European automotive job losses hit record high in 2024: CLEPA report

Posted by Admin January 16, 2025 Jobs

The automotive supply sector announced a staggering 54,000 job cuts in 2024. Credit: Andrey_Popov/Shutterstock.

The European automotive supply industry experienced a challenging year in 2024, with a significant reduction in car production and job cuts reaching an unprecedented level, according to th European automotive suppliers’ trade association publication, Data Digest.

Data Digest is European Association of Automotive Suppliers’ (CLEPA) bi-monthly publication.

High energy prices and inflation since 2020 have diminished Europe’s competitive advantage against markets like China and North America, the report said.

The automotive supply sector announced a 54,000 job cuts in 2024, surpassing the total number of job losses during the peak Covid-19 years of 2020 and 2021.

CLEPA’s Market Affairs head Nils Poel said: “2024 was a difficult year for European suppliers, with low production levels and rising costs.

“These companies have an impressive pipeline of technological innovations, but many projects are being delayed or scaled back due to market pressures.”

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Investment in electric vehicle (EV) projects has seen a drastic decline, with numerous initiatives being delayed, scaled back, or cancelled.

This has raised concerns over the industry’s ability to maintain necessary investments in new technologies and production modernisation.

The situation is exacerbated by a 20% decrease in annual vehicle production in the EU, rising costs, and the ongoing transition to electrification, the report added.

The report referenced GlobalData’s November forecast, which projected that the EU would produce approximately 700,000 fewer vehicles in 2024 compared to 2023, and 3.2 million fewer than pre-pandemic levels. GlobalData is the parent company of Just Auto.

The anticipated increase in battery electric vehicle production for 2024 did not occur, showing a slight decline from the previous year.

However, GlobalData predicts a recovery in 2025, with electric vehicles expected to make up to 27% of total vehicle production.

Despite these projections, suppliers are wary of the speed of the powertrain transition.

A survey by McKinsey and CLEPA revealed that 65% of their members anticipate BEV market penetration to stay below 50% by 2030.

Broader market forecasts also indicate a slower uptake, with EU EV production estimates for 2025 to 2030 revised downwards by five to six million units.

Financial challenges persist in the industry, with only about a third of automotive suppliers maintaining healthy profit levels since 2020. Nearly 38% of the respondents said they expect negative or marginal EBIT in 2024, highlighting the financial pressures faced by the sector.

Profitability issues have led to 65% of suppliers struggling to keep profit margins above the 5% threshold needed for sustainable future technology investments.

After a period of growth, EU investments in EV components have sharply decreased in 2024, with capital investment dropping to €5.64bn, the lowest since 2019.

This investment downturn is largely attributed to weaker-than-expected EV demand, which has significantly influenced investment decisions.

In 2024, at least eight companies have either postponed or completely abandoned European EV battery projects.