59 car suppliers fail across Europe

In Hrušovany u Brna, the presses once used to stamp aluminium logos for Volvo, BMW and Mercedes are silent. Czech supplier CROMTRYCK filed for insolvency this spring after orders from carmakers dried up. In Germany’s Harz mountains, aluminium supplier Bohai Trimet and machining specialist Schlote failed one after the other, putting 1,500 jobs at risk.

The pattern is now too broad to dismiss. 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, more than 100,000 jobs have disappeared in two years, and one in four suppliers expects to lose money in 2026.

For Malta, this is not a story about local car factories. It is about the European industrial chain behind the cars, replacement parts and repair costs on which the island depends. The big assembly plants still make the industry look stable from a distance. The smaller firms beneath them, producing a bearing, a sensor, a gasket or one machined part, are the ones falling away.

The pressure sits in the supply chain before it becomes visible in the showroom.

When Germany cuts, Poland bleeds

Germany remains the centre of Europe’s car industry, which is why trouble there spreads quickly. The VDA, Germany’s auto industry association, projects 225,000 jobs will disappear by 2035, with roughly 100,000 already gone since 2019. High energy costs, Chinese competition and the shift to electric vehicles are hitting at the same time.

Electric vehicles require fewer parts and different skills than petrol and diesel cars. That matters because Europe’s automotive supply chain was built around the combustion engine, not just around the badge on the bonnet.

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

Two figures show the scale of the squeeze. Polish automotive employment fell to 197,700, the lowest level since 2017. At the same time, 37% of Polish automotive firms plan layoffs within the next 12 months.

Thin margins, no cushion

The weakness is structural because the margins are already too thin. 76% of European suppliers fall below the 5% profit margin that CLEPA considers the minimum needed to invest in new technology.

The hardest-hit firms are Tier-2 and Tier-3 suppliers. These are the smaller companies that make one specialised component for a larger supplier, which then sells into the carmaker. They usually lack pricing power, a broad customer base and the reserves needed to survive a long fall in orders.

A short downturn can be enough to push them into insolvency. This downturn is not short. Electric vehicles use far fewer moving parts than combustion engines, and the parts disappearing from the market, including exhaust systems, complex transmissions and fuel injection systems, are precisely the products in which many Central and Eastern European suppliers built their business.

That creates a sharp divide. A multinational assembly plant can spend several years and billions in capital retooling for electric models. A 200-person machining shop in Silesia or Saxony-Anhalt cannot do the same. Total Polish automotive exports fell to €43.8 billion in 2025, down 3.73% year on year.

The percentage looks manageable. On the ground, it means hundreds of small firms losing the customers that kept them alive.

Assembly plants owned by Volkswagen, Stellantis or Hyundai are likely to make it through the transition. The locally owned supplier base around them may not. When a Tier-2 supplier closes, the loss is not only a payroll number. The engineers who know how to cast a particular alloy, and the quality systems refined over decades, disappear with it.

Battery and electric-vehicle component manufacturing is expanding, but often in different places, with different workers and on different timelines. The supplier network that made Europe’s combustion-engine era possible is being phased out before a replacement has fully taken shape. The question now is whether the new industrial base can grow before the old jobs are gone.