Europe’s automotive manufacturers will need to absorb additional job losses and factory shutdowns as the sector overhauls itself to stay competitive, according to Hildegard Müller, head of Germany’s VDA automotive industry association.
Speaking to Bloomberg Television, Müller drew a direct line between Volkswagen’s current difficulties and the wider industry: “The situation in the whole automotive industry is like the discussion in VW [Volkswagen]. Not every production location can be there also in the future, so there must be programmes for restructuring.”
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According to Müller, companies such as Volkswagen and Stellantis have been grappling for an extended period with elevated energy and labour expenses, compounded by regulatory pressures that put them at a competitive disadvantage relative to international rivals.
She urged that reform efforts be accelerated to contain the harm being done to Europe’s car manufacturing base.
Her remarks follow news that Volkswagen – the continent’s biggest vehicle producer – was preparing talks on expanding its German job cuts and shutting down plants.
The company is reportedly weighing the closure of four German factories alongside cuts of up to 100,000 positions, a move that would represent the largest restructuring effort the global car industry has seen.
The sector has come under intensifying strain as Chinese vehicle manufacturers gain ground in the European market, while the expense of building electric vehicles within the region stays elevated.
In a written statement sent separately to Bloomberg, Müller said car manufacturers ought to grant overseas competitors access to their factories as a way of safeguarding jobs across the sector.
Meanwhile, the European Union is drawing up plans under its Industrial Accelerator Act that would benefit manufacturers producing vehicles within Europe, under so-called Made in Europe rules.
That regulation is still working its way through what is expected to be a drawn-out legislative process, even as Chinese firms including SAIC Motor have already begun expanding their European manufacturing footprint.
SAIC Motor announced last month that it would build its first EU-based vehicle manufacturing plant in the Galicia region of Spain, backed by an initial outlay of roughly €200m ($232.9m).
The scheme, which Galicia’s regional authorities have designated as a strategic industrial project, will include a production facility at the Outer Port of Ferrol as well as a separate logistics and industrial hub in As Pontes de García Rodríguez.
SAIC has set a target of producing 120,000 vehicles annually at the site.
