European car-giant chiefs say EU’s ‘disastrous’ regulations crippling business

The European car market was said to be in great peril because of “green” overregulation from Brussels, killing the industry.

Speaking with French newspaper Le Figaro on May 5, John Elkann and Luca de Meo, the bosses of the two rival vehicle manufacturers groups, the Dutch-based Stellantis and France’s Renault, jointly sounded the alarm.

“The European car market has been falling for five years now,” Elkann stressed. “It is the only one of the major world markets that has not returned to its pre-Covid level.”

The bosses stressed that only 15 million vehicles were sold across Europe last year, still down from 18 million in 2019.

Besides less overregulation, they asked that new rules should only apply to new models and that regulations should be bundled into packages.

They also demanded that a single, clear point of industry contact be established within the European Commission.

De Meo warned that by 2030, the price of a Renault Clio would have risen by 40 per cent — almost entirely due to regulation, which accounted for 92.5 percent of the increase.

Once a staple of the market, small city cars were now nearly extinct, with their share plummeting from 50 per cent several years ago to just 5 per cent today.

Multinational vehicle maker Stellantis has replaced several top managers, including CEO Carlos Tavares, after posting dismal results amid the growing economic crisis facing European Union car manufacturers. https://t.co/JJtPDNIyFt

— Brussels Signal (@brusselssignal) October 11, 2024

Elkann warned that the decline would continue, adding: “At this pace, the market could shrink by more than half within a decade.”

De Meo stressed the need to offer more affordable cars.

“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 said.

Renault and Stellantis said they prioritised the production of affordable vehicles made in Europe for European consumers.

According to de Meo, though, premium manufacturers including German marques BMW, Mercedes and certain Volkswagen brands were primarily export-driven.

“Europe matters to them,” he said, “but their priority is elsewhere. For two decades, their influence has shaped the EU’s regulatory framework.”

The outcome, de Meo argued, was a wave of “green” regulations that, while well-intentioned, had made European vehicles increasingly complex, heavier and unaffordable for the average consumer.

“Most people simply can’t buy these cars anymore,” he warned.

Luca de Meo, head of the Renault group, has said he fears European car manufacturers will suffer under stricter emissions rules for new cars imposed by the European Commission. https://t.co/7ZaV5zeO64

— Brussels Signal (@brusselssignal) September 10, 2024

Both men called for Italy, France and Spain to push back against Brussels and what they called its one-sided policies.

Elkann described current EU car sales levels as “disastrous” and urged policymakers to reconsider what he saw as the one-size-fits-all approach to regulation.

He called for tailored rules to support smaller, more affordable vehicles — a segment he viewed as strategically vital to Europe’s industrial base.

“If the trajectory doesn’t change,” Elkann said. “We’ll face tough decisions about our production footprint within the next three years.”

According to him, regions including China and the US were pursuing bold industrial strategies, while Europe remained stuck between weak national budgets and an underpowered European Commission.

“Everywhere else in the world, countries are protecting their car industry — except Europe,” de Meo stated.

Brussels Signal reached out to the EC for comment but at the time of writing had not received a reply.

The EU will sink under regulation. It must go for innovation and productivity instead, writes @ConradMBlack.

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— Brussels Signal (@brusselssignal) June 27, 2024