Green energy offers potential
BCG study: European car industry can hardly keep up
06/23/2023, 11:12 am
The European car industry is facing difficult times – foreign competitors are rising and pushing European cars out of the market. According to calculations by the management consultancy BCG, the market share of European car manufacturers could even halve by 2040 in the worst case.
According to estimates by the Boston Consulting Group (BCG), the European car industry is likely to lose market share to Chinese and American carmakers worldwide. If the world market share falls from 26 to 24 percent by 2040, 300,000 jobs would be lost and economic output would shrink by 37 billion euros, the industry experts wrote in a study.
New competitors with cheaply produced, digitized and fully connected e-cars could gain ground as innovative brands and reduce the brand value of European car manufacturers. They struggled with a shortage of skilled workers and rising energy prices. The development will depend on whether the local auto industry can retain its technological leadership and continue to produce cost-efficiently, but also on the geopolitical environment and the sales market in China.
In addition to the baseline scenario, BCG also outlined a best-case and worst-case scenario. “New technologies and green energy are a huge opportunity for the European auto industry,” said industry expert Albert Waas: “By 2040, 800,000 new jobs and additional tax revenue of 25 billion euros are possible.” But “overall, the downside risks outweigh the upside potential,” the study said. In the worst case, the market share of European car manufacturers could halve by 2040 and annual economic output could fall by a third or 145 billion euros. This would come with the loss of 1.5 million jobs.