ECB Economic Bulletin Pre-Release: Eurozone Car Production Expected to Recover

18 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Automotive sector output should recover on the back of higher consumer demand in the medium term, according to an Economic Bulletin paper pre-released by the European Central Bank on Tuesday.

‘In the medium term a recovery in euro area car production is expected to be primarily driven by consumer demand, but there are significant risks ahead’, the ECB said.

According to the paper, dependence on suppliers that are concentrated in a few countries could be risky to supply chains during times of geopolitical tensions.

Even though carmakers have been affected by the supply chain disruptions and higher energy costs, the euro area was able to transition to electric and hybrid vehicles much quicker than its competitors, the paper said.

‘Efforts must be made to enhance resilience against supply chain disruptions and to diversify sources of strategic components to maintain competitiveness. Industrial policies, particularly those related to the green transition, such as charging infrastructure, will also shape the outlook for the euro area automotive sector’, the ECB said.