Renault, Stellantis bosses urge more favorable EU rules for small cars

PARIS (Reuters) -Stellantis Chairman John Elkann and Renault CEO Luca de Meo urged the European Union to adopt more favourable rules for small cars, warning that the declining profitability of small cars could force plant closures without changes.

In a joint interview in French newspaper Le Figaro, Elkann and de Meo added that France, Italy and Spain should lead the effort as the demand for smaller, more affordable cars is the highest in these countries. They did not give details on the rules they wanted to see apply to small cars.

"What we are asking for is a differentiated regulation for smaller cars. There are too many rules designed for bigger and more expensive cars, which means we can't make smaller cars in acceptable profitability conditions," de Meo said.

He added that Renault and Stellantis, which have a combined market share of 30% in Europe, are primarily focused on producing affordable cars in Europe, for European consumers.

But premium car makers, like Germany's BMW, Mercedes and some brands of the Volkswagen group, are more focused on export, said de Meo.

"(For them), Europe does count, but (their) priority is export. For the last 20 years, their logic has dictated market regulations. And the result is that European rules mean that our cars are ever more complex, ever heavier, ever more expensive, and most people simply can't afford them any more," Renault's CEO said.

Elkann, stressing that EU car sales were at disastrous levels, said having specific regulations for smaller cars was a "strategic" matter.

"At this rate, if the trajectory does not change, we will have to make some painful decisions for our production base over the next three years," he said.

(Reporting by Gilles Guillaume and Benoit Van Overstraeten; Editing by Cynthia Osterman)