Western Europe to account for only five percent of world car production by 2030

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In 2030, Western Europe will account for only five percent of world car production, last year it was 15 percent. European manufacturers, including those from the Czech Republic, will be coping with the effects of the global pandemic.

At the same time, they will have to comply with increasingly strict emission limits, which will lead to more expensive cars. This follows from the KPMG Global Automotive Executive Survey attended by more than 1,100 executive managers from 30 countries, including the Czech Republic.

According to analyst Jan Linhart from KPMG, Europe’s share by 2030 might be even smaller due to the significant impact of the pandemic in the region. On the contrary, China, which accounted for 27 percent of car production last year, will continue to strengthen its position on the market.

“Europe is in a transitional period of introducing stricter emission limits, which will make cars more expensive. This is another blow that carmakers will find difficult to cope with. The solution would be to postpone the new emission limits for several years, and negotiations on this option are already underway. The drop may be more than 30 percent if no action is taken,” warned Linhart.

New partnerships, mergers, and acquisitions are expected to occur as the market awaits consolidation. Car leaders also expect a dramatic reduction in the number of stores by 20 to 30 percent in the future. The current crisis will accelerate this trend even more.

In addition, more than 80 percent of managers believe that the role of showrooms needs to change as automakers increasingly rely on digital channels, flexible contracts, and data handling.

Not only will the ability to recover from the post-COVID recession determine how the carmakers will fare in the long run, but access to natural resources will play a key role. China has an advantage in this direction as it disposes and controls raw materials for the production of battery cars.

Natural resources and politics will also decide which type of drive the carmakers will support. The leaders of European carmakers are focusing on battery electric cars (83 percent) and hybrid cars (80 percent), North American manufacturers want to continue investing in internal combustion engines (89 percent). This also applies to diesels, which thus remain an alternative in the future.

Title image: Sebastian Lohse, left, and Heiko Gruner employees of German car producer Volkswagen Sachsen, work with face masks in the assembly of the ID.3 in the vehicle plant in Zwickau, Germany, Thursday, April 23, 2020. At carmaker Volkswagen, vehicle production restarts after a corona shutdown of more than five weeks. Production of the all-electric ID.3 will initially be restarted with reduced capacity and cycle time. Zwickau is the first VW vehicle plant in Germany to resume operations. (Hendrik Schmidt/dpa via AP)

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