European automotive sector plans recovery

Market: Metals, Oil products
06/05/20

The European automotive sector has proposed a plan to help restart the crippled industry after Covid-19 lockdown restrictions are eased, following closures amid the pandemic and new car sales all but vanishing in April.

EU-wide production losses since mid March, as a result of automotive factory shutdowns, have reached 2.3mn vehicles, according to the European Automobile Manufacturers' Association (ACEA).

New car sales have also fallen drastically. The UK automotive market in April experienced its worst ever month as the pandemic closed showrooms and dealerships across the country, causing new car sales to fall by 97.3pc on the year. New car sales in France fell by 88.8pc on the year in April and the Italian market fell by 97.5pc from last year.

The fall in automotive activity has impacted industries across Europe, with aluminium alloy producers closing alongside their automotive customers, while base oil demand has also been hit hard.

Targeting decision makers at EU and national levels, the industry's action plan has been signed by three other European associations alongside the ACEA, comprising the European Association of Automotive Suppliers, the European Tyre and Rubber Manufacturers Association and CECRA, an umbrella organisation regrouping national automotive trade associations and European brand dealer councils.

Among the plan's 25 suggested actions are calls to issue harmonised guidance on health and safety precautions for the workplace and an exemption on the transport of goods from border closures, as well as temporary flexibilities in competition rules, immediate renewal schemes for all vehicle categories across the EU and the postponement of all non-essential public consultations for at least two months.

"It is now crucial to bring the entire automotive value chain back into motion. We need a co-ordinated relaunch of industrial and retail activity, with maintained liquidity for businesses," ACEA director general Eric-Mark Huitema said. "Targeted measures will need to be taken to trigger demand and investment. Demand stimulus will boost the utilisation of our manufacturing capacity, safeguarding jobs and investments."

Jethro Wookey

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