Renault Chairman Appointed President of European Car Association... Will the 'European IRA' Accelerate?

Luca de Meo, Chairman of Renault Group, to Begin Term Next Year
French Government with Strong Influence on Renault Takes a Hard Line on Bloc Formation

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] Luca de Meo, Chairman of the Renault Group, has been appointed as the chairman of the European Automobile Manufacturers Association (ACEA). This is expected to further strengthen Renault's influence in the European market. The issue is that Renault is under the influence of the French government, which is the most aggressive advocate of the 'European version of the Inflation Reduction Act (IRA)' within the European Union (EU). This could accelerate the economic bloc formation in Europe, making it urgent to prepare countermeasures.

On the 9th, ACEA elected Chairman Meo as the new chairman through its board meeting, succeeding Oliver Zipse, Chairman of BMW Group. Chairman Meo is scheduled to serve a one-year term starting January 1 next year. ACEA noted that the reason for his election was his role as a figure who will lead the activation of e-mobility within Europe.

Renault is currently controlled by the French government, which is the strongest advocate of the Critical Raw Materials Act (CRMA), the 'European version of the Inflation Reduction Act.' The French government currently holds a 15.01% stake in Renault, making it the largest shareholder. Nissan is the second-largest shareholder with a 15% stake, but while the French government holds differential voting rights with triple weight, Nissan's shares have no voting rights. This structure inevitably allows the French government's opinions to be strongly reflected.

Recently, the French government has made strong statements against the U.S. regarding the Inflation Reduction Act. French President Emmanuel Macron criticized the IRA during his state visit to the U.S. earlier this month, saying it is "very aggressive to French industry" and added, "The U.S. may be able to solve its problems, but our problems will become bigger."

The European Union (EU) plans to prepare a draft of the CRMA by the first quarter of next year to counter the U.S. Inflation Reduction Act. The European CRMA is generally expected to resemble the U.S. IRA, which provides various benefits to North American-made electric vehicles. This indicates the emergence of economic bloc formation extending from the U.S. to Europe.

The most aggressive proponents of the CRMA are France and Germany, both of which are representative automobile manufacturing countries within Europe. If the EU enacts the CRMA, support for European products is expected to be provided through the EU budget rather than individual member states' budgets. In this case, the two countries mentioned above will benefit the most. Since ACEA's chairmanship alternates between Germany and France, it cannot be ruled out that ACEA will actively support the CRMA.

Experts point out that economic bloc formation in Europe is accelerating and emphasize the urgency of preparing countermeasures. Hanggu Lee, a senior researcher at the Korea Automotive Research Institute, said, "As the global economy is becoming bloc-oriented, the U.S. Inflation Reduction Act has given legitimacy to Europe's CRMA," adding, "If major economic zones rapidly form blocs like this, domestic companies' factories will inevitably have to enter local markets, which could damage domestic jobs and industries."

This content was produced with the assistance of AI translation services.