Europe sends more cars to the U.S. than vice versa

CGTN Europe

CGTN Europe spoke to Anna-Marie Baisden, Head of Autos & Infrastructure Research at Fitch Solutions

Transcript

00:00Well, let's just stay with that car story for a moment, because President Trump has

00:04complained that Europeans do not buy American cars, but there are some practical reasons

00:09why that is the case.

00:11First and foremost, size.

00:13US cars tend to be much bigger than European vehicles.

00:18This presents some rather practical difficulties, like fitting in parking spaces designed for

00:22smaller vehicles, and of course, Europe's old cities accommodating the new world's big

00:29gas guzzlers.

00:31American car safety rules tend to be less stringent.

00:34The EU has strict crash standards.

00:36Cars are tested for pedestrian survival, and hoods or bonnets must absorb head impacts.

00:43US cars also tend to be less fuel efficient.

00:46Europeans pay around twice as much for gas as American drivers, making those American

00:52SUVs rather unattractive.

00:55And the United States and the EU have different emissions targets.

00:59There are 320 low-emissions zones across Europe, while the United States only has one.

01:06And that's boosted demand somewhat for electric cars in the EU, and US carmakers lag behind

01:12when it comes to EVs.

01:14Well let's talk now to Anne-Marie Bayston, the head of autos and infrastructure research

01:19at Fitch Solutions.

01:20Anne-Marie, good to see you.

01:21With Donald Trump telling us to buy more American cars in Europe, why is that not happening?

01:29Well as you're alluding to there, the dynamics in the market between the US and Europe are

01:34very different.

01:37Europe has always traditionally been more of a small car market.

01:41I would say in the last decade or so we have definitely seen a shift towards SUVs, but

01:45this tends to be crossovers or compact SUVs.

01:49As you were saying, in the US it's a tendency towards much bigger SUVs and pickup trucks.

01:56So there's that difference in dynamic there.

01:59A lot of production in the US is for the US or the North American market.

02:04It suits that consumer demand better.

02:09And also the difference in attitude towards EV.

02:12There's been a lot more support in Europe for EVs.

02:17Production in the US hasn't been as much as expected.

02:20We would expect that to get even less under a Trump administration.

02:24And so we're actually seeing some manufacturers in the US dialing back on their EV production.

02:30So again, that's not something they could target Europe with.

02:33So really it is a matter of the two markets being very different.

02:37So when Trump says, you Europeans, you British must buy more American cars, you're suggesting

02:43the product simply isn't transferable?

02:47Not all of them.

02:49I would say there are some that would work.

02:53And also I think there's a question here about what is an American car?

02:57Because if it's vehicles that are produced in the US, you've got European brands, you've

03:02got Asian brands that are also all produced in there.

03:06Some of those would work.

03:08But maybe some of your higher-end performance cars, muscle cars, some of those would be

03:14in demand.

03:15But if you're talking about large-scale exports, then, yeah, they're very different consumer

03:20preferences.

03:21Ultimately, the car buyer, the consumer, is king, isn't he or she?

03:26I mean, European car buyers just won't be told what to go out and buy.

03:30It's hard enough trying to get them to buy EVs, the manufacturers would tell you.

03:34So taking on what President Trump is telling you to buy might be a rather tricky sell,

03:40presumably.

03:41I think you've hit on a really good point there.

03:43I think that's been one of the issues with EV adoption maybe not being as quick as was

03:49expected because there's very much a regulatory push for that kind of thing in the EU and

03:54to some extent up until now in the US.

03:57But at the end of the day, it's what people want to spend money on.

04:01And that's why we've actually seen maybe more of a shift towards hybrids for that sweet

04:06spot between electrification but at a more affordable price point, not as much range

04:11anxiety because that's what consumers want.

04:14So absolutely, what the consumers are actually asking for is what determines the market at

04:20the end of the day.

04:21We've spent much of the top of this program talking about tariffs.

04:24Inevitably, I must ask you, given your background and your experience, what your team and your

04:30research is telling you about the impact of tariffs on the global automotive industry?

04:37Well, absolutely.

04:40For North America, if you look at the US, Mexico, Canada altogether, if the US did go

04:46ahead with the tariffs on Mexico and Canada, which it has paused for 30 days, but if it

04:52went ahead and then there were retaliatory tariffs from Mexico and Canada on the US,

04:57we would see big increase in prices for vehicles, particularly for the components, which would

05:02then push up vehicle prices again because of the interconnectedness of the supply chain.

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