A Quarter of European Auto Parts Makers Forecast Losses This Year as Industry Consolidation Accelerates

Europe’s automotive parts sector is facing severe operational challenges due to soaring costs and pressure from the transition to electrification. According to a semi-annual survey released on March 23 by the European Association of Automotive Suppliers (CLEPA), 24% of suppliers now expect to report losses in 2024—up significantly from 15% in the previous survey—and 76% anticipate profit margins below 5%, insufficient to fund investments in new technologies and production capacity. Over the past two years, Europe’s automotive supply chain has shed more than 100,000 jobs, with industry giants such as Continental, Bosch, and ZF launching major restructuring programs. Escalating tensions in the Middle East have further driven up energy prices and supply chain risks, intensifying pressures on company survival. In response, nearly 75% of firms are adjusting their product portfolios, while 40% are pivoting toward non-automotive sectors such as defense, accelerating diversification efforts. The rapid industry shakeout could trigger ripple effects across vehicle manufacturers.