Volkswagen CEO Oliver Blume has warned that Europe’s mass-market automotive industry is under increasing pressure from Chinese competition and changing market conditions, renewing calls for more flexible regulation and incentives to support local manufacturing.
Speaking at an event alongside the Paris Motor Show 2026, Blume said European automakers must find ways to produce affordable electric vehicles while controlling costs and maintaining profitability. Volkswagen, Stellantis and Renault together account for more than 60% of European car production, according to Reuters.
We cannot build our future on export profits alone. Our European businesses must be profitable, resilient and competitive.
Blume said the industry needed to protect its manufacturing base as competition intensifies and the transition to electric vehicles reshapes the market.
We must secure Europe’s industrial base.
Chinese Competition and Pressure on Margins
European automakers are facing growing competition from Chinese brands, which are increasing their presence at the Paris Motor Show as they seek expansion opportunities amid a slowdown in their domestic market. The arrival of more Chinese manufacturers has raised concerns among European carmakers about the impact of lower-priced imports.
Volkswagen, Stellantis and Renault are particularly exposed to the mass-market segment, where manufacturers depend on high sales volumes but typically operate with relatively thin profit margins.
This business model is under enormous pressure in Europe.
Blume reiterated Volkswagen’s call for policymakers to provide more flexible regulatory frameworks and incentives for local manufacturing to help European manufacturers remain competitive.
Automakers Focus on Affordable Electric Vehicles
Volkswagen, Stellantis and Renault are using the Paris Motor Show to present new electric vehicle models as demand for the technology gains momentum in Europe. Higher fuel prices and a broader selection of lower-cost electric vehicles are among the factors supporting interest in the segment.
However, manufacturers must balance the development of affordable models with cost management and the financial demands of transitioning their production operations.
Blume’s comments come as Volkswagen pursues a major restructuring programme involving tens of thousands of potential job cuts and possible factory closures, amid opposition from labour unions.
The broader challenge for European automakers is to sustain domestic manufacturing and employment while responding to competition from Chinese brands, shifting consumer demand and regulatory requirements.
