EurActiv Logo
EU news & policy debates
- across languages -
Click here for EU news »
EurActiv.com Network

BROWSE ALL SECTIONS

EU carmakers square up to critics in Parliament

Published 06 October 2005 - Updated 29 June 2007
Printer-friendly versionSend by email

A hearing on the competitiveness of the car sector today in Parliament could end up in a finger-pointing exercise for EU carmakers, who face accusations from consumer groups, green activists and competition authorities.

A Parliament hearing on the competitiveness of the EU car industry on 6 October could end up giving European makers a bumpy ride as they strive to keep up with growing global competition.

Pressure on EU carmakers is mounting at the moment with the latest salvo coming on 5 October from the European Commission when it slapped a €49.5 million fine on French manufacturer Peugeot SA for barring dealers in the Netherlands from selling their products to consumers in other EU countries.

The move comes as the Commission is putting the finishing touches to a broader strategy to reform regulation of the European automotive sector that encompasses the whole supply chain, launched in October 2002. 

Earlier, a proposal to liberalise the 10 billion annual spare parts market in September last year had met with stiff opposition from EU car makers (EurActiv, 6 Sept. 2004). More recently, the Commission issued new rules in a bid to end restrictions placed by carmakers on the location of dealer's showrooms. A chief objective there is to end carmakers' grip on markets and, over time, to lower prices for consumers.

But the Parliament hearing will mainly focus on progress made by a group of CEOs and politicians set up by the Commission to review the regulatory framework of the car industry. The group, called CARS 21, is meant to come up with recommendations to revise the EU's automotive regulatory framework and propose concrete measures to improve:

  • economic competitiveness 
  • environmental performance 
  • road safety
Positions: 

The consumers' organisation BEUC was highly critical of the CARS 21 group and deplored the fact that consumers are not represented in it. "We fear that the group will be manipulated to be little more than a sounding board for industry special pleading and hostility to various progressive measures to enhance consumer and environmental welfare and to blame everybody except the industry itself for current difficulties," BEUC said in a contribution to the group.

BEUC pointed to a lack of competition in the car sector, which is said to have led to a decrease in quality, especially among well known German brands. Citing a test study by Which? Magazine, BEUC says the brands now making the most dependable cars are now all Japanese.

Furthermore, BEUC accuses automakers of not being responsive to consumers' demands, "even when demand is high," because of a "captive chain of dealers" who are "forced to sell cars that consumers do not want".

Some organisations speaking at the hearing on 6 October have already voiced concerns about the direction the CARS 21 high level group is taking. 

Toyota Motor Europe said it believes that the car market "begins and ends with consumers" and that competitiveness should firstly aim to look at consumers' needs and wants. "For us, the key point [of CARS 21] is that its operations need to be transparent," said a Toyota representative in Brussels who added: "This is not the case in my personal opinion". Toyota favours a neutral approach to fiscal incentives for clean vehicles, which does not support one technology over another. Innovation is "the oxygen" of the car industry, Toyota argues.

FIGIEFA, the international federation of automotive aftermarket distributors is furious that it has been denied any direct representation in CARS 21.

According to FIGIEFA, "if free competition is not prioritised during the CARS 21 discussions, it will be the consumers who will be the ones to suffer".

FIGIEFA says CARS 21 should consider the effect of legislation meant to prevent the creation of monopolies and dominant market positions. President Hartmut Röhl said: "the instruments of soft law are not appropriate to remedy the problems of dominant market positions and anti-competitive practices in the automotive aftermarket."

In the context of high oil prices, T&E, the European Federation for Transport and Environment, highlighted that fuel efficiency of vehicles should be the "absolute priority" of CARS 21. T&E says attention to 'revolutionary' technologies such as hydrogen fuel cell engines "should not divert attention from the far more certain and much-needed short and medium term improvements on more conventional drivetrains".

This, T&E says, will also help reduce CO2 emissions, provided ambitious regulatory steps and incentives are taken, ruling out voluntary industry approaches to CO2 emissions reductions.

Commenting on the launch of the CARS 21 high level group, Bernd Pischetsrieder, CEO of Volkswagen and President of the EU automakers association ACEA said "the ambition of this group is not to prevent the worst, it is to make the best, to create a pro-competitive EU regulatory framework for the next decade. Our task is to find the right balance between environmental protection, economic competitiveness, road safety and consumer demands".  

Next steps: 
  • The CARS 21 high level group will give its recommendations to the Commission before the end of 2005
Background: 

The CARS 21 high-level group was set up by Commissioner Verheugen in January to improve the regulatory framework of the car industry and prepare it for the competitive challenges of the next decade. The group is composed of:

  • three Commissioners (Industry, Transport and Environment); 
  • 5 ministers from member states (UK, France, Germany, Italy, Czech Republic);
  • two MEPs (PES and EPP-ED);
  • 5 CEOs from the auto industry (Ford only non-EU) and one petroleum, one automotive supplier;
  • one trade union (Metalworkers), one motorist organisation (FIA) and one environment think-tank (IEEP) 

It soon came under attack, notably by consumer organisations but also by other industry sectors connected to automotive for being tailor-made to fit EU manufacturers' interests (EurActiv, 1 March 2005).

More on this topic

More in this section

Advertising