The state of the EU auto industry
Almost a month in office as ACEA Director General – a month where the EU President delivered her much-anticipated State of the Union address – I think it is timely for me to come forward with a ‘state of the EU auto industry’ too.
Message from ACEA’s Director General – September 2022
Indeed the state of the automobile industry – one of the few cutting-edge industries that Europe has – is intricately linked to the state of the European Union. As we navigate through uncertain times ahead, we must therefore ensure that this strategic industry remains a competitive player, well equipped to pursue the goals of zero-emission, smart and safe mobility. To echo von der Leyen’s words: “Let’s make sure the future of industry is made in Europe”!
The auto sector, for sure, is an economic powerhouse for Europe, bringing in an annual trade surplus of €79.5 billion and generating €375 billion in taxation for governments in major EU markets. With its massive annual investment of €59 billion, the sector remains the EU’s top investor in R&D, accounting for one third of the region’s total spending.
As we navigate through uncertain times ahead, we must ensure that the auto industry remains a competitive player, well equipped to pursue the goals of zero-emission, smart and safe mobility.
Thanks to this, the auto industry is leading the transition towards zero-emission mobility. No better testament to that than the fact that the market share of battery electric cars almost doubled to around 10% in 2021.
Mobility, in all forms, is what keeps society running. It is therefore of utmost importance that our world remains mobile – in a sustainable, safe, smart, and inclusive way. In my view, this is both an appeal to us in industry by regulators and society, and an offer – from our industry and all partners in the mobility eco-system.
Indeed, our sector is unequivocal in its commitment to the objectives of the Green Deal. This commitment is neither made lightly, nor executed lightly. Business strategies are tested to the core, as manufacturers trace out their pathways to decarbonisation – navigating market demand, regulation, technological advancement, supply chain shortages, rising energy costs, as well as global competition.
One thing is sure, vehicles will not be the bottleneck in the transition to zero-emission mobility. As impressively demonstrated at the IAA Transportation last week in Hanover, the main challenge now is to get the right framework conditions in place. These include a rapid rollout of charging infrastructure as well as resilient supply chains, also for key raw materials.
The rising average age of vehicles on EU roads is a worrying trend. If we want to bring the cleanest and safest new vehicles into circulation, we absolutely must ensure that mobility remains affordable for all European citizens.
Indeed, if we are to meet our climate targets, Europe must ensure strategic access to the raw materials needed for e-mobility. President von der Leyen’s announcement of a European Critical Raw Materials Act is therefore timely and essential.
And of course, at the same time as the green transformation, our members are pushing ahead with an unprecedented digital transformation, as well as ever safer mobility for all.
The latest data show that the EU is consolidating its position as the world leader in road safety, with a year-on-year drop in EU road fatalities of over 17%. However, ACEA and its members will not rest until Vision Zero is achieved – and the advanced driver assistant systems which now come as standard in all new vehicles will bring us further towards this goal.
When it comes to the production and sales of vehicles in the EU, the picture is far from rosy unfortunately. Vehicle production took another hit in 2021 (-8%), as supply shortages continue to hurt the industry. As a result of this slowdown in production, sales of new vehicles also continued their decline, as supply struggled to follow demand. Indeed, EU car sales fell to 9.7 million units in 2021 – 3.3 million less than the pre-COVID crisis levels.
The rising average age of the cars (12 years), trucks (14), vans (12) and buses (13) on EU roads is however a worrying trend. If we want to bring the cleanest and safest new vehicles into circulation, we absolutely must ensure that mobility remains affordable for all European citizens.
If we are to meet our climate targets, Europe must ensure strategic access to the raw materials needed for e-mobility. The announcement of a European Critical Raw Materials Act is therefore timely and essential.
We also very much welcome President von der Leyen’s proposal to make 2023 the European Year of Skills. Today the wider automotive ecosystem provides employment for 12.7 million people. As a result of the dual transition however, certain types of jobs are likely to disappear in the medium term, while at the same time completely new skill profiles are needed for emerging jobs. The auto industry has invested heavily in re-and upskilling programmes. ACEA is also a co-founder of the EU Automotive Skills Alliance, which needs further impetus.
With the current Commission entering its last leg before preparing a new legislature, and especially in these times of great upheaval, we are keen to pursue our common goals with partners and policy makers in the crucial months to come.
Sigrid de Vries
Director General of ACEA
With the green and digital transition, certain types of automotive jobs are likely to disappear; at the same time completely new profiles are needed for emerging jobs. We welcome President von der Leyen’s proposal to make 2023 the European Year of Skills.