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THE IMPACT OF THE GLOBAL CRISIS
ON THE EUROPEAN AUTOMOBILE
INDUSTRY
MARC GREVEN
DIRECTOR LEGAL AFFAIRS
ASSISTANT TO THE SECRETARY GENERAL
ACEA
EESC HEARING, BRUSSELS, 6 FEBRUARY 2009
THE AUTOMOBILE INDUSTRY
• Economic importance
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The most important manufacturing industry in the EU
Turnover = 6.5% of EU GDP
R&D expenditure = € 20 bn (4% of turnover)
Export = € 42.8 bn net trade balance
Vehicle tax revenue = € 380 bn (3.5% of EU GDP)
• Employment
– 1 direct job in the auto industry supports 5 more jobs in
the wider economy
– 12.1 m total employment (6% of EU employed population)
– 2.2 m direct jobs
– 9.8 m indirect jobs
CURRENT SITUATION (1)
• New passenger car registrations
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- 7.8% in 2008 (14.7 m)
Sharpest decline since 1993
- 19% in 4th quarter
Some markets hit particularly hard (ES-28%, IRL 18%, IT – 13%, UK -11%)
– 2009 forecast – 15% (12.8 m)
• New commercial vehicle registrations
– - 9% in 2008 (2.5m)
– Sharp decline in 3rd & 4th quarter (-12%, -24%)
– 2009 forecast -30%
• Similar developments in other world markets
(US, Japan)
– Significant slowdown of growth in BRICs
CURRENT SITUATION (2)
• Motor vehicle production in the EU
– 5% in 2008 (18.7 m)
– 2009 forecast – 15%
• Effect on employment
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Extended vacations
Shorter working weeks
Temporary shutdowns
Non-renewal of temporary contracts
15% Reduction of direct employment expected
Possibly more unless public authorities act quickly
and effectively
SUPPORT MEASURES (1)
• Public authorities must support industry
– Direct & indirect support
– No unnecessary legislation (CARS 21)
– No unfavourable trade agreements (South Korea,
WTO)
• Support measures must
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Assist industry through the crisis
Have short-term impact
Facilitate access to credit
Stimulate market demand
Provide a level playing field
Strengthen the industry for the future
SUPPORT MEASURES (2)
• EU support limited to EIB financing
– Plus temporary relaxation of state aid rules
– Otherwise little competence & little money
• European Clean Transport Facility
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EIB loans for manufacturers & suppliers
Investment in fuel-efficient & clean technologies
R&D + production facilities
€ 4bn per year in 2009 – 10
• Indispensable but insufficient
– Submitted projects > € 6bn
– Overall level of funding must be increased
significantly
– Guarantee requirements must be loosened
– Unnecessary conditions & constraints must be
removed
SUPPORT MEASURES (3)
• Many Member States are taking action
– FR, DE, SE, UK, ES, PT, RO, AT, IT
• Financial assistance
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Loan guarantees
Loans with reduced interest rates
R&D support
Training Programmes
• Market stimulation
– Temporary exemption from car tax (DE, RO)
– Fleet renewal measures (incentives from € 1,000 to
€ 2,500 in 7 countries)
CONCLUSIONS
• The situation is serious but not desperate
• The European auto industry remains viable
long-term
• It needs more short-term support for financing
and market stimulation
• Don’t forget suppliers and dealers !
• Emphasis on green technology is ok but
favours certain countries
• How to maintain employment and reduce
overcapacity ?
• More coordination is required to find a
European solution to a European problem
THANK YOU
• Thank you for your attention
• For more info: www.acea.be