CLEPA and McKinsey: Europe’s automotive component suppliers face rising pressure

Hannah Whitfield • June 06, 2026 13:49

The figures are not encouraging. A widespread mood of pessimism is taking hold among European automotive component companies, according to the latest study from CLEPA (the European Association of Automotive Suppliers), produced in partnership with McKinsey.

Even so, Europe’s automotive component firms believe they still have strengths they can draw on. However, significant hurdles remain - including the soaring cost of electricity - and suppliers are now urging policy-makers not to delay in putting measures in place.

Europe’s three obstacles

According to the study, access to affordable energy is seen by 65% of companies as a decisive factor for the industry’s future.

Next, 59% of suppliers stress the need to secure competitive labour costs and high levels of productivity if they are to keep competing in the global market. Finally, 43% of suppliers point to an urgent need to strengthen Europe’s technological capability, viewed as a key lever for dealing with intensifying competition from China.

Additional pressures on European automotive component suppliers

Beyond these main issues, European companies also underline the importance of ensuring the supply of critical raw materials, attracting and retaining specialised talent, improving the regulatory framework, and making it easier to access funding and capital.

Europe’s strategic advantages

In spite of the challenges, European suppliers remain confident in their strengths. CLEPA reports that 62% of companies see technological capability and advanced innovation as the industry’s leading competitive advantage. In addition, half of firms believe the value of their brands and the trust built up over many years are valuable assets when facing competition.

Meanwhile, in an increasingly complex regulatory landscape, 41% of companies highlight deep regulatory expertise as a strategic differentiator compared with Chinese rivals.

Benjamin Krieger, CLEPA’s Secretary-General, warns that effective political action is urgently needed: “If we do not act quickly, we risk losing the global battle for competitiveness. Europe needs concrete and immediate action to ensure its automotive industry remains relevant and strong.”