Volkswagen boss backs EU plan to bolster domestic European industry

Oliver Blume, the CEO of Volkswagen, has expressed support for EU proposals to strengthen the domestic European automotive industry. Blume argues that European car manufacturers need to compete on equal footing with Chinese rivals. Speaking in Paris ahead of the motor show, he emphasized that the "Made in Europe" rules from the EU must incentivize genuine value creation within Europe.

The proposed EU rules, known as the Industrial Accelerator Act, aim to curb the surge of lower-priced Chinese brands and protect European industries. Volkswagen is among the hardest-hit European companies, with the German automaker planning to cut up to 100,000 jobs as part of its largest transformation program yet. Blume highlighted the numerous challenges facing European carmakers, including high energy costs, lower demand due to high inflation, accelerated development cycles, and intense competition from China.

EU and Chinese officials recently reached a landmark agreement to limit the sales of hybrid cars in the European Union by half, as concerns grew over the potential adverse impact on European car manufacturers. Blume acknowledged that Germany's automakers are willing to compete with Chinese manufacturers, but he stressed that the European Union should strive to reward businesses with a significant European presence.

He stated, "Companies that invest and develop in Europe must see a clear benefit," and added that those selling in Europe should follow comparable conditions for competition and job creation.

Blume also expressed confidence in open markets, but stressed the importance of standing up for European interests. He emphasized the significance of a strong industrial base, which goes beyond mere economic success and protects technological independence. Volkswagen is making its debut at the Paris show after a 20-year absence.

Blume emphasized the close ties between France and Germany, while hosting the French industry minister, Sébastian Martin. VW's CFO, Arno Antlitz, explained that the job cuts were necessary to increase economic power by boosting profitability and defending the company's home turf. The company plans to reduce the number of models it offers worldwide from 150 to 75 across brands such as Audi and Škoda, aiming to decrease complexity in its factories and dealerships while cutting costs per vehicle.

VW recently unveiled the production version of its ID Tiguan, an electric variant of its best-selling family SUV.