Volkswagen chief urges EU to protect European car industry from China

The head of Volkswagen Group Oliver Blume supported the initiative of the European Union to strengthen the European industry and spoke in favor of creating equal conditions for competition with Chinese car manufacturers. The head of the company believes that the new rules should encourage businesses that place production and create jobs in Europe.

Blume outlined his position in Paris on the eve of the car show. European companies that invest in the regional economy and create added value in Europe should benefit from the distribution of state support.

The European Commission’s proposals, known as the Industrial Acceleration Act, link access to subsidies and public procurement to the share of European materials and production processes. The initiative aims to strengthen the position of local manufacturers amid the growth of Chinese car brands and increased competition in other industries.

The head of Volkswagen noted that the European automotive industry faces several problems at once. Among them are the high cost of energy, lower demand due to inflation, the need to accelerate the development of new models and pressure from Chinese competitors.

According to Blume, Europe is experiencing serious difficulties in competition. The company does not oppose open markets, but considers it necessary to protect the economic interests of the region and preserve its technological independence.

Volkswagen itself is undergoing a massive business restructuring. The company is implementing a transformation program, which may include the reduction of up to 100 thousand jobs. Blume called it the largest change program in the history of the concern.

Additional measures are aimed at reducing costs and increasing profitability. Volkswagen’s chief financial officer, Arnaud Antlitz, said the steps were necessary to strengthen the company’s competitiveness and maintain its position in the German market.

The group also plans to reduce its global lineup of models from 150 to 75, including Audi and Skoda. It is expected that the reduction in the number of models will simplify the production and operation of the dealer network, as well as reduce the cost of cars.

Amid discussions about protecting the European car industry, the European Union announced an agreement with China to halve sales of Chinese hybrid cars in the European market. Brussels fears that further expansion of the Chinese auto industry could weaken certain segments of the European industry.

Volkswagen is taking part in the Paris Motor Show for the first time in two decades. During the event, the company unveiled a production version of the all-electric Tiguan ID, an electric variant of its popular family SUV.