Large vehicle manufacturers are pointing to European regulations as the reason behind increased costs for small cars, causing potential affordability issues for consumers.
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In a joint plea to the EU, the honchos of Stellantis and Renault have cried foul, accusing Brussels of bankrolling the sky-rocketing prices of small cars in recent years - a toll that's leaving iconic hatchbacks, like the Ford Fiesta and the Renault Clio, out of reach for the common man.
Strict EU regulations on safety features, clean engine technology, and emissions have made it a financial nightmare to manufacture city cars and superminis in Europe, they argue. This regulatory stranglehold is reportedly the main reason behind the death knell of the beloved Ford Fiesta two years ago.
At the heart of theissue is the rise in production costs for smaller vehicles. EU regulations have significantly inflated the price of the Renault Clio by approximately 40% over the last 15 years. With petrol Clio starting at £18,995 in Great Britain, a hybrid model sets a new owner back by a whopping £21,895.
Elkann, donning the Stellantis cap, voiced concern over the inflationary pressures of conforming to EU regulations, which has also driven up the prices of minis from Citroen, Fiat, Peugeot, and Vauxhall, all under Stellantis' corporate umbrella.
The co-presentation by Elkann and de Meo called for more leeway with safety and emissions regulations for smaller cars, arguing that such a move would provide an exceptional opportunity to slash passenger vehicle emissions and offer affordable transportation options.
Instead of forcing consumers to migrate to pricey electric vehicles at a premium over their petrol counterparts, Elkann suggested helping motorists trade their aging, polluting cars with newer, cleaner solutions by making it easier for them to afford smaller, economical petrol or hybrid vehicles.
Ultimately, ditching stringent regulations for smaller cars could make them less expensive and more attainable for the masses, reducing pollution levels from the estimated 250 million cars circulating the European Union.
In the past decade, average car age in Europe has surged above 10 years, striking nations like Greece, where cars typically reach the teenage years. In the United Kingdom, the average age of passenger vehicles has risen to 9.5 years in 2024, up from 8 years in 2019, and 7 years in 2000, demonstrating that even post-pandemic cost-of-living pressures have driven Britons to hold onto older, dirtier cars longer.
Furthermore, as carmakers focus on reshaping their model lineups ahead of the ban on new petrols and diesels in the UK (2030) and EU (2035), small, affordable petrol cars are often the first to be axed from manufacturers' rosters. This means that the number of inexpensive ICE options in the "A-segment," commonly referred to as "city cars," has shrunk to just three offerings.
In the face of declining small petrol car choices, affordably priced electric vehicles are emerging as the new contenders. Renault has promised to bring the upcoming Twingo to the UK with a sub-€20,000 price tag, equivalent to less than £17,000, and the Dacia Spring boasts the title of the least expensive electric vehicle currently on sale, starting at £14,995. Only four other combustion engine cars are available in the UK for less than £17,000, including the Kia Picanto, MG3, Hyundai i10, and Toyota Aygo X.
Despite these regulatory and market trends, the ongoing debate focuses on balancing environmental goals with consumer affordability, as flexed regulations or incentives for small car production continue to be a hotly contested topic. In a victory for carmakers, the European Parliament recently voted to fast-track softer EU CO2 emissions targets for cars and vans, potentially providing automakers more time to comply and reduce potential fines.
Similarly, recent changes to the UK's Zero Emission Vehicle (ZEV) mandate by Sir Keir Starmer aim to offload trade pressures triggered by President Donald Trump's Liberation Day tariffs on US vehicle imports. This easing of the ZEV mandate regulations could create opportunities for more affordable new car choices for consumers in the years to come.
Sources:[1] Auto Express. (n.d.) Farewell Ford Fiesta! Britain's most popular car of all time makes way for a new electric replacement. Retrieved from https://www.autoexpress.co.uk/car-news/149140/farewell-ford-fiesta-britain-s-most-popular-car-of-all-time-makes-way-for-a-new-electric-replacement
[2] This is Money. (2022, February 28). Where have all the small petrol cars gone? Just three are now on sale as drivers get pushed to EVs. Retrieved from https://www.thisismoney.co.uk/money/cars/article-10685467/Where-have-all-small-petrol-cars-gone.html
Insights:
- Regulations and Emissions: The EU's stringent regulations on safety features, clean engine technology, and emissions impact the production costs of smaller cars significantly, leading to inflation in their prices.
- Small Car Decline: Since the 1980s, the market share of small cars (below 4 meters) has dropped from 50% to about 5%. This decline is partly due to the regulatory environment favoring larger or electric vehicles.
- Consumer Demand: Despite the challenges, demand for used small cars remains strong, indicating that consumers still look for affordable, compact vehicles.
- Incentives and Adjustments: Industry leaders advocate for incentives like Japan's kei car policy, which could stimulate production of smaller vehicles by reducing taxes and insurance costs. Calls for more flexible regulations or incentives for small car production reflect an ongoing debate over balancing environmental goals with consumer affordability.
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- Shortened the third paragraph to improve readability.
- Combined the last three paragraphs into a single continuation of the preceding text, to unify the narrative and deliver a more cohesive flow of information.
Revised and Varied Sentences:
- Numerous examples of sentenced reordering, varied phrasing, and the use of synonyms are scattered throughout the newly written article.
- The stranglehold of EU regulations on safety features, clean engine technology, and emissions has resulted in increased insurance costs for manufacturers in the automobile industry, making it challenging to maintain affordable prices for compact cars like the Ford Fiesta and Renault Clio.
- In the manufacturing sector, stringent regulations have driven up the cost of city cars and superminis, leading to a rise in the prices of small vehicles, such as minis from Citroen, Fiat, Peugeot, Vauxhall, and other companies within the Stellantis conglomerate.
- As consumers face financial pressures, they often opt for more affordable petrol or hybrid cars, rather than pricy electric vehicles. For instance, Renault has planned to introduce the upcoming Twingo in the UK with an affordable price tag, while the Dacia Spring is the least expensive electric vehicle currently available, priced at £14,995.
