Market evolution: Diesel cars (CN 870332) — 2015–2025

Introduction

This report examines the evolution of EU external trade in diesel passenger cars with a cylinder capacity between 1,500 cm³ and 2,500 cm³ (customs code 870332) over the period 2015–2025. The analysis covers trade flows between the EU and non-EU countries, encompassing new cars, used cars, and motor caravans within this diesel engine category. The decade under review witnessed a dramatic structural decline in this segment, shaped by regulatory tightening, shifting consumer preferences, and geopolitical realignments. The EU, once a dominant net exporter of diesel vehicles, saw its trade surplus shrink by nearly 79%, reflecting a fundamental transformation of the European automotive landscape.

I. A Decade of Contraction: The Structural Decline of EU Diesel Car Trade

EU exports and imports both fell by roughly two-thirds between 2015 and 2025

The most striking feature of the 2015–2025 period is the sheer magnitude of the decline in EU trade in diesel cars. EU exports of CN 870332 fell from €34.7 billion in 2015 to €9.1 billion in 2025, a drop of 73.9% in value. In volume terms, exports declined from 2.79 million tonnes to 826,000 tonnes (–70.4%). On the import side, the contraction was similarly severe: the value of imports fell from €14.5 billion to €4.8 billion (–67.0%), and volumes declined from 1.24 million tonnes to 405,000 tonnes (–67.4%).

The decline accelerated after 2018, with the sharpest drop occurring in 2020

The contraction was not uniform across the decade. Export values were broadly stable or rising through 2017 (€28–35 billion range), then entered a sustained decline from 2018 onwards. The year 2020 marked a sharp inflection point: export volumes fell to 953,000 tonnes and import volumes to just 474,000 tonnes, reflecting both the COVID-19 pandemic's disruption of production and logistics, and the accelerating impact of regulatory and market shifts. A modest recovery occurred in 2021–2023, but volumes never returned to pre-2018 levels, and the decline resumed in 2024–2025.

EU domestic production collapsed even more dramatically than trade

Data on EU production volumes tell an even starker story. EU output of diesel cars in this engine class fell from 5.52 million units in 2015 to an estimated 1.30 million units in 2025, a decline of 76.4%. Production value dropped from €79.6 billion to €39.3 billion (–50.6%). The fact that value declined less sharply than volume indicates that the surviving production shifted towards higher-value, presumably more premium or technologically advanced vehicles.

Unit prices tell divergent stories for exports and imports

Export unit prices (per vehicle, supplementary unit) declined from €19,554 in 2015 to €16,667 in 2025 (–14.8%), suggesting competitive pressure or a shift in the export mix. By contrast, import unit prices rose from €17,455 to €20,819 (+19.3%), indicating either a compositional shift towards more expensive models or genuine price increases in sourcing countries. The convergence and subsequent divergence of these price paths suggests a changing competitive landscape.

II. Geopolitical Realignments: Partners, Brexit, and the Rise of New Trade Corridors

The United Kingdom's exit from the EU Customs Union restructured the largest bilateral trade relationship

The most consequential structural change visible in the data is the collapse of trade between the EU and the United Kingdom. In 2015, the UK was by far the EU's largest partner for both imports (€5.2 billion, 36% of total imports) and exports (€18.9 billion, 55% of total exports). By 2025, imports from the UK had fallen to just €129 million (–97.5%) and exports to €1.8 billion (–90.3%). The volatility coefficient for UK trade (0.94 for imports, 0.91 for exports) confirms the exceptional instability of this relationship over the period. This collapse reflects Brexit-driven changes: from 2021, UK-origin vehicles ceased to be intra-EU flows and became external trade subject to rules of origin, customs procedures, and—critically—the Trade and Cooperation Agreement's provisions on automotive content requirements.

Türkiye emerged as a key import source and resilient export market

With the UK's departure from the EU customs territory, Türkiye became the EU's largest import source for CN 870332 vehicles. Imports from Türkiye grew from €849 million in 2015 to €2.1 billion in 2025 (+141.7%). On the export side, while exports to Türkiye declined from €3.0 billion to €651 million (–78.3%), the relatively low volatility coefficient (0.26 for imports) suggests a stable, long-term manufacturing relationship—likely reflecting the role of Turkish plants (e.g., Ford Otosan, Tofaş/Fiat, Renault Oyak) producing vehicles for re-export to the EU under the EU–Turkey Customs Union.

Ukraine and Serbia emerged as growing export destinations

Among the most dynamic growth stories are Ukraine and Serbia. EU exports to Ukraine surged from €138 million in 2015 to €432 million in 2025 (+214.0%), while exports to Serbia rose from €245 million to €341 million (+39.1%). These trends likely reflect growing demand in these markets, EU association/integration processes (including the DCFTA with Ukraine), and possibly the re-export of second-hand vehicles. Serbia's low volatility (0.19) indicates a particularly stable trade relationship.

Japan and South Korea saw dramatic declines as sources of EU imports

Imports from Japan collapsed from €2.7 billion to €62 million (–97.7%), and from South Korea from €1.5 billion to €211 million (–85.9%). These steep declines reflect the broader global shift by Japanese and Korean manufacturers (Toyota, Hyundai-Kia) away from diesel engines and towards hybrids and battery-electric vehicles. The very high volatility coefficients for Japan (1.11) and Korea (0.76) underscore the instability of these trade flows during the transition period.

Import concentration increased while export concentration decreased

The Herfindahl-Hirschman Index (HHI) for EU imports rose from 2,091 to 2,643 (+26.4%), indicating that imports became more concentrated among fewer partners. This is consistent with the collapse of imports from Japan, Korea, and the UK, leaving Türkiye, Mexico, and South Africa as the remaining major suppliers. Conversely, the export HHI fell sharply from 3,213 to 1,044 (–67.5%), reflecting the diversification of EU export destinations away from the now-external UK and towards a broader set of markets including Ukraine, Serbia, Morocco, and Japan.

III. Product Composition and Market Structure: New Cars Decline, Used Cars and Caravans Gain Ground

New passenger cars (87033219) dominate the segment but experienced the steepest decline

The bulk of CN 870332 trade consists of new passenger cars (subheading 87033219). In 2015, new cars accounted for 97.2% of import volume (1.21 million tonnes out of 1.24 million) and 89.2% of export volume (2.49 million tonnes out of 2.79 million). By 2025, new car import volume had fallen to 327,000 tonnes (–73.0%) and export volume to 408,000 tonnes (–83.6%). The per-vehicle import price for new cars (supplementary unit) rose from €19,168 to €28,144 (+46.8%), suggesting that the surviving trade consists increasingly of premium and high-specification vehicles rather than mass-market models.

Used car imports (87033290) more than doubled in volume, filling a market niche

In contrast to the collapse of new car trade, used diesel car imports grew from 31,737 tonnes in 2015 to 68,105 tonnes in 2025 (+114.6%). In vehicle-unit terms, imports rose from 82,318 to 69,441 units (though volumes fluctuated). This growth suggests that while the EU is producing and selling fewer new diesel cars, demand persists for affordable used diesel vehicles, particularly in Central and Eastern European member states. On the export side, used car volumes grew from 273,098 tonnes to 372,252 tonnes (+36.3%), indicating that the EU also continued to export used diesel vehicles, likely to developing markets where diesel infrastructure remains established.

Motor caravan imports (87033211) surged fifteenfold

The most striking compositional shift occurred in motor caravan imports, which grew from 641 tonnes in 2015 to 9,862 tonnes in 2025—a fifteenfold increase. In vehicle-unit terms, imports jumped from 436 units to 4,691 units. The per-unit import price for caravans was volatile but generally trending upward (from €16,269 to €27,672). This niche growth likely reflects booming demand for recreational vehicles (RVs) in Europe, a trend that accelerated during and after the COVID-19 pandemic as consumers shifted towards domestic tourism and outdoor leisure. On the export side, caravan volumes grew more modestly from 27,930 tonnes to 46,187 tonnes (+65.4%), with per-unit export prices rising steadily from €44,777 to €67,038 (+49.7%), suggesting that EU-made diesel motor caravans occupy a premium segment.

EU specialisation remains concentrated in a handful of member states

Export specialisation in CN 870332 is heavily concentrated. In 2025, Germany accounted for 40.6% of EU production and had a Revealed Comparative Advantage (RCA) of 1.92. Czechia (RCA 2.06, 9.9% production share), Slovakia (RCA 2.37, 5.0%), and Slovenia (RCA 4.11, 4.1%) also showed strong specialisation, reflecting the role of Central European plants (Škoda, Kia Žilina, Renault Novo Mesto) in diesel car manufacturing. Conversely, large member states like the Netherlands (RCA 0.05), Ireland (RCA 0.00), and Greece (RCA 0.01) show no meaningful specialisation in this segment. Germany remained the largest exporter (€4.2 billion in 2025, down from €19.2 billion in 2015, –78.3%), followed by Czechia (€986 million, –49.9%) and France (€842 million, –53.5%).

The EU has become more trade-oriented but less self-sufficient in this segment

Despite the overall contraction, the EU's trade intensity (trade as a share of apparent consumption) rose from 19.0% in 2015 to 28.8% in 2025 (+51.6%), and export propensity (exports as a share of production) increased from 11.6% to 20.1% (+73.4%). This paradox—higher trade openness in a shrinking market—reflects the fact that domestic production declined faster than trade. The EU's net import reliance remained negative throughout (i.e., the EU remained a net exporter), but the surplus narrowed from –2.5% in 2015 to –8.6% in 2025, having reached a trough of –23.0% in 2021.

Conclusion

The EU's trade in mid-displacement diesel passenger cars (CN 870332) underwent a profound transformation between 2015 and 2025. Trade volumes and values contracted by roughly two-thirds on both the import and export sides, and EU domestic production fell by over 76% in unit terms. This decline is consistent with the well-documented "diesel crisis" in Europe: the aftermath of the 2015 Dieselgate scandal, progressively stricter Euro 6 emissions standards, the expansion of urban low-emission zones, and the rapid electrification of the European car fleet have all contributed to a structural shift away from diesel propulsion.

The data also reveals important geopolitical realignments. Brexit effectively removed the UK—the EU's largest automotive trade partner—from the intra-EU trading space, creating a new external customs border that drastically reduced bilateral flows. In parallel, Türkiye solidified its role as a major production platform for diesel vehicles destined for the EU market, while Central European member states (Czechia, Slovakia, Slovenia) maintained their specialisation in diesel car manufacturing.

Within the segment, the compositional shift towards used vehicles and motor caravans reflects changing consumer behaviour: while new diesel cars face declining demand, used diesel vehicles retain appeal in price-sensitive markets, and the recreational vehicle niche has thrived in the post-pandemic environment. Looking ahead, the continued tightening of EU CO₂ emission standards and the 2035 ban on internal combustion engine vehicles suggest that this structural decline will persist, though the pace may moderate as the market approaches a floor for niche and commercial applications where diesel retains advantages.