Valeo cuts follow “loss of competitiveness” in Europe

Vehicle production volumes across Europe are on the decline, and the impact on suppliers could be severe. Ford, Nissan, Volkswagen, and Stellantis are among the big name automakers looking to reduce European output and headcount. An impact on the local supply chain is inevitable.

Much of the year-on-year vehicle production decline reflects a cyclical fall following 2023’s strong market rebound, but it coincides with longer-lasting challenges, namely the seismic technology disruption from electrification, digitalisation and growing competition from China. Moody’s recently warned that “European parts suppliers are facing the challenges of adapting their product offerings to meet the industry's decarbonisation efforts, and manage costs and investments in new technologies.”

The past few months have already seen cutbacks from leading suppliers such as Bosch, Schaeffler, Michelin, Continental and ZF.