Maëlle Hamma: What does the 61st edition look like, and what will be new?

Philippe Mersch: We will have all the new products that come from the Brussels Motor Show, so there will be world premieres and more than 50 new European products on show during Autofestival. This 61st edition is looking pretty good as registrations rose by 10% last year for private customers. We can feel that they are once again a little more present in the showrooms and dealerships and are interested in a change of vehicle. The Autofestival always attracts a good crowd, and every year it’s a very popular event.

How do you explain this development?

There really isn’t a single concrete answer, because the reasons vary. One of them is certainly that cars are starting to get a bit older and so customers have a need or a desire to change them. Engine technology is also evolving. We can see that customers are interested in having the right engine for the future.

How is the market faring?

Last year, we saw a 5% fall in terms of registrations, but the private market grew by 10% in both numbers and volume. What suffered most was the sale of company cars, a phenomenon linked to the tense economic situation. We hope that the situation will improve this year.

Electric and hybrid vehicles continue to grow in popularity. Many of the new models coming onto the market are 100% electric or electrified, in response to growing demand. Looking at registrations, fully electric vehicles accounted for almost 28% of registrations last year, an increase of more than 15%. The increase is steady. Hybrid models, meanwhile, are also showing a clear upward trend, with an increase of more than 10%. These two types of vehicle now account for almost half the market.

What about support schemes for electric vehicles?

For electric vehicles, you can get a grant of up to €6,000 on purchase, depending on the efficiency of the engine. Consumption must be less than 16 KW to qualify for this maximum bonus. Otherwise, the bonus is reduced to €3,000, or nothing at all. However, this is still very advantageous compared with what is offered in neighbouring countries. What’s more, there is now a bonus for secondhand vehicles, which is also a positive step forward.

Another important point, which should have an impact on company cars, is that we won our case at the end of the year concerning taxation on the benefit in kind of electric cars. Contrary to what was initially planned, this taxation will not change in 2025 or 2026. This will preserve the attractiveness of electric vehicles.

For electric vehicles, the issues of range and the development of charging infrastructure are often put forward as a barrier to purchase. What are your thoughts on this?

That’s absolutely true. But range is becoming less and less of an issue. Things are changing rapidly, and I think that’s precisely one of the challenges of Autofestival: to inform the public and answer their questions. Today, the main challenge remains the possibility of charging your vehicle at home. However, depending on where you live, this can become complicated. In general, people who have this facility already drive electric cars.

In large private complexes, it is often more difficult to install charging points. This is where political action is needed. On the public side, there are already a good number of charging points, but this will not be enough to meet the growing demand. This remains the main obstacle to the wider adoption of electric vehicles.

In addition, there are still some people who refuse to drive electric on principle. For these people, it will be more difficult to convince them to make the transition to electric.

What could change the situation and encourage them?

Over time, the supply of combustion engines will diminish, and we have to hope that the recharging infrastructure, both private and public, continues to develop. This problem is not unique to Luxembourg; it’s also the case in France and Belgium! That said, we’re still in a privileged position for the time being.

What about the international context, with China and the return of US president Donald Trump? Are you feeling the effects here?

Yes, it’s certainly affecting the automotive market, but in Luxembourg the impact remains very limited. What is certain is that it could have an influence on the price of cars imported from China. Customs duties could push up tariffs, although this is not yet the case.

There is also increasing pressure on manufacturers, particularly European ones, to speed up the electrification of sales. Otherwise, manufacturers risk having to pay substantial penalties for non-compliance with CO2 emission quotas.

At the end of the day, everything that happens abroad--in Europe and beyond--ends up having an impact on what we’re supposed to be selling here.

This article was originally published in French.