Global light vehicle demand reached 89.6 million units in 2025, a modest 1.6% increase on the prior year, but 2026 may reverse that trend. Demand has been pulled forward during the previous year in China and the US, where consumers accelerated purchases ahead of tariff and incentive changes, leaving both markets facing difficulties. The EU, India, Japan and South America are all expected to deliver positive growth, but this won’t be enough to offset decline in the largest markets.

Meanwhile, the financial results for 2025 were severe: aggregate operating profit among the world’s leading automakers fell 90% year-on-year to a margin of just 0.65%. Around €60bn (US$68.8bn) in write-downs tied to cancelled electric vehicle programmes drove much of the damage.

Looking ahead, the non-recurrence of those write-downs should bring some relief in 2026. However structural pressures remain: with Chinese OEMs continuing to expand overseas and legacy automakers—particularly Stellantis and VW—increasingly willing to share or sell idle factory capacity, the long-term competitiveness of European automotive production is questionable.

To learn more about recent light vehicle manufacturer trends and how they might develop in the years ahead, read Automotive World’s 2026 industry overview.