Automobile Engine & Parts Manufacturing in European Union 2026: Industry Statistics & Trends

The Automobile Engine and Parts Manufacturing industry in the European Union is a cornerstone manufacturing sector responsible for producing essential mechanical, electrical, and structural components for motor vehicles. According to Eurostat data, the total value of sold production for the broader motor vehicles, trailers, and semi-trailers sector in the EU was €707 billion in 2024 (Eurostat), representing approximately 12% of the EU's total industrial sold production, though it faced a 9% decline compared to the previous year. The industry is currently undergoing a structural transition driven by strict decarbonization targets and an evolving powertrain mix, resulting in heightened investm

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What does the Automobile Engine & Parts Manufacturing in European Union industry cover?

This industry encompasses the fabrication of diverse mechanical, electronic, and structural components designed exclusively for motor vehicles, including engines, gearboxes, suspension systems, and electronic braking assemblies. It explicitly excludes the final assembly of complete vehicles, focusing instead on Tier 1, Tier 2, and lower-tier supply chains that feed components directly into original equipment manufacturers (OEMs) or aftermarket networks. The sector is defined under specialized European classification frameworks to monitor industrial outputs across Member States.

• •Covers NACE Rev. 2 Group 29.3, which includes the manufacture of parts and accessories for motor vehicles.
• •Encompasses NACE code 29.31 (electrical and electronic equipment) and NACE code 29.32 (other parts and accessories).
• •Excludes the manufacture of complete motor vehicles (NACE 29.1) and vehicle bodies/trailers (NACE 29.2).

Who operates in the industry and how is it structured?

The market structure exhibits a dual nature, with heavily concentrated clusters in core industrial member states alongside specialized manufacturing networks across Central and Eastern Europe. Supply chains are highly integrated with major European vehicle assembly plants, utilizing just-in-time and just-in-sequence logistics models. Central European nations represent an increasingly disproportionate share of the production intensity relative to their overall economic size.

• •Slovakia led the EU with 45% of its total industrial sold production originating from the motor vehicles and transport equipment sector in 2024 (Eurostat).
• •Czechia, Romania, and Hungary registered sector production shares of 34%, 30%, and 25% respectively in 2024 (Eurostat).
• •The broader automotive sector accounted for approximately 2.5 million direct manufacturing jobs within the European Union in 2023 (ACEA).

What drives demand in the industry?

Demand is primarily driven by domestic vehicle assembly volumes across the European Union and international export demand from major global transport markets. Additionally, the rapid shift in automotive powertrain preferences toward electrification and hybridization dictates the specific mix of engine types and sub-components required by OEMs. Despite a recent slowdown in full battery-electric vehicle sales, hybrid architectures continue to stimulate demand for complex dual-powertrain parts.

• •New passenger vehicle registrations in the EU reached 10,822,831 units in 2025, expanding by 1.8% over 2024 figures (ACEA).
• •Battery electric vehicle (BEV) registrations in the EU grew by 29.9% to 1,880,370 cars in 2025, capturing a 17.4% market share (ACEA).
• •The EU retained a substantial international automotive trade surplus of €94 billion in 2024 despite rising global import competition (ACEA).

Who are the notable companies in the industry?

The competitive environment features large, highly capitalized multinational engineering corporations that invest extensively in technological innovation to maintain supplier contracts with premier vehicle brands. These operators must balance legacy internal combustion engine portfolios with massive research and development outlays dedicated to next-generation electronic drivetrains. Competition is intensifying due to the market penetration of lower-cost electronics and battery components manufactured outside Europe.

• •Robert Bosch GmbH, Continental AG, and ZF Friedrichshafen AG operate as dominant Germany-headquartered Tier 1 suppliers with expansive manufacturing operations across the EU.
• •Valeo SE and Michelin (Compagnie Générale des Établissements Michelin) lead component and parts manufacturing operations based out of France.
• •The European automotive manufacturing sector collectively sustained a record research and development investment of €85 billion in 2023 (ACEA).

What are the recent trends and outlook?

The industry faces structural headwinds characterized by falling aggregate component production volumes and an unpredictable international trade ecosystem. The production value of advanced low-emission and electric drivetrains has achieved notable growth since the turn of the decade, yet total manufacturing volume remains constrained below historical baselines. Rising regional operating costs and infrastructure bottlenecks represent persistent near-term friction points.

• •EU car production totaled 11.5 million vehicles in 2024, down by 750,000 units against the prior year and remaining below pre-pandemic outputs (ACEA).
• •EU own-production of hybrid and electric vehicles reached €122 billion in 2024, marking an 86% increase compared to 2021 levels (Eurostat).
• •Extra-EU imports of electric vehicles grew increasingly concentrated, with China supplying 55% of all imported electric cars into the EU in 2024 (Eurostat).

How is the industry regulated?

Manufacturers operate under a stringent and complex European Union regulatory framework targeting localized pollution, greenhouse gas emissions, and supply chain accountability. Fleet-wide CO2 reduction mandates for vehicle manufacturers directly influence the technical performance and material specifications imposed on parts suppliers. Future compliance schedules require progressive decarbonization across both individual operations and entire vehicle operational lifecycles.

• •EU Euro 6 and upcoming Euro 7 standards dictate maximum permissible limits for tailpipe pollutant emissions like nitrogen oxides (NOx) and particulate matter.
• •Corporate Sustainability Due Diligence Directive (CSDDD) rules force tier suppliers to rigorously monitor environmental and labor practices across their supply bases.
• •CO2 production emissions per manufactured vehicle within the EU have decreased by 53% between 2005 and 2024 due to industrial efficiency standards (ACEA).

Government, statistical and trade sources used for this Claight analysis.

• Eurostat Industrial Production Statistics 2024 ·
• Eurostat Trade and Production of Hybrid and Electric Cars 2024 ·
• ACEA Automobile Industry Pocket Guide 2025/2026 ·
• European Automobile Manufacturers Association (ACEA) New Car Registrations Report 2025