Challenges and Opportunities in the European Automotive Market

This report from Allianz Research discusses the current state of the European automotive market, highlighting the challenges faced in 2024 and the outlook for 2025. The document outlines that the automotive sector experienced a modest growth of 1.7% in 2024, following a significant increase in 2023. Factors contributing to this stagnation include high interest rates, lower consumer demand, and increased competition in the electric vehicle (EV) market, particularly from China. The report identifies three major roadblocks for European automakers: a failure to innovate towards electrification, reliance on Chinese battery supply, and a disconnect between policy ambitions and actual policy measures. It also presents a 10-step plan for Europe to regain its competitive edge in the automotive sector, drawing on successful strategies from China and Norway. Recommendations include reducing the number of car models, increasing investment in technology, and enhancing charging infrastructure to support EV adoption. The report emphasizes the need for a coordinated approach between industry leaders and policymakers to navigate these challenges effectively.