Europe's automotive trade groups are calling for government incentives to boost demand after coronavirus restrictions are lifted, including scrapping premiums, saying the move is essential to support widespread economic recovery and speed up the introduction of low-emissions vehicles.
Many governments turned to scrapping incentives and similar plans in the 2008 economic crisis. That kept sales from collapsing but also led to slumps over the next several years before sales stabilized in 2012.
"Targeted measures will need to be taken to trigger demand and investment," Eric-Mark Huitema, Director General of ACEA, the automobile manufacturers' association, said in a joint news release.
"Demand stimulus will boost the utilization of our manufacturing capacity, safeguarding jobs and investments."
Sales in most major European markets have fallen by 90 percent or more, with dealerships closed starting in the second week of March. Showrooms have started to reopen, notably in Germany, Europe's largest market, but it remains unclear how consumers will behave after months of furloughs, partial unemployment and long-term worries about a surge in new coronavirus cases.
The four organizations -- ACEA; CLEPA, which represents suppliers; CECRA, the dealers' and services group; and ETRMA, the tire and rubber makers' group -- issued a 25-point plan for reviving Europe's auto industry.
The groups say that programs to trigger demand should be coordinated across Europe, be based on similar criteria and apply to all vehicle categories.
Incentives should be "limited in time" and "technology neutral," the groups said, although they could be "differentiated progressively according to safety and environmental performance," including CO2 emissions. Purchase incentives should be supported by scrapping premiums, the groups say.
The new EU fleet target of 95 g/km of CO2 has left European automakers scrambling to sell more full-electric, plug-in hybrid and conventional hybrid vehicles, which are more costly to produce and buy than non-electrified versions.
Noting that taxis make up 10 to 20 percent of city traffic, the groups are also calling for incentives for private fleet operators.
Other recommendations made by the groups include:
- Exempting the transport of goods from coronavirus border closings, and granting exemptions for workers who commute across borders.
- Considering temporary flexibility in EU competitions rules, for example to allow companies to provide economic support for suppliers and cooperate on distribution.
- Assessing the impact of the coronavirus crisis on existing and planned regulatory requirements, although the groups are not calling directly for emissions standards to be relaxed or postponed.