Italy Faces 77,000 Job losses in Automotive Sector amidst Industry Shift
ROME – A new PWC study warns Italy risks losing up to 25 billion euros in turnover and 77,000 jobs in the automotive sector between 2025 and 2027 due to ongoing closures, stalled production, and a widening gap in plant utilization compared to other EU states. Plant use in Italy has fallen from 67% to 53%, substantially lower than its European counterparts.
the report highlights a pattern of “continuous closures and openings” within Italian automotive establishments, contributing to instability. This decline comes as Europe’s overall defense expenditure is projected to more than double, from 326 billion euros in 2024 to 690 billion euros in 2035.
Though, PWC identifies a potential path forward: sector conversion, specifically leveraging the anticipated surge in Italian defense spending. Italian defense expenditure is forecast to grow from 33.7 billion euros in 2024 to 51.5 billion euros in 2027, and exceed 80 billion euros by 2035 – representing a rise from 1.5% to 3.5% of GDP.
Cesare Battaglia, Pwc partner and Emea and Italy Aerospace & Defense leader, believes this increased defense spending can act as “industrial leverage” for Italy. The strategy involves repurposing existing automotive plants – described as “almost firm today” – and reactivating the workforce through collaboration with the defense industry.
Automotive manufacturers already share common ground with defense in areas like engines, electronics, components, and chassis. Partnerships between suppliers and car manufacturers, alongside the reuse of automotive technologies like Advanced Driver-Assistance Systems (ADAS), could further facilitate this transition.
