LThe European automotive industry is experiencing a severe crisis. For many, the cause is clear – a ban on new combustion engine cars by 2035 in Europe. However, this diagnosis is incorrect for two important reasons. If our automotive industry is suffering, it is primarily due to a shrinking domestic market and loss of export competitiveness, particularly in China, which has been by far the world’s largest car market.
Currently, the number of car sales in Europe is 6 million fewer than in 2019. The reasons for this decline are varied, but there is a fundamental explanation: the significant increase in car prices, regardless of engine, far exceeds average inflation. Between 2018 and 2024, the price of a new car will increase by 40%, from 26,000 euros to 36,700 euros. This strong trend is not the result of chance. Beyond the regulations regarding road safety, which objectively contribute to the increase in car weight, manufacturers themselves manage the decline in sales volumes: by preferring a value strategy – selling fewer, but more expensive cars – they maximize their margins in the short term, while weakening the industrial base.
Carlos Tavares (former CEO of Stellantis) summed it up bluntly by saying: “I prefer value over volume. » Fewer cars produced means fewer jobs in factories, fewer orders for subcontractors and vehicles becoming unaffordable for the middle class. The sociological base of new car buyers continues to shrink, giving rise to growing frustration among people who can no longer afford new cars. Therefore, the priority is to refocus on strategies that encourage manufacturers to produce cars that Europeans can afford! This is why I support the European Commission’s plans, supported, for example, by Renault and Stellantis, to develop European-made zero-emission small cars.
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