Europe's carmakers turn back time to rival Chinese EVs

By Gilles Guillaume and Rachel More

PARIS, Oct 13 (Reuters) - As Chinese electric vehicle makers challenge Europe's auto industry with cheaper cars and increasingly sophisticated technology, established automakers are fighting back with one asset their rivals lack: history.

Europe's carmakers are increasingly reviving classic models from past decades, from Renault's 5 to Citroen's 2CV, betting nostalgia can help them stand out from a growing wave of Chinese rivals and win over EV buyers.

The stakes are high. Demand for EVs has surged in Europe alongside soaring fuel prices, but Chinese manufacturers including BYD 002594.SZ and Geely already had almost 11% of the European market in the second quarter, according to Schmidt Automotive Research, with models that are often cheaper and boast more advanced technology than local brands.

While European automakers race to cut costs and narrow the technology gap, heritage is emerging as one of the few advantages China's newer entrants cannot readily replicate.

The strategy has already paid off for France's Renault RENA.PA. The new electric version of the Renault 5, first launched in 1972, is the best-selling mid-sized EV in Europe so far this year, helping lift the group's first-half revenue 9%.

Now others are in pursuit.

Stellantis STLAM.MI unveiled an electric version of Citroen's iconic 2CV, produced from 1948 to 1990, at this week's Paris Autoshow, while Volkswagen's electric Polo borrows heavily from the 1980s golden era of the Golf.

"We're looking to differentiate ourselves and also to evoke a certain emotional response," said Renault Group design chief Laurens van den Acker.

ANYTHING TO ADD VALUE

For some buyers, the strategy appears to be working.

Briton Chris Litchfield, 51, bought an EV for the first time in May after growing up with Renault 5s and opting for a yellow electric version of the car.

"The impulse to have a new Renault 5 was far greater than my reservations about having an EV," he said. "The main reason I love it is that it's a Renault 5."

"It's an absolute refreshed, modern reimagining of it."

Volkswagen's ID. Polo, part of a suite of affordable EVs designed to fend off Chinese rivals, has triggered a similar response, with an optional retro dashboard mode that mimics the classic speedometer of an early Golf and plays music on a virtual cassette tape.

"We only meant it as a joke," Volkswagen's chief designer Andreas Mindt said of the opt-in feature. But "people love it".

Stellantis STLAM.MI is hoping for similar success with the new electric 2CV, targeting die-hard fans of the compact car while appealing to a broader audience seeking an affordable EV.

"It's notable that we're seeing this kind of retro thing in small affordable EVs in Europe," said Robert Dooley, senior design strategist at Car Design Research, "because that's where the price pressure from Chinese brands is going to be strongest."

With low margins for small cars, "anything you can do to add a little bit more value is going to be well received," he added.

RELYING ON HISTORY HAS LIMITS

The strategy has its limitations, however. While going retro has potential in Europe, where families often remained loyal to particular models and designs for generations, it may not work elsewhere, nor indefinitely, Van den Acker said.

"Icons are not eternal, they have their moment in the sun," he said, adding that automakers need to identify the right opportunity because one generation's icon may be replaced by another's.

Some earlier attempts have had limited success. Strong initial interest in Volkswagen's ID. Buzz electric microbus earlier this decade faded as US consumers balked at its price and driving range.

The Beetle, a classic 20th-century design that transcended its Nazi-era origins through 1960s counterculture, never made it into the EV era. Volkswagen discontinued it in 2019 as consumer tastes shifted towards SUVs.

"We should not rest on our history," said Volkswagen's Mindt, stressing the importance of features such as fast charging and autonomous driving. "We should excel in the technologies we need for the future."

There is also the risk of disappointing fans.

Ahead of the electric 2CV's launch, Citroen sought input from collectors of the original model on what should be retained. Respondents highlighted its affordability, ease of driving and trademark soft top.

But for Thierry Jouanny, head of a French 2CV collectors' club, and proud owner of a 1951 model, any revival must also capture the emotional appeal of the original.

"The new 2CV needs to have that certain something that's hard to put into words," he said. "That element that attracts people, so you are no longer an anonymous person blending into the crowd."