In 2025, European car and auto parts exports to China dropped by 34%, while Chinese car exports to Europe increased by 8%, reaching a value of €22 billion.
As a result, the trade balance shifted significantly. In 2019, Europe exported €23 billion more in automotive products than it imported, but by 2025, imports exceeded exports by €6 million.
Germany has been the hardest hit. Its car market in China has fallen to sixth place in size, and sales from major manufacturers such as Volkswagen, BMW, and Mercedes-Benz have nearly halved.
Germany’s automotive industry has lost around 50,000 jobs in just one year, bringing total employment down to about 725,000 the lowest level in 14 years.
This downturn in Europe’s car market is largely linked to the slow adoption of electric vehicles, making it difficult for companies to generate returns on their investments.
As a result, many automakers are reverting to producing petrol-powered vehicles, despite a planned ban on such cars set to take effect in 2035.
Meanwhile, Chinese manufacturers such as BYD are rapidly expanding.
Despite a 17% tariff on vehicles imported from outside Europe, BYD sold 51,000 cars in the United Kingdom in 2025, capturing a 6% market share.
The company also sold 25,000 vehicles each in Spain and Italy.
