Europe’s car makers want new rules created to favour small cars being manufactured as the industry struggles to sell more expensive bigger models.
Renault CEO Luca de Meo and Stellantis chairman John Elkann have urged the European Union to implement more favourable rules for small cars as the declining profitability of these cars could lead to plant closures.
Ford has stopped Ka, Fiesta and Focus as it concentrates on larger electric models but which are much more expensive and slower selling while Toyota has decided to offer a mix of models across its range to please different markets and buyers around the world and Korean makers are developing new small cars to outsell the Continental car makers.
In an interview with French newspaper Le Figaro, Elkann and de Meo emphasised that France, Italy, and Spain should spearhead the initiative, given the high demand for smaller, affordable cars in these countries but did not specify the exact regulations they want to applied to small cars.
Mr. de Meo was quoted by Reuters as saying, “What we are asking for is a differentiated regulation for smaller cars. There are too many rules designed for bigger and more expensive cars, which means we can’t make smaller cars in acceptable profitability conditions.”
He also noted that Renault and Stellantis, which together hold a 30% market share in Europe, are focused on producing affordable cars for European consumers.
In contrast, premium car manufacturers like BMW, Mercedes, and some Volkswagen brands are more export-oriented, he added.
Mr. de Meo added, “For them, Europe does count, but their priority is export. For the last 20 years, their logic has dictated market regulations. And the result is that European rules mean that our cars are ever more complex, ever heavier, ever more expensive, and most people simply can’t afford them any more.”
Elkann said, “At this rate, if the trajectory does not change, we will have to make some painful decisions for our production base over the next three years.”
Last month, Stellantis reportedly halted production of Leapmotor T03 electric vehicle at its Tychy plant in Poland but not given a reason, although it’s thought to be due to expected low demand as evs are still building up sales and Stellantis is struggling to sell its comparable Fiat e500, which closely resembles the To3 as well.
