Analysing the automobile sector is important for understanding the evolution of many economies in the EU.1 This is because of the sector’s direct importance in terms of GDP and employment, its sensitivity to the economic cycle, as well as its extended role in the economy through national and international value chains. While our analysis covers all EU Member States, we focus particularly on France and Germany, as these countries are widely seen as two opposite paradigms in the way the automobile industry has evolved over the past few decades. Studying the transformation of the automobile industry is a complex exercise given the extensive international fragmentation of production that has taken place in recent decades (Sturgeon et al., 2008). For this reason, our analysis takes a global value chain (GVC) approach in order to evaluate recent trends in the automobile industry and related sectors. Building on these results, we are able to evaluate the potential impact across countries and sectors of a hypothetical negative demand shock for cars. We complement the analysis by describing the current position of countries in light of the ongoing shift towards electric vehicles.