Stellantis and Renault have publicly backed the United Kingdom’s inclusion in the European Union’s proposed car industry protection rules, advocating for the UK to be treated as one of the EU’s 27 member states. This move aims to safeguard European automotive interests amid increasing competition from Chinese manufacturers.
At the Paris Motor Show, Emanuele Cappellano, responsible for Stellantis’s European brands including Fiat and Vauxhall, and François Provost, Renault’s chief executive, called on the British government to consider imposing limits on Chinese car imports. They stressed that the UK’s automotive sector should be included in the EU’s forthcoming “Made in Europe” legislation, which is part of the EU’s broader industrial strategy to maintain competitive advantage in electric vehicle (EV) manufacturing.
Details of the Proposed EU Rules and UK’s Role
The EU’s Industrial Accelerator Act (IAA) intends to restrict subsidies and government procurement benefits to vehicles that meet strict criteria for European origin, requiring a significant percentage of parts and materials to be sourced from the EU. The objective is to ensure that public funds support European manufacturers rather than foreign competitors.
Nevertheless, if the EU rigidly insists on defining “European” as including only EU member states, the UK risks exclusion despite the country’s historical and ongoing ties to the European automotive market. Stellantis’s factory in Ellesmere Port, Merseyside, which produces small vans, exemplifies the UK’s automotive footprint that advocates say should be recognized.
Concerns About Chinese Competition
European carmakers face considerable pressure as they recover from low demand during the pandemic while investing heavily in the transition to electric vehicles. Concurrently, Chinese automakers have expanded their European presence significantly, with brands like Li Auto, GAC, and Chery participating prominently at the Paris event with plans for growth.
In response, the EU confirmed a limit on hybrid electric vehicles imported from China, setting a cap at 350,000 cars annually starting December. This quota is part of a recently agreed four-year deal aimed at halving China’s current 6% market share in Europe.
Both Provost and Cappellano argued that the UK should adopt similar measures to regulate Chinese car imports, with Provost emphasizing that operating within the European automotive ecosystem necessitates deep investment across manufacturing, research, and supply chains. Cappellano noted the difficulty of maintaining a strong industrial base while allowing the market to remain fully open to imports without restrictions.
Industry and Political Perspectives
Major European lobbying groups, such as ACEA and Clepa, support the UK’s inclusion in the “Made in Europe” framework despite resistance from some quarters within Europe, including France’s industry minister, who have been skeptical due to Brexit.
While London has so far resisted imposing its own tariffs on Chinese imports, the UK business secretary has indicated that the policy is under review. Stellantis and Renault stress that if the UK wants to remain competitive and aligned with the European auto industry’s ambitions, a deal with the EU is essential, including coordinated policies on imports and industrial investment.
Additional Considerations
Cappellano expressed reservations about expanding the scope of Europe to include countries like Japan, Turkey, or Morocco for the purpose of these rules. He also recommended extending the timeline until 2030 for sourcing batteries within Europe, citing China’s dominance in the global battery supply and the time required to develop European production capacities.
