By on June 10, 2011

 

The heads of the European automobile industry are assembling in London for their annual European Automobile Manufacturers’ Association meeting. While they were there, they dropped in with UK’s Prime Minister David Cameron to talk a little politics. Norbert Reithofer of BMW, Sergio Marchionne of Fiat, Carlos Ghosn of Renault, Nick Reilly of GM Europe and their leader Dieter Zetsche, president of the association and chief of Daimler, asked for assistance with fair free trade with major economies such as India and Japan, government support for the swift introduction of breakthrough technologies and less bureaucracy through lean regulations. All noble goals. But the BBC found a fly in the ointment:

“The European motor industry has called for non-European governments to scale back assistance for their own automotive industries.

But at the same time, they say they want more government support at home.”

Government support for the swift introduction of breakthrough technologies” is a thinly veiled plea for government money to fund (allegedly) research into EVs. Zetsche told Cameron that Europe’s automakers invest over €30 billion into R&D each year. (His ACEA say it’s “over €26 billion, but who wants to quibble about a little change.) And what about a little government help?

“Fair free trade with major economies such as India and Japan,” is likewise easily breakable code. “The Indian market was effectively closed to European car makers due to high tariffs and excise duties,” the association’s Secretary General Ivan Hodac told the Wall Street Journal. The same day, BMW announced a GBP500 million ($812 million) investment into its Mini plant in Oxford. So it was a good time to ask for some reciprocity.

Complaining about trade barriers in Japan (where the custom duty on cars is zero) was a little mistimed, considering that the day before, Ghosn’s Nissan said it would invest GBP192 million in the U.K. to design, engineer and build the next version of the Qashqai.

China wasn’t mentioned. China charges 25 percent duty, but business with China doesn’t give European automakers reason to complain.

At the meeting, the General Assembly of the European Automobile Manufacturers’ Association did at least on good deed: They accepted Hyundai as a card-carrying member. To qualify for association membership, one must have production in Europe. Hyundai has plants in Slovakia and the Czech Republic. Hyundai tried for years to get accepted to the exclusive club, but were repeatedly rebuffed. Now finally, the association welcomed “Hyundai in our midst and are convinced the company will make a valuable contribution to the work of our association”, said Ivan Hodac.

 

 

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11 Comments on “EU Carmakers Rattle Sabers, Want Money, Accept Hyundai...”


  • avatar
    mike978

    What is wrong with the car companies wanting freer trade with India?

    Bertel – why if there are no tariffs are European cars/foreign cars such poor sellers in Japan? When they do well in other regions (US, Europe, Latin America, middle East etc).

    • 0 avatar

      There is nothing wrong with it. The Indian tariff goes up to 100% and is one of the highest in the world. There is an Indian-EU free trade agreement in the works that would bring those tariffs down. Who’s against it? Automakers in India – some of them European.

      Second question: Tariffs hamper import, but the biggest barrier to entry of a car is when nobody wants it. Japanese cars have a relatively low market share in the EU, and EU cars have an even lower share in Japan. There is no tariff on car imports to Japan. There is a 10% duty on cars brought into the EU. Non-issue. There are just too many choices in both markets for cars, why get an import? As a Japanese auto executive told me a few weeks ago: “These are for people who want to be different. The problem is, not too many people want to be different.” Sales of imports to Japan are up and will go up more this year, because Japanese can’t deliver.

  • avatar
    don1967

    Now finally, the association welcomed “Hyundai in our midst and are convinced the company will make a valuable contribution to the work of our association”, said Ivan Hodac.

    Translation: “And I for one welcome our new insect overlords”

  • avatar
    eldard

    Is it just me, or the people who run Daimler are really old?

  • avatar
    Tstag

    Bertel in general European car makers don’t get much state aid do they? In France they certainly get lot’s of help, but that’s more the exception than the rule.

    During the financial crisis how much help did the UK government give the British car producers? JLR pleaded for cash and were rebuffed several times. In contrast GM, Chrysler and car makers all over the world got massive tax payer support/ bailouts.

    Really if we want to show our anger at bailouts we should all buy a Range Rover :-)

    • 0 avatar
      eldard

      Buying a British car should be for self-flagellation purposes only.

    • 0 avatar
      obruni

      several european countries had very generous “cash for clunkers” programs….even countries without manufacturing plants had them.

      the UK organized a massive bailout of the car industry in the 1970s, and it was painful for everybody.

  • avatar
    siuol11.2

    How exactly are free trade agreements a noble goal?


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