Market evolution: Petrol passenger cars (CN 870323) — 2015–2025

Introduction

This report examines the evolution of EU external trade in petrol passenger cars with engine displacements between 1.5 L and 3.0 L (customs code 870323) over the period 2015–2025. Over this decade, the EU's trade position in this segment underwent a profound structural transformation. Total export volumes fell by over 40 % while production of the broader vehicle class collapsed by more than 60 %. Yet export values declined by a more moderate 26 %, revealing a powerful counter-trend: rising unit values and a decisive shift toward higher-value vehicles. Meanwhile, the geographic composition of trade was reshaped by Brexit, the rise of Asian demand, and geopolitical shocks. The EU simultaneously became a more export-dependent and more premium-oriented producer — a dual shift with far-reaching implications for the continent's automotive competitiveness.

A Decade of Shrinking Volumes: Trade and Production in Long-Term Decline

EU exports fell sharply in both value and volume, while imports contracted even faster

Between 2015 and 2025, EU exports of CN 870323 vehicles to non-EU countries declined from €59.6 billion to €44.2 billion (–25.9 % in value). The volume decline was steeper: export mass fell from 4.24 million tonnes to 2.46 million tonnes (–42.0 %), and the number of vehicles exported dropped from 2,724,099 to 1,550,449 units (–43.1 %) (General Overview).

Imports contracted even more dramatically in relative terms:

Despite the erosion, the EU maintained a massive trade surplus throughout the period — never falling below €39 billion. The net import reliance figure deepened from –52 % in 2015 to –189 % in 2025 (negative values denote a net-exporter position), underscoring that the EU's role as a supplier of this vehicle class to the world market actually intensified on a relative basis, even as absolute volumes declined.

EU production of this engine class collapsed by over 60 %

The most dramatic contraction occurred in EU production volumes. Output fell from 6,985,724 vehicles in 2015 to just 2,754,547 in 2025 — a decline of 60.6 %. Production value declined more moderately, from €124.4 billion to €91.1 billion (–26.8 %), implying that average production value per unit nearly doubled (from approximately €17,800 to approximately €33,100, +85.7 %). This divergence between volume and value is a signature of the broader premiumization and electrification dynamics reshaping the European car industry: the 1.5–3.0 L petrol segment has been squeezed from below by smaller engines and electrified powertrains, and surviving production has shifted toward more expensive, feature-rich models.

The new-car segment bore the brunt of decline; used-car trade proved more resilient

A breakdown by product sub-segment reveals that the contraction was concentrated overwhelmingly in new passenger cars (CN 87032319), while the used-car segment (CN 87032390) displayed surprising resilience:

New-car exports nearly halved and new-car imports fell by 60 %. By contrast, used-car exports were essentially flat over the decade, and used-car imports actually increased by 28 %. The motor caravan sub-segment, while tiny in absolute terms, saw strong growth. These patterns suggest that cross-border trade in used vehicles gained importance as a complement to — and partly a substitute for — new-car transactions, possibly reflecting longer vehicle ownership cycles and growing online marketplaces for second-hand vehicles.

Reconfigured Trade Routes: From Brexit to the Rise of Asian Markets

Brexit restructured the EU's most important bilateral auto-trade relationship

The United Kingdom's departure from the EU single market at the start of 2021 had a dramatic and lasting impact on EU–UK trade in CN 870323 vehicles. UK imports into the EU collapsed from €3,518 million in 2015 to just €393 million in 2025 — a fall of 88.8 %. This was the steepest decline among all major import partners (top import partners). EU exports to the UK declined more moderately, from €5,127 million to €4,160 million (–18.9 %), likely cushioned by the UK's continued reliance on European premium brands and the tariff-free regime under the EU–UK Trade and Cooperation Agreement (subject to rules of origin).

The collapse in UK-to-EU imports likely reflects the disruption of deeply integrated supply chains: many vehicles previously assembled in the UK for the EU market (by Japanese transplants and other manufacturers) faced new customs frictions, rules-of-origin requirements, and regulatory divergence. A price shock detected in UK imports in 2021 (abnormality 4.4, shift –32.6 %) corroborates the disruption.

South Korea emerged as the EU's fastest-growing export market

While several traditional EU export destinations contracted, South Korea stood out as an exceptional growth story. EU exports to South Korea surged from €881 million in 2015 to €3,645 million in 2025 — an increase of 313.9 % (top export partners). This made South Korea the fourth-largest non-EU destination by value, up from a much lower ranking at the start of the period. The growth is consistent with the effects of the EU–Korea Free Trade Agreement (in force since 2011, with tariff elimination on cars fully phased in by 2016), rising Korean demand for European premium vehicles, and the broader expansion of the Korean middle class's appetite for imported cars.

China and Japan declined as export destinations; the US remained dominant but contracted

The United States remained the EU's single largest non-EU export market throughout the period, but its share eroded: exports fell from €21.6 billion in 2015 to €14.6 billion in 2025 (–32.6 %). China — the second-largest market — declined from €10.7 billion to €6.0 billion (–44.2 %), likely reflecting intensifying competition from domestic Chinese manufacturers and the shift toward electric vehicles in that market. Japan fell from €2.7 billion to €1.4 billion (–46.8 %), and Australia from €1.7 billion to €0.9 billion (–48.2 %).

On the import side, Japan remained the largest source of non-EU imports but also declined steeply (from €2,710 million to €1,464 million, –46.0 %). The United States was the only major import partner to record significant growth, rising from €474 million to €920 million (+94.0 %). Türkiye, which had been a meaningful source (€337 million in 2015), saw its imports collapse to just €6 million in 2025 (–98.2 %).

Import source diversification was substantial

The Herfindahl–Hirschman Index (HHI) for import concentration by value fell from 2,933 in 2015 to 1,735 in 2025 (–40.8 %), moving the market from a highly concentrated to a moderately concentrated profile. By volume, the HHI fell from 2,637 to 1,662 (–37.0 %). This diversification was largely a mechanical consequence of the UK's declining share — previously the dominant import source — but it also reflects growing inflows from a wider range of origins. The export HHI, already more moderate, edged down from 1,801 to 1,522 (–15.5 %), indicating a gradual broadening of EU export destinations.

A supply shock to Russia completed the picture of geopolitical disruption

EU exports to the Russian Federation were abruptly curtailed following the imposition of sanctions. A supply shock was detected in 2024 (abnormality 2.4, shift –99.3 %), confirming the near-total severance of this trade flow. While Russia had never been among the top seven EU export destinations by value for this code, the collapse nonetheless illustrates how geopolitical events have further reduced the set of available markets for EU auto exports.

Premiumization and Growing Export Dependence: The EU's Evolving Competitive Position

Unit values rose across the board, cushioning the impact of volume losses on trade values

The most important counter-trend to the volume decline was a sustained increase in the average value per vehicle traded. EU export prices per unit rose from €21,866 in 2015 to €28,483 in 2025 (+30.3 %), while import prices per unit increased from €14,748 to €16,900 (+14.6 %) (General Overview). By mass (EUR per tonne), the divergence was similar: export prices rose 27.8 % while import prices barely moved (+2.6 %).

The premiumization was particularly pronounced in the new-car sub-segment. Export prices for new passenger cars (87032319) per unit rose from €24,765 to €35,612 (+43.8 %), while import prices per unit went from €16,401 to €21,857 (+33.3 %):

The near-doubling of used-car import prices per unit (–98.3 %) is noteworthy and may reflect a compositional shift toward higher-value used imports (e.g., premium and near-new vehicles) as well as general inflation in the second-hand market. Export used-car prices, by contrast, rose only modestly (+9.7 %), suggesting the EU tends to export mid-range used vehicles while importing higher-specification ones.

Export propensity and trade intensity increased markedly

Two structural indicators confirm the EU automotive sector's growing dependence on international markets. Export propensity — the share of production exported outside the EU — rose from 43.3 % to 73.8 % (+70.4 %). Trade intensity — the combined share of exports and imports relative to production — increased from 48.0 % to 75.8 % (+58.0 %).

These figures reveal a sector that has become substantially more outward-oriented. As domestic production declined, the EU's remaining output in this engine class was increasingly destined for non-EU buyers. This dynamic increases the sector's exposure to exchange-rate fluctuations, trade-policy changes, and demand cycles in third-country markets.

Production specialisation concentrated in Central and Northern Europe

Within the EU, the most specialised producers of CN 870323 vehicles in 2025 were Slovakia (RSCA: 0.68), Sweden (0.47), Belgium (0.40), Czechia (0.29), and Denmark (0.22). By contrast, Ireland, Greece, Poland, Romania, and the Netherlands showed negative RSCA values, indicating they are net importers of this product.

Among EU Member States reporting exports, the shifts were telling. Germany remained overwhelmingly dominant, but its exports fell from €43.3 billion to €30.2 billion (–30.1 %). Italy's exports collapsed from €3.4 billion to €0.7 billion (–79.2 %) and Spain's from €2.1 billion to €0.5 billion (–76.0 %), reflecting the rationalisation of production in southern Europe. Conversely, Sweden's exports nearly doubled from €1.9 billion to €3.7 billion (+96.0 %), likely driven by Volvo and Polestar models, and Slovakia's grew from €2.2 billion to €2.7 billion (+23.6 %), sustained by its Volkswagen Group plant (top EU reporters).

Conclusion

The EU's trade in petrol passenger cars with 1.5–3.0 L engines (CN 870323) underwent a fundamental transformation between 2015 and 2025. Trade volumes, production output, and even total trade values all declined substantially, reflecting the combined pressures of electrification, shifting consumer preferences, stricter emissions regulation, COVID-19 disruptions, and geopolitical shocks. Within this contraction, however, several countervailing dynamics sustained the EU's position. Unit values rose significantly — by 30–44 % for new-car exports — reflecting a decisive shift toward premium and higher-specification vehicles. The geographic composition of trade was reshaped: the UK's exit from the single market severed a deeply integrated trade flow, while South Korea emerged as a major growth destination and import sources became more diversified. Export propensity nearly doubled to 74 %, making the sector more dependent than ever on global demand. Production meanwhile concentrated in Germany, Sweden, and Central Europe, while southern European output collapsed. The net result is an EU automotive sector that produces fewer petrol cars, but sells a higher share of them abroad at higher prices — a strategy of premiumization that has partially offset the structural decline in volumes but also increases vulnerability to external market conditions.