Keynote speech at FIA Summer Cocktail, Bibliothèque Solvay, Brussels
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Thank you, Jean [Todt] and Thierry [Willemarck] for your words of introduction.
Ladies and gentlemen, despite these very pleasant surroundings, we cannot deny the very great difficulties in Europe. These are not easy times in Europe. And clearly we will have to reflect seriously on what has happened in the UK and how we move from here. There is no quick fix.
But ladies and gentlemen, Europe's common project must go on. There are jobs at stake across Europe and we must fight for them. And that is why Günther and I felt that it was important to be here tonight. Tonight I want to launch a discussion on the future of the European automotive industry. And I want to start by saying that I strongly believe that the future can and should be bright. We have a potential in Europe in this sector that none of our competitors can match. And by the way, I include both the US and China in this.
We have an established industrial base. And our industry has been an early adopter of green technologies. We have a well-educated and skilled workforce. We have world-class science and research organisations. And that means a strong technological know-how; and the specialists to match.
Our geography means that it is easier for us to form the value chains, hubs and clusters to succeed. So we have a highly integrated and specialised supply chain. And we have a diversity in Europe that no other continent or nation can match.
That is why I am a believer in this industry and a supporter of its future.
1. Let's be honest about the present
But ladies and gentlemen, in order to get to the future, you have to pass through the present.
The present can be summed up in one word:
And if you want two words: "defeat devices". Some in this room might prefer that I didn't talk about it. Some in this room might wish that the issue would go away. And some in this room may think that it is someone else's problem.
Ladies and gentlemen, it's everyone's problem.
And until it is fully addressed, the future won't be European. It will be American, it will be Chinese or it will be Indian. Sadly, the emissions crisis reminds me of the banking crisis. With its four stages of denial. Denial of what went wrong. Denial that the problems were widespread. Denial that there was a need to act. And denial of the extent of the action needed.
In 2007, the financial service industry said that it was only Bear Stearns. And then there was Lehman Brothers. And then Northern Rock. And Dexia. And West LB. And I could go on.
Last year, the car manufacturers said that it was only VW. An isolated issue. But then we hear about other manufacturers. And now we hear that it covers thermo windows. And what will we find out tomorrow?
Look at the impact of the banking crisis on the financial sector. And 8, 9 years on, it still hasn't fully recovered. Is that what we want in your sector?
If we don't, it is time to put all the cards on the table. Now. We need to regain credibility.
Industry can no longer bend the rules. Our consumers should be treated fairly. They need to be sure that what is sold to them as a clean car is indeed a clean car. They should also receive reliable fuel consumption figures. How can you sell cars to crisis-struck Greece that consume 20-30-40% more fuel than indicated?
Consumers bought cars that emit more Nitrogen Oxide than indicated. Yes - the cars will be brought into conformity in the future. But consumers are paying now. And in the future, who will pay for the higher maintenance costs? Not to mention the impact on the environment and local air pollution.
So far, the Commission still has not received all the technical details from the national investigations. But if emission control is switched off under 17 degrees, that means in Northern Finland you drive without emission control almost all year-long. How can anyone consider this as normal conditions of use? If you have to make use of this exception to protect the engine all-year long, why do you sell cars to Finland? What you do is you make the exception the general rule.
That is not acceptable to society. And it is not acceptable to me. We need to sort this out.
In the Commission, we have been honest about the situation right from the start. And we have launched a programme of action. We have made some progress, but not enough. And the reason for that lack of progress is very simple. Denial by car manufacturers. Lack of determination by too many authorities. Too little honesty about the situation, too little cooperation. I am getting weary of explaining to MEPs and environment ministers why we still don't have the full facts and why we still don't have adequate action.
So here is what needs to happen in the next twelve months.
First, we need to make serious progress on reforming the EU's type-approval and market surveillance system. We put our proposal out in January 2016. The Council and European Parliament need to speed up adoption. And they need your support to do that.
Second, we will provide long-term investment certainty with a Communication on a low-carbon transport system and the proposals that will follow. This means reflecting on next steps in emission legislation. For car emissions there can be only one way. They need to come down. We also need a clear policy target for zero emission vehicles.
Third, we will push ahead with making our testing regime fit for the future, through our RDE packages and the WLTP.
2. Let's start thinking about the future
But ladies and gentlemen, in parallel, we need to start planning for the future. Not just thinking about it, but actively planning and making the changes. Every good driver knows the importance of shifting gears ahead of time, so as to allow a smooth acceleration. That is more and more true for the industry itself. Thinking beyond the next model cycle is vital. Industry is rightly demanding long-term policy guidance and investment certainty from us. But in turn, we expect industry to take strategic decisions and to plan and act with a long-term perspective. The future is challenging.
First, there is a profound shift in consumer behaviour and preferences. The most obvious evidence of this is the growing popularity of car-sharing schemes and ride-hailing apps.
Second, climate change is ever more present. And with it, the actions that we will need to take to reduce emissions and to decarbonise.
Third, cars themselves are changing as we move to automated and autonomous driving, connected cars, and alternative powertrains. And with this, the question of road safety and obviously the issue of liability. And also the emergence of competitors from other industries.
Fourth and finally, we are seeing a demand shift from mature to emerging markets. And with it, new competitors in those markets.
3. A European industry that adapts before its partners do will win
But ladies and gentlemen, each of those challenges is also an opportunity to be seized by the industry. And in each, European industry has potential advantages. We have a special advantage on decarbonisation and the environmental challenges. Green issues are more keenly felt in Europe than in competitor regions. Let's use that. In the short term, it might seem a burden. But in the long term, it puts you ahead of the others. Because they will have to adapt. The Paris agreement applies to everyone. And we all know that China suffers from air pollution.
A European industry that develops new green technologies faster will win. A European industry that quickly moves from low emission vehicles to zero emission vehicles will win.
We can do this without sacrificing technology neutrality. We are not prescribing the technical solution. We are prescribing the outcome to be achieved.
We can do this without sacrificing profits or growth. Indeed, early adoption will mean greater profits and greater growth. And that will mean more jobs across Europe. And it will mean smart and clean cities from a smart and clean industry. Fewer traffic jams. Less pollution in our cities.
Let us not see these challenges and opportunities in isolation. Let's see them as one big opportunity. New mobility services that make better use of cars than having them parked 95% of the time will help Europe meet its environmental targets.
And a move to a connected driver-less, zero emission car will allow us to dominate global car markets in the long term.
We cannot create the change or make the innovation. But we can play an enabling role. We can give the policy signals. And we can help create the conditions for that change.
And the current work on emissions is actually an opportunity. It is an opportunity to make a radical overhaul that will put us ahead of our competitors. As the French language says: Reculer pour mieux sauter.
We need to think and act longer term. So GEAR 2030 was set up to do just that. It will enable us to draw important conclusions for securing the industry's competitiveness in the next decade and beyond.
But we cannot be a substitute for innovation by the industry. You must make the change. That requires a change in mentality. Not just in terms of thinking and acting longer term. But also in terms of how you engage with us and with other stakeholders. And that includes with environmental NGOs and consumers. You can work together. So you need to rebuild trust and relations. And that means being totally transparent.
Ladies and gentlemen, if you can do that, and if you work with us to sort out the present, the future will look brighter.
We can lead the world in how we will use cars. We can lead the world on decarbonisation. We can lead the world on autonomous and connected driving. We can do that by planning and acting ahead. By shifting gears early to be ready for the future.
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