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European automotive industry faces crisis, as EU plans action plan to address sustainability and competition.
At this pivotal for the European automobile industry, on March 5th, the European Commission will publish a long-awaited Action Plan. Launched by the transport and tourism commissioner, Apostolos Tzitzikostas, it is now expected to reveal the roadmap ahead for the future of the sector balancing both its economic sustainability with the growth toward zero-emission mobility.
ACEA has warned the industry that without change, factory closures and massive layoffs will bring disastrous consequences. Increased competition by Chinese manufacturers exacerbates the troubles faced by the European car manufacturers, with heavyweights such as Audi already considering shutting down the plants and dismissing thousands of employees. This, in turn, has brought forth the competitiveness crisis within the sector.
European car manufacturers and suppliers have appealed to Brussels to act, and their voices are being heard. A Strategic Dialogue with European Commission President Ursula von der Leyen has allowed the sector's critical issues to be discussed by the key stakeholders: manufacturers and social agents. Nevertheless, the European Union has not moved to ease its strict regulations such as the Corporate Average Fuel Economy (CAFE) standards and the 2035 ban on combustion engine cars, which have been the bone of contention over the last couple of years.
The Action Plan, to be published soon, is expected to herald a turn toward a more flexible and market-driven approach and address the slow adoption of electric vehicles, especially in light of inadequate charging infrastructure. ACEA calls for changes in CO2 compliance regulations as well as incentives to encourage demand for zero-emission transport.
Trade tensions are making things worse because Europe's manufacturers are unable to compete with the very cheap, good-quality vehicles that are coming out of China, Japan, and South Korea. Therefore, the success of this plan in solving these problems is what will keep Europe competitive on the world map.
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