“With China trying to dominate the world and the United States protecting its playing field, Europe has to invent a hybrid model,” urged the president of the Renault Group, Luca de Meo in an open letter to community politicians, three months before the new composition of the Executive is decided in Brussels.
The manager took the opportunity to address future MEPs “not to do politics, but to contribute to choosing the appropriate policy, which will allow our companies to face the technological and geopolitical challenges of the moment.”
In his letter, De Meo reviewed, precisely, the geopolitical challenges he was referring to, highlighting the threat posed by Chinese manufacturers to the European automotive industry. “The center of gravity of the world market has shifted to Asia,” with China registering 8.5 million vehicles in 2023, 60% of the planet's total sales.
Furthermore, China is the country that exports the most in the world, with more than five million units leaving its borders, around a third of the world total.
The disappearance of the automobile sector in the Old Continent, after its 140 years of history, seems practically impossible, but the Italian manager still entertains it to highlight its importance: «Without an automobile industry, Europe would be left behind in the race for innovation: the percentage of gross domestic product dedicated to R&D would fall below 2% and the gap with the United States (3.4% in 2021) would be abysmal.
The numbers that show its importance are dizzying: it employs 13 million people on the continent, which represents 7% of all employees and 8% of the GNP of the European Union. It exports more than it exports, generating a trade surplus of 102 billion euros, which completely neutralizes the trade deficit generated by a country the size of France.
Thus, the problems that Europe faces are decarbonization, the digital revolution, volatility in raw material prices and the construction of new technology production centers (such as automotive battery factories). However, the bureaucratic problem must be added.
«Cars are being asked to be increasingly sophisticated, to consume less fuel and to be cheaper. “Environmental requirements translate into tests to pass and new standards to comply with, which have had a counterproductive effect: passenger cars are 60% heavier, 50% more expensive and production centers have been relocated,” says De Meo.
To ensure the competitive future of European industry, the manager proposes several measures for the Commission, starting with the adoption of a principle of technological neutrality to “stop imposing decisions on the industry.” “You can write the objectives to be achieved, but not how to do it.”
Furthermore, if the 200 largest European cities had common mobility policies, De Meo points out, “it would mean faster and more tangible benefits for citizens, since measures can be taken regarding traffic management systems, local taxation or the access to urban areas.
To guarantee European leadership, the main project proposed by the president of Renault is to make small vehicles collaboratively between community manufacturers, with the aim of having them at a low cost – he also proposes incentivizing their purchase, in a similar way to that of the US Inflation Reduction Act (IRA).
Thus, he defends, “the carbon footprint of urban cars would be reduced by up to 75%, as well as better use of space in cities.” In addition, he believes that up to 10,000 new jobs could be created.
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