GLOBAL AUTOMOTIVE OUTLOOK
Global car output is back at 86m units, but since 2019 China gained 9m and Europe lost 4m. Our Outlook 2027 shows what follows, with three scenarios to 2030.
NOT A GLOBAL CRISIS. A REGIONAL ONE.
- Global car output is back at 85.8m units (2025), but since 2019 China gained 9.2m and Europe lost 4.2m.
- Europe is losing ground at home: production fell 24% since 2019 to 13.5m units, below sales of 14.6m, and Chinese brands are filling the gap.
- The market itself is not shrinking: in all three H&Z scenarios, global output stays at 84m to 89m units in 2030, while Europe loses up to 1.4m.
H&Z Global Automotive Outlook 2027 by Dr. Albert Neumann, Jörg Rückauf and Qiwei Sun, published on 22 October 2026.
KEY FINDINGS
Based on passenger car production and sales by region from 2019 to 2025, supplier financials, a US landed cost model with tariffs as of September 2026, and three scenarios to 2030.
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36%
Global output is back. Europe's share is not.
China's share of global passenger car production rose from 26% (2019) to 36% (2025). Europe's fell from 21% to 16%.
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-24%
Europe builds less than it buys.
European production fell 24% since 2019 to 13.5m, below sales of 14.6m. Chinese brands reached around 7% market share in Europe by early 2026.
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5.6m
China exports its overcapacity.
Capacity rose to 56m units as utilisation fell to 50% (2024). Exports reached 5.6m in 2025 and climbed further to 6.1m in January to August 2026 alone.
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$8.4k
Tariffs, not wages, decide footprints.
Gross margin per combustion C-SUV for a German OEM in the US: $8.4k with US assembly, $5.8k from USMCA-compliant Mexico, $3.1k exporting from home.
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7%
Many suppliers earn too little.
Suppliers need around 7% EBIT to stay financeable. Around 70% of European suppliers expect profitability below sustainable levels (CLEPA).
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84-89m
Every scenario moves volume, none shrinks the market.
Global output stays between 84m and 89m units in 2030 in all three H&Z scenarios. Europe loses around 1.4m in the worst case.
Sources: H&Z analysis based on Marklines, S&P Global Mobility, VDA, CPCA, Statista, ZDK, CLEPA and company reports. EBIT threshold: H&Z Supplier Profitability Study 2025.
WHERE IS GLOBAL CAR PRODUCTION MOVING?
To China, and away from Europe. Between 2019 and 2025, China added 9.2m units of production while all other regions combined lost 7.3m. China’s share of global output rose from 26% to 36% and could approach 40% in the coming years.
Europe’s share fell from 21% to 16%, as European OEMs pursue local-for-local strategies in China and selectively cut capacity at home.
China added 9.2m units since 2019, all other regions combined lost 7.3m. Global output grew from 83.9m to 85.8m.
WHY IS THE EUROPEAN CAR INDUSTRY LOSING GROUND AT HOME?
European production fell 24% since 2019, faster than sales (-16%), and new entrants are filling the gap. One driver is affordability: in Germany, average new-car prices rose by around 42% since 2019 while salaries rose by around 24%.
Between 2019 and 2024, new-car revenue fell 12% and used-car revenue rose around 36%: demand moved, it did not disappear. Meanwhile, average car prices in China are around 10% below 2019, and that price base travels with Chinese OEMs into Europe.
Prices split after 2021: +42% in Germany, -10% in China. German salaries rose around 24% over the same period.
WHAT DO TARIFFS MEAN FOR FOOTPRINT DECISIONS?
They now outweigh wage and logistics differences. The US applies 25% on imported vehicles and parts since May 2025, 15% for the EU under the agreement in force since 1 July 2026. USMCA compliance does not mean duty-free access, because only US content is exempt.
Footprint decisions therefore have to be tested on total landed cost and against more than one tariff regime. More on tariffs and rules of origin.
Only US assembly earns a defensible margin for both powertrains. Exporting electric vehicles from Germany sits close to break-even.
WHY ARE EUROPEAN AUTOMOTIVE SUPPLIERS IN CRISIS?
Several pressures hit at once. The profit pool is moving to batteries, semiconductors and software while traditional products commoditise. Legacy OEM customers are losing volume, Asian suppliers compete at lower cost, and balance sheets thin just as the transition needs investment. Germany’s largest suppliers earned between a negative margin and around 1.8% in 2025, well below the 7% a supplier needs (Supplier Profitability Study).
Around 42,300 jobs were lost in the German automotive industry in the twelve months to mid-2026, and CLEPA warns that up to 350,000 supplier jobs in Europe could be at risk by 2030. Where that calls for a turnaround, see our restructuring work.
WHAT WILL THE AUTOMOTIVE INDUSTRY LOOK LIKE IN 2030?
Similar in size, different in shape. Our three scenarios, Managed Reglobalisation, Walls Hold, and Policy & Economy Double Hit, land between 84m and 89m units of global output in 2030. The rest of the world, including India and ASEAN, gains in all three.
Europe roughly holds its production in the first two, though part of it would be controlled by Chinese manufacturers, and loses around 1.4m units in the Double Hit.
The total barely moves, the distribution does. In the Policy & Economy Double Hit, Europe loses around 1.4m units.
WHAT SHOULD OEMS AND SUPPLIERS DO NOW?
The Outlook identifies five priorities. They work best when major decisions are tested against all three scenarios, with staged investments and decision triggers defined in advance.
- Simplify products, variants and organisational structures
- Reduce product cost and development time together, with procurement and manufacturing involved from the first concept
- Expand customer access, including relationships with Chinese OEMs
- Align capacity and footprints with realistic regional demand
- Protect liquidity and investment capacity throughout the transformation
What’s Inside?
- Executive Summary: three hypotheses, key findings and five priorities
- Reality Check 2026: market, regulation and the supplier ecosystem
- Market dynamics in a new trade order, including the US landed cost model
- China as a systemic competitor in Europe
- Outlook 2030: three scenarios and long-term trends
- Summary & Implications: eight levers for European suppliers
DOWNLOAD THE OUTLOOK
Get the full H&Z Global Automotive Outlook 2027 with all 14 figures, the landed cost model assumptions and the implications for policymakers, OEMs and suppliers.
CONTACT OUR EXPERTS
Albert Neumann
Jörg Rückauf
YOUR QUESTIONS ANSWERED
What is the H&Z Global Automotive Outlook 2027?
H&Z’s annual automotive industry outlook, published on 22 October 2026. It combines market evidence since 2019 with three scenarios to 2030 and translates them into decisions on portfolio, customers, footprint and capital allocation for OEMs and suppliers. The full Outlook is free to download.
What EBIT margin does an automotive supplier need?
Around 7%. That is the margin at which a European supplier earns an adequate return on equity, remains financeable and can fund the transition. The 3 to 5% increasingly described as the new normal is not enough.
How much of the European car market could Chinese brands win?
Chinese brands reached 5.1% of European sales in the first half of 2025 and around 7.3% by early 2026. Market consensus and H&Z scenarios put them at 10 to 15% by 2030, or 1.5m to 2.1m units from imports and local production. Holding that share depends on service networks, residual values and fleet credibility, not on price alone.
How do US tariffs affect European carmakers?
Volkswagen Group absorbed €2.9bn of tariff costs in 2025, and BMW reported a 1.5-point effect on its automotive EBIT margin. The difference lies in footprint: manufacturers that assemble in the US keep the widest margin, while exporting electric vehicles from Europe sits close to break-even.
