Italy and France are the automotive markets in the EU that produce the least at home

Europe is seeing some interesting trends in new car purchases. The relocation of car production has enabled manufacturers to cut costs by moving to countries where manufacturing is cheaper.

This is part of the commercial game encouraged by globalisation, which creates winners and losers. This 'game' explains why Eastern Europe has played an increasingly important role in car production over the last two decades, to the detriment of lesser leadership in the West.

The role of the Czech Republic

The changing landscape of car production in Europe has placed the Czech Republic at the forefront. Although it is a small market (220,000 units in 2023) and a small country in terms of population (only 10.5 million inhabitants), it is the fourth largest car producer in Europe, behind Germany, Spain and France. However, these three markets are much larger than the Czech Republic in terms of population. In fact, the total number of vehicles produced per 1,000 inhabitants was 134 in 2023.

This is probably why most of the most popular cars in the Czech Republic are produced locally. According to data from JATO Dynamics, seven of the ten best-selling models between January and April 2024 were produced in Czech factories.

After all, as Skoda is a local brand and produces most of its cars in Czech factories (86% of its overall production in 2023), it's normal to see these results.

Germany holds up well

Despite the changing economic situation in Europe, Germany remains an important production centre. Last year, 49 new cars were produced for every 1,000 inhabitants. There is a symbiosis between German car manufacturers and the economy itself, and although it is quite expensive to produce cars in Germany, production is a key part of the country's economy.

The Top 10 from January to April 2024 shows that six models were produced locally: Volkswagen Golf, Tiguan, Passat, Opel Astra, Audi A4 and BMW 3 Series. An indicator which shows that conditions are still good for car production in Europe's largest economy.

Italy and France are getting closer

It's no surprise that the Italian industry has fallen on hard times in recent decades. When Fiat, the country's largest carmaker, absorbed most of its local rivals (Lancia in 1969, Alfa Romeo in 1986, Innocenti in 1990, Maserati in 1993), Italy was left with just one major local manufacturer.

The lack of competition at a time when European markets were not as economically integrated as they are today made Fiat less competitive and more dependent on state funding. When foreign competition became evident, the company began to lose market share. In the January-April 2024 Top 10, only one model, the Fiat Panda, was produced locally. In 2023, only 15 cars were produced per 1,000 inhabitants.

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France is not far behind. The Peugeot 208, Renault Clio and Dacia Sandero are produced abroad, while the seventh model in the January-April 2024 Top 10, the Peugeot 308, as well as the eighth, the Toyota Yaris, and the tenth, the Toyota Yaris Cross, are produced locally. If this continues, France could soon find itself in the same situation as Italy.

More industry analysis from Motor1 Numbers:

Chinese cars in Europe: Some create new brands and some don't

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How are sales of the Tesla Cybertruck coming along?

What does the future hold for the Alfa Romeo Junior?

The author of this article, Felipe Munoz, is a specialist in the automotive industry at JATO Dynamics.

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