Automotive News Europe — 2025-10-13
Automotive Industry
Slack car demand and new competitors like China’s BYD could force Europe’s automakers to shed as many as eight factories as the industry moves through a painful reset, according to consultancy AlixPartners.
Across the continent, car plants are running at just 55 percent of capacity on average, with sites operating at less than three-quarters full, which is draining company bottom lines, the restructuring advisers said. AlixPartners sees Stellantis as worst off, with the automaker’s European operations working at about 45 percent.
“European carmakers will lose between one and two million vehicles to Chinese brands in the coming years,” said Fabian Piontek, AlixPartners’ managing director in Germany. “Chinese carmakers will reach a market share of around 5 percent in Europe this year.”
A representative for Stellantis declined to comment.
Shuttering a site is costly and leads to lengthy negotiations with powerful worker representatives. AlixPartners estimates that closing a large factory with about 10,000 workers triggers expenses of around €1.5 billion ($1.7 billion), with the process taking one to three years.
After decades of growth, automakers are cutting thousands of jobs and throttling output because demand has not bounced back to levels seen before the pandemic. Volkswagen Group closed its plant in Zwickau, Germany, for a week this month while Stellantis is temporarily halting output at sites that make models such as the Fiat Panda and Alfa Romeo Tonale.
Deliveries in Europe inched up just 0.9 percent last year, to around 13 million vehicles, ACEA, the European automaking body, said. Chinese brands, such as BYD and SAIC’s MG, could capture 10 percent of the market by 2030, increasing pressure to reduce capacity, according to AlixPartners.
Generally, car plants are profitable when they are designed to make at least 250,000 vehicles annually, according to AlixPartners. If Chinese automakers were to sell around 2 million cars a year in Europe by 2030, the region would have about eight factories too many, the advisers said.
Closing down whole sites is difficult in most European countries. In Germany, worker representatives sitting on company supervisory boards, such as VW Group and Mercedes-Benz, can also block decisions.
VW executives last year took months to reach an agreement with labor leaders on cost savings and eventually backed down from plans for VW’s first-ever factory closures in Germany. The final deal included capacity cuts and a reduction of 35,000 workers.
“It’s a process that takes long, and executives need a narrative that closing down the plant is the only viable business option,” AlixPartners consultant and Managing Director Tom Gellrich said.