Auto plants in Europe and North America face closure by 2025, Gartner says in Reuters report
(Reuters) – Several European and North American auto plants are at risk of closing or being sold this year as car brands struggle with excess capacity and price competition, a research and advisory firm Gartner (NYSE:), said in a report released on Thursday.
Automakers are likely to cut production capacity on the two continents in 2025 as they face emissions targets and tariffs, while China’s electric vehicle (EV) dominance will grow due to advantages in software and electrification, the company said.
Closures or sales are more likely in high-cost countries, where political and social pressure will be offset by growing competition, Gartner vice president analyst Pedro Pacheco told Reuters.
“This is a little bit like a pressure cooker,” Pacheco said. “The pressure is mounting, mounting and … it’s going to push a number of automakers to make more pragmatic decisions.”
Chinese brands could buy factories to overcome trade barriers or open new factories in cheaper European countries and free trade partners like Morocco or Turkey, the company predicts.
Fearing disruption to the European Union’s 2025 CO2 rules, the CEO of a German car supplier Bosch (NS:), Stefan Hartung, told the publication Auto Motor und Sport on Wednesday that the bloc should refrain from punishing companies that do not meet targets.
The European car industry is no longer on track to meet its EV targets for 2030 and 2035, said Luc Chatel, president of the French car lobby PFA.
“The risk is that we end up reducing sales of combustion engine vehicles in order to artificially increase” sales of electric vehicles, he told Reuters.
Despite the challenges of electrification, Gartner expects shipments of electric buses, cars, vans, and heavy trucks to grow a combined 17% in 2025. It predicts that more than 50% of all vehicle models sold by automakers by 2030 will be electric vehicles.
To achieve the shift, legacy automakers can buy software architecture from newer electric vehicle makers and digital companies, foster R&D centers in tech hubs or team up with tech companies to create self-financing electric vehicle joint ventures, Pacheco said.
