ECG to revive car sales

ECG, the Association of European Vehicle Logistics, urges the European Commission to

take the lead in tacking the unprecedented crisis affecting the Automotive Industry by coordinating the intervention of the Member States and promoting tax breaks and financial incentives to stimulate the sales of new cars, particularly for corporate clients. Incentives should be made available to private citizens too.

It is urgent that the EU Commission promotes and coordinates tax breaks and financial incentive throughout Europe to reactivate the automotive market and the support industry that consists of more than 12 million jobs in Europe said Mr. Frits Mehrtens, the President of ECG.

The Automotive crisis in Europe - he insisted - is different from that affecting the USA. European Automakers are not in such a bad financial shape and they also have an excellent pipeline of new fuel-efficient products but if nothing is done to help sell the cars in the shortest time possible the situation will indeed become worse in Europe. At that point millions of jobs would be at risk. Therefore to avoid this the coordinated support of the National and European institutions is urgently required.

With car sales down 19,3 % in the last quarter of 2008 compared to one year before across Europe, and some National markets suffering December losses of up to 62% the outlook for 2009 appears even more negative. "We need a stimulus to restart the market. The financial arms of the automotive companies should have access to cheap financial resources while those companies that are due to renew their corporate fleet should be entitled to both tax breaks and financial facilities", stressed Mr. Mehrtens.

In terms of value of the cars sold, Corporate fleets are worth about half of the European market.

The Corporate fleet market has not totally stopped yet - noted Mr Mehrtens -, and this has helped to avoid what would be a complete disaster for the industry, but without serious and effective incentives to maintain the normal trend of renewal for their fleet, Corporations may decide to stop buying new cars to replace those already in service, or extend the normal renewal dates.

If this happens, the size of today's problems would be multiplied and there will be no escape Mr Mehrtens concluded pledging Intervention from the Member states should be stimulated and coordinated by the European Commission in a framework that would safeguard the competition while maximising the benefits throughout the Continent. In such dramatic times for the European Automotive Industry, the European Commission must lead the way and show its value.

Source: Transportweekly