ACEA

Supportive framework is paramount to the future of vehicle manufacturing in Europe

Brussels, 29/10/2008 - The European automotive industry is experiencing extremely difficult times with the sharply declining economic circumstances further limiting the manufacturers’ scope to absorb regulatory requirements and to respond to both changing and reluctant consumer demand. The industry, which is key to the European economy, urgently needs a supportive framework to secure its future; and the EU has the means and tools to make it work.

These are the main conclusions of today’s conference on CARS21 (Competitive Automotive Regulatory System for the 21st Century*) at the European Commission in Brussels. Hosted by European Commission Vice-President Guenter Verheugen and with the participation of five vehicle producers’ CEOs, national ministers and other important stakeholders, the meeting reviewed progress since the start of CARS21 in 2005, and agreed on a set of important forward-looking conclusions with regard to the time-frame of 2020 and beyond.

“The fallout of the financial crisis has only increased the urgency to further improve the automotive policy framework. Over the past weeks, various manufacturers have announced they would scale back their production as a consequence of the current trend. We welcome the fact that the Commission has confirmed the strength and competitiveness of the automobile industry to be a top priority”, said Christian Streiff, President of the vehicle manufacturers’ trade association ACEA and CEO of PSA Peugeot Citroën.

The automobile industry is one of the most regulated sectors in Europe with over 80 EU directives and regulations, and additionally international UN/ECE requirements, all of which specify conditions for the registration and use of a vehicle. In the near-term, the industry is implementing numerous new regulatory requirements including Euro 5/6, Pedestrian Protection, Electronic Stability Control, CO2 requirements and the General Safety Regulation.

A supportive framework should consist of four important pillars: so-called ‘better regulation’, reciprocal trade relations, a low-interest loans package and market incentives.

• The aim of ‘better regulation’, as outlined in CARS21, is to reduce the regulatory burden on the industry though simplification and assessing new regulation’s impact in advance, to avoid unnecessary costs. The automotive manufacturers acknowledge the important work the Commission has done with the introduction of ‘better regulation’ principles.


However, the industry asks EU legislators to enhance the transparency and quality of these impact assessments, in particular with respect to setting feasible long-term targets. Streiff: “Too often, legislation is designed in a restrictive manner with the industry becoming involved in too late a stage and without recognition of the constraints of manufacturing vehicles in a profitable, durable way. The upcoming CO2 legislation on cars is a glaring example, because of the imbalance between supply and demand side measures and the lack of sufficient lead-time.”


• EU trade policy should strive for a further trade liberalisation on both multilateral and bilateral level. Each bilateral free trade agreement (FTA) should ensure the European industry full reciprocity and a real opportunity and fair market access on both sides of the negotiating table. In this respect, the envisaged conditions for an FTA with South Korea are alarming. The country’s exports represent already a significant imbalance compared to the import numbers. There is a major risk that EU trade barriers will be eliminated to further Korean exports, without offering the European auto industry any kind of reciprocity.



• A low-interest loans package (40 billion EUR) would help secure a sustainable market for current and newly developed fuel-efficient technologies. Details of such a package are currently being discussed with the European Commission, the member states and the European investment bank. The package would, for instance, provide provisions to sustain investments in R&D and new product programmes.



• Market incentives, e.g. in form of scrapping scheme for older vehicles, is a further important way of accelerating the take-up of fuel-efficient technologies and renewing the car fleet on Europe’s roads, which has a clear environmental benefit. In the EU15, cars older than 8 years represent 36% of the existing fleet. Their replacement with new cars would result in CO2 savings of 20 megatonnes per year, or 4.5% of total passenger car emissions. There would also be a significant reduction on emissions of nitrogen oxide and particulate matter.

The industry welcomes the Commission initiative to set up a task force to explore technical, regulatory and economical hurdles. The industry is committed to produce clean, safe and affordable vehicles and wants to ensure further progress while maintaining a competitive industry in Europe.



Note to editors: The auto industry’s trade association ACEA is an active partner in CARS21. The five CEOs present in today’s meeting were: Christian Streiff (ACEA President, PSA Peugeot Citroën), Dieter Zetsche (Daimler), Sergio Marchionne (FIAT), Carl-Peter Forster (GM Europe) and Leif Johansson (Volvo). The conclusions can be found at http://www.acea.be

*CARS 21 was initiated in 2005 and championed by the European Commission with the goal of strengthening the 'engine of Europe', the automotive industry. CARS 21 (Competitive Automotive Regulatory System for the 21st Century) involves national governments, the European Commission, the European Parliament, the automotive industry, environmentalists, trade unions, suppliers, consumers and the oil industry.

The aim of CARS 21 is to make recommendations on the regulatory framework of the European automotive industry “enhancing global competitiveness and employment while sustaining further progress in safety and environmental performance at a price affordable to the consumer”.

The CARS 21 initiative is a crucial recognition of the fact that the automobile industry is key to the EU economy, that regulation does affect its competitiveness and that this effect should be minimised in the interest of society as a whole. The CARS 21 recommendations also sketch a framework to balance economic and environmental interests. These interests are not contrary to one another: they should and can be addressed in a comprehensive, cost-effective way, leading to the results society demands.

New car registrations in Europe fell by 8.2% in September compared to the same month last year, despite two working days extra across the region. Usually, September is a strong month for car sales that tend to pick up after the calmer summer months. In absolute numbers, registrations stalled at 1,304,653 units, or the lowest September level since 1998. Three quarters into 2008, a total of 11,713,937 new passenger cars were registered, or -4.4% less than over the same period of last year.

The drop in registrations confirms the aggravating market circumstances, as the fallout of the financial crisis hits auto manufacturers hard. The credit crunch weighs on the sector’s ability to finance daily operations and sustain the high level of investments needed to support the market transition to low-emission vehicles. At the same time, demand for new cars is weakening because of the deteriorating economic circumstances. Customers are increasingly hesitant to make large expenditures.

The ACEA members are BMW Group, DAF Trucks, Daimler, FIAT, 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 support another 10 million jobs in related sectors. Annually, ACEA members invest € 20 billion in R&D, or 4% of turnover.

For further information, please contact Sigrid de Vries, Director Communications, ACEA +32 2 738 73 45 or .(JavaScript must be enabled to view this email address) Please also visit http://www.acea.be

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