Europe’s car industry is in trouble: could defense spending help?

Europe’s car industry is going through a difficult phase: soft sales, high costs and a slower-than-expected electric transition are putting many manufacturers under pressure. In this context, some see rising defense spending as a possible source of new orders for suppliers.

For Italy, the issue mainly concerns supply chains, investment and jobs: steel, electronics and components could benefit from extra demand. But that would not solve the sector’s structural problems, which are tied to global competition, environmental rules and shrinking margins.