#EU

The most successful brands in our industry don’t have much meaning to them.

Toyota, Chevrolet, Ford, Hyundai, Kia, all of these are names that wouldn’t evoke much of any imagery had their manufacturers never existed.

Mercury and Saturn are popular planets that make you think of space and the futuristic pursuit of those faraway places. Acura should be quite accurate and precise. Rams are tough. Infiniti pays homage to the outer limits of capability and performance.

Yet all of these names experienced failure, or ultimately failed, due to the key essential ingredient within any brand’s reputation.

Product.

Now here is something that is rarely heard these days. A top EU Commissioner told European automakers to get out of the way of European trade deals with Asia. Europe’s carmakers must reform their industry and cannot place the blame for falling sales on foreign trade, Reuters reports.

Porsche’s soon-to-be 100 percent owner Volkswagen is making money hand over fist. At the same time, the German tax payer is contributing 43.67 million euros to the expansion of Porsche’s plant in Leipzig, Germany, where the new Macan will be made starting in 2014. This has attracted the attention of EU competition regulators.

Brussels has bad news for Fiat and PSA, and by extension for Chrysler and GM. There will be no EU assistance for an orchestrated and painless capacity shedding, Financial Times Deutschland says. A report of an expert group puts European overcapacities at 25 to 30 percent. Fiat-Chrysler CEO Sergio Marchionne has been publicly lobbying for government support, PSA pressured the French government. As predicted here months ago, a lobby of German carmakers torpedoed any support from Brussels and is for Darwinian solutions instead. With carmakers at odds, European governments are happy that they don’t have to act. After all, there are more pressing problems in Europe.

If you have ever traveled through Europe, you know that electrical plugs are a mess. European carmakers want to avoid the same mess when you travel with your electric vehicle, say from Germany to Italy via Switzerland. It’s enough that you will have to charge early and often. It’s enough that places to plug in will be scarce in the beginning. But at least the plug should fit your car. To promote that noble cause, the European Automobile Manufacturer Association ACEA has defined “a comprehensive set of recommendations to standardize the charging of electrically chargeable vehicles. The joint industry proposal will enable the use of one type of plug independent of car make, electricity provider or country.” So what will they use?

The European Commission’s competition authority has a problem:

The Commission had to launch a formal investigation into aid for a large investment project by BMW for the manufacturing of electric cars. The formal investigation will allow the Commission to gain an insight into the emerging market of electric cars, a market for which it has not examined regional investment aid before.

A subsidy is a subsidy is a subsidy, right? Apparently not…

After Greenpeace attacked Volkswagen for opposing proposed increases in the EU’s emissions regulation, Ford is joining the opposition to tough EU proposals. Ford Europe CEO Stephen Odell railed against the EU’s recent White Paper On The Future Of Transport [ PDF here], which calls for (among other things):

-“A higher share of travel by collective transport, combined with minimum service obligations”
-“The use of smaller, lighter and more specialised road passenger vehicles”
-“Road pricing and the removal of distortions in taxation [to] also assist in encouraging the use of public transport and the gradual introduction of alternative propulsion”
-All in the pursuit of the goal: “Halve the use of ‘conventionally-fuelled’ cars in urban transport by 2030; phase them out in cities by 2050; achieve essentially CO2-free city logistics in major urban centres by 203”

Now what about that plan might worry an auto executive?

I know, the sniping at Jalopnik is getting old, and I’m sure this article will receive a lot of complaints. But this is The Truth About Cars, and the truth must be told. Banking on the limited attention span of its readers, Gawker’s outlet for things remotely related to cars headlined yesterday: “ European Union wants to ban gas, diesel cars by 2050.” A headline like that is sure to produce clicks. Too bad, clicking readers are being had.

Just for this occasion, we break the TTAC rule of not copypasting whole articles. Here is the Jalopnik article in full length:

“The European Union’s transport chief wants to ban diesel or gas-burning vehicles in cities by 2050, mainly through higher taxes and new rules. Maybe now’s the time to start broadening those U.S. import rules…”

That’s it. No more. Where’s the beef the Jalopies have with the brutal transport chief?

The site that just a few days ago did pride itself of its investigative journalism skills, not only fornicated the puppy on this one, it also missed out on the juicy stuff.

George Orwell said it would happen in 1984, but better late than never. The European Commission decided that from 2013 on, every new car sold in the EU must have a system called eCall. What is eCall? Think of it as a government-mandated OnStar. If your car crashes, eCall will automatically send an S.O.S. to emergency centers. It will send your GPS-derived coordinates, the number of people on board, impact sensor data, airbag deployment and other data which probably only the EU and the carmakers know.

Toyota is probably feeling a little unloved right now. The US government has been trying to burn them at the stake, Chinese buyers are shunning them and even the Canadians are even saying “No, eh?” (My experience of Canadians is pretty much limited to “South Park” and “Due South”). But love and good news can come from the most unlikely of places.

Tata reiterated its threat to invest the the U.S. and Europe with their bargain-basement Nano car. At an event held today in Toyko, Tata’s Vice Chairman Ravi Kant said that “Tata Motors now plans to take it forward to the developed markets in Europe and in the U.S.,” The Nikkei [sub] reports. “Now plans?”

It’s been some time since since we had a “ Trade War Watch” on mounting trade tensions in the auto industry, and thank goodness for that. In this economic climate of cuts, currency swings and bankruptcies, what we need are things which will make the situation worse, right? In May I reported about how the EU put a 20.6 percent tariff on aluminium wheels from China. The EU did this in response to complaints from domestic manufacturers. Naturally, this left a sour taste in China’s mouth. Well, over 5 months later, you’d think that the EU would have calmed down and this nasty business would be swept under the carpet, right? Erm, not quite….

Ford Europe will swallow a tried and trued antidote against flagging car sales: Heavy discounting. Yesterday, Ford had announced – in a rather roundabout way – that their European sales had dropped a breathtaking 17 percent in April. Putting cash on the hood is no surprising move. Wouldn’t there be another detail.

Now that the Conservatives (with the help of the Liberal Democrats) have come to power in the UK, the Conservatives are going to push forward their plans for a reduction in the UK deficit (i.e savage cuts). Now, while I agree in the long term, this will be good for the UK, in the short term, it will cause higher unemployment and severe “belt tightening”. The UK isn’t the only country with this frame of thinking. Only today, the Spanish government has announced deep budget cuts in order to reduce their deficit and to prevent markets from thinking of them as the next “Greece”. So, with the UK and Spain making these budget cuts, the Euro looking unsteady and Greece still not convincing markets, what else could make Europe stare at another recession? That’s right, a possible trade war.

It’s tough to be a European car maker with a governmental sugar daddy. First you have to make nice with your sugar daddy, and commit unspeakable acts until he shakes loose a few hundred million Euro. Then, the prudes from Brussels shoot the stipend down. Your sugar daddy can say: “Darling, I tried.” He then can go on with the business of bailing out Mediterranean states. So it happened with Renault. So it might happen with Opel.