Automotive production to contract 0.2% in 2026, Atradius reports
Global automotive production is expected to decrease by 0.2% in 2026, according to a new industry trends report by Atradius Kreditversicherung. The decline is attributed to trade protectionism, an uneven transition to electric vehicles, and subdued consumer confidence.
Global motor vehicle and parts production is projected to contract by 0.2% in 2026, a reversal from the 2.9% growth seen last year, according to an industry trends report by Atradius Kreditversicherung. The slowdown is driven by increasing trade protectionism, a disparate transition to electric vehicles (EVs) across markets, and diminished consumer confidence.
The report highlights that while China is expected to continue driving growth, developed markets, particularly in Europe, face significant headwinds. These include weak demand, rising costs, and structural overcapacity. The recent war in the Gulf led to a surge in energy prices and eroded consumer confidence, impacting spending on discretionary goods like new vehicles.
The automotive sector's globalized supply chains remain highly susceptible to geopolitical risks and trade tensions. Dependence on critical minerals, essential for EV production, poses a strategic vulnerability. Despite facing headwinds in markets like the US and Europe, global hybrid and EV sales are forecast to significantly increase their share of the market by 2030.
In the United States, automotive output is forecast to fall by 2.8% in 2026 due to trade policy uncertainty and tariffs. Atradius suggests that efforts to re-shore production are likely to be slow and uneven. Looking ahead, global automotive production is expected to rebound with 1.7% growth in 2027, primarily fueled by a recovery in the Americas.