Donald Trump’s discontent over EU car imports and the relatively low popularity of American vehicles in Europe, excluding Tesla, raises a pertinent question. Why, indeed, don’t Europeans buy more American cars? Several compelling factors contribute to this automotive trade puzzle, extending beyond simple tariffs and touching upon deeply ingrained market preferences and practical considerations for those looking to Buy Cars in Europe.
The sheer size of many American vehicles presents an immediate challenge. Europe, with its historic city centers and winding, narrow roads, simply isn’t designed for the expansive dimensions of typical US cars, particularly large SUVs and pickup trucks. Navigating the ancient streets of Italian towns, as Hampus Engellau, a car industry analyst, points out, becomes a cumbersome task even for experienced drivers. The practicality of maneuvering and parking such vehicles in dense European urban environments significantly impacts consumer decisions when they consider to buy cars.
Cost considerations further dampen the appeal of American automobiles for European buyers. Mike Hawes, CEO of The Society of Motor Manufacturers & Traders, highlights the disparity in fuel prices. Europe generally experiences higher petrol costs compared to the US, naturally inclining consumers towards vehicles that offer greater fuel efficiency. Smaller, more economical cars are favored, contrasting with the American preference for larger, often less fuel-conscious models. This economic reality plays a crucial role in shaping the choices of Europeans looking to buy cars that align with their budgets and daily running costs. Engellau reinforces this point by noting the significant difference in petrol prices, with Europeans paying per litre what Americans pay per gallon, making fuel economy a more pressing concern when Europeans buy cars.
Despite these factors, European automakers have successfully penetrated the US market. Brands like BMW, Mercedes, and Volkswagen enjoy substantial sales in the United States. In 2022, EU-made car exports to the US significantly outweighed US exports to the EU, highlighting a trade imbalance that concerns figures like Donald Trump. This imbalance, partly attributed to differing tariff structures – the EU’s 10% tariff on US car imports versus the US’s 2.5% on EU imports – fuels trade tensions and debates about fair trading practices in the global automotive industry.
The historical context of car manufacturing and market presence also shapes European car-buying habits. While US carmakers once had a stronger foothold in Europe through brands like Opel/Vauxhall and Saab (under General Motors) and marques like Aston Martin, Jaguar, Land Rover, and Volvo (previously associated with Ford), strategic shifts and financial pressures led to divestments. European brands, conversely, have maintained and strengthened their presence, often manufacturing within North America for the US market and even exporting back to Europe. This established infrastructure and brand recognition give European manufacturers an edge when it comes to attracting local buyers.
Ford’s current strategy in Europe, focusing on electric and commercial vehicles while moving away from smaller, affordable models, reflects the evolving market dynamics. Tesla, with its factory near Berlin, represents a notable exception of American car manufacturing success in Europe, specifically with electric vehicles like the Model Y. However, even Tesla faces increasing competition, particularly from lower-cost Chinese electric car imports, demonstrating the intensely competitive nature of the European electric vehicle market.
Jose Asumendi, head of European automotive research at JP Morgan, emphasizes the demanding nature of the European car market. Success requires not only the “right products” tailored to European preferences but also efficient manufacturing operations. Furthermore, strong brand loyalty towards domestic manufacturers in countries like Germany, France, and Italy creates a natural advantage for local champions such as BMW, Mercedes, Volkswagen, Peugeot, Citroen, Renault, Fiat, and Alfa Romeo. This preference for local brands, combined with a crowded market featuring Japanese, South Korean, and increasingly Chinese competitors, makes it challenging for American brands to significantly increase their market share and convince Europeans to buy cars from across the Atlantic.
Adding to the complexity, Europe’s diverse landscape includes varying taxation regulations and multiple languages, posing operational hurdles for overseas carmakers. However, experts like Andy Palmer, an automotive industry veteran, believe that European customers do not inherently dislike American cars. Rather, the issue is the sheer breadth of choice and intense competition in the European market. Europeans considering to buy cars have a wide array of brands and models readily available, making it a battle for market share where established local and international players already have strong positions.
While Donald Trump’s focus might be on strengthening the US car industry through trade measures, Palmer argues that trade wars and tariffs are counterproductive. Instead of fostering innovation and competitiveness, tariffs can shield domestic industries from market pressures, potentially leading to complacency and hindering long-term growth. Palmer emphasizes that “it’s not about trade, it’s about investment and collaboration,” suggesting that a more effective approach to enhancing the automotive industry involves fostering international partnerships and innovation rather than erecting trade barriers. For Europeans looking to buy cars, this competitive and collaborative global market ultimately offers a wider range of choices and technological advancements.
