#eu

Daimler and Volkswagen reached an agreement over an air-conditioning refrigerant that Daimler claimed was flammable and extremely hazardous to one’s health.

European new car sales had their worst January in recorded history. The European manufacturers organization ACEA started recording in 1990, and it had never seen a January as bad. New car registrations were down 8.7 percent to 885,159 units in the EU.

The United States and the European Union will begin talks on a free-trade agreement, which may take as long as two years to complete. The deal is expected to be worth some $613 billion annually, and could have some interesting implications for the auto sector.

After approving a $1.6 billion loan guarantee for PSA’s captive finance arm, the European Commission demanded a restructuring plan for all of PSA within six months.

New car registrations dropped a painful 16.3 percent in Europe in an acceleration of a long, and initially slow a downward trend . The European carmaker association ACEA calls the decline ”the steepest recorded in a month of December since 2008.” For the year the EU market was down 8.2 percent to 12,053,904 units, which is the “lowest level recorded since 1995,” says the ACEA.

The French government is asking the EU Commission to approve its bail-out of GM’s alliance partner PSA Peugeot Citroen, Reuters says with input from French daily Les Echos.

Two things happen today, December 21: The world is coming to an end. And in Europe, insurance companies are no longer allowed to vary premiums according to a policyholder’s sex. The first thought that flashed through my caveman mind was: “Those accident-prone women drivers will get great deals, and us guys will pay for it.” Wrong on both counts.

We did not believe that EU regulators would let France’s government bailout of GM’s alliance partner PSA skate through unchallenged. State aid to companies is against EU rules, and refinancing of Banque PSA Finance is state aid EU Competition Commissioner Joaquin Almunia wrote in a letter to the French government. This according to a report in the French daily Les Echos.

Fiat and Chrysler CEO Sergio Marchionne repeated its pleas that European governments should do something about the overcapacity in the region. Being in Shanghai when he said that, he recommended that the Chinese government does the same. The governments likely won’t be enthusiastic about Sergio’s advice.

Said Sergio while the Wall Street Journal took notes:

Stephen Odell, CEO of Ford Europe, thinks that state aid of ailing carmakers is a dead-end street.

Odell told Reuters:

Europe’s second-largest automaker and GM alliance partner PSA Peugeot-Citroen is being saved from the brink for the time being. PSA is putting the final touches on an agreement with creditor banks on 11.5 billion euros ($14.9 billion) of refinancing, in addition to 7 billion euro ($9 billion) in government guarantees for its captive financing arm Banque PSA Finance, Reuters says.

The French government will provide multi-billion euro guarantees to GM’s alliance-partner PSA Peugeot-Citroen via PSA’s banking arm, Reuters says. Don’t bet on it happening: There is already opposition from Germany, and wait until Brussels officially hears of the deal.

The EU sent a warning shot across the bow of protectionist France. Brussels refused France’s request to monitor car imports from South Korea. According to the Wall Street Journal, import surveillance could have been Europe’s first step toward blocking or reversing tariff cuts instated by a free trade deal between the EU and Korea.

It looks like Fiat and Chrysler CEO Sergio Marchionne does not want to be head of the European automakers association ACEA much longer. Today, he called for a massive EU rescue package for the ailing European car industry, with coordinated capacity cuts as the centerpiece. He also called for a stop of free trade agreements. “Let the European car industry make its adjustments… This is not the time to embrace free trade,” Marchionne said while Reuters was taking notes.

Bailing out a European carmaker in need is sure to attract the attention and ire of a few EU Commissars. Once people are in the street, money can legally flow.