According to the Economic and Steel Market Outlook 2026-2027/Q1 2026 Report from the Economic Committee of the European Steel Association (EUROFER), in the third quarter of 2025 automotive output in the EU increased slightly by one percent year on year, compared to the 4.2 percent drop in the previous quarter.
Ongoing supply chain bottlenecks that continue to delay orders, combined with war-related disruptions, weak consumer confidence, limited growth in disposable incomes and broader economic uncertainty, kept EU car demand under pressure in 2025. Nevertheless, a slight improvement has been observed in the first four months of this year, while total new car registrations in the EU increased by 1.8 percent year on year in 2025, although volumes remained significantly below pre-pandemic levels.
The automotive sector expects a limited output recovery for 2026, with growth of 0.9 percent, followed by a moderate increase of 1.7 percent in 2027. Despite this, output levels are forecast to remain well below those recorded in 2019.
A full recovery in global trade and external demand from key markets, particularly the United States and China, appears unlikely in the near term, given intensifying global trade tensions. This includes the recent introduction of 15 percent US tariffs on EU car exports. As a result, significant challenges are expected to persist, especially the continued rise in Chinese electric vehicle exports to the EU and the negative impact of newly imposed US tariffs on EU-made cars, which are likely to substantially affect EU exports to the US.
