EU automotive production is expected to decline by 0.9 percent in 2026, compared with the previously forecast decrease of 0.2 percent, before recovering by 3.5 percent in 2027, according to the European Steel Association's (EUROFER) third-quarter Economic and Steel Market Outlook 2026-2027.
Trade uncertainty and energy costs weigh on production
The revised outlook follows production declines of 9.6 percent in 2024 and 4.1 percent in 2025, with persistent trade and geopolitical tensions, higher energy prices, weak consumer demand and slower-than-expected electric vehicle uptake continuing to constrain activity.
EUROFER highlighted the automotive supply chain's exposure to energy and trade shocks, alongside uncertainty surrounding the EU's transition to full electrification by 2035, warning that output will remain well below pre-pandemic levels despite the projected recovery in 2027.
Car registrations improve, but steel demand recovery remains uneven
EU passenger car registrations increased by 5.7 percent year on year in the first half of 2026, primarily supported by market support measures, with hybrid-electric vehicles accounting for 37 percent of registrations and battery-electric cars for 20.7 percent.
Nevertheless, automotive weakness continues to limit the recovery across steel-consuming industries, whose combined steel-weighted output is forecast to increase by 1.5 percent in 2026 and 2.5 percent in 2027, supported by construction and mechanical engineering.
