By Rachel More
PARIS, Oct 11 (Reuters) – Volkswagen chief Oliver Blume expects European policymakers to create the framework needed to make the German automaker’s restructuring a success, he said on Sunday, amid a push by Brussels to shield industry from low-cost Chinese competitors.
At an event titled “For Europe” on the eve of the Paris motor show, Blume said Volkswagen was working to reduce complexity across the company, whose brands range from mass-market VW to high-end marques like Porsche and Lamborghini, in what he called “the biggest transformation programme in our history”.
“This is a shared responsibility: The business community must become more competitive and create attractive opportunities, while policymakers must establish the right framework conditions,” he said.
PRICE WAR IN ELECTRIC VEHICLES
The auto show in Paris comes at a critical juncture for Europe’s top carmaker, which is undergoing a major restructuring and is racing to update its mass-market electric vehicle offering as Chinese competitors rapidly gain ground in Europe.
Battered by an EV price war and falling sales at home, Chinese automakers are aggressively expanding into Europe.
In his speech, Blume backed proposed “Made in Europe” rules to incentivise local manufacturing, and welcomed a deal between the EU and China that could cut Chinese imports of plug-in hybrid vehicles to the bloc by more than half.
“Those who sell here should compete under comparable conditions and create jobs and value here in Europe too,” Blume said at the event, attended by France’s minister for industry Sebastien Martin.
Battling to implement sweeping job cuts and threatening to close up to four plants in Germany, Blume also faces pressure from investors to prove his turnaround strategy goes beyond downsizing to make strides in product development and software.
A suite of affordable EVs across Volkswagen’s volume brands, including VW, Spain’s Cupra and the Czech Republic’s Skoda, will be on show at the event.
Volkswagen will also premiere its new ID. Tiguan electric SUV.
Volkswagen is by far Europe’s top-selling automaker, with a consistent market share of roughly a quarter over the last decade, even as Chinese entrants like BYD and Leapmotor build a following.
Still, Volkswagen is feeling the heat. Its CEO is among German auto industry leaders calling for a more protectionist EU stance, as fears of retaliation from Beijing give way to worries that brutal competition in China has spread to Europe.
EUROPEAN MARKET ‘COULD BECOME VERY UNPROFITABLE’
Gregor Williams, an analyst at Rhodium Group, said: “Industry has become a lot more concerned about the competitive challenge arising in China.”
The downturn in China’s domestic auto market is creating export pressure, Williams said.
“It’s one thing to lose revenues,” he added. “But if China also manages to export the price war, the European market could become very unprofitable.”
(Reporting by Rachel More; Editing by David Holmes)
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