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De Meo: European cars are too big, upmarket and expensive

From the Geneva Motor Show, Renault Group's number 1 explains its 'making small cars' strategy

Luca De Meo

By: Alessandro Lago

Published by: Brian Potter

Feb 28, 2024 at 5:33am ET

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It is a known fact that buying a new car has become a luxury for the average person. But when the CEO of a car manufacturer reminds us of this at a motor show, the relevance is different.

All the more so since Luca de Meo lays some of the blame for this disproportionate rise in car prices at Europe's doorstep, due to regulations that have allegedly 'pushed up the product mix' over the past twenty years.

Who gained? According to De Meo, those who build premium cars (read the German manufacturers) and who, moreover, would have brought factories to Eastern countries with European money to the detriment of Italy, Spain, Portugal and France.

We need small cars

'We need to go back to making small cars that people can buy'. De Meo pays lip service to this and not without a conflict of interest, given that he is going to sell these cars with a plan that envisages at least three new compact models, starting with the Renault 5 presented with great fanfare at the Geneva Motor Show 2024, which will be followed by the Renault 4 and Twingo 'remakes'.

However, during the meeting with the Italian press organised on the sidelines of the Swiss show, the Italian manager added a number of nuances on what would be the Renault Group's competitive advantage in 'small cars', namely the new platform developed for the Twingo.

Nuova Renault Twingo elettrica, il debutto della concept

Renault Twingo Concept

"We are making a platform for the Twingo that allows us to profitably sell a car at less than €20,000 in price, a new generation. A good part of it is in the platform of the Renault 5, the Ampere Small. So we take it, shorten it, change the battery, engines, power electronics, all these things, and we have the possibility of reducing the cost by 40-50% between now and 2026 compared to a Renault 5. This is quite unique, we try to develop it in two years, it would be a record."

We were the fastest, but we are open to collaboration

The issue of design speed for De Meo comes even before the reduction of production costs and would be helped by, among other things, artificial intelligence applied to internal processes. And it was by leveraging Renault's competitive advantage that De Meo reiterated what he had anticipated in other public statements:

"I say, to be able to go back to making small cars that people can buy in Europe, maybe it's worth associating us to share investment costs, capacity utilisation. We are very open and we talk to everybody, we have something that nobody else has and we have a production capacity (...) Whoever wants to, be my guest, you can take over."

Renault 5 E-Tech Electric

Renault 5 2024

Renault 4EVER Trophy Blu Ile de France (2023)

Renault 4ever Trophy Concept

We need alliances on city cars as in the past

The subject of cooperation between European manufacturers is particularly dear to the Renault Group's number one and should not be confused with the rumours of possible mergers with Stellantis that have circulated in recent weeks and have been repeatedly denied. According to De Meo, it would be enough to copy from what has been done in the past:

"I remember when I was at Toyota, we launched the Aygo, C1 and 107 programme with PSA in the Czech Republic. When there were Fiat 500, Ford Ka and other models in that segment. It's time to do it again, otherwise we won't be able to afford and allow small cars to be sold'.

Toyota Aygo x-style x-cite

The Toyota Aygo born in 2014 from the collaboration with Citroën and Peugeot

Citroen C1

Peugeot 108 MY 2018

Peugeot 108

The dig at German manufacturers

To reinforce his 'small car manifesto', De Meo cites a study by researcher Tommaso Pardi (you can download the 2022 publication here) that highlights the contradiction of European regulations that have allegedly pushed the Old Continent's industry to build bigger, heavier and more expensive cars over the past two decades.

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'Those who gained,' adds De Meo, 'were the premium manufacturers, basically. Then on the other side they put all the money from the European Community in factories in Eastern Europe. The Germans went there to produce at low costs and sell at high prices and then they got bingo. They emptied Italy, they emptied Spain, they emptied Portugal, they emptied France. This is what happened'.

So De Meo concludes, 'we have to go back to having a balanced mix of premium cars and cars that people can buy. To date there is nothing that works apart from Dacia, basically, but Dacia is not produced in Western Europe.

Cars Grow More And More:

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