(dr) Stellantis
Peugeot E-5008
How to survive world competition? Here are 3 factors that can help the European industry straighten.
Even before US President Donald Trump announced a 25% rate on all imported cars, European car manufacturers were already facing a number of challenges. Sales have fallen and manufacturers face increasing costs, while Chinese competitors quickly earn market share.
On the eve of the rate announcement, the combined market capitalization of the five largest industries in Europe (Volkswagen, Stellantis, Mercedes-Benz, BMW and Renault) was about 187 billion euros: less than a quarter of Tesla’s value.
However, The five European giants sell 25 million vehicles a year, representing One third of all cars acquired around the world. Tesla, despite having lost half of its market value since the beginning of the year, can barely enter the top 15 of the industries. It sells less than a third than Stellantis alone.
This means essentially that Financial markets no longer believe that European car manufacturers can profit from a business that dominated almost a century ago.
A private car is used in only 5% of its potential for life. It remains stopped and occupying a valuable parking space during the other 95%. It carries on average only 1.2 passengers, using only a quarter of its capacity.
About 80% of cars are still moved to fossil fuelswhich cost significantly more than electricity per mile. This despite the scale economies that are reducing the purchase price of an electric vehicle (EV) rechargeable.
These issues strongly affected European and American automotive industries. However, there may be a clear way to follow. Here are three ideas to bring the European Auto Industry to the 21st century, proposed by Francesco Grillo analyst.
1. Become more competitive, attracting electric rivals
China has already guaranteed a technological advantage in this field – similar to the domain that Volkswagen had when it established its first factories in Shanghai.
The same week as the Byd announced that he exceeded Tesla in terms of revenue Of electric cars, the Chinese car manufacturer also revealed that it developed a system to load an electric car with 400 km (249 miles) of autonomy in five minutes.
BYD and other Chinese manufacturers export less than 10% of their products for the EU. They will survive any import tax that the EU imposes on them. Instead of fearing Chinese automakers, the EU should encourage them to establish production facilities in the bloc, promoting competition and innovation within their borders.
2. Sell services and symbols
New business models should focus on SALE OF SERVICESas well as objects. This trend prevails in many industries, and car manufacturers should adopt it to develop partnerships with organizations that can make driving a less expensive experience. The technology of autonomous conduction, For example, it offers the opportunity to bring vehicle sharing to a much broader customer base.
And European car manufacturers should value their history as Symbol of experience and longevity. This is not much different than the Kodak Chamber manufacturer has done to survive the digital revolution. It is remarkable that Ferrari now is worth more than its “sister”, Stellantis.
3. Governments must be involved
For transformation to be successful, governments must play an important role. It is not about supporting European industry with subsidies or treating cars as the new steel industry. Yes, it is about conceiving and implementing the necessary infrastructures for the future of mobility.
A century ago, European cities were completely restructured to transition from horsepower carriages to the first Fiat Topolinos who left the Mirafifi factory.
Today we need new charging networks and exclusive lanes for electric and autonomous vehicles. This is already happening in China, clearly showing that without significant modernization of infrastructure, innovation does not happen.
O Impact you give rates
Trump’s tariffs will hurt – a lot. Volkswagen, which exports two thirds of its production outside Western Europeit will be the most harmed, after assuming that their “people of the people” could be sold indiscriminately to different populations.
However, the age of tariffs should serve as a warning, not as a death sentence. The European automotive sector must use this challenge to reinventas it did in the postwar.
In the 1960s, countries such as Italy and France combined industrial strategies similar to those of Fiat and Renault with a vision of the future. This alignment between industrial ambition and pragmatic policies was a fundamental part of postwar reconstruction.
Now, European leaders must embrace the same spirit of bold and future innovation to build a Transport system capable of defining global patterns. The car crisis is not just a specific industry issue. It requires a rebirth of both vision and pragmatism.
