The Market is moving away from Automotive

Do you remember the times when automotive customers simply called? They knew your foundry. You were registered in their supplier system. Their engineers understood your processes, and when they had a new component, they sent you the drawing and asked whether you could cast it.

Those times are becoming less common. The automotive market is changing, and European foundries are feeling pressure from several directions at the same time. Vehicle production is shifting geographically, electric drivetrains require fewer components, and structural integration is replacing several smaller castings with one large part.

None of these developments is completely new. The problem is that they are now happening simultaneously.

European Automotive Volumes are under Pressure

At first glance, global vehicle production still looks attractive. Cars are being produced, new markets are growing, and worldwide production is projected to increase.

However, the regional distribution tells a different story. In 2015, Europe and China produced almost the same number of passenger cars. Europe produced approximately 18.2 million vehicles, while China produced around 19 million.

By 2025, European production had fallen to approximately 14.4 million vehicles. Chinese production, meanwhile, had increased to more than 30 million.

Europe therefore lost around 21 percent of its passenger-car production, while China increased its output by approximately 59 percent. The annual gap between the two regions has grown to almost 16 million cars.

This means fewer local projects, fewer new tools, more available capacity, and more suppliers competing for the same remaining work. This available capacity creates price pressure. The customer sends the same drawing to several suppliers, everyone calculates a similar process, and the cheapest offer becomes difficult to ignore. This is how foundries enter the commodity trap.

More Cars means fewer Castings

There is another problem hidden behind the global production figures. The type of vehicle is changing. A traditional combustion drivetrain contains a large number of individual components. It includes the engine, transmission housing, drivetrain parts, and many additional housings, brackets, and structural parts.

A battery-electric drivetrain is fundamentally simpler. It still requires castings. Electric vehicles require motor housings, inverter housings, battery structures, thermal management components, and many other parts. However, an EV-first platform does not require as many individual castings as a combustion vehicle platform does.

The volume starts at approximately 81 million vehicles in 2022, 94 million in 2025, and 104 million in 2030. At first glance, that looks like excellent news for the foundry industry.

However, when the increasing share of electric vehicles and the reduced number of casting shots per electric vehicle are taken into account, the result changes significantly.

The total number of calculated casting shots increases only slightly between 2022 and 2025. By 2030, it falls from approximately 8.1 billion shots to just under 6 billion.

That is a reduction of approximately 26 percent compared with 2022, even though more vehicles are expected to be produced globally.

So, more cars can therefore mean fewer castings. This is why waiting for automotive production to recover is not a complete business-development strategy. Even if vehicle volumes rise, the traditional component spectrum will not return with them.

Structural Integration changes the Part Spectrum

The automotive industry is also combining more components into large structural castings. From the OEM perspective, this development makes sense. Fewer individual parts can reduce joining operations, simplify logistics, lower assembly costs and potentially reduce weight.

For the traditional foundry market, the consequences are more difficult.

One large structural casting replaces many smaller castings. A group of individual body-in-white components becomes one integrated part. Several integrated parts can then develop into a complete front underbody, rear underbody or battery structure.

This results in the work also being transferred to a smaller group of suppliers with very large machines, sufficient financial resources, and the ability to manage significant technical risk.

Does this mean that every foundry should immediately invest in a 6,000-ton or 9,000-ton machine? Probably not.

That could transform a capacity problem into a debt problem. The better question is what foundries can produce with the equipment, knowledge, and customer access they already have.

The Commodity Trap

The automotive market is not disappearing, but it is moving away from the traditional components and customer relationships that many foundries have relied on for decades. Escaping the commodity trap means moving with it. Foundries must stop competing only for the same drawings; a competitor can always offer a lower price, but it cannot quickly copy years of engineering experience, material knowledge, and proven industrialization.

That is how foundries move beyond the commodity trap and into new markets. Click here for part two