Trade associations ACEA, CECRA and CLEPA, which collectively represent the entire automotive value chain in Europe, are calling on the 27 EU member states to support the automotive sector. This support is needed for the sector's recovery in the aftermath of the COVID-19 crisis.
The automotive sector has been hit hard by the corona crisis. For instance, many manufacturers were forced to completely shut down their development and production sites for several weeks or even months. Production losses in the sector so far are estimated at over 2.4 million vehicles, while 1.1 million jobs in the sector are affected. Many factories are now gradually reopening, but their production levels are sharply lower than before the COVID-19 crisis.
Turnover loss
Zooming in on the supply chain, almost all companies expect a turnover loss of 20% or more. More than half expect to post a negative result this year. ACEA, CECRA and CLEPA warn that this also has an impact on tax revenues in EU member states. Many companies do not expect to put the crisis behind them until 2022.
Many car dealers in the European Union (EU) also closed their doors for weeks. This led to historically low sales sectors across all vehicle segments. For example, the number of passenger vehicles registered is expected to decline from 12.8 million units in 2019 to 9.6 million units this year, according to ACEA figures. The European car market has shrunk by 41.5% so far. Garages and maintenance specialists saw their business decline by 85%.
Biggest contraction ever in Europe
ACEA predicts that car sales this year will fall to their lowest level since 2013. That year, the sector recovered after six consecutive years of contraction in the wake of the 2008-09 financial crisis. In percentage terms, this year will be the biggest contraction ever recorded in the European automotive sector.
"We would like to draw your attention to the urgent need for political support - both at EU level and from EU member states - to mitigate the effects of the extensive economic crisis in our sector," the parties wrote in a letter addressed to leaders of EU member states. Among other things, ACEA, CECRA and CLEPA point to the impact of the crisis on the sector's ability to invest in CO2 neutrality and digitalisation. Employment in the sector is also under pressure.
'Support boosts entire economy'
The industry associations stress the important role of the automotive sector in the overall European economy. "It should be noted that such support stimulates the entire economy, and not only in countries hardest hit by the crisis, given the complex supply chain set up by suppliers, manufacturers and dealerships in the EU. Our sector brings great value to the European economy, with highly skilled and well-paid jobs. Programmes to boost demand also accelerate the rejuvenation of the vehicle fleet on European roads and help reduce CO2 emissions and emissions."
Support plans from national governments to be approved by the European Council and Parliament. "This means that many budget lines will not be available before 2021. We strongly hope for a quick and positive decision by member states on the proposed budget to avoid further delays."
European support package
The European Commission earlier announced a support package to alleviate the impact of the corona crisis. This includes measures to encourage electric driving, including funding for 1 million public charging stations in the European Union. ACEA, CECRA and CLEPA point out that the financing of these charging points is already part of the Green Deal and the number is not sufficient in view of market demand. The parties therefore call on EU member states to introduce initiatives to boost the rollout of charging infrastructure.
The full letter from ACEA, CECRA and CLEPA can be found here.
