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European automotive industry gears up for 21st century

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The European automotive industry is a major driving force of the European economy, but it is currently facing a number of pressing challenges. The recommendations of the CARS 21 High Level Group should help the sector pursue a sustainable future delivering economic growth and jobs. Cleaner alternative fuels and vehicles as well as developing more sophisticated road safety technologies and gaining better access to third markets are part of this vision leading up to 2020.

The CARS 21 High Level Group released its final reportpdf Choose translations of the previous link  in June, in which it sets out its vision for the European automotive industry for 2020. The recommendations are essentially about helping to ensure that the European automotive industry enjoys a healthy and sustainable future delivering economic growth and jobs whilst making progress in terms of vehicle safetypdf Choose translations of the previous link  and environmental performance, and at the same time delivering products at an affordable price.

The CARS 21 Group, which was initially set up in 2005 and re-launched in 2010, has held a series of meetings leading to the drafting of its final report. The Group is made up of representatives from the European Commission, EU Member States and other institutions, industry, trade unions, NGOs and users.

‘The CARS 21 report provides useful input for the important strategic vision for the automotive industry in 2020 which we will present after the summer,’ said European Commission Vice-President Antonio Tajani, responsible for Industry and Entrepreneurship. ‘But the automotive industry needs to be in good shape first in order to realise this vision. We therefore need to act now and decisively in order to counter current economic difficulties by mobilising financing for research, carefully evaluating any new regulations and supporting the expansion on third markets.’

12 million jobs in Europe

The automotive industry is a cornerstone of the economies of EU Member States, accounting for around 3% of Europe’s gross domestic product (GDP), 7% of employment in the manufacturing sector and 8% of EU governments’ total revenue. Furthermore, the EU was the biggest producer of light vehicles (passenger cars and vans) in 2012, accounting for 20% of the global market, only behind China with 23%. This is also one of the biggest industries in Europe, with more than €700 billion in turnover, and it provides over 12 million direct and indirect jobs. Another way in which it contributes to society is by providing the European public and economy with increased mobility.

However, the automotive industry is also facing the much discussed globalisation challenge head-on as well as being subject to significant demands from society, particularly in terms of the environment and road safety.

Research into clean, renewable fuels and vehicles

One of the report’s recommendations is for clean and energy-efficient vehicles to be not only deployed but also produced in Europe with European support for research, development and innovation on a broad range of automotive issues and critical future technologies. In this context, a specific and major initiative on breakthrough technologies (including the electrification of combustion engines, hybrid and electric vehicles, fuel cells, electrical and electronic systems) is also being considered. The CARS 21 Group says a ‘roll-out of multiple alternative infrastructures is necessary in order to create favourable conditions for the deployment of vehicles powered by different alternative fuels’ and that ‘to coordinate the roll-out of the infrastructure for electromobility, it would be useful to launch a platform at EU level, focused on information exchanges and best practices.’

The report also points out that electric vehicles will become a valid choice for the European consumer. It expects the charging of electric vehicles to be done mainly at home and work, but argues that there will be also a need for publicly accessible recharging infrastructure. ‘In order to ensure interoperability across the EU, standardisation at the European level is needed,’ it says.

Intelligent roads and vehicles

The level of safety on EU roads has improved considerably between 2001 and 2010, with the overall reduction in road deaths in the EU27 just 7% off the 50% target for this period. Three main reasons explaining this progress are safer vehicles, improved infrastructure and stricter enforcement measures, areas in which further road safety progress can be made.

In order to achieve the new goal of an additional 50% reduction of fatalities between 2011 and 2020, the report recommends the continuation of an integrated policy approach, which should consider accident research a routine activity and ‘underpin the identification of the measures which are most cost-effective in reducing accidents and fatalities’. Considerable emphasis is also placed on the significant role that the use of advanced technologies such as intelligent transport systems can play in improving road safety, while highlighting that ‘due to the complementary actions in different areas’, it is essential to have a ‘stronger coordination of actions among stakeholders and authorities.’

Helping the sector penetrate markets abroad

Expanding into third markets, i.e. markets outside the EU, is another important area. In the view of the CARS 21 Group, this would entail supporting the internationalisation of EU industry by making it possible for a larger portfolio of vehicles assembled in the EU to be exported. The two broad strands of technical work here are to improve market access through trade negotiations and to work with international partners on regulatory and procedural convergence, with the ultimate objective that in future – regardless of where a car is produced – there will be no restrictions as to which country it can be marketed in. In terms of trade, the report identifies market access to China as one of the major areas ‘of crucial importance for the competitiveness’.

The report does not mark the end of the process by any means. In fact, the European Commission will continue its dialogue with industry and monitor the economic situation in order to translate the CARS 21 recommendations into concrete actions over the coming months.

The European Commission will also be adopting an official communication on the outcome of CARS 21 in autumn this year, which will include the recommendations and an action plan to support the automotive industry. In the future, the Commission is expecting to hold an annual meeting of a CARS 2020 Group in order to monitor the progress made towards the recommendations.

Employment, research and development

Europe’s automotive industry (vehicle and equipment manufacturers) provides work for more than two million Europeans and supports an additional ten million indirect jobs in both large companies and SMEs (7% of total European manufacturing employment).

The increasingly research-intensive nature of the sector means that it requires a highly skilled workforce and contributes to the development of modern education and training systems as well as new ways of working.

With an annual investment of around €30 billion in R&D, Europe’s automotive sector is the largest R&D private investor in Europe (accounting for 20% of total European manufacturing R&D) and is a major driver in the development and spread of new technologies and innovations throughout the economy.


‘Automotive Industry’ Unit
Directorate-General for Enterprise and Industry

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