The Impact of the Automotive Sector Crisis on Italian Foundries
On October 24, 2025, the traditional annual Amafond conference was held in Rezzato (Brescia). This year's theme was "Melting the Future. Macrotrends in the Automotive and Industrial Vehicle Sectors and the Impact on European Foundries." The day's conference focused on analyzing an increasingly challenging global and regulatory environment for companies in the foundry supply chain, particularly those linked to the automotive industry.
The second part of the conference featured a heated and crucial debate between industry and politics, with presentations that exposed the contradictions of the Italian and European systems.
The auto components crisis: between ecological transition and competitiveness
"The patient has a fever, the treatment isn't working, so we need to change the doctor." With this effective metaphor, business representatives opened the afternoon debate, explaining the state of health of the industry within the framework of the European ecological transition.
Companies have invested in green projects, achieving significant results. "The problem today is political. Europe must decide whether to continue to be the large market it has been for so many decades, or to abandon competition from China and the United States."
For Italian manufacturing companies, it's difficult to digest the fact that, with the Green Deal, industry has been placed in the dock as the sole culprit in the global climate crisis. Industry is not the problem, but the solution. Industry and sustainability are a combination that can exist, as demonstrated by numerous companies in the sector.
The Contraction of the Global Automotive Market
The problem is twofold: on the one hand, the climate issue; on the other, the stability of the automotive sector, which is contracting worldwide. The 95 million vehicles produced in 2017 have fallen to 90 million, after a plunge to 80 million during the pandemic. Production is expected to reach 97 million units by 2030.
Europeans are no longer interested in cars. The social achievement that workers could buy with four salaries in 1990 now requires four years of installments. On the other hand, other markets are growing. Asia, South America, and India are now consolidated hubs for the supply chain, not to mention Africa, which could be the market of the future for low-cost cars. Overall, demand is shifting geographically.
What are the causes of this situation? The Green Deal started with a good idea, only to then use a completely flawed method. The Fit for 55 targets, the CBAM requirements, and the energy transition have caused production and transportation costs to skyrocket, especially for foundries.
Many companies could easily work in China to avoid these costs, but the desire to continue producing in Italy remains strong, provided that European policymakers assume responsibility for protecting their industry, as other countries are doing. Action is needed on the system of fines imposed on car manufacturers and on energy costs. Otherwise, we are admitting that Europe's future lies in tourism and services, without any illusions about industrial competitiveness.
The European Political Response
Politicians attending the conference emphasized how some European parliamentary groups are actively supporting industries, acknowledging their ability to implement often incomprehensible regulations—especially those in Italy.
The problem isn't limited to industry, much less the automotive supply chain. Europe isn't functioning because of its divisions, between member states and parliamentary groups. Businesses have increasingly felt harmed by the lack of political coordination.
The Green Deal hasn't been completely blocked. Rather, it's in a state of limbo, generating uncertainty for productive forces. The recent decision by some member states to introduce a fixed price for their energy-intensive industries creates unfair competition that undermines both the market and mutual trust between suppliers and customers.
The interests of individual states are hindering the energy mix needed to achieve technological neutrality. Energy costs will never be lowered unless nuclear power is included in the mix. Everyone wants a clean environment, but without economic sustainability, there is no social sustainability.
The Crux of Energy Costs and the Impact on the Production of Automotive Die-Cast Components
The crux of this state of affairs lies in energy costs. Italian costs are the highest in Europe and are bluntly described as "a national disgrace." According to data from January to August 2025, the spot price of electricity in Italy was €117.63/MWh. In Germany, it was €88.93/MWh, with a 32.34% differential affecting Italy. Compared to Scandinavian countries, Italy pays 228.84% more. Huge differentials are also recorded with Spain (+83.53%) and France (+82.13%).
The claim by the Italian Energy Companies Association that all Italian energy consumers benefit from a plethora of measures and discounts that bring the real price of energy paid by companies down to as low as €39/MWh is incorrect. These claims are openly contested by the industry. The Interconnector is not a useful measure for foundries; interruptibility is not a discount, and the reimbursement of indirect ETS costs (although estimated at around €16/MWh this year) was zero until 2020 and around €4/MWh in 2021-2023. This is not to mention that in the foundry sector, only cast iron foundries are eligible for the benefit.
This benefit, moreover, was long-awaited and only became available at the end of the year, as was the case with the Energy Release, which was supposed to be operational many months ago but will instead only begin, albeit retroactively, in early 2026.
"Faced with this reality, political inaction is unacceptable. This battle has been fought for years. However, the last real aid received by the sector was the tax credit during the Draghi government. Since then, there have been many words and many initiatives, but in reality, absolutely nothing has been achieved. If we don't address this very evident emergency, we risk collapse. And if that happens, it won't be the fault of external competitors, but of the Italian system itself."
The impact of the automotive sector crisis on foundries and the production of die-cast components for the automotive industry highlights how the auto components crisis is the result of political and energy choices that structurally penalize the Italian industry compared to European and non-European competitors.
Source: In Fonderia – Il magazine dell'industria fusoria italiana