The trade association of European car suppliers CLEPA has warned that many of its members are predicting a drop in profits in 2026. It says one in four retailers is headed for a loss by 2026, according to the spring 2026 edition of CLEPA’s Pulse Check survey. The proportion expecting a loss this year has increased significantly according to CLEPA’s latest survey.
With a growing share of companies expecting losses, the data also shows an urgent shift towards non-automotive sectors as a temporary measure to maintain industrial capacity during “one of the most volatile periods in the history of the sector”.
Profit expectations for 2026 remain weak, according to CLEPA research. About 76% of automotive suppliers expect a profit margin of less than 5%, the minimum level necessary to promote long-term investment in innovation and industrial capacity. This represents a slight decline compared to the Autumn 2025 Pulse Check, where 70% of providers reported similar expectations.
Some 24% of suppliers now expect negative profits (below -1%) in 2026, a sharp increase from 15% in the previous survey. This means that one in four car suppliers is preparing for negative margins by 2026, highlighting the serious financial difficulties.
Temporal variability: protecting the motor core
To navigate what CLEPA describes as “a perfect storm of ongoing market uncertainty and margin pressure”, suppliers are adjusting their business strategies.
About 73% of companies have significantly adjusted their product portfolio, focusing on social media, existing low-margin products, or expanding the use of existing technologies. For example, this involves the elimination of limited-margin fixed base components, focusing investment on critical electronics or software-driven platforms, or reusing automotive technologies such as sensors or power electronics for use in industrial applications.
Correspondingly, 40% of suppliers report increasing their exposure to non-automotive sectors, including industries such as defense and other adjacent markets.
“Automotive suppliers in Europe are facing a profitability crisis that calls for immediate action,” said Benjamin Krieger, Secretary General of CLEPA. “This economic instability has forced an emergency pivot. Diversification in adjacent sectors must be a short-term, strategic step to protect our workers and industries. Implementation of the Industrial Acceleration Act is more important than ever. In the current context of the country, strategic independence must move from a distant state to a political and industrial priority.”
“Many European car suppliers face losses” was originally created and published by Just Auto, a brand owned by GlobalData.
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