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Issue No. 2, 2009

The European Commission responds to the automotive sector crisis

Aiming to help Europe’s vehicle manufacturers in the current global economic crisis, the European Commission issued on 25 February a new Communication,“Responding to the crisis in the European automotive industry” .

Günter Verheugen, Commission Vice-President responsible for enterprise and industry policy, stressed that “We are talking about millions of jobs, not only in the automotive sector, but in the supply chain […].  We are committed to defend these jobs, because the European automotive industry is the most competitive and innovative industry in the world.”

Nevertheless, the Commission reiterated that “Primary responsibility for dealing with the crisis lies with industry”, which was called upon to “address the structural problems of production efficiency and capacity utilisation in a way that improves its long-term competitiveness and sustainability.”  The Commission proposed to complement the efforts of manufacturers through carefully targeted and temporary measures.

CARS 21

In the Communication the Commission renewed its commitment to progress based on the CARS 21 recommendations—whose mid-term review conclusions were endorsed by the EU Competitiveness Council on 5 March 2009—while affirming that it “will weigh up the costs and benefits of any new legislative initiative and seek, as far as possible, to avoid creating new economic burdens.”

Furthermore, the Commission aims to strengthen the CARS 21 process by developing “a platform of mutual information, dialogue and best practices” that will bring together representatives from the Member States, the automotive industry and the trade unions.  This “round table” will track developments in the following areas:

National scrapping schemes

The Commission’s Communication also refers to vehicle recycling and recovery schemes already established by several EU Member States as the most effective means to counter the short-term decline in demand and improve consumer confidence.  These scrapping schemes have in fact proved successful in boosting demand for new vehicles and accelerating fleet renewal.

Guidelines on common principles for such schemes were established by the Commission upon discussion with the Member States.  The key principles are:

In addition, Member States are invited to notify the Commission of their scrapping schemes without fail, “in the interest of transparency and to avoid problems after a scheme has been put in place.”

Fight against protectionism

JAMA welcomes the emphasis placed in the Commission’s Communication on the importance of open markets and fair competition, since competition in open markets will help fight the current crisis, whereas protectionist measures would likely deepen it further.  JAMA members also fully endorse the EU’s desire to avoid “any new trade restrictions possibly applying to third countries” and its opposition to “a revival of protectionism”.

The European Commission has promised to closely monitor global developments and encourage international dialogue, working in particular with its main trade partners—including the US, Japan, Korea and China—to keep world markets open and ensure fair competition.

http://ec.europa.eu/enterprise/automotive/pagesbackground/competitiveness/com_2009_0104.pdf