Mind the Curve! (April 2026)

The European Union is no longer the largest player in the global goods market. This shift is driven primarily by competition from China, which produces increasingly sophisticated products at low prices. One consequence has been the stagnation of the German economy, partly reflecting difficulties in its automotive sector. Within just five years, China has transitioned from a net importer of cars into a net exporter, with a global market share in automotive trade now comparable to that of Japan. Chinese carmakers currently control two-thirds of their domestic market, whereas before the pandemic they held just over one-third. Although only around 8 percent of Slovak car exports are shipped directly to China, Chinese final demand is as important for Slovakia’s automotive industry as demand from Germany and the United States. For Slovakia, competing in this environment will be challenging; however, the relatively lower production costs compared with plants in Western Europe could provide a competitive advantage.