Overcapacity threatens car plants in Europe, North America, Gartner says
Automakers likely to cut output amid emissions targets and tariffs, competition from China
16 January 2025 - 15:13
byAlessandro Parodi, Gilles Guillaume and Ilona Wissenbach
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Several European and North American car factories are at risk of being closed or sold this year as automobile brands struggle with overcapacity and price competition, research & advisory firm Gartner said in a report on Thursday.
Automakers are likely to cut production capacity on the two continents in 2025 as they face emissions targets and tariffs, while China’s electric vehicle (EV) dominance will increase due to its edge in software and electrification, the firm said.
Closures or sales are more likely in high-cost countries, where political and societal pressure will be offset by mounting competition, Gartner analyst Pedro Pacheco said.
“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.”
Chinese brands could buy plants to overcome trade barriers, or open new factories in lower-cost European countries and free-trade partners such as Morocco or Turkey, the firm predicted.
Fearing disruptions from 2025 EU CO2 emission rules, the CEO of German auto supplier Bosch, Stefan Hartung, told the publication Auto Motor und Sport on Wednesday the bloc should abstain from fining companies that fall short of targets.
Europe’s auto industry is no longer on track to reach its 2030 and 2035 EV targets, said Luc Chatel, chair of the French car lobby PFA.
“The risk is that we end up reducing combustion engine vehicle sales to artificially beef up” EV sales, he said.
Despite the challenges to electrification, Gartner expects shipments of electric buses, cars, vans and heavy trucks to grow overall by 17% in 2025. It forecast more than 50% of all vehicle models marketed by automakers to be EVs by 2030.
To achieve the shift, legacy carmakers may buy software architecture from newer EV makers and digital firms, boost research & development centres in tech hubs or partner with tech companies to create self-funded EV joint ventures, Pacheco said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Overcapacity threatens car plants in Europe, North America, Gartner says
Automakers likely to cut output amid emissions targets and tariffs, competition from China
Several European and North American car factories are at risk of being closed or sold this year as automobile brands struggle with overcapacity and price competition, research & advisory firm Gartner said in a report on Thursday.
Automakers are likely to cut production capacity on the two continents in 2025 as they face emissions targets and tariffs, while China’s electric vehicle (EV) dominance will increase due to its edge in software and electrification, the firm said.
Closures or sales are more likely in high-cost countries, where political and societal pressure will be offset by mounting competition, Gartner analyst Pedro Pacheco said.
“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.”
Chinese brands could buy plants to overcome trade barriers, or open new factories in lower-cost European countries and free-trade partners such as Morocco or Turkey, the firm predicted.
Fearing disruptions from 2025 EU CO2 emission rules, the CEO of German auto supplier Bosch, Stefan Hartung, told the publication Auto Motor und Sport on Wednesday the bloc should abstain from fining companies that fall short of targets.
Europe’s auto industry is no longer on track to reach its 2030 and 2035 EV targets, said Luc Chatel, chair of the French car lobby PFA.
“The risk is that we end up reducing combustion engine vehicle sales to artificially beef up” EV sales, he said.
Despite the challenges to electrification, Gartner expects shipments of electric buses, cars, vans and heavy trucks to grow overall by 17% in 2025. It forecast more than 50% of all vehicle models marketed by automakers to be EVs by 2030.
To achieve the shift, legacy carmakers may buy software architecture from newer EV makers and digital firms, boost research & development centres in tech hubs or partner with tech companies to create self-funded EV joint ventures, Pacheco said.
Reuters
Daimler, Traton 2024 truck sales drop on weak European demand
Global electric vehicle sales rise 25% in 2024
Honda may delay new EV models due to Donald Trump presidency
China’s top diplomat focusing on Africa while West’s attention wanes
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.