Europe risks losing its automotive industry, says Gestamp’s executive director Francisco Riberas. The head of the Spanish auto component supplier indicates European production remains 20-25% below its 2017 peak, whilst Chinese car manufacturers have gained market share through lower costs and more advanced EV technology.
“Europe’s wealth won’t last unless it can salvage its auto industry and establish a beneficial relationship with Chinese carmakers opening factories in the region,” he explains in an interview with the Financial Times, monitored by Kallanish. “The European car industry faced an existential crisis, having been asleep while China stole a march in electric vehicles and the US threw up import barriers against Chinese cars. So, losing the automotive industry could mean losing industry itself in Europe, and that would have far-reaching consequences.”
Riberas supports Chinese investment in Europe but argues that Asian manufacturers should increasingly source components locally rather than importing them. Otherwise, Europe risks becoming more than an assembly base.
“Who makes the cars isn’t the most important thing. What’s important is that they’re made here and create jobs here,” Gestamp’s ceo says. He emphasises that each job in a European vehicle plant typically supports three jobs in European component manufacturing.
The ceo also said that European manufacturers face less favourable financing conditions than their Chinese competitors.
“While the European auto sector is not considered attractive to the financial world, Asian companies have access to abundant funding that means they are often investing with a zero cost of capital in effect,” he points out.
Riberas supports the EU’s proposed Industrial Acceleration Act, including local-content requirement, but says the automotive sector also needs broader support through investment, technology, digitalisation and artificial intelligence.
“It’s not just about taking a protectionist approach. With each passing day, more companies are going under, and once that industrial base is lost, it won’t come back,” Riberas tells FT.
