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Fast-tracking Europe’s car industry - 09/11/2012

Car headlight © iStock/Olaru Radian-Alexandru

Proposals to make EU auto sector more competitive by investing in innovation, cutting red tape, boosting skills and increasing access to overseas markets.

Keeping the automotive industry fit is vital for Europe's prosperity. Some 12 million people depend, directly or indirectly, on the sector for their livelihoods.

But carmakers are under pressure from the global downturn. Demand is falling at a time when competition is growing, challenging EU companies at home and abroad. Manufacturers must also respond to the increasing demand for better energy efficiency and safer cars.

Meeting these challenges means companies need to focus more on quality and innovation. To help them make this transformation, the Commission is proposing a package of measures. These include:

  • investing in technologies to reduce greenhouse gases, pollutants and noise – by targeting EU funds and European Investment Bank loans and streamlining financial incentives
  • creating a viable consumer market for vehicles using alternative fuels (electricity, hydrogen and natural gas) – by increasing the required infrastructure, creating an EU standard for electrical recharging plugs
  • promoting advanced road-safety measures – these include intelligent transport systems (such as onboard computers, sensor technologies, digital services, communication systems)
  • reducing red tape and unfair competitive practices throughout the EU
  • helping industry get better access to international markets through fair, balanced trade deals and better promotion, especially in countries where demand is growing
  • concluding international negotiations on common standards and safety rules for electric vehicles and their batteries
  • improving skills and training and anticipating future industry needs
  • using funding for research and innovation more efficiently at European and national levels.

The plan is based on the Commission's industrial strategy, which sets EU priorities for boosting strategic sectors – which also include aeronautics, engineering, space, chemicals and pharmaceuticals.

The strategy aims to reverse the decline in manufacturing, increasing its share of gross domestic product from the current 16% to around 20% by 2020. Manufacturing currently accounts for 80% of the EU’s exports.

EU support for carmakers

EU report on automotive industry

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