The boss of Volkswagen has backed EU proposals to boost its domestic industry, arguing European carmakers need to be able to “compete under comparable conditions” with Chinese rivals.
Oliver Blume said “Made in Europe” rules from the EU “must reward real value creation in Europe”, speaking in Paris before the motor show this week.
The rules are aimed at countering the rapid rise of Chinese brands in Europe in the automotive sector and other important manufacturing industries. Lower-priced Chinese manufacturers have prompted a crisis in several industries.
Volkswagen is among the most-affected European companies. Germany’s biggest carmaker has launched a brutal plan to cut as many as 100,000 jobs. Blume said it was the “largest transformation programme in its history”.
The proposals for the Made in Europe rules, formally known as the Industrial Accelerator Act, would limit subsidies and public procurement to products with a large proportion of their materials and manufacturing coming from within the EU.
Blume listed a litany of challenges facing European carmakers, saying: “Europe is under enormous competitive pressure.” These included: high energy costs; lower demand as consumers struggle with high inflation; the need to be quicker to develop cars; and intense competition from China.
On Friday, the EU said it had reached a landmark deal with China to “halve” its sales of hybrid cars in the bloc amid fears surging sales could kill off parts of the European car industry.
Blume said Germany’s carmakers were happy to compete with Chinese rivals, but said the EU should try to reward businesses with significant European footprints.
“Companies that invest and develop in Europe must see a clear benefit,” he said.
Referring to Chinese companies, he added: “Those who sell here should compete under comparable conditions and create jobs and value here in Europe, too.
Blume added: “We believe in open markets, but openness also means standing up for our own interests in Europe. Because a strong industrial base means more than economic success. It protects technological independence.”
Volkswagen is exhibiting at the Paris show for the first time in 20 years. Blume emphasised the “close ties between France and Germany”, while hosting the French industry minister, Sébastian Martin.
Arno Antlitz, VW’s chief financial officer, said the job cuts were necessary to “increase our economic power” by increasing profitability and allowing it to defend its “home turf”.
The company is cutting the number of models it offers worldwide from 150 to 75 across brands including Audi and Škoda. It hopes the move will reduce complexity in its factories and for dealers, cutting the cost of each vehicle it makes.
On Sunday, it revealed the production version of its ID Tiguan, an electric edition of its bestselling family SUV.