The European Auto Industry, and also the industry globally, has not had the best treatment from the press. Widespread concern over the downward trend that has been impacting the industry for the last few years. This article is going to explore the impacts, the reasons and the future projections for such a huge industry like the auto industry.

What is the Auto Industry? What does it Include?

First of all, let’s get some perspective on what the auto industry covers. This includes everything from the manufacturing of car parts, to the manufacturing of the cars themselves. The import and export of vehicles from vans, to trucks, to busses, to all vehicles no matter if they are intended for consumer or business use. But it is not just the hardware that is included, insurance such as Part-Time Motor Trade Insurance, car insurance, the workers that work within the industry, all form what it is today. So this is why the industry is as big as it is because so much goes in it and so much is affected by its performance.

What is causing the recent downturn?

Now this section can be tricky, as there are multiple factors causing this downward trend. The first and main factor is political uncertainty and instability within Europe. With the subject of Brexit taking the main stage in most EU political gatherings, the uncertainty of how the changes between trade with the UK and the EU are huge problems for the auto industry. Will there be tariffs? How much will those tariffs be? Also, with the likes of BMW and Nissan producing and manufacturing cars within the UK, trade is a major issue, as new trade deals get delivered in the coming years between the UK and countries outside the EU. All of these affect the industry, and with no sign of instant relief coming soon, these will continue to impact. Of course, with Brexit now official, and the UK no longer an EU member, that has cleared some uncertainty. However, the deals and the trade negotiations are yet to come, and these are the talks that business industries globally, not just the auto industry, are going to be watching closely.

Will the downward trend continue?

This is a key question, that also has a lot of elements to it. A short answer would be no, but here is why. With most of the reasons for the downturn being the political issues that are currently facing the bloc, in time these issues will slowly get smaller and smaller, the more Brexit is settled and the more deals that are pushed through to formalize and stabilize. Also, another big change happening in the auto industry is the rise of electricity. With this, many companies, if not all of the main auto manufacturers have invested heavily in recent years with increasing their electric capabilities. More cars and vehicles than ever are being manufactured with purely electric capabilities, which will be the norm come 2040 when the UK and France implement their planned axing of petrol and diesel cars. 


So, watch this space. The auto headlines may be doom and gloom now, but with time, the industry will be in the best shape ever, with some help from the turn to electric.