Production in the EU automotive sector to decline by 3% in 2024 – EUROFER

The European steel association EUROFER expects a 3% decline in production in the EU’s automotive sector in 2024 compared to 2023. The previous forecast assumed a more moderate decline of 0.4% y/y. This is stated in the Association’s review “Economic and steel market outlook 2024-2025, Q3”.

At the same time, in 2025, the indicator is expected to grow by 2.3% y/y, compared to previous expectations of +0.8% y/y.

In the first quarter of 2024, production in the EU automotive sector declined for the first time after seven consecutive quarterly increases – by 0.9% y/y. The positive cycle had been in place since Q2 2022, partly due to a low comparison base, so production in the sector remained well below pre-pandemic levels.

Overall, in 2023, despite a weaker overall investment outlook, production in the EU automotive sector recovered more strongly than expected, by 8.7% y/y. However, production levels remained low compared to 2018-2019. In 2024, a negative trend is expected amid continued weakness in the manufacturing sector, general uncertainty over electric vehicle standards, and weak consumer confidence.

Demand for cars will remain weak until the overall macroeconomic environment and consumer disposable income improve. This is currently unlikely given the deteriorating economic outlook. In the longer term, the EU’s commitment to a full transition to electric vehicles by 2035 may support the industry.

As GMK Center reported earlier, EUROFER expects apparent steel consumption in the EU to grow by 1.4% in 2024 compared to 2023, to 127 million tons. The previous forecast envisaged a 3.2% y/y increase to 130 million tons. Expectations for the growth of apparent steel consumption in the EU in 2025 have also been downgraded from +5.6% to +4.1%. At the same time, consumption volumes decreased from 137 million tons to 133 million tons.