EU in denial over car industry crisis: German auto lobby

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The German car lobby blasted Brussels on Tuesday, accusing the European Union of failing to appreciate the severity of the crisis facing the continent's automotive industry and of a lack of action.

Presenting a survey that showed almost three-quarters of German automotive firms planning to delay or cancel investments into their home market, Hildegard Mueller, head of the VDA industry group, said the EU was in denial.

"All too often, Brussels presents a dangerous mixture of denying reality and illusions about its own relevance," VDA head Hildegard Mueller said at a press conference. "But reality catches up with us time and again."

Europe's car industry was in crisis even before US President Donald Trump last year slapped tariffs on auto imports, investing billions into electric vehicles (EVs) while facing tepid demand and fierce competition from Chinese rivals like BYD in the segment.

Volkswagen, Mercedes-Benz and BMW have been stung by years of plummeting sales in China and France's Stellantis, which operates the Jeep and Fiat brands, last week reported a bumper 22-billion-euro hit ($26 billion) after writing down the value of its EV business.

Promises to make carmakers' lives easier by easing bureaucracy had not been fulfilled, Mueller charged.

She said the bloc's recent half-hearted easing of a ban on new petrol engine cars by 2035 showed it was only paying "lip sevice" to deregulation.

"(EU commission president Ursula) von der Leyen promised to get rid of bureaucracy at the beginning of her second term," Mueller said.

"In 2025, the European Union introduced more legislation than at any point in the last 15 years, four laws a day. We cannot keep up with implementing them," she added.

Asked about a push from the EU to boost industrial production on the continent as part of a mooted "Made in Europe" strategy -- pushed by EU industry chef Stephane Sejourne and backed by over 1,000 CEOs and business leaders -- Mueller said the plans threatened to heap more bureaucracy on the car industry and hurt its sales abroad.

"Our supply chains are very closely intertwined internationally," she said. "Cutting ourselves from the rest of the world also presents the danger of other countries taking countermeasures."