ETRMA, EU bodies warn of energy crisis impact on automotive industry

Brussels – Five major European industry associations* have jointly sounded an alarm over the level of strain being placed on the EU's automotive 'ecosystem' by rising energy prices and increased production costs.

Without “significant political action” to address the issue, it will become “increasingly difficult to make the case for manufacturing and investments in the EU,” said the grouping, which include the European Tyre & Rubber Manufacturers’ Association (ETRMA).

“Additional political initiative is urgently needed to avoid new import dependencies and to ensure access to affordable energy,” the associations further cautioned in a 21 Oct statement.

Spelling out the challenges currently faced by the industry, they said rising energy prices, coupled with high costs of raw materials and other components, were negatively impacting the sector as well as customers.

“Costs of production are therefore skyrocketing, undermining profitability and putting investments and the very survival of critical industries within the automotive ecosystem at risk,” the European bodies added.

Industry, they pointed out, cannot absorb such high costs in the long-term, especially in the face of competition from other major markets such as the US or China.

With energy prices in Europe being seven to eight times higher than in the US, the associations warned that the EU car industry could not be competitive and required “a comprehensive and coordinated policy response.”

High costs also jeopardise employment in an industry that supports 11.5% of EU manufacturing labour, noted the statement, which also called for equal conditions across the EU.

“Single market and state aid rules must not undermine fair competition between production sites in different member states,” said the statement, noting the “essential role” of the European Commission in this area.

The European automotive industry employs over 13 million people and provides €375 billion in tax revenue for European governments in major markets.

*As well as ETRMA, the signatories are: the European Automobile Manufacturers’ Association (ACEA), the European Council for Motor Trades and Repairs (CECRA), the European Association of Automotive Suppliers (CLEPA), European Tech & Industry Employers (CEEMET).