European Auto Parts Industry Plunges into Layoff Crisis, 100,000 Jobs at Risk

Europe’s automotive parts industry is facing severe challenges. According to Benjamin Krieger, Secretary General of the European Association of Automotive Suppliers (CLEPA), the sector has already cut or plans to cut 104,000 jobs between 2024 and 2025—far exceeding job losses during the pandemic—while only adding 7,000 new positions in the same period, creating a massive gap. Major players like Bosch and ZF have announced large-scale layoffs, and the industry downturn could persist until 2026. The crisis stems from multiple pressures: declining profits among automakers, high capital expenditures required for electrification, shrinking employment in internal combustion engine-related roles, and Europe’s steep energy and labor costs. These factors are driving companies to shift investments overseas and delay technological upgrades, fueling a vicious cycle of overcapacity. Meanwhile, Chinese auto parts manufacturers are accelerating their global expansion, leading the EU to record its first-ever trade deficit in automotive components in 2025. In response, companies like ZF are turning to Chinese suppliers for critical components and freezing wage increases, expecting to save over €5 billion. Although some firms are calling for local content requirements to support domestic suppliers, industry experts warn this could undermine competitiveness. However, new opportunities are emerging as Chinese automakers speed up localization in Europe and rising European defense spending boosts demand.