European automobile manufacturers are currently grappling with severe competitive pressures from Chinese automotive companies, which are driving down vehicle prices across the market. As a result, many manufacturers are forced to implement drastic price cuts in order to remain viable in a rapidly changing environment. This situation raises concerns over the sustainability of several established automotive brands, some of which may potentially exit the market in the near future.

In addition to external competition, a number of internal factors are exacerbating the challenges faced by the European automotive industry. Economic conditions in Germany, a key market for various European car brands, are adversely affecting local manufacturers. There are also rising production costs, coupled with changing consumer preferences which are shifting towards electric vehicles. This transition not only intensifies competition but also puts significant cost pressures on European firms that may not be as prepared for the electric vehicle surge compared to their Chinese counterparts.

The impact of these market dynamics is particularly pronounced within the Polish automotive sector, which finds itself intertwined with developments in Germany. As Polish manufacturers supply parts and vehicles for assembly in the German automotive industry, the pressures felt there directly affect production and employment levels in Poland. Predictions regarding the future of vehicle pricing, both for electric and combustion-engine cars, suggest a complicated landscape ahead, potentially resulting in lower profit margins and market contractions as the industry adapts to these transformations.