Recently, the European Commission plans to announce the “Made in Europe” initiative, which aims to respond to the recent call by more than 1,200 European companies to develop a “Europe First” or “Made in Europe” agenda.
Tires will be included in the automotive sector of the proposal, which aims to explore how to use public procurement and other methods to incentivize production within the EU.
Industry insiders believe the move may boost economic growth in Europe and support demand for high-performance tires.
However, combined with the current severe industrial reality and geopolitical impact, this vision is facing unprecedented structural challenges, and its path to realization is by no means smooth, and in some areas it is even close to a “huangliang dream”.
Soaring costs, market loss and shrinking production capacity
At present, the foundation of the European tire manufacturing industry is experiencing triple internal shocks.
The first is the structural rise in energy costs.
The Russia-Ukraine conflict has completely changed Europe’s energy landscape. The loss of Russia’s cheap and stable energy supply has caused European industrial energy prices to continue to fluctuate at high levels.
Tire production is a high-energy-consuming process, and its manufacturing costs have increased significantly, seriously weakening the price competitiveness of local products relative to foreign products.
The second point is the permanent loss of key markets and the erosion of local share.
On the one hand, European tires have lost the huge Russian market, and this demand has been largely filled by Chinese tires.
On the other hand, in Europe, continued inflationary pressure forces consumers to pay more attention to cost-effectiveness, and Chinese tire imports, which have significant price advantages, continue to grow.
In the EU and UK passenger tire import data in the first November of 2025, Chinese tires accounted for as high as 76%, which intuitively reflects the reality of market selection.
Although part of the growth stems from the expectation of “grabbing imports” due to anti-dumping measures, its solid market share cannot be ignored.
Thirdly, the decline in competitiveness of the European tire industry has triggered a “wave of factory closures.”
Unaffordable costs and squeezed market space have directly triggered the contraction of the European tire manufacturing industry.
Yokohama has closed its Czech off-highway tire plant, Michelin has successively closed its factories in Germany and France, Goodyear plans to close two old factories with a long history in Germany, and Apollo Tire will also withdraw from its production base in the Netherlands… This series of events is not an isolated adjustment, but a concentrated reflection of the entire European tire manufacturing industry being forced to reorganize global production capacity and strategic contraction under multiple pressures.
The closure of factories not only means the disappearance of production capacity, but also the loss of skilled workers and supporting industrial chains, weakening the integrity of the industrial ecology.
The new round of geopolitical crisis has exacerbated the supply chain crisis
The escalation of tensions in the Middle East since the end of February 2026 has cast a deeper shadow on the return of European manufacturing.
Iran’s blockade of the Strait of Hormuz has a direct impact on global energy supply and shipping security.
For Europe, this means that energy costs are facing a second upward risk, further squeezing the profit margins of all manufacturing industries.
At the same time, the import logistics costs and uncertainties of key raw materials and finished tires have increased sharply.
The European market is highly dependent on the global supply chain. Any blockade of major waterways or risk premiums will directly push up its import costs. Although this may temporarily increase the relative attractiveness of local manufacturing, in the context of significant shrinkage of local production capacity and high costs, this “stimulus” effect is of no avail and may instead exacerbate the turmoil of the overall industrial environment.
The Paradoxes and Limitations of the “Made in Europe” Initiative
In this context, the EU is trying to promote industrial reshoring through public procurement and other policy tools. Although its intention is clear, it faces a fundamental paradox.
The contradiction between demand and cost: Policies can guide “buy European goods”, but they cannot order consumers to bear significantly higher prices.
In the context of inflation, public finances are also under pressure. The mandatory implementation of high-cost procurement of local products will be subject to dual constraints of budget and public opinion.
Deeply embedded in the global value chain: The modern tire industry is highly globalized, from synthetic rubber, carbon black, additives to production equipment.
Even if final assembly is located in Europe, a large amount of intermediate goods may still come from around the world, especially Asia.
Challenges in the investment environment: In Europe, where energy prices are high, market growth is weak, and social costs are high, how to attract large-scale investment in new production capacity, rather than just delaying the closure of existing production capacity, is a core problem that policy cannot avoid.
Current corporate actions (factory closures, restructuring) have clearly demonstrated the choice of capital.
Taken together, in the foreseeable future, it is indeed close to a phantom to expect a comprehensive and large-scale resurgence of the European tire manufacturing industry.
Structural disadvantages in energy, market, and cost are difficult to reverse through a single procurement policy.
However, this does not mean that the Made in Europe initiative is meaningless.
Its more realistic direction may be in high-end fields, strengthening key links in the supply chain, and finding breakthroughs in the circular economy.
Therefore, the future of the European tire industry is not a low-cost “large-scale reshoring”, but a difficult transformation to climb up the value chain while shrinking and reshape competitiveness on the green and digital track.
For European policymakers and industry leaders, acknowledging and facing the “unreality” of full reshoring may be the first step in formulating more precise and effective industrial support policies.
