EU must step up and support measures for the EU automotive industry

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The European automotive manufacturers urge   the  EU to intensify and coordinate efforts to restore the functioning of  the  financial 

The European automotive manufacturers urge   the  EU to intensify and coordinate efforts to restore the functioning of  the  financial  market  and  overcome  the  current  crisis.  The vehicle  industry,  in  particular, needs significantly broader and quicker access.

“2009 will be a decisive year for our economies and for our industry. The  automotive  manufacturers  are  taking all measures within their reach to emerge  from the crisis. In parallel, governments have to take urgent and drastic measures to prevent a prolonged period of recession”, said Carlos Ghosn,  President of the European automobile industry’s trade association ACEA  and  CEO  of Renault. “We believe it is time for Europe to take the lead by designing and deploying instruments that are critically needed in this  time of crisis. A coordinated European policy would not only ensure more  fairness  and  greater  respect for EU competition rules but – more  importantly – greater efficiency in a single, European market.” 

Ghosn  met   in  Brussels  with  European Commission Vice-President Günter  Verheugen  and  Competition  Commissioner Neelie Kroes to discuss support  measures  for  the  automotive  industry, which health is key to restoring the EU economy. He also addressed an audience of EU legislators and auto industry stakeholders at the ACEA annual reception in Brussels.

The  ACEA  members  call  for  a  number  of  immediate  actions  for the automotive industry:

  • Ensuring  a  level playing field by deploying and coordinating support  measures such as market incentives, fleet renewal schemes and relieving cost  of  temporary  unemployment  throughout  the  EU. While some member  states have taken these important steps, other still have to follow.

  • Improving  access  to  liquidity  by  allowing  state  guarantees  for  low-interest loans.

  • Increasing  the  amount  of European Investment Bank (EIB) funding and ensuring a quicker availability of these funds

  • Safeguarding  the  competitiveness  of  the industry by, among others, postponing  costly new regulation and ensuring that newly negotiated free trade agreements are balanced.

 

“The measures that the EU has agreed upon so far are insufficient to meet the  needs  of  our  industry.  In  October last year, we have called for low-interest  loans  amounting  to    40  billion.  Up to today, vehicle manufacturers  have already applied for over € 6 billion in EIB loans and the funds needed in 2009 alone could easily add up to 15 billion. Similar levels  may  well be necessary in the years thereafter”, said Ghosn. “The level  of  funding needs to be raised and decision making procedures must be  simplified and shortened. This aid is urgently needed to maintain our industry’s  capacity  for  innovation  and  ensure  the  transition  to a low-emission fleet.”

Industry outlook 2009

Reflecting  a  dramatic  drop  in  consumer confidence, passenger car and commercial  vehicle  sales  in  Europe  fell  sharply in 2008. Automobile production  was subsequently trimmed back by around 20% in the last three months  of  2008  and 5% year-on-year. Anticipating a further decrease of the markets in Europe and around the world, ACEA expects European vehicle production  in  2009  to  decline  by at least 15%, which inevitably puts further massive pressure on costs and employment.

Provided  the  right  framework conditions are in place and assuming that sales  will  pick  up  again in 2010, the industry strives to master this development  with  flexibility  measures  such as taken over the past few months:   manufacturers  are  decreasing  vehicle  output  by  cancelling temporary  contracts  and  cutting  working  hours,  aiming  to  retain a high-skilled  workforce.  In  addition,  the  manufacturers  are  cutting general expenditure and investment levels.

The  European  vehicle  manufacturers  are  also  urging  EU  support for suppliers,  whose access to credit is often even more critical, and where many more jobs are at stake. In terms of employment, every job within one of   the   vehicle  manufacturers  provides  at  least  another  five  at vehicle-parts  suppliers,  other equipment producers, car dealers, repair workshops  and  other  vehicle-related  activities.  In countries such as Germany,  France,  Spain  or  the  Czech  Republic, the ratio is at least double as high. Preserving a solid supply chain from suppliers to dealers is indispensable for the existence of the automotive industry.

About ACEA

The   European   automotive   industry   is   key  to  the  strength  and competitiveness  of Europe. Direct employment in automotive manufacturing amounts  to  2.2  million people; indirect employment involves another 10 million jobs. Annually, ACEA members invest € 20 billion in R&D, or 4% of turnover.

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.

to  financial  support  through the European Investment Bank as part of a  broader  set  of  measures  to  survive  the  economic  turmoil, ensuring  innovations  in  low-carbon technologies and maintaining the high-skilled  workforce Europe needs.