The European Automotive Sector: A Glimpse into the Future (2026 and Beyond)
The European automotive industry is poised for a resurgence, despite the current challenges. Despite the recent downturn, we foresee a positive outlook for the sector, with a projected 2.4% growth in 2026 and 3.8% in 2027. However, this recovery is not a return to the glory days of the 2000s and 2010s.
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- The Rise of EVs: The electric vehicle (EV) market is a key driver of this growth. While global car demand is shifting towards EVs, European producers are trailing their Chinese counterparts. This transition is a significant challenge, but it also presents an opportunity for domestic producers to capitalize on increasing domestic demand.
- Cyclical vs. Structural Demand: The recent drop in car sales (-19% from 2019 to 2024) has a cyclical component that will recover over time. However, a portion of this decline can be attributed to a lasting decrease in car demand. Europe's automotive output will likely stabilize rather than grow significantly in the long term, with a projected global share of 13.6% by 2050, down from 15.4% in 2024.
Download the full report to explore the implications and potential strategies for the European automotive sector's future.
