ACEA: Pandemic biggest risk ever to face EU car market

The Covid-19 pandemic is the "biggest single risk ever to face the EU automotive industry", European Automotive Manufacturers Association (ACEA) president Michael Manley said, and recovery will be geared towards a green transition.

EU-wide production losses because of Covid-19 amounted to over 4mn vehicles from 1 January to 30 September 2020 — 22.3pc of total output.

The automotive market is a key end use market for ferrous and non-ferrous metals. The threat of further lockdowns could add to this figure.

Car sales have also been hit hard — new car registrations fell in every month of 2020 except for September. Registrations in September rose by 3.1pc year on year to 933,987. The ACEA forecasts a 25pc fall in vehicle sales this year.

"Minus 25pc would be the sharpest drop ever witnessed by our sector," Manley said at an ACEA virtual event, "The picture is similar on the global scale, with market demand expected to shrink by 21pc this year. The Covid-19 pandemic is the biggest single risk ever to our industry… Our number one priority is to revive the market while enabling production to return to normal levels and preserving jobs.

Emphasis on transition to EVs

Manley emphasised a focus on a green recovery, meaning any investment in the automotive sector will be geared towards the transition to electric vehicles (EVs), which will increase demand for battery metals such as lithium, cobalt and nickel.

The European Commission's recently-proposed 2030 Climate Plan will require "massive additional investments" by the automotive industry in a challenging landscape but said investment alone is not sufficient, Manley said.

"If we want zero-emission mobility to become a real option for all Europeans, we also need a vast network of charging points and re-fuelling stations right across the EU, coupled with economically-sustainable incentives."

The ACEA has repeatedly called for any national recovery stimulus packages to target investment towards electrification and reiterated this yesterday.

"If we rebuild the economy we need to immediately build back better. We need to see this as an opportunity to accelerate the transition that was already happening in many markets," said Diederik Samsom, head of cabinet for EU Commissioner Frans Timmermans.

By Thomas Kavanagh