One in Three Plants Operate at 50% Capacity or Less

One in three plants among the major European manufacturers operates at 50% capacity or less, and according to Bloomberg Intelligence, below this threshold profitability becomes unlikely. The snapshot, based on data from Just Auto and reported by Bloomberg News, puts pressure on Volkswagen, Stellantis, Mercedes-Benz, Renault, and BMW, with both large and small plants suffering from weak demand and a slower-than-expected electric transition.

The Map of Overcapacity

The attached infographic shows a very irregular industrial geography. In Germany, France, Italy, and Spain, there are factories close to full capacity and sites that remain well below the necessary threshold to justify their operation, with colors and sizes of circles indicating the ratio between nominal capacity and actual usage. Among the reported cases are Wolfsburg, one of the largest plants in the world; Osnabrück, a smaller factory currently underutilized after absorbing capacity from other sites; Douai, where Renault has repurposed production towards electric vehicles; and Mirafiori, indicated with a 63% decrease in output in the first half of 2024 due to lukewarm demand for the Fiat 500 electric.

The issue is not just weak sales. Bloomberg also links the problem to the structure of European plants, often sized for volumes much higher than current levels, with heavy fixed costs and compressed margins when the line isn’t running sufficiently. The 50% threshold separates defendable sites from those at risk of chronic losses. Thus, the map is not a simple snapshot of the moment but a signal of overcapacity that could lead to cuts, restructurings, or selective closures.

Why the Numbers Don’t Add Up

The heaviest burden falls on large historical groups, which must balance profitability, employment, and political consensus. Volkswagen remains the most delicate case, but the same logic affects Stellantis, Mercedes-Benz, Renault, and BMW, all present in Bloomberg’s analysis with plants that, in several cases, operate well below efficiency thresholds.

The context is worsened by Chinese competition and uncertainty about the speed of electric vehicle adoption. If demand does not recover and plants are not realigned, the risk is that part of Europe’s industrial capacity becomes simply excess. This would lead to increasingly disturbing scenarios, where Chinese automakers acquire European plants to produce on the Old Continent and avoid tariffs.

The Italian Knot

For Italy, the most sensitive name is Mirafiori, which appears in the infographic among the most troubled sites. This issue is not new, but it emerges clearly within a general European map, where the problem does not concern a single country but the entire production chain of the continent.

Bloomberg's reading is brutal: when the utilization rate drops too much, the margin for maneuver tightens, and the factory ceases to be a defendable asset without deep interventions. And it is precisely here that today’s game of the European automotive industry is being played.