Spotlight Falls on European Car Industry Challenges in Paris
The Paris Motor Show made its notable return to the exhibition center in Port de Versailles last week for this biennial event. While the number of automakers present was not as high as in the pre-pandemic era, the event saw a significant improvement in OEM participation compared to 2022.
In 2024, a considerable emphasis was placed on new energy solutions. Many automakers showcased new products embodying current trends in Europe, mirroring key challenges facing the automotive sector in the region.
Local brands were prominently represented. This is hardly surprising, considering that Peugeot, Citroën, Renault, and the adopted brand Dacia secured four of the top five passenger car brand positions in France during the first nine months of 2024. Most of these brands focused their announcements on expanding their battery electric vehicle (BEV) portfolios, with many automakers seeking to meet forthcoming EU light-vehicle CO2 targets set to be introduced from 2025.
Peugeot mainly highlighted enhancements to its existing lineup, including extended-range versions of the battery electric e-3008 and e-5008, alongside the new battery electric e-408. Citroën, however, introduced a concept for the next-generation C5 Aircross, which for the first time will feature a battery electric powertrain. Both brands are leveraging the STLA Medium platform, crucial for Stellantis’s future European compact and mid-size products.
On the other hand, Renault Group is focusing on standalone BEV models rather than modifying existing passenger cars. Their latest launch drew from their rich history, with the Renault 4 E-Tech sub-compact crossover reviving the classic Renault 4 from 1961 to 1992. It follows the Renault 5 E-Tech sub-compact hatchback, introduced at the Geneva Motor Show (Switzerland) in February, both utilizing the modern AmpR Small platform with advanced technological features combined with nostalgic styling.
Paris also witnessed the unveiling of the Alpine A390_β concept by Renault Group’s Alpine, heralding a new mid-size crossover that aims to expand the brand’s market presence when it launches next year. This move helps the parent company capture customers at a higher price point. Audi introduced the sleek Q6 e-tron Sportback mid-size battery electric crossover, while BMW Group’s Mini presented the higher-performance John Cooper Works Electric version of the Aceman crossover and a similarly enhanced Cooper hatchback.
The event showcased how OEMs are leveraging crossover and SUV body styles to diversify their offerings and attract more consumers. Beyond battery electric models, there were also notable internal combustion engine (ICE) releases, such as Dacia’s Bigster, which expands the brand’s lineup as its largest model to date. Volkswagen brought forward the Tayron, a spacious new crossover positioned between the Tiguan and Touareg in Europe.
Alongside European manufacturers, several Chinese automakers presented products aimed at boosting their presence in the European market. These offerings included BEVs and SUVs of various fuel types. A significant participant in this endeavor is Leapmotor, linked to Stellantis through their investment in the Chinese automaker and majority stake in the Leapmotor International joint venture. Leapmotor unveiled several models, including the new battery electric B10 compact crossover, built on the innovative LEAP 3.5 architecture featuring advanced driver assistance systems, a customizable digital cockpit, and intelligent driving features.
Another brand seeking to generate interest before fully entering Europe is GAC Group, with its AION V battery electric compact crossover. Meanwhile, BYD plans to expand its lineup in the region with the larger Sealion 7 battery electric crossover. Both Xpeng and Skywell also made significant debuts at the event.
The push from Chinese automakers persists despite the European Commission’s anti-subsidy investigation, which could lead to tariffs of 7.8% to 35.4% on imported BEVs from China, set to be imposed alongside an existing 10% passenger car import tariff starting November 2024. Forecasts indicate that these tariffs may temper the expected rise of Chinese-built passenger car imports to the EU, yet volumes are predicted to grow for several years due to an increasing array of Chinese brands and products, as well as anticipated shifts in BEV shipments being replaced by other powertrain types.
S&P Global Mobility forecasts an increase in EU registrations of Chinese-built passenger cars from 508,700 units in 2023 to 563,100 in 2024. A significant surge is expected in 2025, reaching 812,700 units, peaking at 977,600 units by 2027 before declining in subsequent years. Changes in vehicle sourcing, bolstered by investments in and near the EU, are partly responsible, including BYD’s plans to construct vehicles in Hungary and Turkey.
Regarding the broader EU passenger car market, S&P Global Mobility anticipates a relaxation of CO2 targets by 2035 and a potential delay in the effective end-of-sale deadline for ICE passenger cars until 2040. In the short term, passenger car registrations in the EU are expected to modestly increase by 1.9% year-over-year to 10.80 million units in 2024. Current registrations remain approximately 12.5% below the five-year average from 2015 to 2019, prior to recent disruptions. Predictions suggest EU passenger car registrations will stay below 11 million units in 2025.
