The European automotive industry makes a significant contribution to the continent’s economy, providing employment to 13 million people and accounting for 8% of industrial production and one-third of Europe’s investments. However, the CEO of Renault, Luca de Meo, has raised concerns about the industry’s future, warning about potential economic implications if not addressed. In a letter addressed to candidates running in the upcoming European elections, he outlined a 10-step plan to address these challenges.
De Meo highlighted the importance of the automotive industry in Europe, noting that it represents 7% of the European economy and generates €392 billion in revenue for governments, which accounts for over 20% of the European Union’s tax revenues. He emphasized the critical role played by automotive research, which contributes €59 billion and supports R&D spending in Europe. However, despite these significant contributions, the global car market has largely shifted to Asia, with China emerging as a dominant player. Chinese manufacturers now hold a 4% market share in Europe, and they are responsible for exporting 35% of electric cars worldwide.
De Meo also stressed the need for the automotive industry to adapt to new trends and technologies, such as electrification, software, electric car recharging, and the circular economy. These changes come at a time when technologies are evolving rapidly, and raw material prices are fluctuating unpredictably.
In contrast to the perspective of Mercedes chairman Ola Källenius, who has advocated for leaving the market alone and opposing the introduction of tariffs or protective measures, de Meo has voiced his support for fair competition without resorting to protectionism. He highlighted the significant cost advantage enjoyed by “made in China” cars over their European counterparts, citing a €6,000 to €7,000 price differential, which accounts for approximately 25% of the total price.
As the president of the European Automobile Manufacturers’ Association (ACEA) and an industry veteran with 30 years of experience, de Meo’s insights carry significant weight. His proposed 10-step plan aims to reverse the slowdown in the automotive industry, safeguard jobs, and support continued innovation and research in the sector.
De Meo’s letter has ignited crucial conversations about the future of the European automotive industry, and it is imperative for policymakers to consider his proposals to ensure the industry’s sustainable growth and competitiveness in the global market.
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