Europe’s three largest automakers unite: Renault, Stellantis, and Volkswagen seek protection from Chinese brands in the European Union

Today, Europe has five major automobile manufacturers: BMW, Mercedes-Benz, Renault, Stellantis, and Volkswagen. The latter three, which have the highest production volumes in the region, have recently joined forces to pressure the European Union to adopt greater protectionism against Chinese manufacturers, whose arrival in the old continent has caught local players off guard.

The goal is for the European Union to establish rules regarding local content and relax the targets for electrification. “We account for over 60% of European automobile production,” said Oliver Blume, CEO of Volkswagen Group, referring to these three groups, during the recent Paris Motor Show. “We must safeguard Europe’s industrial base, and we need to do it now.”

"We sell a large number of vehicles with relatively low margins. This business model is under enormous pressure in Europe. Europe needs a high-volume segment. The ecosystem cannot survive solely on luxury cars." Among other things, Renault, Stellantis, and Volkswagen want the European Union to establish local content rules to defend against Chinese competition, an approach that does not seem to convince BMW and Mercedes-Benz.

In June, the first three sent a joint letter to the European Commission requesting that if 70% of a manufacturer’s vehicles produced in the EU meet local content criteria, 100% of their cars could qualify for the benefits under the new regulations.

Unity creates strength

On the other hand, Renault, Stellantis, and Volkswagen also advocate for the establishment of emission credits for small vehicles. Renault specifically wants such cars to be exempt from new regulations for ten years to reduce their costs. Models like the future Citroën 2CV could fall under this new category, known as M1E, which includes electric cars up to 4.20 meters long manufactured in Europe.

"It is time to reach agreements and approve the regulations," says Antonio Filosa, CEO of Stellantis. "We agree on 90% [of the details] and on the urgency of having regulations in place. Compromises will be necessary, but everyone will benefit if we have a regulatory framework that includes, among other things, flexibility in carbon dioxide targets and fair competition conditions."

Recently, Europe’s three major automakers have introduced a new generation of small electric cars. Although they are much more affordable than previous models, they remain more expensive than their Chinese alternatives, with a few exceptions such as the affordable Dacia Spring and Renault Twingo.

Source | Motor.es