European automotive sector sets out action plan for restart

The four leading European associations representing the full automotive supply chain, from equipment and tire suppliers to vehicle manufacturers, dealers and workshops, is proposing a 25-point plan to ensure the automotive sector and the economy at large restart in a robust manner.

In the document seen by S&P Global Platts, the associations underlined the importance of a coordinated relaunch of industrial activity (in line with public health guidelines) in order to maintain the necessary liquidity for businesses and to lay the foundations for economic recovery, primarily by triggering vehicle demand and investment in the latest technology and innovation.

As part of the 25-point action plan, the sector is calling for coordinated renewal schemes for all vehicle types and categories across the EU, as this will help to boost private and business demand, support economic recovery across the board as well as accelerate the rejuvenation of the vehicle fleet on Europe’s roads.

“Purchase and investment incentives should be based on similar criteria across Europe, drawing on both national and EU funding,” the associations said. “Such schemes should be enhanced by scrapping premiums, and should take into account society’s climate ambitions and resource-efficiency objectives in concert with the economic impact.”

The European automotive sector has been hit particularly hard by the coronavirus pandemic, with most activities in the sector suspended for several weeks. Many in the sector are under significant economic stress and in need of government support.

Eric-Mark Huitema, director-general of ACEA, the automobile manufacturers’ association, stressed the need for a “coordinated relaunch of industrial and retail activity, with maintained liquidity for businesses.”

“Targeted measures will need to be taken to trigger demand and investment,” he said. “Demand stimulus will boost the utilization of our manufacturing capacity, safeguarding jobs and investments.”

The document was signed by ACEA, as well as CECRA, the European federation that represent the interests of the motor trade and repair businesses; CLEPA, the European Association of Automotive Suppliers; and ETRMA, the European Tyre & Rubber Manufacturers Association.

Automotive is a key industry for steel and aluminium producers, with a turnover that represents over 7% of EU GDP and that generates a trade surplus of €84.4 billion for the EU.

— Annalisa Villa