No need to block Chinese brands in Europe, definitive industrial strategy needed – Renault Group CEO –

There is no reason to hinder the progress of Chinese carmakers in Europe, however there is a need for a definitive industrial strategy to allow established automakers on the continent to compete with them, Renault Group CEO Luca de Meo said at the Munich motor show, Autocar reported.

“The only thing we can do is to accept that, to actually look at them and be humble, but not playing the victim,” de Meo told the magazine. The CEO rejected suggestions that Europe should adopt policies such as the Inflation Reduction Act (IRA) used in the United States, saying that the rapid growth of new players in a market doesn’t necessarily mean that they would dominate the market, the report wrote.

“When the Japanese and the Koreans came to Europe, it was the same thing. They can play the game,” de Meo said, adding that the total of all non-European brands in Europe make up 25%, and not the vast majority.

“We also have to recognise that globally we’re in the kind of race that’s a form of asymmetrical competition. America is playing the protectionist game with IRA and we’re facing on the other side a Chinese ecosystem that’s supported heavily by authority, by clear industrial policy, including subsidies on manufacturing, giving money for investment,” de Meo said.

Chinese automaker BYD plans to open two EV production plants in Europe, according to a report late last year. This will enable BYD to not just meet growing demand for its products, but to also bypass tariffs imposed by the European Union upon products from China, according to the Bloomberg report at the time.

“The thing that isn’t in the habits or the rules of the European community [is manufacturing support]. We tend to finance innovation projects but not manufacturing, so you get the money to develop a platform but not to put the platform on the line,” he continued, adding that the current system of subsidies in the region only supports research and development, but not manufacturing development.

The ACEA (European Automobile Manufacturers’ Association) is set to publish a study in the coming weeks, wrote Autocar, and the study is conducted by an independent body and which compares the structures and impact of the systems in the US, China and in Europe. While it is difficult to compare them, the study will be useful, said de Meo.

European manufacturers “want to be listened to” by the European Commission, the Renault Group CEO said, and suggested that imposing carbon-reducing regulations upon carmakers are not a suitable substitute for structured support.

The CEO said that car companies in Europe must demonstrate that they can achieve the collective decarbonisation goals in their own way, suggesting that simply mandating the end of sales of combustion-engined vehicles does not make a comprehensive decarbonisation strategy, Autocar wrote.

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