Europe risks losing its automotive industry, says Francisco Riberas, executive director of Gestamp. The head of the Spanish automotive components supplier notes that European production remains 20-25% below its peak in 2017, while Chinese car manufacturers have gained market share thanks to lower costs and more advanced electric vehicle technologies.
"Europe's prosperity won't last long unless it can save its automotive industry and establish profitable relationships with Chinese automakers opening factories in the region," he explains in an interview with the Financial Times, which is being monitored by Kallanish. "The European automotive industry faced an existential crisis as it was "sleeping" while China was ramping up production of electric vehicles and the United States was installing import barriers against Chinese cars. Thus, the loss of the automotive industry could mean the loss of the industry itself in Europe, and this would have far-reaching consequences."
Riberas supports Chinese investments in Europe, but argues that Asian manufacturers should increasingly purchase components locally rather than import them. Otherwise, Europe risks becoming more than just an assembly base.
"It's not the most important thing who makes cars. The important thing is that they are produced here and create jobs," says Gestamp CEO. He emphasizes that each workplace in a European automobile plant typically provides three jobs in European component manufacturing.
The CEO also noted that European manufacturers face less favorable financing conditions than their Chinese competitors.
"While the European automotive sector is not considered attractive to the financial world, Asian companies have access to abundant financing, which means they often invest with zero cost of capital," he notes.
Riberas supports the proposed EU Law on Accelerating Industrial Production, including a requirement for local content, but says the automotive sector also needs broader support through investment, technology, digitalization and artificial intelligence.
"It's not just about applying a protectionist approach. Every day more and more companies go bankrupt, and once this industrial base is lost, it will not be returned," says Riberas FT.
Author: Todor Kirkov Bulgaria
