Ref. Ares(2020)3731150 - 15/07/2020
What are your current plans to convert some of the existing facilities to produce
protective personal and medical equipment (e.g. masks and ventilators)?
What type of support do you need in this respect?
What are your needs in terms of financial support? Has your government
proposed to help?
Given the cross border nature of the automotive sector, which are your
recommendations for the facilitation of circulation of essential goods, services and
persons (e.g. experts) across EU countries?
What is the situation on your third country markets: in particular in China and
the US but also in Japan and Korea?
What kind of measures do you consider necessary to relaunch the production
and demand once the health pandemic is over?
Defensives (based on questions received so far from the industry)
1. Wil the EIB also provide a financial support to the automotive industry?
The EIB Group wil rapidly mobilise up to EUR 40 bil ion to fight crisis caused by Covid-19.
Amongst them, EUR 10 bil ion wil be dedicated liquidity lines to banks to ensure
additional working capital support for SMEs and mid-caps.
2. What long-term measures are planned by the Commission to support economic
recovery of the automotive industry after the end of the crisis?
Several measurements are under reflection but have yet to be confirmed and wil be
taken in coherence with the Green Deal main objectives. To relaunch car demand, the
Commission wil invest in fast charging infrastructure to support electric car sales and wil
encourage state and local subsidies to the industry. A legislative proposal for the EU
Unemployment Reinsurance Scheme is also in preparation to help workers who lose jobs
because of the crisis and support reskil ing.
3. Wil the Commission adjust regulatory deadlines for the acts that wil be applicable
or wil enter into force in the coming months?
I have instructed my services to make a thorough analysis of al the upcoming regulatory
deadlines and of their adequacy under the current circumstances.
Your input wil be appreciated in this respect.
4. Wil the Commission maintain Green Deal ambition, in particular with regard to CO2
standards?
The Green Deal remains and wil remain a priority for the Commission. Concerning CO2
standards and there is intention to implement it (this has been double checked with
CLIMA).
5.Does the Commission envisage temporary VAT waiver on some products? That would
be of great help.
2
The Commission wil consider broad range of measures that can be of support to the
industry.
6. How can you help us to generate demand?
Keeping in mind that the pandemic wil be over, the Commission has already started
reflection on the type of support measures that should be introduced as a matter of
priority ( e.g. scrapping schemes ( cash for clinkers ) used to facilitate the fleet renewal
also after 2008.crisis, reinforcement of charging infrastructure, tc.).
7. How can you prevent vulnerable innovative European companies from being taken
over by the Chinese competitors as the situation in China stabilizes?
Sovereignty is at the core of the recently adopted Industrial Strategy. This crisis is a
wake-up cal in this respect. Consolidating and securing the value chains of European
industry wil be one of my priorities.
Background information
The automotive sector represents 3.2% of total EU output, 12.5% of total EU
manufacturing output and 13.8 mil ions of direct and indirect jobs.
Three major impacts of the crisis are already evident:
o 1. (almost) complete stop of production (with the exception of a limited
production of emergency and light commercial vehicles) due to supply
chain disruptions and public health concerns: major carmakers and
suppliers plants closed in the EU, causing massive temporary layoffs.
o 2. decline in demand: sales nearly stopped in late February (tendency
which continued to almost flat level in March) due to the closures of
dealerships (limited online sales being the exception
very quickly). According to first estimates, the col apse in demand in the
automotive industry is expected to reach 80% in March (for comparison,
in China, retail sales fel by 79% y/y in February). Export to traditional
markets (US, China) is equal y affected
o 3. financial stress: liquidity is a primary problem concern in particular for
SMEs, including ramping up of vehicle stock in case of volume
manufacturers. Market capitalisation (stock value) of already overvalued
automakers and their suppliers plummeted since January. The announced
share buybacks to restore the market value may be seen as a concern as
this may negatively affect the available cash-flow for the very much
needed capital expenditure/investments. Consequences are expected on
long-term employment but remain unclear.
bil ion Corona Response Investment Initiative
(CRII), notably to provide liquidity to firms (covering e.g. working capital in SMEs)
Automotive industry expects a decisive involvement and support from the
European Investment Bank, fol owing the example of the Economic Recovery
Plan from 2008, where SMEs have been the main beneficiaries
They also cal for extra measures such as temporary VAT exemptions (proved
effective to boost sales of EV for example in Norway).
3
We are currrently assessing which regulatory deadlines should be postponed
fol owing the almost complete shutdown of the whole EU automotive industry.
We are doing this assessment for al sectors of the automotive sectors (cars,
trucks, busses, motorcycles tractors) but also for engines that equip mobile
machinery. We already had several contacts with stakeholders (associations and
individuals companies).
Our preliminary analysis is that we wil have to make legislative proposals to
change certain deadlines that became irrealistic because of the crisis.
4
CV
/
ACEA and
Fiat-Chrysler
CV
/
CLEPA and
Faurecia
5