EU car industry calls for “urgent policy action” as sales set to decline

Brussels – The European Automobile Manufacturers’ Association (ACEA) has urged policy makers to support the automotive industry amid continued challenges faced by the sector.

With the EU car market expected to shrink by over a quarter this year compared to pre-pandemic 2019 levels, ACEA president and CEO of BMW Oliver Zipse has called for “a policy framework that enables the market to both recover and make the shift to zero-emissions.”

“To ensure a return to growth – with an even greater share of electric vehicle sales so climate targets can be met – we urgently need the right framework conditions to be put in place,” Zipse said during an ACEA reception 6 Oct.

These, he said, include greater resilience in supply chains, an EU 'critical raw materials act' that ensures strategic access to the raw materials needed for e-mobility, and an accelerated roll-out of charging infrastructure.

According to Zipse, the last few years have been marked by major events such as Brexit, Covid-19, semiconductor supply bottlenecks and the war in Ukraine, with its impact on prices and availability of energy.

The impact of these challenges, according to ACEA, is reflected in recent EU car sales figures, with overall volumes down 12% year-on-year in the first eight months of the year.

“So far, the market was only constrained on the supply side as ongoing component shortages constrained production volumes,” said ACEA.

Demand, however, may also suffer over the coming months due to inflation and fears of recession, the association warned.

ACEA has now revised down its initial forecast of growth for the year, expecting the European car market to shrink by 1% to 9.6 million units.

Compared to the 2019 pre-pandemic figures, this represents a drop of 26% in car sales.

“Despite the contracting market and pressure from inflation and energy costs, the automobile industry continues to invest massively in R&D and in the skills and technologies driving the green and digital transition,” explained ACEA’s new director general, Sigrid de Vries.

“Such a vast transformation can only be successfully achieved by an industry that remains competitive well into the future. This is also strongly dependent on the right political framework conditions,” de Vries added.