{"id":57279,"date":"2026-09-21T17:00:00","date_gmt":"2026-09-21T15:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=57279"},"modified":"2026-09-21T11:23:42","modified_gmt":"2026-09-21T09:23:42","slug":"europe-affordable-cars","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/europe-affordable-cars\/","title":{"rendered":"Why can Europe no longer make affordable cars?"},"content":{"rendered":"
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For decades, the automotive industry has been one of Europe\u2019s great industrial strengths. But the model that turned Volkswagen, Mercedes-Benz, BMW, Renault and Stellantis into global benchmarks is under pressure.\u00a0<\/b><\/h3>\n

 <\/p>\n

Manufacturing on the continent is expensive, the technological transition requires multibillion-euro investments, and China has built an industry capable of producing electric vehicles at much lower costs. The consequences are already visible: <\/span>workforce cuts, oversized factories and new cars that are increasingly difficult to afford<\/b>. An industrial crisis that is inevitably also transforming the second-hand market.<\/span><\/p>\n

The crisis facing Europe\u2019s automotive industry is often presented as a consequence of the transition to electric vehicles, <\/span>but the problem runs deeper. Europe is suffering from a combination of high costs, excess production capacity, technological dependencies and increasingly aggressive international competition<\/b>.<\/span><\/p>\n

The sector remains enormous: it accounts for approximately <\/span>one trillion euros of European GDP<\/b> and directly or indirectly employs around <\/span>13 million peopl<\/b>e. Precisely for this reason, the European Commission itself acknowledges that the industry is at a \u201c<\/span>critical inflection point<\/b>\u201d in the face of technological transformation and increasing global competition.<\/span><\/p>\n

For decades, European manufacturers perfected <\/span>the combustion engine<\/b> until it became one of their great competitive advantages. Now they have to transform factories, train workers and invest billions in <\/span>batteries, software, electronics and new platforms<\/b> while continuing to support much of <\/span>the old industrial structur<\/b>e. In a way, it is like having to rebuild the plane while it is still flying.<\/span><\/p>\n

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China is no longer competing on cheap labour alone<\/b><\/h3>\n

The problem is that Europe is undertaking this transformation at a time when <\/span>its Chinese competitors<\/b> have already achieved enormous scale in some of the technologies that will define the car of the future.<\/span><\/p>\n

According to the <\/span>International Energy Agency (IEA)<\/span><\/a>, the cost of manufacturing an electric vehicle in China is more than 30% lower than in advanced economies. Battery cells alone are, on average, more than 30% cheaper than in Europe. It is not merely a question of labour costs: production scale, automation, a highly integrated supply chain and access to components and critical minerals all play a role. The gap continues to widen. In 2025, battery packs were approximately<\/span> 35% cheaper in China than in Europe<\/b>.\u00a0<\/span><\/p>\n

At the same time, <\/span>the global centre of gravity of the automotive industry has shifted<\/b>. China already accounted for 35.4% of global passenger car production in 2024, while European Union production fell by 6.2%. <\/span>This forces European brands to compete on price while financing a costly industrial transformation<\/b>. A particularly difficult combination.<\/span><\/p>\n

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Job cuts are the symptom<\/b><\/h3>\n

When factories can produce far more cars than the market can absorb profitably, sooner or later an adjustment follows.<\/span><\/p>\n

Volkswagen<\/b> agreed to cut more than <\/span>35,000 jobs in Germany<\/b> by 2030 and reduce the production capacity of its German plants by around <\/span>734,000 units<\/b>. The company itself links these measures to the contraction of the European market and increasing competition.<\/span><\/p>\n

The crisis also extends to <\/span>suppliers<\/b>. In 2025, <\/span>Bosch<\/b> announced an additional <\/span>13,000 job cuts<\/b>, mainly in its German mobility division, after identifying an annual gap between costs and revenues of around <\/span>\u20ac2.5 billion in this area<\/b>. The company directly points to falling demand, overcapacity and the need to restore competitiveness.<\/span><\/p>\n

Therefore, job cuts are not the origin of the problem, but rather the result of <\/span>an industry that simultaneously needs to invest more and spend less<\/b>.<\/span><\/p>\n

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What happened to the affordable car?<\/b><\/h3>\n

For consumers, this transformation has a much more tangible consequence: <\/span>new cars have become enormously more expensive<\/b>.<\/span><\/p>\n

In Spain, the average price offered by dealerships rose from \u20ac30,513 in 2019 to \u20ac44,419 in 2025, an increase of 45.6%,<\/span> more than twice the accumulated inflation over the same period<\/b>. The increase is even more striking in traditionally affordable segments: prices for A-segment cars rose by 78.3%, while B-segment cars increased by 46.7%.<\/span><\/p>\n

Not all of this increase is due to <\/span>electrification<\/b>. Vehicles now incorporate more technology and mandatory safety systems, production costs have increased, and the supply problems caused by the pandemic have also left their mark. But manufacturers have contributed to the phenomenon through a commercial decision: prioritising larger, better-equipped vehicles with higher margins.<\/span><\/p>\n

In the European electric vehicle market, for example, C-segment SUVs and models in higher segments went from <\/span>accounting for 28% of sales in 2020 to 64% in 2024<\/b>.<\/span><\/p>\n

The business logic is easy to understand. If a company sells fewer cars, it can try to compensate by making more money on each unit. <\/span>The problem arises when this strategy turns the car, traditionally a mass-market product<\/b>, into something increasingly inaccessible to the middle class.<\/span><\/p>\n

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The second-hand market absorbs the blow<\/b><\/h3>\n

When a new vehicle becomes too expensive, the need for mobility does not disappear. <\/span>Buyers simply look for an alternative<\/b>.<\/span><\/p>\n

In 2025, 2.22 million second-hand passenger cars were sold in Spain, almost two for every new vehicle. And 57.3% of transactions involved cars more than ten years old. This figure exposes a contradiction that is difficult to ignore. <\/span>Europe wants to accelerate the renewal of its vehicle fleet to reduce emissions<\/b>, but high prices are pushing many families to keep their cars for longer or buy an older one. If replacing a vehicle is economically inaccessible, the transition slows down, no matter how ambitious the regulations may be.<\/span><\/p>\n

However, an interesting shift has emerged during 2026. Growing competition from new brands, many of them Chinese, has forced manufacturers and dealerships to increase promotions. By July, the average discount on the list price of new cars had already exceeded 14%, while the average price had fallen to \u20ac43,477. It remains well above the 2019 level, but <\/span>the trend has begun to change<\/b>.<\/span><\/p>\n

And this price war has reached the second-hand market<\/b>. Nearly-new cars less than a year old had seen their average price fall by almost 10% in the first quarter of 2026 and, during the first half of the year, the correction was already affecting even cars more than ten years old. It is a clear example of the extent to which the arrival of new competitors can disrupt the entire value chain.<\/span><\/p>\n

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Europe needs to bring back the affordable car<\/b><\/h3>\n

The battle facing Europe\u2019s automotive industry is not simply about manufacturing more electric cars. <\/span>It is about managing to produce them at a price <\/b>that allows them to be sold on a mass scale without destroying companies\u2019 margins or the jobs that depend on them.<\/span><\/p>\n

Europe still has powerful brands, engineering expertise, human capital, an extensive network of suppliers and decades of industrial experience. <\/span>But history does not guarantee future competitiveness. If its manufacturers need \u20ac40,000 or \u20ac50,000 <\/b>to offer a vehicle that a competitor can sell considerably more cheaply, the problem cannot be solved through tariffs or regulations alone.<\/span><\/p>\n

Europe also needs to regain efficiency, scale and, above all, an idea that was fundamental to its automotive industry for decades: <\/span>the affordable car<\/b>. The paradox is that Europe wants to renew its vehicle fleet, electrify mobility and reduce emissions, but it will struggle to achieve this if a growing share of the population can only afford to drive a <\/span>fifteen-year-old vehicle<\/b>.<\/span><\/p>\n

The big question, therefore, is not only whether Europe will be able to manufacture the car of the future. It is a much more fundamental one: <\/span>whether European citizens will be able to afford it<\/b>.<\/span><\/p>\n

 <\/p>\n

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