EC plan seeks to boost auto industry

WHILE Slovakia is noted for its strong automotive industry, it is hardly the only country in Europe that depends on the sector. As such the European Commission has tabled a Cars 2020 Action Plan aimed at reinforcing the industry’s competitiveness and sustainability.

WHILE Slovakia is noted for its strong automotive industry, it is hardly the only country in Europe that depends on the sector. As such the European Commission has tabled a Cars 2020 Action Plan aimed at reinforcing the industry’s competitiveness and sustainability.

In Europe, car-making as a whole includes automotive producers, supply chains and aftermarket and thousands of small and medium-sized enterprises. The industry is of strategic importance to the whole European economy and as such represents 12 million direct and indirect jobs, 4 percent of GDP, tens of billions of euros in trade surplus and private investments in research and innovation.

“Europe produces the best cars in the world,” European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said on the occasion of the launch in November 2012. “The EC wants this leadership to be maintained, moving even further ahead in safety and environmental performance… The automotive industry has all the assets to overcome current problems, remain competitive, become more sustainable and retain its manufacturing base in Europe.”

Tajani believes that because of the multiplier effect it has in the economy, the car industry should provide a strong impetus to maintain a healthy industrial base in Europe.

The action plan is comprised of specific proposals for policy initiatives in order to promote investment in advanced technologies and innovation for clean vehicles; improve market conditions; support industry in accessing the global market and promote investment in skills and training to accompany structural change and anticipate employment and skills needs.

Jaroslav Holeček, the president of the Automotive Industry Association of the Slovak Republic (ZAP), welcomes the action plan and considers it important that Slovakia prepares so as not to be left behind. He stressed that research and development in Slovakia is poorly geared for investments into new technologies and innovation and that Slovakia lags behind others in this area. The country also lags in training its workers, with an education system that is completely detached from the needs of the labour market, he said.

“It is useless to speculate whether the volume of the automotive industry in Slovakia is high or too high; it is here,” Holeček told The Slovak Spectator. “For the time being, we do not have any other alternative but the automotive industry. And because we do not have any other alternative, it is really necessary to create as optimal conditions for its further development as possible and secure further competitiveness of the automotive industry in Slovakia.”

The Slovak Economy Ministry, with regards to the size of the automotive industry and the presence of three major carmakers in Slovakia – Volkswagen Slovakia, PSA Peugeot Citroën and Kia Motors Slovakia – and their subcontractors, supports the action plan.

“The action plan Cars 2020 touches upon many facets of the policy in this sector,” Andrea Farkašová from the industrial strategies department of the Economy Ministry told The Slovak Spectator.

“Producers point to setting strict emission limits, which, however, in the long-term represent a stimulus for innovative solutions in new kinds of propulsions. Also because of this the Economy Ministry is preparing a document – the Strategy of Development of Electromobility in Slovakia and its Impact on the Economy of the Slovak Republic.”

The ministry plans to submit the document to the cabinet in December. It believes that the trend of transport and transport infrastructure for electric vehicles in Slovakia might play a significant role in the process of a qualitative change of the industrial base and improved innovation performance.

Ivan Hodač, secretary general of the European Automobile Manufacturers (ACEA), views all the aspects of the action plan as positive for Slovakia.

“Slovakia is going to benefit from a better regulatory framework,” Hodač told The Slovak Spectator. “If we are talking about the importance of the industry and of the global competitiveness and the key role of this industry for the European economy, I think Slovakia is the number one country that benefits from this recognition. There is no other country in Europe for which the automotive industry is as important as Slovakia.”

He points to a better regulatory framework, a levelled free market playing field and links to free trade agreements as among the biggest benefits to Slovak industry, which should boost exports outside of Europe to third-country markets.

“If I was the Slovak automotive industry, I would try to make sure of one thing: that the conclusions of CARS 2020 are put into practice,” said Hodač. “If there is one problem with the plan, it is that we have not seen the results of it. So far, it is written on a piece of paper.”

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