The European auto industry is under threat: production crisis and competition with China

The European auto industry is facing another blow. A reduction in steel production in the European Union (EU) could significantly worsen the crisis in the automotive sector, which is already suffering from competitors from China. Auto expert Maxim Bagaev told Life.ru about this.

Currently, steel production in the EU has fallen to its lowest levels in history, and supplies to external markets have fallen by about 20 percent. Among the reasons: expensive energy resources, US tariffs and an oversupply of Chinese steel.

Bagaev noted that the difficulties of European automakers are cumulative and complex. Labor in the EU is expensive, and Chinese companies have mastered the necessary technologies and gained a foothold in the market. In his opinion, duties on Chinese cars are unlikely to stop the onslaught of automobiles from China. “To be absolutely precise, this is probably not even a collapse for the European car market, but rather a global systemic crisis that needs to be overcome, because they are very lagging behind,” Bagaev said.

He believes that attempts to resist the Chinese auto industry have resulted in a decrease in the quality of the latest BMWs and Mercedes. In his assessment, they use inexpensive plastic, and the assembly has deteriorated. Against this background, the higher quality and more technologically advanced Chinese Li Auto and Zeekr stand out.

The scale of the problems in the European industry is well reflected by the wave of thousands of layoffs at automakers. Bagaev sees an additional danger in the possible transfer of the European automobile industry to military needs. All this will only complicate the situation for manufacturers of civil transport, the specialist concluded.