EU automotive industry in 2025: growth in registrations, pressure on production and stronger competition

The year 2025 brought a modest recovery to the global automotive market. According to the ACEA report, worldwide registrations of new passenger cars rose by 3.5 % to 77.6 million vehicles. The main driver of growth was Asia, particularly China, where sales increased by 5.5 % to 24.2 million cars. Growth was supported by government incentives, vehicle fleet renewal and policies focused on new energy vehicles.

Europe grew considerably more slowly. Registrations across Europe increased by 1.4 %, and in the European Union itself by 1.8 % to 10 822 831 new passenger cars. Although this is a positive result following a weaker start to the year, the EU market is still approximately 2.2 million vehicles below its 2019 level, or about 17 % below the pre-pandemic level. This means that the European automotive industry is stabilising, but has not yet returned to full strength.

Within the EU, individual markets developed unevenly. Germany retained its position as the largest market, with almost 2.86 million registrations and growth of 1.4 %. Spain grew significantly, gaining 12.9 %, as did Poland, with growth of 8.3 %. By contrast, France declined by 5 % and Italy by 2.1 %. These differences show that the European market is not uniform and that performance is still also determined by national incentives, investment and consumer sentiment.

A notable trend in 2025 was a further shift in the powertrain mix. Hybrid cars became the best-selling choice in the EU, reaching a share of 34.5 %. Battery electric vehicles increased their share to 17.4 % and plug-in hybrids to 9.4 %. Together, electrified powertrains thus accounted for more than half of new registrations. At the same time, the combined share of petrol and diesel cars fell to 35.5 %, compared with 45.2 % just a year earlier. Electrification is therefore no longer a marginal topic, but the main direction in which the European market is moving.

The differences between individual countries are also interesting. Denmark achieved a battery electric vehicle share of as much as 68.5 %, the Netherlands 40.2 % and Belgium 34.7 %. By contrast, Poland and Italy were among the markets dominated primarily by hybrids. For manufacturers and suppliers, this means that the European market will continue to diversify and a single strategy for all countries will no longer be sufficient.

On the production side, too, it became clear that Europe remains an important automotive manufacturing base, but growth is very fragile. Passenger car production in the EU increased by just 0.3 % in 2025, reaching 11.47 million vehicles. ACEA links this result to weaker external demand and persistent cost pressures. While global car production rose by 4.2 % to 78.7 million units, European production effectively stagnated. Meanwhile, Asia retained its dominant position with a 62.1 % share of global production, while the EU accounted for 14.6 %.

For Slovakia, however, the data are very favourable. In 2025, 1 073 050 passenger cars were produced in our country, representing year-on-year growth of 8.1 %. Slovakia thus accounted for 9.4 % of total EU production and ranked among the Union's strongest manufacturing countries. Only Germany, Spain and Czechia ranked ahead of Slovakia, while France, for example, ranked behind it. Relative to the country's size, this is once again an exceptionally strong result, confirming the strategic importance of the Slovak automotive industry for European industry as a whole.

It is also interesting to look at where the cars sold on the EU market originate. Germany manufactured 21 % of all cars sold in the Union, Spain 13 %, Czechia 9 %, France 8 % and Slovakia 5 %. Together, manufacturers from EU countries supplied 73 % of the market. At the same time, however, ACEA points out that cars manufactured in China already account for 7 % of EU sales, confirming the growing competitiveness of Chinese brands and increasing pressure from imports.

Foreign trade is currently among the most sensitive issues facing the European automotive sector. The value of new car imports into the EU fell by 3.2 % in 2025 to 71.9 billion euros, while exports fell by 6.2 % to 147.9 billion euros. This reduced the trade balance to 76 billion euros, its lowest level since 2021. In volume terms, meanwhile, imports rose to 3.58 million vehicles, while exports fell to 4.49 million. European manufacturers are thus facing both weakening external demand and a growing influx of cars from abroad.

Developments in trade with China were particularly pronounced. China remained the largest source of new car imports into the EU by both value and volume. In 2025, imports from China increased by 30.7 % to 1 006 188 vehicles, exceeding the one-million-unit mark for the first time. China also accounted for 28.1 % of all car imports into the EU from third countries. By contrast, EU car exports to China plunged — by 43 % in value to 8.3 billion euros.

Exports to the United States were also weaker, with export value falling by 21.4 % to 30.9 billion euros, a development ACEA links to rising tariffs. By contrast, Turkey recorded a significant recovery, with the value of EU exports to the country rising by 27.9 % to 15.6 billion euros. The United Kingdom remained the largest export market for EU-manufactured cars, in terms of both value and volume.

ACEA also points out that more than a third of cars manufactured in the EU are destined for markets outside the Union. In 2025, this share stood at 35.6 %, further confirming how strongly export-oriented the European automotive industry is. Developments in foreign markets are therefore decisive for manufacturers, suppliers and the subcontracting supply chain alike. If exports weaken, the pressure quickly spreads throughout the entire industrial structure.

Commercial vehicles also recorded a weaker year. Van registrations in the EU fell by 8.8 % and truck registrations by 6.2 %. Only the bus segment grew, by 7.5 %. The report interprets this as a consequence of a challenging industrial environment, slower fleet renewal and continued pressure associated with the transition to zero-emission powertrains. This segment therefore also indicates that 2025 was not an easy year for the European automotive industry, even though passenger cars recorded modest growth overall.

From the perspective of Central European industry, the report's message is fairly clear. The European automotive sector is not in decline, but is entering another phase of transformation in which competitiveness, the ability to respond to electrification, cost pressures and changing trade relations will be decisive. For Slovakia, the production figures are positive, but in the coming years the entire sector will have to manage much more than volume growth alone. Flexibility, technological readiness and the ability to hold its own amid tougher global competition will be decisive.