“The Volkswagen plant closures will also have repercussions in Italia”

“For years we have been trying to draw attention to a problem caused by a transition that has gone wrong in terms of its approach, the choices made and a lack of technological neutrality.” Marco Stella, 54, managing director of Duerre Tubi Style in Maranello and vice-president of Anfia, the association of Italian component manufacturers, looks beyond the closure of the four Volkswagen plants in Germany currently under discussion in Wolfsburg. He sees a structural crisis in the European automotive industry, stemming in part from “a terrible phase in the economic cycle, with stagnant markets and companies facing an unprecedented crisis of competitiveness”. But it is also the result of completely misguided strategic decisions. “The manufacturers,” he explains, “have pushed hard for electric vehicles and have become disconnected from the supply chain, from dealers and, ultimately, from consumers.” 

The result of a combination of a self-defeating transition and poor strategic decisions has been a continuous and progressive decline in car sales in Europe, accompanied by the growth of Chinese manufacturers, who have gained market share at the expense of European carmakers. Added to this was the closure of the US market following Trump’s policy on tariffs. All European manufacturers are operating at excess capacity. According to estimates by Alix Partners, production capacity in Europe exceeds market demand by around three million vehicles a year. Half of this overcapacity is located in Germany; the other half is divided more or less equally between Italia and Spain. The closure of factories and the sale of production capacity to those very same Chinese manufacturers could become a trend in the coming years. “We must acknowledge the profound crisis of competitiveness into which the German model of a self-sufficient supply chain has plunged,” says Stella, “but we must avoid stopgap solutions dictated by the need to save the company’s half-yearly results; strategic choices are needed.”

A further downturn in Germany would certainly have repercussions on the Italian components sector, comprising some 2,135 companies with an estimated turnover of 58.8 billion euros and 170,000 direct employees. Germany is the sector’s leading trading partner, with exports of €4.9 billion (out of a total of €24.58 billion) and imports of €4.1 billion (out of a total of €17.3 billion) recorded in 2025. In 2026, projections – made prior to the announced German closures – indicate stable results. “The fallout from the German crisis on Italia will be inevitable,” explains Stella, “even if the very structure of our supply chain makes it resilient. Family ownership, production flexibility and the dynamism of our companies could give us the capacity to withstand the crisis and remain competitive. But manufacturers will once again be decisive. If they chase the mirage of Chinese low-cost production or production deals at any cost, we risk yet another own goal.”

But there isn’t much time to react. Starting with the IAA, the Industrial Accelerator Act, the legislation to protect ‘Made in Europe’ currently under discussion in Brussels. “We must clear up any misunderstandings straight away: the only ‘Made in Europe’ products eligible for incentives must be those produced within the EU-27, or at most including the United Kingdom. It cannot be extended to Morocco or Turkey, which would become a bridgehead for Chinese industry. Furthermore, the scope of ‘Made in Europe’ incentives should be extended to company fleets, which are currently excluded from the measure.”

But above all, we must plan ahead. “At the current rate, the IAA would come into force in 2029. In the meantime, European manufacturers would have lost a further 15 per cent of the market to Chinese manufacturers. We cannot afford that. It would not be wrong to consider a policy of tariffs and barriers to the entry of Chinese cars into Europe. China, too, has eight million vehicles’ worth of production overcapacity. This is a problem they will soon have to deal with – and one that we Europeans can help resolve.”