EU auto industry faces crisis, 14 million jobs at stake, says ACEA

The effect of the coronavirus on society and the global economy is unprecedented, with grave consequences for the automobile industry. Europe, like India, is among those affected.

Most of the members of the European Automobile Manufacturers’ Association (ACEA) have already announced temporary closures of plants due to collapsing demand, supply shortages, and government measures, and are facing cases of corona infections and quarantines among their employees.

“It is clear that this is the worst crisis ever to impact the automotive industry,” said Eric-Mark Huitema, ACEA Director General. “With all manufacturing coming to a standstill and the retail network effectively closed, the jobs of some 14 million Europeans are now at stake. We call for strong and coordinated actions at national and EU level to provide immediate liquidity support for automobile companies, their suppliers and dealers.”

Huitema added, “We appreciate the policy measures that have already been announced, which will provide much needed immediate support for employees and companies alike. But we now also need an urgent dialogue with the President of the European Commission to do two things.”

“Firstly, to take concrete measures to avoid irreversible and fundamental damage to the sector with a permanent loss of jobs, capacity, innovation and research capability. Secondly, Europe should prepare to stimulate the recovery of our sector, which will be a key contributor to the accelerated recovery of the European economy at large.”

“We stand ready to work with the European Commission, national governments and other stakeholders to navigate through this unfolding crisis,” stressed Huitema.

Amid the unfolding situation, it is also important to keep the production and supply of spare parts going, as well as vehicle service networks. This is essential not only for the maintenance of vital logistics, but also for the work of emergency services like ambulances, firefighters, law enforcement, relief organisations and other public (medical) services.

Huitema commented, “The free flow of medicines, food, fuels, equipment and supply parts across the EU must be guaranteed under all circumstances.”

Across the European Union, vehicle manufacturers operate some 229 vehicle assembly and production plants, directly employing 2.6 million Europeans in manufacturing. The wider auto sector provides indirect and direct jobs for 13.8 million people in the EU. “The health of those people that are the backbone of our industry, and their families, is paramount to Europe’s automobile manufacturers,” said Huitema.

ACEA represents the 16 major Europe-based car, van, truck and bus manufacturers: BMW Group, CNH Industrial, DAF Trucks, Daimler, Ferrari, Fiat Chrysler Automobiles, Ford of Europe, Honda Motor Europe, Hyundai Motor Europe, Jaguar Land Rover, PSA Group, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars, and Volvo Group.

The ACEA commercial vehicle members are DAF Trucks, Daimler Trucks, Ford Trucks, IVECO, MAN Truck & Bus, Scania, Volkswagen Commercial Vehicles, and Volvo Group.

An estimated 13.8 million Europeans work in the auto industry (directly and indirectly), accounting for 6.1% of all EU jobs. 11.4% of EU manufacturing jobs – some 3.5 million – are in the automotive sector. Motor vehicles account for 428 billion euros in taxes in the EU15 countries alone. The automobile industry generates a trade surplus of 84.4 billion euros for the EU. The turnover generated by the auto industry represents over 7% of EU GDP.

Investing 57.4 billion euros in R&D annually, the automotive sector is Europe's largest private contributor to innovation, accounting for 28% of total EU spending.