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It's Five Minutes to Midnight for the Dutch Automotive Manufacturing Industry

The Dutch automotive industry plays a leading role both nationally and internationally. With an annual turnover exceeding €20 billion, 90% of which comes from exports, the sector holds a global top position, says section chairman Dennis van Well. However, in RAI Vereniging's 2024 Annual Review, he issues a warning to the Dutch government. "A structural long-term policy must be developed to support innovative technologies, ensuring that the sector can continue to play a significant role on the international stage. It’s five minutes to midnight."

It's Five Minutes to Midnight for the Dutch Automotive Manufacturing Industry

RAI Automotive Industry NL is recognized as the leading authority in the Dutch automotive manufacturing and supply chain industry. It focuses on global automotive and mobility solutions by uniting industry members and stakeholders to act as a catalyst for innovation and education. Representing a network of approximately 200 companies, the section aims to help them maintain and strengthen their international competitive edge through collaboration with each other, the government, and knowledge institutions.

Major Challenges

According to Van Well, the transformation to fossil-free and safe mobility presents significant challenges. "After COVID-19, the industry faced material shortages, such as semiconductors and wiring harnesses. In 2023 and early 2024, there was a recovery phase. However, that recovery effect has faded, primarily due to increasing competition from Asia and China. As a result, the automotive industry is under immense pressure. For now, European automakers lack an adequate response to the high levels of Chinese imports, which have already led to factory closures at companies like Audi and Ford. The key question is: how can we remain competitive and innovative?"

Albie van Buel, managing director of RAI Automotive Industry NL, adds that the first Chinese car manufacturers are already establishing themselves in Europe. "It's only a matter of time before Chinese automotive suppliers follow in their wake. This puts the European supply chain, which Europe is striving to develop, under significant pressure. After all, imports do not generate substantial employment for the industry."

Supportive Industrial Policies

Introducing protectionist measures, such as 100% import tariffs in the U.S., is not a viable long-term solution, according to Van Buel. "Such measures ultimately lead to retaliatory actions, potentially sparking trade conflicts, which would be undesirable for our industry."

Both Van Well and Van Buel advocate for a unified and supportive European industrial policy. Van Well notes that while the U.S. and Asia offer extensive support to their industries, Europe lags far behind. He references the recent report by Mario Draghi, "EU Competitiveness: Looking Ahead," which concludes, "We are being overtaken by China and the U.S." The report emphasizes that to catch up technologically and economically, governments and businesses must invest at least €750-800 billion more annually.

Joining Forces

Van Well stresses the importance of all mobility stakeholders joining forces to ensure the European mobility industry’s strong position is consolidated while retaining technological and innovative leadership globally. "This will create greater impact and synergy. Together, we’re talking about a combined turnover exceeding €100 billion and more than 200.000 jobs."