Podcast: will Europe’s ailing auto sector drive down steel prices?

8th October 2025

Challenges faced by Europe’s steelmakers and automotive manufacturers will raise the stakes in annual steel contract price negotiations between the two sectors in the coming months, a new MEPS podcast concludes.

The latest episode of MEPS International’s Speaking of Steel podcast delivers an expert overview of the factors challenging the profitability and sustainability of Europe’s carmakers, from Chinese car imports to cyber attacks. It then draws on MEPS’s latest research and historical data to deliver insight into the price direction of automotive steel contracts. 

David Bailey, professor of business economics at the University of Birmingham’s Birmingham Business School, and Jato Dynamics global automotive analyst, Felip Munoz join MEPS managing editor Tom Sharpe to reflect on the current state of Europe’s automotive sector. MEPS head of research, Stuart Gray, shared insight into the sector’s upcoming steel contract price negotiations and their likely outcome. 

“Last year we saw the annual steel negotiations with steelmakers extend well into the new year after declining steel prices and muted demand, in both the automotive and industrial sectors, increased companies’ focus on profit margins”, said Gray. 

“As challenging trading conditions continue, this year is likely to see a similar scenario.” 

Gray added: “I’ll be attending the upcoming BlechExpo with my MEPS colleague, Adam Crookes, where we expect many contract negotiations to progress, but with the current uncertainty about CBAM and new EU trade defence measures, we don’t expect those conversations to be straightforward.” 

Among the topics explored in MEPS’s new European automotive-themed episode of Speaking of Steel are: 

  • Faltering demand for cars and the sustainability of Europe’s auto sector 
  • Are tariffs the answer? The growing market share of Chinese-made vehicles
  • JLR’s recent cyber attack and the impact on the automotive supply chain 
  • What is the most likely outcome of automotive steel contract negotiations for 2026? 

Speaking of Steel is available on all major podcast platforms. Click on one of the links below to access the latest episode now. 

YouTube 

Spotify 

The automotive sector consumes over 17% of European steel production. However, speaking in MEPS’s new automotive-themed podcast, Prof David Bailey and Felipe Munoz agreed that Europe would need a robust economic plan make it sustainable. They also suggested that carmakers would have to be willing to collaborate with Chinese manufacturers to meet their environmental and production goals. 

“Now the Western carmakers need the knowhow from the Chinese to meet [their decarbonisation] goals”, said Munoz. “It’s not them that want to become electric; it’s the European Commission. The regulation is forcing them to move into something that they have not done since they were created 120 years ago and it just so happens that the Chinese are the ones that know how to do it in a proper way, in a competitive way.” 

European automotive “not secure in the long term” 

Prof Bailey told the Speaking of Steel podcast: “If Europe can attract Chinese investment into Europe there is a chance that mass production will be maintained, albeit under different ownership. Otherwise, I think Europe can compete in the premium market but, even there, Chinese products are emerging at the high end that are going to compete with Mercedes and BMW, so even that isn’t secure in the long term.”  

European car production contracted by 2.6% in the first half of this year, according to the region’s industry association, ACEA. It said that output was hindered by stricter CO2 targets, high energy costs, and tariffs. China’s output rose by 12.3% during the period. 

Munoz said that the European market was in decline before the recent escalation of Chinese imports. New vehicle sales have declined by around three million units since the Covid-19 pandemic, he said, adding: “The European car market is mature, it’s old, the population isn’t growing anymore. The fact that this is happening is becoming a major issue because the production in Europe needs to be repositioned. 

“Those volume cars are not possible to produce anymore in Western Europe. Most of the small cars that Europeans buy now are not built in Europe anymore.” 

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