Fiev warns local content rules may harm component suppliers

The Federation of Vehicle Equipment Industries (Fiev) has raised concerns that current European policies aimed at protecting locally assembled cars might not effectively shield the companies that produce their parts. The European Commission’s proposal requires a 70% local content level for electric and plug-in hybrid vehicles, but this rule does not apply to component manufacturers.

Chinese competition grows in European car markets

Chinese automakers are gaining traction in Europe, with their brands holding 17% of the UK market, 11% in Spain, and nearly 11% on average across the European Union. This increasing presence has forced European manufacturers to reconsider their strategies to remain competitive.

Component imports from China surge

Between 2021 and 2025, imports of Chinese car components rose by 67%, reaching five billion euros in the first half of 2026—a 23% increase from the previous year. Meanwhile, European exports of car components to China have dropped by half, reflecting a shift in trade dynamics.

European suppliers face 'dessourcing' challenges

A survey by the Fiev in September 2026 found that 50% of its members had moved production overseas in the past year, with China, Morocco, Turkey, and India being the primary destinations. This trend has led to significant job losses in the European automotive component sector.

Job losses outpace electric vehicle sector growth

The industry has lost 18,900 jobs in the first half of 2026, adding to nearly 50,000 job losses in 2025. Since 2022, the total number of job losses is 145,000, far exceeding the 35,000 jobs created in the electric vehicle sector during the same period.

Debates over how to calculate local content

Suppliers are challenging the methods used by manufacturers to calculate local content, arguing that including R&D, engineering, and assembly in the percentage could lower the required share of components that must be sourced in Europe. This debate highlights the complexity of defining what constitutes local production.

Fiev urges stronger IAA implementation

Christophe Périllat, CEO of Valeo, explained that 75% of the value of a European car is produced in Europe, but this figure drops to 55 or 60% when research and development costs are included. Jean-Louis Puech, president of the Fiev, called for full implementation of the Industrial Accelerator Act and the use of public funds to support the industry, acknowledging the growing presence of Chinese cars and components in Europe.