04’EUROPEANAUTOMOBILEINDUSTRYREPORTEUROPEANAUTOMOBILEMANUFACTURERSASSOCIATIONRueduNoyer211B–1000BruxellesTEL+3227325550FAX+3227387310:16.9millionvehiclesproducedofworldwideproductionAbout1.9milliondirectjobsinthemanufacturingofvehiclesandcomponents(7%ofallmanufacturingemploymentintheEU)33billion€ininvestment19billion€inR&Dexpenditure33.5billion€ofnetcontributiontotheEU’stradebalance340billion€oftaxrevenue(alltaxesfromMotorVehicles)04’EUROPEANAUTOMOBILEINDUSTRYREPORTTheEuropeanautomotiveindustryhasalwaysattractedtheintenseinterestofpoliticians,regulatorsandthemedia,andthereasonisnotdifficulttodiscern.Theindustry’ssize,itscomplexity,itseconomiccontribution(aroundatotalof10millionjobsand3%ofEUGDP)anditsroleinprovidingmobilityforallEuropeansmeansthatitwillalwaysbecloselyobserved.ACEA’saimistoinformthedebatearoundtheautomotiveindustryandensurethatdecisionsmadeaffectingitcontinuetopromotethesustainablemobilityandtheeconomicprosperityofEuropeanditscitizens.Webelievethattheindustryhasanexcellentrecordoffulfillingitsresponsibilitiesinprotectingtheenvironment,improvingroadsafetyandservinggrowingmobilitydemands.Recentdecadesandyearshaveseenradicalprogressinreducingemissions,fuelconsumptionandnoise,improvingrecyclingandvehiclesafety,developingandintroducingofalternativefuelsandnewtechnologies.Theautomotiveindustryiscommittedtocontinuousimprovementinthedrivetowardssustainablemobility.Thefreemovementofpeople,goodsandideas,shouldnotbelimited.Mobilityisabasichumanrightandanessentialfacilitatorofeconomicandsocialdevelopment,andofqualityoflife.Accesstomobilitymeansaccesstoemployment,education,healthcare,toleisureandculturalactivitiesandtoindispensablesupplyofgoodsandservices.Intoday’sglobalworld,mobilityneedsareincreasing,bothinthedevelopingcountriesandintheindustrializedones.Whatweneedtodoistomakemobilityaffordabletomostpeopleandtomakeitmoresustainableandefficient.Itisimportanttorecognise,however,thatwecanonlycontinuetoachieveprogressiftheindustryisallowedtodevelopprofitablyinpartnershipwithregulatorsandotherstakeholders.EnlargementoftheEUpresentsEuropewithararechancetoreassessitsapproach,notonlytoourindustrybuttoindustryasawhole.Itisindustrialgrowththatcreatesthewealththatallowstheimportantsocialandenvironmentalgoalsthatweallsharetobemet.Industryisnottheopponentofsociety,butitsengine,andfornoindustryisthismoretruethantheautomotivesector.Whileourcontributiontoemployment,taxrevenuesandtradebalancesareverysignificant,industrycompetitivenessremainspotentiallyfragileinthefaceofglobaleconomicforces,over-regulationandstructuraleconomicweaknessathome.IhopethatthenewMemberStatesandcitizensfromallcornersofEuropewillappreciatethattheautomotiveindustryiscapableofevengreaterthings,givensupportabroadandbalancedregulatorytouchathome.Ihope,too,thattheywillacknowledgethatnotallwisdomresidesinoneplaceandthatwe,andourcustomers,arewell-placedtohelpdecidewhatitisdesirable,practical,appropriateandaffordabletoexpecttheindustrytodeliverintermsofnewdevelopments.FOREWORD.1FOREWORDfromthePRESIDENTBerndPischetsriederCEOOFVOLKSWAGENAGANDPRESIDENTOFACEA_2004Fromtheautomotiveindustry’sperspective,howwouldyoucharacterise2003?ItwasachallengingyearfortheindustryintheEU,foritsmembercompaniesandforACEAinitstaskofrepresentingtheindustry’sinterestsattheEuropeanlevel.Thesechallengespresentedthemselvesonanumberoffronts:macroeconomic,political,andregulatory.Thebroadeconomicpicturethatprovidedthebackgroundtotheindustry’sactivitiesin2003wasnotabrightone.Theweaknessofthedollarandthestrengthoftheeuro,particularlytowardstheyear’send,madeforanextremelytoughenvironmentforexports.ThiswasexacerbatedbythefailureoftheWTOnegotiationsatCancún,whichmeantthatlittleprogresswasmadetowardstheremovalofthevarioustariffandnon-tariffbarriersthatcontinuetoconfrontEuropeanmanufacturersacrosstheworld.Athome,thecontinuedtorpidityofthecoreeconomiesofEuropemeantthatdemandwasstagnantorslightlydepressedwithinvehiclemanufacturers’keymarketsand,overall,newvehiclesalesfortheyearweredownbyalittleover1%.LastyearalsoshowedthatthereisalsoapressingneedfortheEUtoreassessbothitsindustrialpolicyanditsregulatoryapproach.Withoutthis,theautomotiveindustrywillstruggletoachieveitspotentialcontributiontorealisingthecompetitivenessobjectivessetoutintheLisbonAgenda.InwhatwayswouldyousaythattheEU’sregulatoryapproachadverselyaffectstheindustry?Whiletheindustryappreciatesregulation’svalueinsettingstandards,ensuringconsistencyandtheworkingoftheinternalmarket,thescaleandnatureofthemeasuresthatareincreasinglybeingimposeduponvehiclemanufacturersgiveseriouscauseforconcern.Balancedandproportionateregulation,whichtakesintoaccountthesizeandcomplexityoftheindustryandco-ordinatesallthepolicyobjectivesimpactinguponitis,inprinciple,amust.Conflictingregulations-suchasthosethatsimultaneouslydemandbothgreaterfuelefficiencyandsafetyenhancementsthatmakecarsheavierandrequiremorepower-arelesshelpful.Thelead-timessetforcompliancewithreg