Renault backs EU-wide local content rules with flexible approach
Renault Group supports calls from automotive suppliers for the introduction of European Union (EU)-wide local sourcing rules, the automaker’s CEO François Provost told Reuters.
However, Provost said this backing depends on the Local Content Requirements being defined in a more flexible way.
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Some suppliers have urged to mandate that 80% of components in vehicles sold in the EU be sourced locally, mirroring provisions already applied in the US.
These discussions, to counter competition from Chinese manufacturers, form part of the strategic dialogue launched earlier this year between EU institutions and the automotive industry.
The European Commission is expected to present a package of measures for the sector on 10 December.
Provost, however, said he did not expect such stringent rules to be in place by that date.
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By GlobalDataThe chief said: “We have to be realistic: complicated local content schemes per model, with mandatory parts, will never work.
“The only system that can work is local content averaged across a manufacturer’s sales. This would allow us to achieve our desired objective, which is to support the European sector and, above all, our suppliers.
According to Provost, a threshold set on this averaged basis – for example around 60% – could be more acceptable to other manufacturers, including German brands that have been wary of strict sourcing constraints.
These companies fear that rigid rules could restrict supplier choice and undermine their cost competitiveness.
Provost said: “Any other solution would end up not working and not being implemented … if that is what we want!”
The debate comes amid growing concern among European parts makers about production shifting out of the bloc.
The European association of automotive suppliers CLEPA has repeatedly warned that manufacturing is at risk of being relocated and has estimated that up to 350,000 jobs could be threatened by 2030.
Christophe Périllat, CEO of French components group Valeo, told investors that without binding European content rules, plant closures in the region would be unavoidable over time.
Perillat said: “If they do not decide for a European content per car minimum, then there will be significant, massive, delocalisation of the automotive industry from Europe to the rest of the world, let’s say from Valeo Europe to Valeo China for instance.”
Provost, who took over from Luca de Meo earlier this year when the latter departed to lead luxury group Kering, recently held talks with EU officials in Brussels.
He said: “The positive point is that I feel they understand the sense of urgency, the need to move forward, however I really get the impression that important points are still under discussion.”
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