Portugal Climbs to 9th in European Auto Production, Overtaking Italy
Portugal has achieved a historic milestone in the European automotive sector, surpassing Italy to become the ninth-largest vehicle producer in the region. This shift in the industrial ranking underscores a diverging trend between the two nations, as Portugal expands its manufacturing footprint although Italy faces a severe industrial contraction.
According to the annual report from the European Automobile Manufacturers’ Association (ACEA), Portugal produced 240,400 vehicles in 2025, marking a 2% increase over the previous year. In stark contrast, Italy experienced a significant downturn, with production falling 23% compared to 2024 to reach 237,975 units. This decline represents a critical blow to the Italian automotive industry, with output for legacy brands such as Fiat, Alfa Romeo, and Lancia hitting levels not seen since 1954.
The growth in Portuguese production has been driven primarily by two major industrial hubs. The Volkswagen Autoeuropa plant in Palmela recorded its second-best year on record, producing more than 240,000 units. Simultaneously, the Stellantis facility in Mangualde achieved a historic production record, delivering over 91,000 vehicles. This expansion reflects Portugal’s increasing strategic importance within the European supply chain.
While Portugal’s rise is notable, the broader European landscape remains dominated by traditional industrial powerhouses. Germany maintains its lead with over 4 million vehicles produced, followed by Spain with 1.7 million and Czechia with 1.4 million. The European Union produced more than 11.4 million automobiles in 2025. But, the ACEA noted that European production has remained relatively stable, though it continues to be hampered by persistent energy costs and the impact of trade tariffs.
On a global scale, the automotive market showed resilience in 2025. Total global production rose by 4.2% to 78.7 million vehicles, while global sales increased by 3.5%, totaling 77.6 million units. Asia continues to dominate the global landscape, accounting for 62.1% of total production, while the European Union represents 14.6% of the world’s output.
The report highlights a surging influence from Chinese manufacturers, whose production jumped 10.4% due to strong political support and expanding export volumes. Currently, cars manufactured in China account for 7% of all sales within the European Union, a trend that has contributed to the pressure on traditional European markets. Analysts suggest that the decline in Italy is partly attributable to this increased international competition, alongside delays in launching new models and weakening demand across Europe.
This shift in production rankings reflects a broader reconfiguration of the automotive industry, where agility and export-oriented hubs are gaining ground over traditional manufacturing centers. For more on these developments, readers can explore reports from Jornal Económico, MaisTecnologia, Turbo.pt, Expresso, and SIC NotÃcias.
