Volkswagen CEO Oliver Blume has warned that Europe’s mass-market carmakers face “enormous pressure” from Chinese rivals and worsening market conditions, reported Reuters.

Blume’s comments come as Volkswagen pursues the most extensive overhaul in its history, with plant closures and tens of thousands of job losses among the possible outcomes.

The plan has met strong resistance from trade unions, but the chief executive says the company can no longer depend on profits generated outside Europe to sustain its regional operations.

"We cannot build our future on ​export profits alone. Our European businesses must be profitable, resilient ​and competitive," he was quoted as saying.

Speaking at an event held alongside the Paris motor show, Blume said the pressure is not confined to Volkswagen.

Stellantis and Renault face the same challenge, and the three companies together represent more than 60% of European vehicle production.

Their exposure is significant because the mass-market model depends on selling large numbers of relatively low-priced vehicles while preserving narrow margins.

That formula is becoming harder to maintain as manufacturers invest heavily in electrification.

European demand for electric vehicles (EVs) is growing, supported by higher fuel prices and a broader selection of cheaper models.

Yet the transition creates a difficult balancing act: carmakers must offer affordable battery-powered vehicles while absorbing the cost of new technology, complying with emissions rules, and protecting already-thin returns.

Blume has therefore renewed Volkswagen’s request for more adaptable regulation and incentives that encourage production within Europe, rather than relying solely on import-based supply chains.

Chinese manufacturers are adding to the pressure.

Their participation at the Paris exhibition reached record levels as companies sought European growth while demand weakened in China.

According to a separate Reuters report, European carmakers sought further regulatory intervention to manage Chinese competition and the transition to electric vehicles, following lower third quarter deliveries at BMW and Stellantis.

An agreement announced by the European Union on Friday (9 October 2026) could cut Chinese hybrid vehicle exports to the bloc by more than half.

European manufacturers broadly welcomed the pact but sought additional measures, including support for the EV transition and relief from high energy costs.

Recent delivery figures reflect the pressure: Mercedes-Benz Cars’ third quarter deliveries fell 8% to 407,200 vehicles, while Volkswagen Group’s declined 14.3%, with both affected by weaker Chinese demand and Volkswagen also facing North American regulatory challenges.