Market evolution: Small diesel cars (CN 870331) — 2015–2025

Introduction

This report examines the EU's external trade in small diesel passenger cars (cylinder capacity ≤ 1,500 cm³, CN 870331) over the period 2015–2025. The data reveals a market undergoing a profound structural transformation. What began as a period of modest net import reliance in 2015 evolved, by 2025, into a scenario where the EU is a strong net exporter of these vehicles. Over the same decade, overall trade volumes collapsed, domestic production nearly halved, and the United Kingdom's departure from the EU single market fundamentally redrew the geographic map of trade flows. Meanwhile, used-vehicle exports surged even as new-vehicle trade contracted, and unit prices shifted in ways that signal changing product composition and market positioning. The following three sections unpack these dynamics.

I. The Collapse of Imports and the Rise of Export Surplus

The single most striking feature of EU trade in CN 870331 over the decade is the dramatic contraction of imports. EU imports fell from €4.59 billion in 2015 to just €565 million in 2025 — a decline of 87.7% in value. By contrast, exports, while also declining, fell more moderately from €4.40 billion to €2.91 billion (−33.7%). The result is a striking reversal in the EU's trade balance.

The trade balance flipped from deficit to surplus

In 2015, the EU ran a small trade deficit of €189 million in small diesel cars. By 2025, that had swung to a surplus of €2.35 billion — a change of over 1,300%. The EU's net import reliance shifted from +1.1% in 2015 to −35.1% in 2025, indicating a decisive transition toward self-sufficiency and export orientation in this product segment.

Import volumes fell across both new and used vehicles, but the collapse was overwhelmingly in new cars

The segment breakdown reveals the source of the import implosion. New-car imports (CN 87033110) plunged from 530,645 tonnes in 2015 to just 51,994 tonnes in 2025 — a 90% decline in mass. In supplementary unit terms (number of vehicles), new-car imports fell from 432,186 units to 47,726 units. Used-car imports (CN 87033190), while much smaller in absolute terms, remained relatively stable — moving from 4,604 tonnes to 5,165 tonnes and from 3,354 units to 3,490 units over the same period. This divergence suggests that the EU's demand for small diesel cars increasingly shifted to either domestic production or other powertrains, while residual demand for imported used diesels persisted.

Source: Product segment breakdown

The EU's export propensity surged as domestic demand weakened

The EU's export propensity — the share of production exported — rose from 4.4% in 2015 to 31.1% in 2025 (+602%). Similarly, trade intensity (the combined share of imports and exports in production) increased from 9.4% to 34.4%. These shifts suggest that while the EU's domestic market for small diesel cars shrank, the industry pivoted toward export markets to absorb output — though even this was not enough to fully compensate for declining domestic demand.

II. Brexit and the Reconfiguration of Trade Partnerships

The geographic concentration of EU trade in CN 870331 was radically reconfigured between 2015 and 2025. The United Kingdom — the EU's largest trading partner in this segment at the start of the period — effectively exited the single market in January 2021, with consequences that are starkly visible in the data. Meanwhile, Türkiye emerged as the EU's dominant partner on both the import and export sides.

The UK's trade with the EU collapsed on both sides

In 2015, the UK was the EU's single largest export destination for small diesel cars, absorbing €2.42 billion worth of EU exports (over half the total). By 2025, that figure had fallen to just €120 million — a 95.1% decline. On the import side, the UK supplied €1.73 billion of imports in 2015, falling to €27 million in 2025 (−98.4%). The UK's departure from the customs union introduced tariffs, rules-of-origin requirements, and regulatory divergence that made cross-Channel trade in these vehicles far more costly and complex.

Türkiye consolidated its position as the EU's primary third-country partner

With the UK's exit from the single market, Türkiye became the EU's most important trade partner in this segment. EU exports to Türkiye grew from €944 million to €1.52 billion (+60.7%), making Türkiye the top export destination by 2025. On the import side, Türkiye remained significant at €512 million, though this represented a 61.5% decline from the 2015 peak of €1.33 billion. Türkiye's customs union agreement with the EU and its role as a manufacturing hub for European automakers help explain this resilience.

The import supply base diversified then concentrated again

The Herfindahl-Hirschman Index (HHI) for import concentration tells a revealing story. Import HHI (by value) started at 2,581 in 2015 — a moderately concentrated market — then surged to 8,384 by 2025, a 225% increase. This reflects the near-total disappearance of imports from the UK, Morocco, Serbia, India, Japan, and South Korea — all of which saw declines of 98–99.9% — leaving Türkiye as the overwhelmingly dominant supplier. Export concentration, by contrast, remained relatively stable (HHI of 3,568 to 3,000), as the loss of the UK market was offset by growth in Türkiye, Morocco, Ukraine, Serbia, and Algeria.

Source: Partners overview

Several EU member states experienced dramatic import declines

Among EU reporters, Italy saw the steepest drop in extra-EU imports, from €1.21 billion to €51 million (−95.7%), followed by Belgium (−99.0%) and the Netherlands (−99.4%). France and Spain also saw large declines (-69.2% and -85.8% respectively). On the export side, Spain was the standout performer, increasing exports from €914 million to €1.26 billion (+38.2%), overtaking Germany, whose exports collapsed from €1.96 billion to €310 million (−84.2%).

III. Production Contraction, Price Dynamics, and the Used-Car Export Surge

Beyond the trade-partner reconfiguration, the data reveals deeper structural pressures: a sharp decline in EU production of small diesel cars, a divergence in unit prices between new and used vehicles, and the emergence of the used-car segment as a growing export niche.

EU production of small diesel cars nearly halved

EU production of CN 870331 fell from 1,332,104 vehicles in 2015 to an estimated 600,000 in 2025 — a 55% decline. Production value declined from €13.6 billion to €8.4 billion (−38.1%). This contraction reflects the broader European shift away from diesel powertrains, driven by stricter emissions regulations (Euro 6d and beyond), urban diesel bans, and consumer preference shifts toward petrol, hybrid, and electric vehicles. The fact that production value declined less sharply than volume suggests a move toward higher-value models or inflationary pressures on manufacturing costs.

Used-car exports grew dramatically even as new-car exports declined

The product segment breakdown reveals a striking divergence in export trends. New-car exports (CN 87033110) in supplementary units fell from 330,760 vehicles in 2015 to 168,271 in 2025 (−49.1%). Used-car exports (CN 87033190), however, grew from 26,435 to 80,650 vehicles (+205%). In value terms, used-car exports surged from €95 million to €512 million (+438%). This suggests that as the EU fleet aged and diesel vehicles lost domestic resale value, a robust export channel developed to third-country markets — particularly in North Africa, Eastern Europe, and Türkiye — where demand for affordable used diesel vehicles persists.

Source: Product segment breakdown

Unit prices diverged between new and used, and between imports and exports

For new-car imports, the price per vehicle (supplementary unit price) rose from €10,534 in 2015 to €13,022 in 2024 before easing to €11,437 in 2025 — suggesting a trend toward more expensive, better-equipped models as volumes shrank. Used-car import prices, conversely, fluctuated widely and ended lower at €5,568 per vehicle in 2025. For exports, new-car unit prices remained relatively stable (€13,009 in 2015 to €14,275 in 2025), while used-car export prices more than doubled from €3,596 to €6,344, reflecting either rising quality of exported used vehicles or inflation in destination markets.

Volatility and price shocks concentrated in 2023

The data detects two notable price shocks in 2023: one in EU exports to Türkiye (a 34.2% price shift with an abnormality score of 5.4) and another in exports to Ukraine (38.1% price shift). These events coincide with a period of macroeconomic turbulence — including the post-COVID supply-chain normalization, the EU's tightening emissions standards, and the economic disruption caused by the Russia-Ukraine conflict, which redirected EU automotive exports toward Ukraine as a substitute market. Among import sources, China exhibited the highest coefficient of variation (2.08), though its trade volumes in this specific segment were negligible, while the UK (CV 0.94) and Türkiye (CV 0.72) showed high but less extreme volatility — consistent with the structural breaks caused by Brexit and shifting production patterns.

France emerged as the most specialised EU producer

The specialisation analysis for 2025 identifies France as the most significant specialised producer, with an RCA (Revealed Comparative Advantage) of 3.44 and accounting for 26.9% of EU production in this segment. Luxembourg and Portugal showed the highest relative specialisation indices, though their absolute production shares were small. At the other end, Bulgaria, Greece, and Finland showed negligible specialisation in small diesel car production, consistent with their limited automotive manufacturing bases.

Conclusion

The period 2015–2025 witnessed a structural transformation of the EU's trade in small diesel passenger cars. Three forces drove this change:

1. The diesel decline: EU production of small diesel cars fell by 55% in volume, reflecting the sector-wide pivot away from diesel powertrains amid regulatory tightening and shifting consumer preferences. This contraction rippled through trade flows, reducing both import demand and export capacity.

2. Brexit: The UK's exit from the EU single market eliminated the single largest bilateral trade relationship in this segment — the UK accounted for over half of EU exports and over a third of EU imports in 2015. By 2025, UK trade had effectively collapsed, forcing a geographic reorientation toward Türkiye, North Africa, and Eastern Europe.

3. The used-car export boom: As the EU's diesel fleet aged and domestic resale values fell, used-vehicle exports emerged as a dynamic growth niche, tripling in volume and quintupling in value. This channel absorbed vehicles that no longer found buyers within the EU and redirected them to markets where small, affordable diesels remain in demand.

The net result is an EU that, by 2025, is a strong net exporter of small diesel cars — but from a much smaller production base and with a radically different trade geography than a decade earlier. The sustainability of this configuration will depend on how quickly the remaining diesel fleet is phased out, whether third-country demand persists, and how the EU's broader green transition reshapes the automotive value chain.