59 car suppliers collapse across Europe

In Hrušovany u Brna, the presses that once stamped aluminium logos for Volvo, BMW and Mercedes are quiet. Czech supplier CROMTRYCK filed for insolvency this spring after orders from carmakers fell away. In Germany's Harz mountains, aluminium supplier Bohai Trimet and machining specialist Schlote followed in quick succession, putting 1,500 jobs at risk.

This is no longer a collection of local mishaps. At least 59 European automotive suppliers with revenues above €10 million went bankrupt in 2025, a record tracked by CLEPA, the European association for auto parts makers. Across the sector, more than 100,000 jobs have disappeared in two years, and one in four suppliers expects to lose money in 2026.

From a distance, the European car industry still looks grand enough. The big assembly plants are open, the brands are familiar, and the production lines have not vanished. The damage is lower down, among the hundreds of smaller firms that make the bearing, sensor, gasket or machined part without which the big plant cannot move. The weakness is in the supply chain, not yet in the showroom.

When Germany slows, Poland feels it

Germany remains the centre of gravity for Europe's car industry, and the trouble begins there. The VDA, Germany's auto industry association, projects that 225,000 jobs will disappear by 2035, with roughly 100,000 already gone since 2019. Three pressures are landing at once: high energy costs, aggressive Chinese competition, and the move to electric vehicles, which require fewer parts and different skills.

When German factories cut production, the impact does not stay in Germany. It travels east through supply chains built over three decades. Poland sends about a third of its automotive exports to Germany. In 2025, that flow shrank 5.45%.

The labour market shows what that means in practice. Polish automotive employment fell to 197,700, the lowest level since 2017. And 37% of Polish automotive firms plan layoffs within the next twelve months.

Thin margins, no cushion

The reason this looks structural, rather than merely cyclical, is margins. 76% of European suppliers fall below the 5% profit margin that CLEPA regards as the minimum needed to invest in new technology. The worst-hit firms are Tier-2 and Tier-3 suppliers: smaller companies that make a specialised component for a larger supplier, which then delivers to the carmaker. They have little pricing power, few alternative customers and not much cash to carry them through a bad spell.

A short dip in orders can be enough to push such firms into insolvency. But this is not just a short dip. Electric vehicles need far fewer moving parts than combustion-engine cars. The components now being designed out, including exhaust systems, complex transmissions and fuel injection, are precisely the areas where many Central and Eastern European suppliers built their expertise.

That creates a hard divide. A multinational assembly plant can spend several years and billions in capital retooling for EVs. 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. On paper, that percentage looks manageable. On the ground, it means hundreds of small firms watching their only customers pull back.

The assembly plants owned by Volkswagen, Stellantis or Hyundai are likely to survive the transition. The locally owned supplier base around them may not. When a Tier-2 supplier closes, something more than capacity disappears: the engineers who know how to cast a particular alloy, the quality systems refined over decades, the practical knowledge that made Europe's combustion-engine industry work.

Battery and EV component manufacturing is expanding, but in different places, with different skills, and on different timelines. The supplier base that powered Europe's combustion-engine era is being engineered out of the system. The question is whether anything can grow quickly enough to replace it before the jobs are gone.