Europe's carmakers set course for managed decline
XLY•European carmakers face rising competition from Chinese brands as EU tariffs and proposed “Made in Europe” rules offer only limited protection, the article argues. Chinese brands captured 9% of the European market in the first half of the year, and AlixPartners expects them to reach 16% of wider European sales by 2030.
1. Chinese competition grows
Chinese brands captured 9% of the European market in the first half of the year. AlixPartners expects them to account for 16% of wider European sales by 2030, while BYD’s European market share has risen to 2.5%, more than twice the previous year’s level.
2. EU measures face limits
The EU imposed tariffs on Chinese electric vehicles in 2024 and is considering measures targeting hybrids and subsidising cars made in Europe. A proposed export cap would limit Chinese hybrid shipments to 350,000 units from December, compared with 302,000 in 2025; the article says the agreement lasts four years and would still allow annual sales to grow by 6%. “Made in Europe” rules are not yet law, and countries disagree over which suppliers and factories would qualify.
3. Structural challenges remain
The article says European carmakers face underused factories, ageing brands and slower restructuring, while Chinese groups are moving upmarket and developing new technologies. Volkswagen’s restructuring plan includes cutting 100,000 jobs. Volkswagen trades at less than four times expected earnings, while Stellantis trades at under five times, down from nearly seven times a year earlier, per LSEG data.
