Special Press Correspondence from Luxembourg – Dan Cărbunaru
The CEO of the Renault Group, Luca de Meo, who attended the EIB Group Forum in Luxembourg, pointed out during the panel “Decarbonization of the European industry” that “the center of gravity of the automotive industry has shifted to China”. He also called for a reconfiguration of the entire European car industry system to deliver affordable electric cars to Europeans.
“(…) Currently, the center of gravity of the car industry has shifted to China. The automotive sector and in particular new energy vehicles (hybrid, plug-in hybrid) are key points in the Made in China plan. Over 30% of new car sales in the world are produced in China (…) So now is the time for European car manufacturers to be humble and learn. We need to imitate our competitors, where they do better than we do”, Luca de Meo stressed in his speech in Luxembourg.
According to Renault’s CEO, European consumers are under pressure and their incomes are not keeping up with the prices of the European car market: “Consumers’ purchasing power is declining. Cars are getting more and more expensive these days. Europeans have a 25% lower real income compared to the U.S. (…) New cars have become a luxury, especially electric cars. The average age of the average buyer in Europe is 56 and in China 35. When you come up with electric vehicles which are 50% more expensive than combustion ones, then it’s no surprise to see demand stagnate below 15% in some markets.”
Luca de Meo also pointed out that the financial markets are not supporting European carmakers: “Europeans invest about five times less in equities than Americans, and when they do invest, they invest elsewhere, with about 300 billion in savings invested abroad annually, mostly in the US, and European companies are actually undervalued by the markets.”
In his speech, the CEO of Renault called for a new approach at European level for the automotive sector to solve Europe’s competitiveness problems and to be able to produce electric vehicles at an affordable price: “It is time for Europe to get out of this regulatory process that constrains the ability of companies to innovate and leads to price hikes (…) a new approach is needed to bring a system-wide solution, a holistic perspective and a European industrial strategy capable of addressing the whole ecosystem, even beyond, of course, the automotive.”
Earlier today, March 5th, the European Commission unveiled an action plan for the European automotive sector, which is at a critical juncture of rapid technological change and increased competition.
The Renault Group recorded strong growth and operating profit in 2024 and achieved a net financial position at record levels. Renault Group’s 2024 results exceeded financial expectations, according to the financial report.
The Dacia&Renault Group in Romania recorded investments of €4.2 billion between 2000-2024, reaching a turnover of €6.3 billion in 2023. Thus, a 2.1% share in GDP was reached in 2023. Export contributions of 10% were also recorded and 12,800 direct jobs and around 100,000 indirect jobs were created among suppliers. Last but not least, annual local procurement reached €2.5 billion.
“The Renault Group continues to improve its operational performance, implement its strategy and achieve its objectives. 2024 was an important year in which we reaped the first results of our unprecedented push to launch new models. This performance is the result of a profound transformation of the company, following a remarkable collective effort. We have transformed the Renault Group into a much more flexible, more efficient and more effective company. And we’re not stopping there! Thanks to the solid foundations built over the past 4 years and an agile and innovative mindset, we are preparing for the next chapter, pursuing profitable growth while investing for the future.” said Luca de Meo, CEO of the Renault Group.
