European manufacturers are being outpaced by Chinese rivals on development speed and cost, prompting calls for faster EU action as the industry faces mounting pressure on production, jobs and competitiveness.
Europe’s car industry is facing a sharper competitive squeeze from China, with cost, speed and industrial capacity all moving in Beijing’s favour, according to a special session of FORUMAutoMotive held in Milan on 13 October 2026. The meeting brought together politicians, manufacturers, unions and trade groups, and exposed a common concern: unless Brussels acts faster and with greater policy certainty, the continent risks losing more ground in a sector that remains central to jobs, exports and technological capability.
The starkest warning came from AlixPartners, which said the automotive sector now carries the highest disruption score in its 2026 index, at 74, ahead of retail and other major industries. The consultancy said the result reflects deep pressure from technological change, geopolitical tension and shifting supply chains. It also noted that the index draws on the views of more than 3,200 senior executives across 11 countries and 10 industries, underlining how widespread the strain has become.
At the Milan event, AlixPartners partner Emanuele Cordone said 60% of the executives surveyed believe European manufacturers are being outpaced by Chinese rivals. The gap, he said, is visible in product development cycles: a new model can be completed in around 20 months in China, compared with roughly 40 months in Europe. The consultancy also estimates that Chinese manufacturers enjoy a cost advantage of about 35%, while their faster refresh rates allow between 50% and 100% of volumes to be updated over three years, far above the 22% to 34% range typically seen among established brands.
The industrial implications are already feeding into wider concerns about production and employment. Marco Bonometti, president of OMR Automotive, argued that energy pricing is another structural weakness, saying electricity in China costs about half as much as in Europe. He proposed linking access to the European market to a 70% local production threshold and called for energy prices to be detached from gas. Union representatives also warned that the pressure is being felt across factories and suppliers, including in Germany, where the biggest groups are struggling with a difficult market transition.
The policy debate in Milan also exposed a growing split over how Europe should respond. Alberto Gusmeroli, who chairs the Italian Chamber of Deputies’ productive activities committee, argued for simpler and more affordable cars and for greater freedom over powertrain choices. Roberto Pietrantonio, president of UNRAE, called for technological neutrality, stronger industrial competitiveness and a European fund to support the market, charging infrastructure and energy costs. UNRAE also supports the European Union’s objective of cutting carbon dioxide emissions by 90% by 2035, but wants more flexibility over the remaining 10%. Fabio Pressi, who heads Motus-E, took a different line, saying electrification is essential to reduce dependence on fossil fuels and urging incentives for commercial vehicles. His remarks reflected a broader point echoed throughout the discussion: the challenge is no longer only the future of the combustion engine, but whether Europe can still design, build and sell cars at scale in a market increasingly shaped by Chinese speed and economics.
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