European Investment Bank loans underline importance of the automobile industry for Europe’s economy

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Brussels,  12  March 2009 – The European automobile manufacturers welcome
the  €  3  billion  in  loans

The European automobile manufacturers welcome
the  €  3  billion  in  loans freed today by the European Investment Bank
(EIB)  to  finance  automotive  projects, most of them concerning ‘green’
investments.  As  the  Bank  indicated,  in total around € 7 billion will
become  available  in  the  first half of this year and its budget allows
maintaining similar levels of financing until 2012. “The arrangement with
the  EIB  underlines  the  importance  of  the  automobile  industry  for
investments,  R&D  and  employment  in  Europe  as  a  whole”,  says ACEA
secretary general Ivan Hodac.

 

acea

The  EIB  loans will contribute to meeting environmental requirements but
are  insufficient  to  confront the extraordinary economic circumstances.
There  is  an  immediate need for access to financing in general. “At the
moment  the  financial  markets  are  not functioning despite billions in
government aid to financial institutions”, adds Hodac. Both vehicle sales
and   automotive  manufacturing  are  largely  dependent  on  credit  and
financing because of the capital-intensive nature of the industry and the
relatively high purchasing price of the product.

The  EU  must  tackle  the  automobile  industry’s  problems  with utmost
priority.  “Viable  businesses  are  at  stake and the EU risks doing too
little  too  late”,  adds Hodac. “This is not a question of ‘bailing-out’
but  of  securing  a healthy and fundamental industry.” Another step that
the  EU has to take is avoiding additional costly vehicle legislation for
a number of years.

The European automobile industry is a competitive, € 550 billion turnover
industry   with  a  strong  commitment  to  manufacturing  world-leading,
high-tech  automobiles  in Europe. The sector is particularly hard hit by
the economic recession as it suffers from the extraordinary credit crunch
as well as an unprecedented sharp drop in vehicle demand. Lower levels of
automotive  manufacturing  in Europe have a large spiraling effect on the
wider  economy  because  of  the  thousands  of  small  and  medium sized
companies  involved  in  the  supply chain, vehicle sales and after-sales
services.

“The automotive industry is essential to the EU economy. It is the engine
of  the manufacturing industries, one of the biggest employers in Europe,
the  largest  investor  in  innovation  and  R&D, and a formidable export
force”,  said  Hodac.  The  relative overcapacity in the industry, though
often cited, is not a reason for the troubles that auto manufacturers are
currently  facing. “Overcapacity has and will continue to be addressed by
the   automobile  manufacturers  as  part  of  a  long-term  strategy  to
strengthen   their  global  competitiveness  and  ensure  a  high-skilled
workforce.  The  cause  of the current crisis is the unprecedented credit
crunch  and  the  rapid  deterioration of all key automotive markets. The
European automobile industry is taking its responsibilities; now European
policy makers must follow.”

The  ACEA members are BMW Group, DAF Trucks, Daimler, FIAT Group, Ford of
Europe,  General  Motors  Europe,  Jaguar  Land Rover, MAN Nutzfahrzeuge,
Porsche,  PSA  Peugeot  Citroën,  Renault,  Scania,  Toyota Motor Europe,
Volkswagen  and  Volvo.  They  provide direct employment to more than 2.3
million  people and indirectly support another 10 million jobs. Annually,
ACEA members invest €20 billion in R&D, or 4% of turnover.