Overregulation, an ambitious path toward zero emissions, and high energy costs are among the key factors currently affecting the competitiveness of Europe’s automotive industry. Combined with strong pressure from Chinese competitors—who are steadily increasing their market share—and changing social trends, these factors pose serious challenges that will shape the future of one of the most important sectors of the European economy.
“The presence of Chinese companies in Europe is a major challenge for the automotive industry,” Jakub Faryś, President of the Polish Automotive Industry Association (PZPM), told Newseria. “We have to deal not only with challenges such as the transition to zero emissions, the consequences of the war in Ukraine, or U.S. tariffs, but also with very strong Chinese competition—not only in electric vehicles, but also in hybrids, plug-in hybrids, and gasoline-powered cars. This is crucial for the survival of the automotive sector. Today, the word ‘competitiveness’—in the context of the automotive industry and Poland—is being declined in every possible grammatical case.”
According to the Automotive Market Research Institute Samar, citing data from Poland’s Central Vehicle and Driver Register, Chinese manufacturers sold 39,340 passenger cars in Poland during the first 11 months of 2025. In November alone, registrations reached 5,105 units—3.5% fewer than in October, but 3,477 more than a year earlier. This translates into an approximately 10% market share.
The report “Automotive Industry 2025/2026”, prepared by PZPM and its partners, shows that in 2025 Chinese brands accounted for over 4% of new vehicle registrations in the European Union. Their share is also rising rapidly in the electric vehicle segment. Among registered Chinese models, the vast majority are hybrids and plug-in hybrids, whose low prices allow them to compete very effectively. According to the report’s authors, the strategic goal of Chinese manufacturers is to achieve a 15% share of the European market within a few years.
“The automotive industry in Poland and Europe needs, above all, good legislation, because it is overregulated,” says Faryś. “More than 100 different legal acts at the European level, not counting national regulations, govern how the sector operates. Second, we need rules that allow us to transition to zero emissions in a way that preserves competitiveness. Third, we need appropriate energy regulations—we need cheap, green, and easily accessible energy so that we can not only survive, but also grow.”
On 16 December 2025, the European Commission presented the assumptions of the so-called automotive package, designed to support the sector’s decarbonization while strengthening its competitiveness. Key proposals include changes to the approach to CO₂ emission standards for passenger cars, vans, and trucks—intended to help manufacturers meet the 2035 targets—as well as initiatives to reduce administrative burdens, lower costs, and introduce a new category of “small and affordable cars.”
In the assessment of the Polish Automotive Industry Association, the package represents the first positive step toward a more pragmatic and flexible pathway that links the decarbonization of new vehicles with competitiveness goals. However, further transformation of the sector may require more decisive action.
“The European—and therefore Polish—automotive industry is facing a moment of great challenge,” Faryś stresses. “If we fail to meet it, if we prove uncompetitive, we may face layoffs and see manufacturers relocate production to other continents, such as Africa. Maintaining the competitiveness of the European—and Polish—automotive sector is therefore absolutely crucial and the greatest challenge.”
According to data from the European Automobile Manufacturers’ Association, between January and November 2025 the number of new passenger car registrations in the European Union increased by 1.4% year on year. Despite this positive trend, overall sales volumes remain significantly below pre-pandemic levels.
“If we look at registration data, for several years now around 10 million cars have been registered annually in Europe—at least 2–3 million fewer than a few or a dozen years ago,” Faryś explains. “This poses a major challenge for the automotive industry, because not producing, for example, 1.5 million cars per year means that a significant number of people will lose their jobs.”
ACEA data cited in the “Automotive Industry 2025/2026” report show that 2.5 million people are directly employed in automotive factories across Europe, while nearly 14 million workers are employed across the entire automotive ecosystem. As the European Commission emphasizes, the sector has for many years been central to Europe’s industrial strength and a driving force of technological innovation.
“Today, there is very strong pressure to restrict cars from city centers and encourage a shift to public transport,” says Faryś. “There has also been a fundamental social change: 30 or 40 years ago, owning a car was a symbol of life success. Today, especially among young people, a car is often seen as non-essential, or simply as a tool. And one more very important factor: Europe is aging, and fewer cars are needed overall. All of this is a challenge for the automotive industry.”
“Certain social trends cannot be stopped,” he concludes. “The number of cars will decline, but it is crucial that we buy vehicles that are increasingly environmentally friendly, while also ensuring that the automotive industry continues to have an important place in Europe’s economy.”
