Soaring car prices threaten European auto industry

Soaring car prices threaten European auto industry
Soaring car prices threaten European auto industry

New car registrations continue to plummet in Europe. According to a latest study by JATO Dynamicssales in 28 European markets totaled just 9.74 million units in the first three quarters of 2024, compared to 12.11 million in the same period in 2019. This drop is largely explained by prices that have become inaccessible for many consumers.

Felipe Munozglobal analyst at JATO, warns: “ Although the European automotive market is mature and historically cyclical, the current weakness does not simply reflect a passing crisis. It reflects a deep structural problem. »

The European Union imposes ambitious targets for 2035, where only zero-emission cars can be marketed. However, this ecological transition, although necessary, comes at a high cost. It causes price inflation, making electric vehicles more expensive and slowing their adoption by households.

At the same time, Chinese competition is intensifying. With an optimized battery supply chain, China is flooding the European market with more affordable electric vehicles. Of the 7.2 million electric vehicles sold worldwide between January and September 2024, 57% came from Chinese manufacturers.

Thermal cars remain an obstacle

Contrary to popular belief, it is thermal engine vehicles that contribute the most to the surge in prices. In Germany, their prices increased by 26.1% between 2019 and 2024, compared to only 5.2% for electric ones. In Spain and the United Kingdom, the trend is similar, with significant increases for thermal cars.

Felipe Munoz notes a disconnect between regulators and industry: “ In ten years, electric vehicles still represent barely 15% of registrations in Europe. Policies and realities on the ground diverge, threatening the competitiveness of local manufacturers. »

Find solutions to reduce costs and prices

Between 2019 and 2023, Western Europe lost the equivalent of 3.3 million new car sales. With increased competition from Chinese brands, European manufacturers must find solutions to reduce their costs and prices. Otherwise, they risk marginalization in a changing market. Faced with these challenges, the future of the European automotive industry rests on its ability to innovate, meet consumer expectations and maintain its global competitiveness.

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