EU seeking ways to save its beleaguered auto industry

EU seeking ways to save its beleaguered auto industry

BRUSSELS
EU seeking ways to save its beleaguered auto industry

The EU has promised  an "action plan" to help the bloc's beleaguered auto sector as it faces mounting pressure to ease green targets for an industry beset by Chinese competition.

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On Jan. 30, EU chief Ursula von der Leyen held talks with industry leaders in Brussels in a show of support for a sector that employs 13 million people and accounts for about seven percent of Europe's GDP, amid a broader push to revive the continent's competitiveness.

"The European automotive industry is at a pivotal moment, and we acknowledge the challenges it faces. That is why we are acting swiftly to address them," von der Leyen said.

The so-called "strategic dialogue" brought together carmakers, suppliers, civil society groups and trade unions, chaired by the European Commission president who pledged an "action plan" by early March.

Representatives of 22 industry players including Volkswagen, BMW, Mercedes and Renault, participated in the meeting, the commission said.

The talks saw car industry representatives launch a "big attack" on emission standards set by Brussels and related fines, said William Todts, executive director of clean transport advocacy group T&E.

"They don't want to pay the penalties. They want to make changes to 2035," he said referring to the EU's ambitious target to phase out the sale of fossil fuel-burning cars within the next decade.

"They made very little proposals on how to actually stimulate the market for electric vehicles in Europe."

The get-together came as the commission embarks on a pro-business shift, with firms complaining its former focus on climate and business ethics has led to excessive regulations.

On Jan. 29, it unveiled a blueprint to revamp the bloc's economic model, amid worries that low productivity, high energy prices, weak investments and other ills are leaving the EU behind the United States and China.

The car industry has been plunged into crisis by high manufacturing costs, a stuttering switch to electric vehicles (EV) and increased Chinese competition.

Announcements of possible job cuts have multiplied. Volkswagen plans to axe 35,000 positions across its German locations by 2030.

Carmakers have been calling for "flexibility" on the steep emission fines they could face in 2025, something the bloc's new growth blueprint said should be in the cards.

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About 16 percent of the planet-warming carbon dioxide (CO2) gas released into the atmosphere in Europe comes from cars' exhaust pipes, the EU says.

As of this year carmakers have to lower the average CO2 emitted by all newly sold vehicles by 15 percent from 2021 levels or pay a penalty with tougher cuts down the road.

The idea is to incentivise firms to increase the share of EVs, hybrids and small vehicles they sell compared to, for instance, diesel-guzzling SUVs.