The leaders of Stellantis and Renault are calling on the European Union to help boost production of small cars allowing lighter, less complex vehicles with better profit margins.
Stellantis Chairman John Elkann and Renault CEO Luca de Meo issue the call in a joint interview with French newspaper Le Figaro while attacking German premium brands’ overbearing influence on vehicle regulations.
They argue rules for manufacturing small cars must be altered to improve automakers’ operating profits if they are to avoid more production plants being shuttered.
The pair say France, Italy and Spain should lead the push for small cars in Europe because these markets enjoy strong demand for smaller, better value-for-money cars.
So far, we do not know the exact details of what changes to small-vehicle production rules the two executives would suggest, but some relaxation of vehicle standards would clearly help boost manufacturing profit margins for this sector.
“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,” de Meo tells the newspaper.
He adds that Renault and Stellantis, with a combined market share of 30% in the economic bloc, are primarily focused on domestic production of affordable cars for European consumers.
Meanwhile, premium carmakers, such as Germany's BMW, Mercedes-Benz and Volkswagen, are more focused on export, says de Meo. As such for them, while “Europe does count,” their priority is export.
Yet, their influence has dictated the direction of vehicle regulations, he says, adding, “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 anymore.”
Elkann stresses that EU car sales are at disastrous levels, and says having specific regulations for smaller cars is a “strategic” matter.
“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,” he says.
