Kia Warns of Tough Road Ahead in Europe Without Government Aid

(Bloomberg) --

Europe’s carmakers face a worse quarter than the tough one they just completed unless governments step in with additional aid, according to Kia Motors Corp.’s European chief operating officer.

The South Korean firm saw its European registrations decline 14% in the first quarter because of disruptions sparked by the coronavirus crisis, Emilio Herrera said in an interview on Thursday. If governments don’t decide on subsidies soon, “the second quarter will be even worse,” he said.

Kia joined a chorus of carmakers in Europe hoping for state aid to lift the industry out of the worst sales slump in recent memory. In Germany, representatives from the likes of Volkswagen AG, Daimler AG and BMW AG are scheduled to discuss possible car-buying subsidies with politicians next week.

The idea has stoked political controversy, given the billions in profits the companies achieved last year. German Economy Minister Peter Altmaier suggested he’s against a program favored by the industry that would cover all models, saying any new aid would need to help reduce carbon emissions.

Herrera said carmakers need any help they can get to achieve tough emission targets set to fully kick in next year.

“To benefit every consumer, it should be a program that also supports combustion engines,” he said. “But I have no problem with a CO2-only plan.”

©2020 Bloomberg L.P.

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