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May 28, 2020 11:59 AM

Automakers disappointed by EU's recovery program

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    Automakers criticized Europe's 750 billion-euro ($827 billion) fiscal stimulus package for not outlining how the region's auto industry will be helped to recover from the coronavirus pandemic, which has caused vehicles sales to collapse to historic lows.

    The plan, which is called "Next Generation EU," aims to distribute grants to the EU's 27 member states worth 500 billion euros and a further 250 billion euros in loans.

    The coronavirus crisis had demonstrated the "crucial role" that the transport sector plays in the economy, the European Commission, the EU's executive arm, which drew up the package, said. However, its plan did not detail aid to the sector, saying only that it wanted "to accelerate production and deployment" of sustainable vehicles.

    ACEA, automakers' Brussels-based lobby group, said it was discouraged by the lack of details.

    "ACEA is surprised and disappointed to note that the proposed Recovery Package remains quite concise and vague on the instruments and financial means for the recovery of the European auto industry," it said in a statement sent to Automotive News Europe.

    The association said vehicle sales were not showing any signs of picking up soon.

    Governments across Europe imposed restrictions to limit the spread of the coronavirus, forcing factories and dealerships to shut. The COVID-19 measures resulted in production losses of more than 2.4. million vehicles in Europe affecting 1.1 million jobs, according to ACEA.

    It said the 1 million electric vehicle charging points referred to in the recovery plan already were part of the Green Deal proposed in December and fall well short of what it believes is required.

    A previous leaked draft of the Commission's proposal suggested it could offer EU consumers incentives worth 20 billion euros to buy environmentally friendly cars. The final draft published on Wednesday does not include any such detail.

    "As a sector representing the jobs of 13.8 million people, we eagerly await clarity on when and how some of the announced measures -- such as fleet renewal schemes, the installation of charging points and fast-tracking of the European Battery Alliance -- will be implemented in practice," ACEA said.

    At the start of the month, ACEA joined European tiremakers, suppliers and dealers to call for a coordinated fleet renewal scheme for all vehicle types and categories across the EU with incentives based similar criteria across Europe, drawing on both national and EU funding.

    According to the EU Commission, the mobility sector is critical to a recovery of the economy. It represents the most integrated ecosystem in the bloc, as it relies on cross-border value chains within the Single Market for 45.3 percent of its total production.

    "The automotive industry is extremely important for Europe's economy, and an incredible amount of jobs are linked to that. This industry is now suffering so they will need support," EU Commission Executive Vice-President Frans Timmermans told reporters on Thursday.

    "If we give that support, we should make sure this support helps them move towards clean mobility. This starts of course with complying with the 95 grams per km goal that we have set but especially moving to electric mobility," he said.

    The Commission expects economic output to decline by 7.4 percent in the bloc this year with only a partial recovery of 6.1 percent in 2021.

    The recovery plan is subject to approval by all 27 governments and the European Parliament. Negotiations on the package could take months and result in significant amendments.

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        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
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