CLEPA, the report said that "only about a third of automotive suppliers have maintained healthy profit levels since 2020."

“Even more concerning, 38% of respondents expect negative or marginal EBIT in 2024, underscoring the persisting financial strain on the industry,” it said.

Profitability challenges, CLEPA said, continued to “weigh heavily” on the sector in 2024, with 65% of automotive suppliers struggling to maintain profit margins above 5% — the minimum threshold needed for sustainable investments in future technologies.

“Unless demand picks up and Europe regains competitiveness, the wave of job losses will continue well into the coming years, leaving the industry and its workforce in a precarious position,” concluded CLEPA in its report.

* European Association of Automotive Suppliers