EU carmakers hail deal on emissions that opens door to the UK
It is a key step towards providing more breathing room for carmakers and some of their top suppliers
European car manufacturers expressed satisfaction with a deal reached between France and Germany, which offers relief to companies struggling with high costs and competition from China. The agreement, signed on October 16, addresses the concerns of automakers like Volkswagen, Stellantis, and Renault, as well as their key suppliers such as Valeo.
The pact effectively eliminates the ban on fuel-burning cars and provides more flexibility for European manufacturers to compete with Chinese brands like BYD and MG. The German-French agreement bolstered auto stocks, outperforming other sectors on Europe's Stoxx 600 index on Friday. Volkswagen and Stellantis saw a 2.8% increase, while BMW rose 3.5%.
Stefano Aversa, a vice-chair of AlixPartners, believes the proposal can help rebalance the competitive disadvantage European manufacturers face against Chinese ones. The deal also allows the UK to qualify for European subsidies under "Made in Europe" rules, provided Britain takes measures to protect its own industry from Chinese competition.
Renault CEO Francois Provost called for the UK and EU to work together, urging the UK government to stay within the European ecosystem. To qualify for "Made in Europe," the UK must limit imports of Chinese cars, according to Provost.
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