The European car industry employs 2.5 million workers. Together they account for 8% of total value added in industry. Indirectly the sector provides employment for 12 million workers. European exports of cars are twice as big as imports, resulting in a large trade surplus. European assembly plants produce one out of three cars worldwide. The sector is highly innovative as it accounts for 20% of industrial research funding in Europe. The long tradition and accumulated know-how are making the automotive sector a stronghold of European industry. The industry is a world leader in terms of product innovation, flexible production (modular production systems), high-quality (premium) design, green engines and alternative powertrains, the management of complex value chains etc.
Despite the strengths of the European car industry, it is currently confronted with a large number of structural challenges, which could bring about a new industrial revolution in the sector. The sector will need to adapt to changing conditions and turn these challenges into opportunities. Among others, Main challenges can be identified as: mature markets; ongoing globalisation; sustainable development; consumer preferences are changing; the gradual automation as part of the long-term evolution to self-driving cars; disruptive production technologies; or the need for electrification.