European people urgently needs an Industrial Automotive Project


Alfred Hitchcock’s “The Birds” © by papalars

In 2008 the global financial crisis hit European Economy reducing real purchase power and effecting commodities sectors, including the automotive. Markets started to decline and the European Governments decided to support automotive, considering the high impact over GDP.

In All Top 5 European markets, scrap incentive schemes were introduced in order to stimulate market demand and push low emission vehicles sales. Different was the approach by single European State, having to defend national production and local lobbies, but the effects were similar.

The effect over 2009 and first part of 2010 was apparently positive for the sector, with Western European countries able to minimize market decline. In countries where incentives had not been introduced, such as Scandinavian or all East Europe countries, market dropped.

Anyhow car sales are strongly correlated with real purchase power and the incentive effect was limited to anticipate the purchase decision, mainly for budget- oriented families. As the incentives terminated all markets dropped, confirming the failure of all European Governments actions.

The European car industry (the EU 27 countries plus the 3 Efta countries) after having achieved its all-time volume record in the 2007 at 16.0 million units, declined at 14.7 million in 2008 (-7.9%), 14.5 in 2009 (-1.5%), 13.8 million in 2010 (-5.0%) and 13.56 million in 2011 (-1.7). In the period 2007-2011 European yearly registrations declined by 2.4 million or 15%. That’s not enough!

In autumn 2011 the European car industry started to suffer for the euro area sovereign debts crisis. The fiscal policies put in place by Governments (the first was the UK in 2010) directly touched commodities demand. The VAT increase, higher taxation over consumption related to the car’s usage, increased fuel price, increased fuel taxation combined with high unemployment level, in particular for young people, and credit crunch reduced to very low level new vehicles demand.

First quarter 2012 hard European car industry decline was simply a consequence as confirmed by the countries where the negative peaks have been achieved: France, Italy, Portugal, Belgium, Slovenia and Greece.

European citizens urgently need an Industrial Automotive Project, based on structural changes aiming to defend European uniqueness (style, design advanced technology), improve International Trade agreements effectiveness (but not increase barrier as suggested by Mr. Marchionne), incentivize new mobility concepts and technology able to reduce CO2 consumptions (like car sharing or CNG engines) in a medium term vision.

In Europe we need a project ike Mr. Obama is porsuing in North America, where the market dramatically dropped under financial crisis (from 17.4 millions in 2005 to 10.4 million in 2009) before to recover thanks to the increase of real demand without short term scrap incentives.

Obama leaded the GM and Chrysler rescue, protecting over 1 million employers (also heavily reducing their net and fix salary), and pushing the progressive structural market change from a traditional “Big high consumption cars” to “Small low CO2 cars”. I am not affirming US is perfect, but they looks perfects at an observer living in the Old Europe.

In case someone in Bruxelles would think over this project, the hope is he’ll talk with citizens rather than ask to Car Manufacturers.

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