Stellantis, Renault Executives: If EU Doesn't Introduce Rules Favorable to Small Cars, Automakers May Close Factories

According to Reuters, Stellantis Chairman John Elkann and Renault Group CEO Luca de Meo urged the European Union to introduce rules more favorable to small cars, warning that a decline in the profitability of small cars could lead to factory closures if no changes were made.

The report stated that Elkann and de Meo were jointly interviewed by France's Le Figaro. The two automaker executives said that France, Italy, and Spain should take the lead in this effort, as demand for small, more affordable cars is most robust in these countries. However, they did not disclose which rules for small cars they hoped to see.

"What we are asking for is differentiated regulatory policies for small cars," de Meo said. "Too many rules for large, more expensive cars mean that we cannot produce small cars under conditions that allow for appropriate profitability." De Meo pointed out that Renault and Stellantis are primarily committed to producing affordable cars in Europe to meet the needs of European consumers. It is reported that these two companies have a combined market share of 30% in Europe.

In contrast, some brands under Germany's BMW, Mercedes-Benz, and the Volkswagen Group focus more on export business. De Meo said, "For them, Europe is indeed important, but their priority is exports. Their ideas have dominated the formulation of market rules over the past 20 years. As a result, European rules have meant that our cars have become increasingly complex, heavier, and more expensive, and most people can no longer afford them."

Elkann emphasized that sales of small cars in the European Union are at a disastrously low level and stated that formulating specific regulations for small cars is a "strategic" issue. "If this continues and the trend does not change, then in the next three years, we will have to make some difficult decisions about our production sites."

Earlier, the French research institute Gerpisa Automotive Research Center stated in a study that EU regulators should allow automakers to sell car models similar to Japanese kei cars in Europe, thereby providing consumers with affordable and environmentally sustainable electric vehicles (EVs).

Tommaso Pardi, director of the Gerpisa Research Center, said that if Europe were to establish this new category, it would enable European automakers to develop car models that helped them increase competitiveness in the 1980s, 1990s, and early 2000s. Researchers said that affordable and environmentally sustainable EVs would also help European automakers fend off competition from China and incentivize suppliers to innovate.