Record 59 European auto suppliers collapse

In Hrušovany u Brna, the presses that stamped aluminum logos for Volvo, BMW, and Mercedes stand idle. Czech supplier CROMTRYCK filed for insolvency this spring after carmaker orders collapsed. In Germany's Harz mountains, aluminium supplier Bohai Trimet and machining specialist Schlote went under in quick succession, putting 1,500 jobs at risk.

These are not one-offs. At least 59 European automotive suppliers with revenues above €10 million went bankrupt in 2025, a record tracked by CLEPA, the European association representing auto parts makers. Across the sector, over 100,000 jobs have disappeared in two years, and one in four suppliers expects to lose money in 2026.

The car industry's headline numbers still look healthy. Big assembly plants keep running. But the hundreds of small firms that feed them, companies making a specific bearing, sensor, or gasket, are going under. The crisis is in the supply chain, not on the factory floor.

When Germany cuts, Poland bleeds

Germany is home to Europe's largest car industry, and that's where the trouble starts. The VDA, Germany's auto industry association, projects 225,000 jobs will disappear by 2035, with roughly 100,000 already gone since 2019. Three forces are converging: high energy costs, aggressive Chinese competition, and the shift to electric vehicles, which need fewer parts and different skills.

When German factories cut production, the shock travels east along supply chains built over three decades. Poland sends about a third of its automotive exports to Germany. In 2025, that flow shrank 5.45%.

Two numbers tell the rest of the story. Polish automotive employment fell to 197,700, the lowest since 2017. And 37% of Polish automotive firms plan layoffs within the next twelve months.

Thin margins, no cushion

What makes this structural rather than cyclical? Margins. 76% of European suppliers fall below the 5% profit margin that CLEPA considers the minimum needed to invest in new technology. The firms getting hit hardest are Tier-2 and Tier-3 suppliers: small companies that make one specialized component for a larger supplier, who then delivers to the carmaker. They have no pricing power, no diversified customer base, and no cash reserves to ride out a downturn.

Even a temporary dip in orders can push them into insolvency. But this isn't temporary. Electric vehicles need far fewer moving parts than combustion engines. The components that are vanishing (exhaust systems, complex transmissions, fuel injection) are exactly what Central and Eastern European suppliers specialize in.

This creates a stark split. A multinational assembly plant can retool for EVs over several years, backed by billions in capital. A 200-person machining shop in Silesia or Saxony-Anhalt cannot. Total Polish automotive exports fell to €43.8 billion in 2025, down 3.73% year on year. That decline looks modest in percentage terms. In practice, it reflects hundreds of small firms losing their only customers.

Assembly plants owned by Volkswagen, Stellantis, or Hyundai will survive the transition. The locally owned supplier base that feeds them may not. When a Tier-2 supplier closes, its specialized knowledge disappears permanently: the engineers who know how to cast a particular alloy, the quality systems built over decades.

Battery and EV component manufacturing is expanding, but in different locations, with different skills, and on different timelines. The supplier base that made Europe's combustion engine era possible is being designed out of existence. Can anything grow in its place before the jobs are gone?