European automakers urge support as VW warns of 'enormous pressure'

By Rachel More and Giulio Piovaccari

PARIS, Oct 13 (Reuters) - European automakers urged policymakers on Tuesday to do more to help them cope with Chinese competition and the shift to electric vehicles, as a drop in third-quarter deliveries at BMW and Stellantis underscored the pressure on the industry.

Europe's mass-market car industry is under "enormous pressure", Volkswagen CEO Oliver Blume told an event taking place alongside the Paris motor show, renewing calls for more flexible regulation and incentives to support local manufacturing.

The European Union announced a deal on Friday that could cut Chinese exports of hybrid vehicles to the bloc by more than a half, addressing concerns among European automakers that Chinese rivals, grappling with weak demand at home and largely shut out of the US market, could flood Europe with low-cost cars.

While broadly welcoming the deal, European manufacturers say policymakers need to do more to help them compete, including tackling high energy costs and supporting the transition to EVs.

Stellantis CEO Antonio Filosa said Europe needed more EV battery factories. 

Renault's CEO Francois Provost, meanwhile, warned the company may have to cut European production by about 300,000 vehicles if policymakers do not show flexibility over 2030 targets for automakers to cut carbon emissions.

COMPLEX RELATIONSHIPS

The pressure on European carmakers was highlighted by BMW, which reported a 6.4% drop in global deliveries in the third quarter as sales in China fell by a quarter.

Stellantis, meanwhile, said third-quarter shipments fell 1%, hit by a summer production shutdown in North America. 

One bright spot was a 10% rise in European shipments, helped in part by vehicles from Chinese partner Leapmotor, highlighting the industry's complex relationships as European and Chinese manufacturers compete fiercely while also tapping each others' expertise.    

Both sides are using the Paris show to launch a wave of new models as that battle for the European market intensifies.

With Chinese manufacturers combining increasingly sophisticated technology with competitive prices, some European automakers are fighting back with an asset their rivals lack: heritage. Stellantis unveiled an electric version of Citroen's classic 2CV, while Volkswagen's electric Polo draws heavily on the Golf's 1980s heyday.    

The stakes are high.  

"We cannot build our future on export profits alone. Our European businesses must be profitable, resilient and competitive," Volkswagen's Blume said.

"We must secure Europe's industrial base."

(Additional reporting by Gilles Guillaume and Nick Carey. Editing by Mark Potter)