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COM ( 83) 633 
 
 
 
Vol. 1983/0 235 
  
 
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
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COMMISSION OF THE EUROPEAN COMMUNITIES
COM(83) 633 final
Brussels, 21 December 1983
COMMISSION ACTIVITIES AND EC RULES FOR THE AUTOMOBILE INDUSTRY
1981/1983
PROGRESS REPORT ON THE IMPLEMENTATION OF THE COMMISSION'S STATEMENT  
"THE EUROPEAN AUTOMOBILE INDUSTRY" OF JUNE 1981
(Report from the Commission to the European Parliament  
and to the Council)

COMMISSION OF THE EUROPEAN COMMUNITIES
COM(83) 633 final  
Brussels, 21 December 1983
COMMISSION ACTIVITIES AND EC RULES FOR THE AUTOMOBILE INDUSTRY
1981/1983
PROGRESS REPORT ON THE IMPLEMENTATION OF THE COMMISSION'S STATEMENT  
"THE EUROPEAN AUTOMOBILE INDUSTRY" OF JUNE 1981
(Report from the Commission to the European Parliament  
and to the Council)
C O M ( 8 3 ) 6 3 3  final

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TABLE OF CONTENTS ‘
Preface
Part One: Commission Activities and EC Rules
Survey
1. Basic approach
2. Strengthening of the internal market
3. Structural development of the industry
4. Changes in employment
5. External relations 
Specific Issues
1. Differences in car price levels in the Community
1.1 The Commission approach
1.2 The case of the United Kingdom
1.3 The case of Denmark
2. Bloc exemption for selective distribution systems for 
motor-cars
3. EC type-approval for motor-cars, and harmonization of technical 
regulations
3.1 Objectives of technical harmonization
3.2 EC type-approval and the "third country problem"
3.3 Optional nature of harmonized standards
3.4 EC type approval exclusively related to 
technical questions
3.5 Roadworthiness tests
3.6 Global approach - noise, air pollution

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3.7 Lead in fuel
3.8 Passive safety of motor vehicles
4. Taxation issues
4.1 Survey on fiscal charges on car acquisition
4.2 Fiscal issues related to temporary use of car
4.3 Harmonization of tax-related legislation
5. Trademarks
6. Insurance and driving licences
6.1 Insurance matters
6.2 Driving licences
7. Energy conservation
7.1 Commission approach
7.2 Impact of taxation policies on fuel consumption
7.3 Use of substitute components in fuel
7.4 Research on energy- saving technologies
8. Research and development
8.1 Commission approach
8.2 Existing R&D programmes
8.3 New R&D programmes
9. Structural development of the industry
9.1 Studies
9.2 Monitoring of state aid
9.3 Transparency of financial relations between 
Member States and public undertakings

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9.4 Use of Community financial instruments
10. Employment and working conditions
10.1 Studies
10.2 Employment developments
10.3 European Social Fund
11. Trade policies
11.1 Japan
11.1.1 Japanese share in EC car imports, development
of market shares on third markets
11.1.2 Request for Japanese export moderation
11.1.3 Development of Japanese car exports to the EC
11.1.4 Light commercial vehicles
11.1.5 Restraints on imports of Japanese cars
11.1.6 High-level working party
11.1.7 Access to the Japanese market
11.1.8 Industrial co-operation, investment issues
11.2 USA
11.3 Enlargement - Ireland, Greece, Spain, Portugal
11.4 Australia
11.5 Regulatory matters - Sweden, Switzerland
11.6 Imports from state trading countries
FOOTNOTES
PART TWO: PERFORMANCE OF THE EC CAR MANUFACTURERS AND
M A R K E T  D E V E L O P M E N T S

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1· Production and demand in 1981/1982
1.1 Passenger cars
1.1.1 Production
1.1.2 Demand
1.2 Commercial vehicles
1.2.1 Production
1.2.2 Demand
2. Trade in automobile products
2.1 General
2.2 Importance of automobile products in 
total extra-EC trade
2.3 The importance of the Internal Market
2.4 Exports/imports of passenger cars
2.5 Exports/imports of commercial vehicles
2.6 Increasing importance of components
P A R T  T H R E E :  A N N E X E S

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PREFACE
1. The present progress report intends to present a working document to 
the European Parliament and to the public which summarizes the specific auto- 
related measures and initiatives of the Commission.
It refers in principle to follow-up actions to the Statement on the European
Automobile Industry of June 19811 ("Statement 1981"). Whereas the Statement
2had been a response to the Parliament's resolution of January 1981 ,  the 
present report provides reactions to subsequent resolutions, in particular
3
those adopted by the Social and Economic Committee of July 1981 and those
4adopted by the Parliament in January 1983 .
The Commission had adopted its Statement 1981 at a point of time when the 
motor industry in the Community lived through an extremely difficult period. 
The intention was to add an element of stability to the discussion, by way of 
laying open what the Commission regarded as necessary to do or intended itself 
to undertake. The Commission's analysis of the state and the prospects for 
the industry gave reason to be confident about the potential for adjustment.
2. The Commission's objective in the various activities described below, 
is to secure a stable margin of manoeuvre for the industry,  by creating 
favourable, coherent, and stable framework conditions within which the 
industries themselves would develop and apply the best possible strategies for 
adapting to the requirements of the future and for remaining competitive at 
world level.
Two years later, that confidence appears to have been justified, as the 
outline of industry performance in Part Two of the present document will show. 
The carefully optimistic assessment of the present situation needs of course 
to be qualified: one of the major problems persisting has been generally weak
demand, both in Europe and world—wide. Moreover, some important structural
problems continue to make a negative impact, the EC dimension not yet having 
materialized in all areas where problems go beyond what can be solved at 
national level. The extent to which nationally-based strategies still prevail 
can be demonstrated in those areas where there is a choice between national 
approaches and Community options. One test case is the limited recourse to 
harmonized technical standards (EC Directives, cf.  point 3.3 below). Another

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area is investment. Strenuous efforts are under way in order to maintain or 
restore competitiveness. As part of such efforts, however, there should be 
greater emphasis on the Community-wide approach called for in the Statement 
1981 and which would e.g. consist in aiming at bigger economies of scale 
through more standardization of components.
PART ONE: COMMISSION ACTIVITIES AND EC RULES 1  2
1. The first part of this report gives an account of the Commission's 
activities as of early 1983 and refers to the four major aspects identified in 
the Statement 1981, namely:
- strengthening of the internal market;
- structural development of the industry;
- changes in employment;
- dialogue with the Community's trading partners.
2. The most important of the four aspects singled out for action in the
Statement 1981 is the strengthening of the internal market.  Allowing for the 
EC market to function as a national market is of vital importance, both for 
industry - because, as may be recalled, the EC owns a passenger car market 
comparable to the one of the US and this is therefore a major asset for the 
competitiveness of the EC industry - as well as for the consumerj. The
Commission's attention focusses on two major questions:
- the differences between car prices in certain Member States and the 
problems related to so-called "parallel imports" (i.e. imports 
outside the manufacturer's distribution system). The issue was 
analysed in the Commission's Xllth report on Competition Policy. 
Wide publicity was also given to this subject in two BEUC reports of 
1981 and 1982, and other publications. The industry has given its 
views through the appropriate channels at European level. The 
differences in car price levels are not per definition a matter of 
concern: there are and there will always be price differences for
similar or even for identical products in different regions. 
However, the prices sometimes differ greatly. The gap, based on the

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low-price market, may reach 100% of the price, for example between 
the UK and Denmark. Taking Germany and the U.K. as another example, 
the gap is in the order of 20% of German prices.
In theory, a number of reasons could be put forward to explain these 
differentials, including differences in the trend of exchange rates 
and inflation rates, differences in purchasing power, in consumer 
preferences, in the extras with which models are equipped, in tax 
systems, in specification requirements, in governmental price control 
and in transport and distribution costs.
None of these variables can alone adequately explain the existing 
price differentials. The situation also seems to depend on whether 
or not there are any national manufacturers who dominate the national 
market, or whether keen competition among importers prevails.
The Commission services are approaching this complex of questions 
under three main aspects: (1) analysis of the economic reasons
underlying the price differences, (2) principles of the free 
circulation of goods and (3) competition rules;
— the harmonization of automobile—related regulations and the coming 
into force of EC type-approval for automobiles.  In the area of 
technical harmonization of car components, the creation of the 
internal market has advanced a good deal since 1970. Common rules 
have been laid down in a series of 59 directives covering all 
relevant automobile parts except windscreens, the weights and 
dimensions of certain types of vehicles and tyres.
However, the Community-wide system of type-approval has not yet comme
into force, because the last three proposals for directives have been
kept on ice by the Council for several years. The EC-wide type
approval system would automatically come into force, as stipulated
7 ·  ·under the basic Directive of 1970, once the three remaining 
technical directives were adopted. This is not so much a problem 
of agreement on technical questions. It is rather the access of 
vehicles from third countries to the EC type approval system which is 
at stake. Health and safety considerations have led to concern about

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the need to rely on tests performed abroad, without adequate means of 
control. Discussions on this problem have gone on in the Council for 
three years without positive results, despite a precise mandate given 
to the Council by the European Council on the occasion of its meeting 
in Copenhagen of 3/4 December 1982. Following three meetings of the 
"Internal market" Council of 1 February, 1 March and 26 May 1983, it 
must in fact be concluded that the envisaged solution, on which the 
efforts of those involved had so far been concentrated, is not likely 
to enable the adoption of the three technical directives mentioned 
above; if that was the case, the EC type approval for motor cars 
would remain in its present stage of suspension.
Scientific work has been initiated in view of other subjects on 
which the Community will have to consider regulatory measures in the 
future. The particular subjects dealt with in expert working groups 
so far were noise and exhaust emissions. Reports from these groups 
will provide an objective basis for a "global approach" to the 
problems involved and for political decision-making, taking into 
account the repercussions, of, say, noise-related standards on energy 
consumption, air pollution or safety, as well as cost/benefit 
considerations.
In its Statement 1981, the Commission has emphasized the need for 
such a global approach. There are in fact two major reasons for it: 
the first one is that motor vehicle manufacturing requires long 
lead-times (3-5 years for a new model) and major investments, and it 
does therefore need a harmonious and stable body of legislation. 
Reliable, coherent rules can only be achieved, however, if the 
interdependency of all aspects involved is taken into account when 
dealing with any particular regulatory subject. Secondly, this kind 
of global approach is needed for setting priorities on a political 
level. It is indeed necessary, particularly in economically 
difficult circumstances, that priorities are fixed taking into 
account that one particular objective (e.g. environment protection) 
may conflict with other objectives (e.g. energy saving), and also in 
awareness that the innovation capacity of the motor vehicles industry 
may not be suffcient to cope with all desirable objectives at the 
same time.

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Regarding the impact of the already harmonized EC Directives, the 
Commission services have started to make an assessment on the extent 
to which the Directives are actually used. These Directives are 
optional, in principle,  and manufacturers have a choice between these 
and the remaining national regulations, except in cases where a 
national government has replaced national regulations by the 
harmonized rules.
3. Regarding the structural development of the industry,  the 
Commission's activities consist of an analytical and an operational part: for 
a better understanding of the evolution in the industry's structure, two major 
studies on the automobile industries and the automotive components industries 
have been ordered. On the operational side, the Commission had proposed 
action to obtain more transparency in state aids provided for the automobile 
sector (retroactive monitoring). Moreover, the Commission stated its 
intention to give due consideration, in applying EC competition rules, to the 
need for cooperation both within the motor vehicle industry and the 
other industries, earlier or later in the production chain.
These initiatives are necessarily of a more long-term nature, and progress is 
not readily presentable in this area like on other points. However, some 
details on the state of progress are given below.
4. As regards changes in employment and working conditions in the 
automobile sector, the Commission has initiated a number of complementary 
studies in order to fill the information gaps pointed out in the Statement 
1981, concerning the effects which may be brought about by technological 
changes in automobile production. A list of these studies is provided under 
point 10.1.
Faced with the changes in employment, the Commission continues to examine the 
question of the reduction and reorganization of working time, is preparing new 
activities in the context of vocational training measures related to new 
information technologies, and is proposing a programme of special measures to 
combat youth unemployment.
As regards the Social Fund, an outline of financial support is presented under 
point 10.3.

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5· In its dialogue with the Community's trading partners the Commission 
has pursued its efforts to keep world car trade as free as possible, to 
prevent protectionist tendencies, to improve the balance — particularly with 
Japan — and to provide favourable conditions for the on—going restructuration 
in the Community car industry. As a result of such efforts, but also due to 
the developments in the market place and to increasing competitivity of 
European manufacturers, the Japanese market share in the Community has 
declined.
In its Statement 1981, the Commission had furthermore pointed to the positive 
effect which could be brought about by more industrial cooperation, higher 
levels of foreign direct investment, and as a result, a certain shift from 
trade in assembled cars to trade in components. The factual developments 
since the Statement 1981 has been drafted, seem to justify these expectations.
Details provided below under point 11 deal with trade policies basically on a 
country—by—country basis, covering particular developments and/or 
controversial issues.
SPECIFIC ISSUES
1· Differences in car price levels in the Community.
1.1 The problem of the differences of car price levels is certainly at 
present the most complex and wide-ranging automobile issue. Car price levels 
differ considerably between some of the Member States. An "average" group, 
including France, Germany, Italy and the Netherlands could be identified from 
the Commission's XIIth report on Competition Policy; the United Kingdom is the 
most expensive country, whereas Denmark and Greece have the lowest prices8,  
where net prices are almost half as high.
Final consumers have increasingly used the rights following from the principle 
of free circulation of goods, by buying their cars where they are cheaper than 
in their own country.
The Commission is faced with a number of complaints8 against efforts to 
protect high-price markets, in particular the U.K. market, against such 
parallel imports from other Member States where price levels are lower. In so

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far as these efforts violate EC competition rules or the principle of free
circulation of goods, the Commission is bound to intervene, on the basis of
Articles 30-36 or 85 of the Treaty. However, although certain tendencies to
protect high-price markets have been discovered, the very existence of
different national price levels cannot be attributed in full to anti­
competitive behaviour. Price differentials are also caused by legitimate
reactions to divergent economic conditions in and between the countries
concerned, such as local production cost, consumer habits, inflation rates,
exchange rate fluctuations, etc. One could in fact not realistically assume
that prices could be uniform throughout the common market, not only because
the objective factors determining price policies vary from firm to firm but
also because normal competition does not necessarily make prices uniform.
The Commission does not want to directly regulate prices in the automobile
10sector, nor does it have the legal powers to do so. Indirect pressure
towards price alignments on an average EC level is however inherent to the
application of Articles 30-36 and 85 in these cases.
Given the complex nature of the problem, the Commission is paying utmost
attention to some basic questions; and has ordered a background study on
pricing strategies of car manufacturers in the UK and some other EC countries.
The first major problem in dealing with the price differentials lies in the
distinction between anti-competitive strategies and legitimate reactions to
the economic environment.
A second problem is the correct evaluation of the economic consequences which
a downward adjustment of price levels in high price markets would entail.
Dramatic consequences for local production in the UK in particular have
11sometimes been suggested.
Thirdly, in the area of economic policies, the price differential problem has
to be tackled by promoting more coherent national policies and by enhancing
the internal market. A good deal of progress has of course been made in this
direction, in particular as regards technical harmonization, but still the
overall conditions under which the manufacturers operate more generally reveal
considerable disparities. Sustained long-term efforts are necessary to make
progress in this respect.

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In emphasizing the importance of dealing with the problems at their roots, the
Commission does not wish to sanction the present situation. Specific measures
have also been taken, or are under consideration, on the basis of both
1 2Articles 85/86 and 30 to 36 of the Treaty.
It may be appropriate to illustrate and quantify the problems involved and the 
measures taken, by having a closer look at the situation in particular as 
regards the U.K. and Denmark.
1.2 As regards the United Kingdom price levels are much higher than on
the continent. According to the 1982 BEUC report, the price gap has widened
considerably since 1975, leading to a ratio of almost 2 :  1 in prices of
13certain models in the UK and Denmark.
British citizens, therefore, have started to buy their cars on the continent
and in particular in Belgium and Germany. The level of such private imports
into the UK is difficult to quantify, but may have reached about 50 000 units
per year. Thus, a considerable part of car sales in the UK (1982 = approx.
1.55 million units), roughly 3%, may be done outside the manufacturers' own
distribution networks in the UK. Evidently this affects the dealer networks
in the UK, affects the cash-flow of the British-based manufacturer, and adds
to the unions' concern about the large quantities of cars shipped to the UK
14by the manufacturers themselves.
The Commission is aware of two main groups of difficulties which have been
15underlying the complaints received:
- those concerning the supply of the car the consumer wants. 
British consumers have had particular problems sometimes in buying 
right-hand drive cars on the continent for import into the UK; 
but motor dealers are also sometimes confronted with this problem.
- those related to the registration of the car which often appears 
difficult without the cooperation of the manufacturer or his 
authorized dealer, since normally they alone can certify that the 
vehicle complies with national requirements; in this respect, it is

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mainly the motor dealers who are sometimes facing difficulties, in obtaining  
the "certificate of conformity" which is required as a proof that the car  
conforms to a type-approved model.
In respect of the first group of problems, the Commission has carried out widespread  
investigations whereby three major kinds of impediment to UK residents' purchases on  
the continent have been identified: straightforward refusals to supply, long delivery  
times and substantial surcharges for the right-hand drive variant. Moreover claims for  
guarantee restrictions concerning parallel imported vehicles were pursued.
In a number of selected cases Commission's proceedings are under way with the aim of
determining the compatibility of the various established measures with the EEC
16competition rules and in particular Article 85 thereof . In the case of Ford, the
17Commission has taken specific action .  The Commission has concluded on 16 November 83  
that the distribution system operated by Ford Werke AG (Cologne) in Germany for Ford  
cars infringes the competition rules in Article 85 of the EEC Treaty, and in the form  
in which it has been applied since 1 May 1982 cannot be exempted. Ford Werke must  
immediately cease operating the distribution system.
Ford Werke AG operates an exclusive and selective distribution system for the sale of  
its cars in Germany. Dealers admitted to the distribution system have considerable  
restrictions placed on them. Although other motor manufacturers also operate such  
systems, the restrictions of competition contained in them can only be accepted if  
dealers in the network are allowed by the manufacturer to sell vehicles on request to  
consumers anywhere in the Community.
Until May 1982, Ford AG, which manufactures both left-hand-drive and right-hand-drive
models in various specifications, had also supplied its German dealers with right-hand-
drive vehicles both in the specifications customary in Germany and in other
specifications, and at more or less the same prices as left-hand-drive models. The
dealers resold these cars mainly to British consumers. As Ford AG's selling prices to
its German dealers were much lower than those at which the British Ford company sold
the vehicles to British dealers, German dealers were able to supply the right-hand-
drive models to British consumers up to 30% cheaper. Between January and April 1982,
for example, German dealers sold over 2000 right-hand-drive Ford cars.
So as not to undermine the high British prices and to protect the British Ford company
against competition from exports by German dealers, in May 1982 Ford Werke AG stopped
supplying right-hand-drive models to its German dealers.
18In August 1982 the Commission issued an interim order to Ford to resume supplies of
right-hand-drive cars to German dealers. The President of the European Court of
19Justice, in his decision on Ford's interim application for the order to be set aside,  
upheld the order pending the Court's final judgment of the case, inasmuch as Ford AG  
was instructed to fulfil orders from German dealers for right-hand-drive vehicles (in  
the specifications customary in Germany) within the limits of traditional supply levels.  
The proceedings before the Court of Justice have not yet been concluded.20

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The decision of 16 November 1983 underlines that the refusal by Ford Werke AG  
to supply right-hand-drive vehicles has the object and effect of completely  
shielding the British market from parallel imports by German dealers and hence  
from the form of competition these represent. There was hence no possibility  
of the system receiving the Commission's approval. This applied all the more  
in the present case in that the refusal to supply was intended to hold up high  
prices to the detriment of the consumer.
The decision means that Ford Werke AG can only continue to operate its  
anticompetitive distribution system if it resumes supplying German dealers on  
request with right-hand-drive vehicles (either in the customary German  
specifications or in other specifications).
Ford Werke AG has announced that it would contest also this decision in the  
Court of Justice.

The second group of problems basically comes under the Community rules on the free  
movement of goods (art. 30-36 of the EEC Treaty). Investigations have been initiated
to see whether the apparent restrictions mentioned above are or are not  
obstacles to the free movement of goods, and whether or not they are  
justified on grounds known to Community law (especially "the protection of  
life and health of humans", Article 36).
However, there can also be room for the application of Article 86 EEC in
cases where manufacturers and their official importers enjoying a monopoly
over the issue of certificates of conformity refuse improperly to provide
such a certificate or require a disproportionate payment in return for their  
21service.
Pursuant to the failure of two motor manufacturers in the United Kingdom to  
provide certificates of conformity for parallel imported cars, the Commission  
has initiated proceedings under Article 86 EEC which have led to the result  
that the two companies have changed their policy and are now prepared to  
provide applicants with the necessary information and documents.
The Commission presently considers that the two most practical solutions are
the following: either the national authorities ensure that the manufacturers
and their dealers actually provide the appropriate certificates of conformity
or the necessary data, or they eliminate the effective monopoly of the
manufacturers and their dealers by establishing their own public testing
arrangements for vehicles in the operation of which the manufacturers and
22dealers play no part. The Commission intends shortly to send a
communication about this problem to the Member States, in which these
solutions will be put to them. Infringement proceedings could then be
23considered in the light of the Member States' replies to the communication.
The British authorities have publicly stated the intention of adopting a
24solution of the first kind, and other Member States have made arrangements  
for the second type, although these do not always extend to independent  
dealers.
1.3 The other case is Denmark where net car prices are particularly
low. The low price level can be attributed to the high level of car taxation  
(cf. 4.1) and to fierce competition among imports in the absence of local  
production. As a consequence of low price levels, consumers, particularly  
from Germany, have bought their cars in Denmark in increasing numbers.-14-
(2 )

-1 5 -
Like in the case of the UK, exact figures on these across-the-border  
purchases are not available. Figures on Danish car exports may however serve  
as an indication. They show that Danish exports to Germany, e.g., have gone  
up from 69 units in 1976 to 4726 in 1982.
Besides the on-going efforts for further harmonization in taxation levels,
the Commission has conducted an investigation into whether the Danish system
of motor vehicle taxation is compatible with the EEC Treaty, in particular
with Article 95. So far, no elements can be found which would justify the
conclusion that this tax system is in infringement of Article 95.
Furthermore, the Commi ssion a Iso had to examine, from the point of view of competition rules,
the complaint of German car dealers near the Danish border to see whether their sales
difficulties are mainly due to the substantially lower wholesale prices
25offered to Danish dealers for similar products. The legal tests for
application of the ban on discrimination laid down by Article 86 of the EEC  
Treaty would not seem to be satisfied: they require one or more undertakings
to have abused a dominant position within -the common market or in a  
substantial part of it. With the goods in question here there is probably no  
fundamental reason why manufacturers and importers should not sell at  
different prices in response to varying economic circumstances in different  
Member States.
2 BLOC EXEMPTION FOR SELECTIVE DISTRIBUTION SYSTEMS OF MOTOR CARS
Following the Statement 1981, as regards the manufacturers' rights to set up
networks based on the selection of dealers, the Commission has published a
draft regulation on bloc exemption for distribution and servicing systems
26for motor vehicles.
The draft which was discussed in 1982 by the Advisory Committee on
Restrictive Pratices and Dominant Positions, will set the limits within which
motor vehicle manufacturers may draw up standard agreements. It is based on
the administrative principles developed in, and in connection with, the BMW  
27decision of 1974. The Regulation will offer the advantage of applying the  
exemption automatically, without the need for individual decisions. It is  
intended to cut down the administrative burden of taking individual decisions  
on the hundreds of such agreements and amendments to agreements that are  
notified to it. The main argument for exemption is that distribution

- 1 6 -
agreements of a selective or exclusive nature are usually indispensable  
measures of rationalization. The co-operation between the manufacturer or  
his importer and a number of selected dealers and repairers guarantees the  
provisions of specialized servicing for the product. Competition in the  
motor trade tends to focus on inter-brand competition between rival  
distribution networks rather than intra-brand competition between dealers and  
repairers in the same network; a certain degree of restriction of competition  
in the latter area can be tolerated.
As drafted, the regulation grants an exemption, in principle, for the  
following types of restrictions on the motor dealer:
1. not to sell another manufacturer's vehicles or parts,
2. not actively to seek custom outside his allotted territory,
3. not to sub-contract distribution or servicing and repairs to other  
dealers or repairers without the consent of the manufacturer or his  
importer, and
4. not to sell new vehicles or replacement parts obtained from the  
manufacturer to dealers outside the distribution network.
Also exempted is a restriction on the manufacturer's freedom to appoint other  
dealers in the allotted territory during the period of the contract.
A series of conditions attached to the exemption are believed necessary in  
order to safeguard effective competition and unrestricted freedom for  
consumers to buy new cars wherever in the common market prices and conditions  
are most favourable. The most important conditions are designed to ensure  
that:
1. Dealers must not be made so dependent on the manufacturer or  
importer that their freedom to compete is seriously diminished.
2. Consumers can have servicing or repairs done under the  
manufacturer's warranty anywhere in the common market.
3. Spare parts supplied by third parties matching the quality of those  
supplied by the motor manufacturer can be sold and used in the  
official distribution network.

- 1 7 -
4. Consumers can order cars with the specifications required at the
place where they are to be registered from official dealers in other  
Member States who are willing to sell the vehicles to them, if the  
manufacturer or his importer sells the model concerned through the  
official distribution network at both places (requirement of  
availability of vehicles with certain specifications).
This last condition is intended to stop manufacturers or importers trying to  
prevent or hinder sales of right-hand-drive versions of their cars on the  
continent.
Finally, the draft suggests a means of dealing with the considerable 
differences in the prices paid for the same make and model of car by  
consumers or official dealers in different Community countries. This  
consists in automatically allowing parallel imports (that is, imports by  
dealers outside the official distribution network who buy vehicles in a  
Member State where prices are low and import them into one where they are  
high) whenever the difference between the retail prices (list prices)  
recommended in two countries exceeds 12% for six months. For the purposes of  
the price comparison, however, no account will be taken of recommended prices  
which are distorted by extremely high tax rates or temporary freezes of  
prices or profit margins.
The parties to motor vehicle distribution agreements will have a choice  
between submitting to the provisions of the new regulation or electing for  
those of the general block exemption for exclusive distribution and  
purchasing agreements under Commission Regulation 67/67. The latter has been 
extended in an amended form as from 1 July 1983. Both regulations also  
provide for the possibility of further restrictive clauses being exempted by  
individual decision in special cases.
The Commission is expecting to receive written submission on the draft from 
motor trade associations and consumer organizations and will also give such  
interest groups an opportunity to add to their comments orally.  This round 
of consultations will be followed by further talks with the Member States  
through the Advisory Committee on Restrictive Practices and Dominant

-18-
Positions which was already consulted on an earlier draft. The Economic and  
Social Committee has adopted an opinion on the draft regulation on 28 September 1983  
(doc. CES 848/83, not yet published in the Official Journal). It approves the  
Commission's proposal to exempt vertical distribution in the motor vehicle sector  
from the general ban stipulated in Treaty Article 85 (1); the conditions of  
exemption are laid down in Treaty Article 85 (3) and Regulation 19/65/EEC. The  
Committee suggests at the same time a number of modifications. The Commission  
should avoid imposing a standard contract, and should simplify the text of the  
draft still further. It should on the one hand not under-estimate the keenness  
of intra-Community competition between motor vehicle manufacturers and ensure  
on the other hand a fair balance between the parties' reciprocal rights and  
obligations in the interests of competition and consumers. Unauthorized sellers  
should not be accepted for vehicle distribution. The Committee considers that  
it is of vital importance to safeguard the interests of consumers particularly  
in respect of spare part availability, price, quality and guarantees, and it  
objects to the inclusion of spare parts in the regulation. It also is against  
rules that are too extensive and impracticable as regards the availability  
of different versions of the same model of vehicle. Nevertheless, consumers  
should be able to order from anywhere in the Community a vehicle meeting the  
specifications legally required in the country of registration, provided that  
such a vehicle is supplied in that country.
The Committee rejects the clause of the draft amounting to a suspension of the  
system of selective distribution while prices net of tax differ by more than  
12% for a period of more than six months between any two EEC markets, because  
the elimination of important price differentials must be regarded in the first  
instance as an objective to be achieved; price differentials exceeding 12%  
should not necessarily entail as an automatic legal consequence the cancellation  
of selective distribution.

-1 8 a -
As usual, the European Parliament will also be invited to give its opinion on  
the proposed legislation.
3. EC TYPE-APPROVAL FOR MOTOR-CARS AND HARMONIZATION OF TECHNICAL
REGULATIONS
3.1 Full harmonization of technical requirements is a cornerstone of the
Commissions's efforts to strengthen the internal market. Its particular  
relevance has changed over the years: whereas some major technical problems
had to be solved in the early stages of harmonization, i.e. 1970 - 1977/78,  
the adoption of the three draft directives still pending at the Council is  
chiefly related to foreign trade rather than to technical issues. Secondly,  
whereas one major objective of harmonization was, in the beginning, to enable  
bigger economies of scale, the technological progress now allows to cope with  
differing technical requirements more flexibly. And thirdly, as regards  
further efforts in harmonization, new objectives have come to the forefront,  
such as noise levels, air pollution, and, possibly, passenger safety in case  
of lateral and frontal impacts in road accidents, and pedestrian safety in  
car front impacts following a Community-sponsored research programme on
biomechanics (cf. below point 8.2). Along with the promotion of these  
objectives, consciousness has grown of the need to provide the industry with 
a comprehensive, coherent and stable body of legislation as a favourable 
basis for long-term planning and competitivity.
These changes have entailed consequences as summarized below.
3.2 The question of the three remaining directives which were envisaged
28in Directive 70/156/EEC of 1970 and which are still blocked at the Council
are part of what is called the "third country problem" which relates not only
29to motor cars, but to several other products as well
It is mainly the differences of views within the Community about the access  
of vehicles from third countries to the EC type approval system which has  
until now delayed the appropriate decisions. Health and safety
considerations have led to concern about how to control the conformity of  
individual vehicles with the prototype which has received type approval. It

- 1 9 -
is also to be remembered that in the context of approving the results of the
GATT negotiations, the Community issued a very detailed statement on  
.. 30reciprocity.
3.3 It should be noted that the entry into force of the EC type-approval
system for motor-cars would not mean that national testing procedures were 
fully abolished for models produced in the EC. It would still be possible  
to maintain national standards, due to the fact that the Commission has not 
proposed total harmonization so that only one complete set of standards is  
applied throughout the Community, to the exclusion of all others.
When it harmonized standards by introducing "optional" EC standards, the
Community recognized that the Member States could retain their national
standards alongside the harmonized ones. This means that there will be two
sets of standards and two procedures among which the manufacturers will have
to choose, if national governments do not prefer to abolish their national
rules: on the one hand, the manufacturers can comply with EC standards, with
the effect that no Member States may refuse to register or prohibit the sale,
entry into service or use on grounds relating to the construction or
31functioning of the car. On the other hand, they can also decide for  
national standards, but in this case, changes in specifications and further  
testing may become necessary in other Member States.
Given the optional nature of harmonized standards, the Commission is, of  
course, highly interested to assess the extent to which already existing EC 
standards are actually used. In order to do so, the Member States and the  
car manufacturers were approached in early 1982 in order to find out:
- where the Member States have replaced their national standards by  
the harmonized ones, so that the latter have in fact become  
mandatory;
- and, in so far as EC standards are optional, to what extent the  
manufacturers prefer to comply with them.

-2 0 -
40 EC directives were included in the questionnaires.
Provisional results of these enquiries, though not yet covering all the  
Member States, suggest that the manufacturers still have the choice, to a 
large extent, between national rules and EC rules. The national governments  
have replaced national standards by the EC ones only partially, and of course  
to a varying degree. Italy and the Netherlands seem to be quite far along  
this road. France has made obligatory less than half of the standards covered 
by the enquiry .  Germany has done so on a selective basis for environment  
protection purposes mainly. The situation in Ireland and Luxembourg is  
different in so far as there is no type approval requirement (Ireland) or  
because type approval granted in any other Member States is accepted 
(Luxembourg).
As regards the second part of the enquiries some 20 car manufacturers were
approached, including Japanese and US multinationals. They replied in
respect of about a hundred different models. It was found, on a provisional
basis, that the utilization of EC standards varies to a considerable degree.
Italian makers are quite naturally on top of the list, due to the mandatory
implementation of EC standards in Italy. They are however followed by some
Japanese makers. On average, although it is difficult to generalize in a
meaningful way, 18 of the 40 directives covered by the enquiry are more
widely used. Among those are particularly the directives on environment
protection and active security. For the rest of the standards, the
manufacturers seem to prefer the national ones, and EC standards are also
almost without effect where the specification concerned is not subject to
32national standards. Further discussion of the results of the enquiries 
have been initiated in the relevant expert groups and at the level of the  
Commission services responsible for technical harmonization.
3.4 The thrust of the envisaged EC type approval system is limited to
the technical aspects of construction and functioning of the vehicle.  
Inasmuch as these aspects are in the interest of the consumers, the EC type  
approval serves the purpose of consumer protection as well.
The envisaged rules do not, however, deal with questions like e.g. where and  
when a particular car has been registered for the first time. The  
certificate by which conformity of a particular vehicle with an approved type

-21 -
is testified, does consequently not include this kind of information. There  
is no intention, at present, to reconsider this question, given that the  
technical aspects coming under EC type approval rules are fundamentally  
different from those related to the biography of a particular car.
3.5 Whereas the harmonization of technical standards establishes  
requirements which new cars have to comply with, the Commission is also  
involved in creating common rules for roadworthiness tests for used cars.  
For certain categories of vehicles, (buses, commercial vehicles weighing more  
than 3.5 tons, taxis and ambulances), the rules of Directive 143/77 have  
come into force on 1 January 1983. The vehicles will have to pass tests  
annually, in the future.
As regards private cars, the Commission is proposing to examine the
34possibilities for the introduction of roadworthiness tests in 1984.
3.6 Turning to current efforts for further harmonization, it should be  
recalled that the Statement 1981 has urged for a global approach to be  
applied which would cover at the same time the aspects of environment,  
energy-saving and safety when dealing with specific questions. Cost/benefit  
considerations would also have to be made.
Taking into account these principles, and in the follow-up to the Environment
Council of 3 December 1981, the Commission established two expert working
groups which were to analyse, in view of future harmonization, the problems
35relating to noise levels and air pollution.
3.6.1 Regarding noise emissions,  the Member States and the Commission
36committed themselves in 1977 to create equal noise standards for all
categories of motor vehicles by 1985. The envisaged level is 80 dB(A). The
present level for passenger cars is in fact 80 dB(A) but is higher for
37commercial vehicles and for motor-cycles. The present EC requirements 
already compare quite well on an international level, with only Switzerland 
(since October 1982) and Japan (for commercial vehicles as from October 1983)  
lying ahead. The expert working group, formed in December 1981 with  
participants from the national governments and industry, presented its report  
in June 1982. The report establishes for the six-vehicle categories included  
a breakdown of possible noise limits to be achieved in 1985 and beyond, based

-2 2 -
on the state of the art, and indicating the consequences on production costs,  
energy consumption, reliability, air pollution etc. A draft directive based  
on these results is presently under consideration.
In addition to the work of the expert group, the Commission has introduced
^ .  .  .  38 .  .  ,some improvements to the measurement methods of noise emissions whicn
establishes the basis on which to consider the conclusions of the experts's
work.
3.6.2 In the area of exhaust emissions,  the Community has laid down limits
in particular for carbon monoxide, unbumt hydrocarbons and nitrogen oxides.
39The standards at present in force date back to 1978. Although a direct  
comparison of the standards is difficult, due a.o. to differing methods of  
measurement, it is safe to assume that the EC standards are less strict than 
those particularly in the US and Japan. In these countries, EC manufacturers  
face competitive handicaps because their cars have to be refitted.
40In April 1982, the Commission transmitted to the Council a draft directive
aiming at the introduction of the fourth amendment of the UN Economic
Commission for Europe to its exhaust gas regulations (Regulation 15.04).
Under this directive, new cars would have to comply with the reduced emission
standards from October 1984 onwards. The Economic and Social Committee and
41Parliament have adopted a favourable view. The proposal was adopted in  
42June 1983.
The second working group created in December 1981 is charged with the  
establishment of the basis for the next steps to be considered. In the first  
phase, it has dealt with the three pollutants already regulated ..., on which  
it has presented its report in June 1983.

- 2 3 -
3.7 In the same period, the working group has received a new mandate
according to which the reduction of lead in fuel is being examined. In the  
present situation, the lead content may vary at national level between 0.15 
g/1 and 0.40 g/1, according to Directive 78/611.^
Lead in fuel presents an important obstacle for reducing polluting exhaust  
emissions, because it is a pollutant in itself, and because it prevents some  
anti-pollutant measures from becoming effective (e.g. catalytic post­
combustion). However,an in-depth analysis of the real impact of lead in fuel
on human health will still have to be carried out. There are also economic
44and foreign trade implications. It is necessary to take into account that  
considerable investment would be needed, and more crude oil be required for  
the production of lead-free fuel. Furthermore, any steps on this matter  
would need to be coordinated on as broad an international level as possible  
in order to avoid unilateral measures resulting in trade barriers.
The Commission will present specific proposals to the Council in April 1984,  
as regards reduction of polluting exhaust emissions and of lead in petrol. As  
far as lead is concerned, this will be in accordance with the time-table  
proposed by the Environment Council of 16/17 June 1983:
With regard to the special case of lead in petrol, a maximum possible  
reduction of lead contents will be aimed at, ending up with the use of a  
leadless petrol.
For this purpose the Commission is asked to submit the necessary proposals.  
The Commission will submit an interim report for the next meeting of the  
Council. At its meeting in Spring 1984 the Council will decide on  
Commission proposals to be submitted of the latest on 15 April 1984.
and with the overall guidelines given by the European Council of 17 June 1983:

-2 3 a -
The European Council also welcomed the conclusions of the Environment Council  
on the special case of lead in petrol. It emphasized the importance of  
reducing the amount of lead in the Environment and called for progress which  
may lead to the use of leadless petrol.
The Commission proposals will chiefly be based on the two reports of the working group.
Moreover, the resolution adopted by the European Parliament on the subject of
45lead in petrol, on 6 June 1983 ,  will also be taken into account. In this
context, reference should also be made to a Directive adopted by the  
Environment Council on 3 December 1982 and which limits the general lead  
value in the atmosphere.4^
^•8 Another focus of interest is found in passenger safety, as a result
of the Community sponsored research programme on biomechanics. This  
programme,  which consists of some 37 specific projects dealing particularly  
with side crash impact and the development of special dummies, was wound up  
at the end of 1982. The results were presented to a world-wide public during  
a symposium in March 1983. Building on the research performed, it will  
subsequently have to be considered whether a sufficient base has been  
established for conclusions in terms of passive safety regulations, applying,  
again, the principles of the "global approach".
t

-24 -
With regard to specific safety regulations, the existing directives on seat  
belts and on anchorages of seat belts have been amended.^7
4. TAXATION ISSUES
4.1 In its Statement 1981, the Commission has drawn attention to the
favourable effects which would flow from more homogeneous taxation on
purchase and use of motor-cars (also as regards energy-saving, cf. point 7.2
below) within the Community. There are, however, considerable discrepancies
in the national laws concerning vehicle purchase taxes, or the operation
48directly connected therewith:
- Belgium: VAT at 25%; cars with an engine capacity greater than  
3 000 cc or developing more than 116 kW are subject to
an additional tax of 8% computed on the value of the car  
excluding tax;
- Federal Republic of Germany: VAT at 14% (since 1.7.1983);
49- Denmark: VAT at 22% together with a registration tax,
computed on the purchase price including VAT, of 105% on the  
first DKR 19 300 and 180% on the remainder;
- France: VAT at 33.33%;
- Greece:^1  two taxes are charged on cars:
(1) a special consumption tax made up of two  
elements: A and B:
(a) Element A is calculated on the cubic
capacity of the car at a rate of 23 Drachmas  
(DRA) per cc for a capacity up and including  
to 1200 cc,
DRA 28 per cc where the capacity is between  
1 200 cc and 1800 cc and DRA 40 per cc above  
1 800 cc;

(b) Element B, an ad valorem tax calculated 
in accordance with the following formula:
B = Element A x 4 x V  
100 000
where V = value of the car less DRA 25 000.
The total consumption tax is A + B.
(2) A registration tax is charged as follows:
(a) for a capacity up to and including  
1 800 cc: 100 DRA per cc for the first
1 200 cc,  200 DRA for cc between 1 200 and  
1 800 cc
(b) for a capacity exceeding 1 800 cc: 150  
DRA for the first 1 200 cc, 300 DRA thereafter
- Ireland: VAT is charged at 18%. An excise duty at the rate  
of 50% on the value after importation or manufacture is  
also charged. The 50% rate is increased to 60% for cars  
over 16 horsepower.
- Italy: VAT at 20% on cars with an engine capacity of less  
than 2 000 cc (2500 cc for diesel cars) and 38% for cars  
of more than 2 000 cc;
- Luxemburg: VAT at 10%;
- Netherlands: VAT is charged at 18%, a special tax on motor  
cars is levied. It is due at the time of the supply
and is payable by the manufacturer or importer, but is  
calculated on the basis of the price at which the vehicle  
will be sold to the user, minus VAT.- 2 5 -

- 2 6 -
Rate of the tax: with effect from 1.8.1982:
- if the total price does not exceed HFL 10 000: 16% of  
price excluding VAT
- if the total price is more than HFL 10 000:
16% of 100/118 of HFL 10 000 increased by
24% of 100/118 of the total price minus HFL 10.000.
- United Kingdom: VAT is charged at 15%. A special car tax  
of 10% is also levied on the wholesale price of the car (taken  
as 5/6 of the retail price), except in the case of motor 
caravans for which the value for tax is 60% of the wholesale 
value.
These discrepancies constitute one of the factors underlying the price  
differentials for cars in the Member States. They present one of the long­
term aspects under which to improve the framework conditions for the  
automobile industry in order to do away with price differentials.
However, the Community competence in this area is limited. Taxation policies  
have in principle remained the sovereignty of the Member States. The  
Commission is considering the necessary political initiatives, to be taken at  
the right moment. In the short-term, it can examine taxation issues only  
under Article 95 or 101 of the Treaty. Article 95 has therefore been the  
basis on which the Commission has started to examine some complaints  
addressed to the Commission and which concern in particular the level, and,  
partly the system, of taxation in Denmark ,  Greece and in France. No  
formal proceedings have yet been opened.
4.2 The lack of harmonization as regards tax is also a reason for
restrictions in the free use of vehicles throughout the Community.
52Under international conventions, a foreign vehicle may, subject to certain 
conditions, be imported for temporary use, provided that it is not placed at  
the disposal of a resident of the country of importation; this latter  
restriction is designed to prevent tax evasion. Whilst the Court of Justice,

- 2 7 -
in its judgment of 9 October 1980 (Case 823/79, criminal proceedings against  
Giovanni Carciati/1980/ECR2773),  has held that this restriction is compatible  
/With Community law, it has pointed out that measures taken to prevent tax  
evasion should not be excessive.
The Commission presented in 1975 a proposal for a Directive on tax exemptions
for certain means of transport temporarily imported into one Member State
from another,^ which Parliament has endorsed^* and which was adopted by the
55Council on 28 March 1983 .  The draft is designed to harmonize certain
conditions governing the temporary importation of vehicles for private or  
business use. The Commission is aware that this proposal does not eliminate  
all the problems in this area; it intends to submit further proposals.
4.3 A further point concerning passenger cars, namely whether companies
should be eligible to deduct VAT incurred in respect of expenditure on such
cars (purchase, repairs, etc.), has been considered as part of the
preparatory work for a further directive on the harmonization of VAT law. A
proposed directive, under which the deduction of such tax would, subject to
certain exceptions, be excluded has been submitted by the Commission to the  
56Council.
5. TRADEMARKS
Suppliers to car manufacturers are in certain cases expected to stick the  
trademark or brand name of the manufacturer on the automobile component they  
are supplying, failing which they would no longer be accepted as contractors.  
The parts manufacturers, through their federation of national associations  
(CLEPA) claim that they should be given the right to affix their own brand 
name or trademark to parts which they have developed or in the development of  
which they have at least played a major role. This should be achieved by an  
enforcement at EC level of mandatory identification of products, which could  
well be in the already widespread form of allowing the trademark/brand name  
of both the parts manufacturer and the vehicle manufacturer to be affixed.  
The attention of the European Parliament has been drawn to this problem by  
CLEPA late 1982.

- 2 8 -
Community law does not at present lay down any general rule requiring  
manufacturers of replacement parts for motor vehicles to mark such parts with 
thieir qwn trademark. Suppliers of parts and manufacturers of motor vehicles  
may by agreement determine what trademarks are or are not to be affixed to  
the product or its packaging. The question of whether a motor vehicle  
manufacturer cam enforce a general rule that all the replacement parts  
distributed by it must bear its trademark alone depends on the willingness of 
suppliers to relinquish their own brand image. It is not possible to give a  
general answer to the question whether in individual cases clauses  
prohibiting suppliers from using their own trademarks infringe the  
competition rules laid down in the EEC Treaty. The problem of refusal by a  
motor vehicle manufacturer to allow the use of other trademarks should be  
examined with particular reference to whether there is abuse of a dominant 
position under Article 86 of the EEC Treaty. If the manufacturer has a  
dominant position on a regional market, there may also be infringement of  
national law.
The Commission has sent requests for information to eight motor vehicle
manufacturers pursuant to Article 11 of Council Regulation No 17/62 with a
view to determining to what extent supply agreements contain clauses
preventing the suppliers from using their own trademark and from referring in
their advertising to the fact that they are suppliers to a motor vehicle
manufacturer. The Commission has already obtained extensive material, but
cannot decide on the questions involved in the branding of parts until it has
more precise information on the facts of the various situations and on the
economic circumstances. It is therefore at present organizing hearings of
57the relevant associations.
6. INSURANCE AND DRIVING LICENCES
6.1 Another indirect restriction on the free use of vehicles in the
Community stems from the obligation on the owner to take out third-party 
insurance with an insurance company established in the Member State in which  
the vehicle is registered.
58In this field, Council Directive 72/166/EEC of 24 April 1972 deals with
accidents which vehicles registered in one Member State cause in another  
Member State or in certain third countries bordering on the Community. This

-29 -
Directive and the Commission Decisions relating to its application (Decisions
74/166/EEC and 74/167/EEC of 6 February 197459 and 75/23/EEC of 13 December 
001974) have removed the need for the International Motor Insurance Card  
("green card") to be checked at the Community's internal frontiers and at the  
frontiers with a number of neighbouring third countries.
On 7 August 1980 the Commission presented to the Council its proposal for a
second Directive on the approximation of the laws of the Member States
relating to insurance against civil liability in respect of the use of motor  
,  .  61
vehicles. This proposal is designed to eliminate major disparities which 
s^iH exist, for example as regards the minimum insurance cover prescribed by  
law, and thus to ensure uniform insurance protection for road accident  
victims in the Community.
On 8 January 1981, the Commission made a recommendation (81/76/EEC) on  
accelerated settlement of claims under insurance against civil liability in  
respect of the use of motor vehicles, which urges the Member States to take  
all the measures necessary to facilitate the communication of police 
reports . ^
6.2 With regard to driving licences, the Council adopted on 4 December
1980 its first Directive (80/1263/EEC) on the introduction of a Community 
03driving licence, which is in force in the Member States as from 1 January  
1983. This Directive covers, amongst other things, the mutual recognition of  
national driving licences and their exchange when holders take up ordinary  
residence in another Member State. Further measures to harmonize provisions 
on the issue of driving licences are planned; proposals to this effect will  
be presented by the Commission once the work arising directly out of the  
first Directive has been carried out.
7. ENERGY CONSERVATION
7*3- Although motor vehicles account for a considerable proportion of
total energy consumption (19.3% in 1981 in the EC-10), this issue was dealt  
with in the Statement 1981 on a rather low key. The Commission wants to  
avoid any regulation in this area. The developments in the market place have 
justified this approach: fUel efficiency has more and more become an
important factor of competition, and the reductions in fuel consumption

- 3 0 -
achieved or aimed at by the car manufacturers go perhaps beyond what could  
have been expected from any legally imposed rules. Furthermore, the car  
manufacturers have committed themselves voluntarily at national and EC level  
to improve fuel efficiency as part of general energy saving efforts.
The commitments made were for a reduction of 10-12% by 1985, according to the  
country concerned, based on 1978 as a point of reference. The average  
reduction envisaged at EC level is 10% by 1985.
64According to a Council Resolution of June 1980 concerning new lines of  
action by the Community in the field of energy saving, the Commission  
services undertook to analyse the situation on a year by year basis, by  
approaching the Member States' authorities, and with help from independent  
consultants. The results covering the years 1978—1980 became available early  
1983, and the Commission intends to continue the exercise until 1985. The  
results now available show that in 1980, the weighted average fuel  
consumption of newly registered cars went down by 5.34% compared to 1978. EC  
car manufacturers attained 5.69% of reduction, whilst foreign makes attained  
4.12%. On a national basis, the French makers were at the top of the
list,with average reductions of 6%, followed by German makes (5.5%), UK makes  
(4.73%) and Italian makes (3.8%).
These reduction rates cannot of course be compared with each other as they  
depend on e.g. the absolute level of consumption.

-31-
How ever, it can be concluded, that half of the objectives envisaged for 1985  
were achieved by 1980.
7.2 The Statement 1981 has also pointed to the need to design the  
harmonization of tax structures as regards purchase and use of motor vehicles  
so that energy saving could be encouraged. In order to establish a basis  
which would enable it to evaluate the impact of any particular taxation  
measure on energy consumption, the Commission has therefore launched a study  
on how fiscal systems affect the use and ownership of private motor-cars. In  
this context a model is being developed for the prediction of the impact of  
taxation policy on car fuel consumption.
7.3 Regulatory work in this area, as may be recalled, has been limited
65to a Directive on measurement methods for fuel consumption. More recently,  
the Commission transmitted to the Council a draft directive aiming at the
0g
saving of crude oil by using substitute components in fuel, in particular  
methanol and ethanol. The draft directive is based on the work of a special  
working group involving representatives of the Member States and of the  
Industry on alternative fuels which had conducted technical research work in  
1980/81. The European Parliament gave its opinion in March 1983 on the basis  
of a report from the Committee on Energy and Research.
7.4 Particular efforts are also being made to support research into  
energy-saving technologies (cf. below point 8.2.3).
8. RESEARCH AND DEVELOPMENT
8.1 The Commission takes the view that R&D directly related to the
development for the market of new products and processes is the task of the
07
relevant industry and the Commission does not intend to intervene directly  
to support such R&D in the European motor vehicle industry. The Commission  
has however initiated, or contributing to, a number of specific research  
projects which have a clear industrial objective but are still precompetitive  
and multisectoral in character. Also under preparation are further large  
research programmes which by their subjects are of interest to the automobile  
industry.

-32-
8.2 The main existing programmes and projects are the following:
8.2.1 Under the multiannual R&D programme adopted by the Council on 17 May  
1982,68 the Commission is entrusted with the task of carrying out during the  
period 1982-1985 an R&D programme in the raw materials sector.
The fundamental objective of this programme is to reduce the external  
dependence of the Community for its supplies of raw materials by increasing 
its self-supply potential and developing materials technologies.
This programme includes four sub—programmes:  metals and minerals substances,  
wood as a renewable raw material, recycling of non-ferrous metals,  
substitution and materials technologies (technical ceramics).
Invitations to submit proposals for participation in these research  
programmes have been published in mid 1982. A total of approximately 200  
proposals have been received and examined in the relevant Council Committees.
There are a number of research areas particularly relevant to the automobile
70industry in the section dealing with ceramics
Technical ceramics of the type of carbides silicides, nitrides and  
oxynitrides are likely to play a paramount role in the development of engines  
with high thermodynamic efficiency, such as adiabatic diesel engines (blocks  
and valves and pistons of ceramic materials),  or gas turbines equipped with  
ceramic fans.
The target envisaged by the EC car manufacturers by the year 2000 is a  
vehicle of medium size, of a weight of about 800 kgs, and having an engine of  
approximately lOOkW which would burn 3—4 litres per 100 km at a speed of 120  
km/h. These results seem to be achievable only by applying major
technological changes, including use of advanced materials.
Using technical ceramics for these objectives presents the advantage of the  
material being available in the 1iC and of its qualities such as reduced  
weight, high resistance to high temperatures and to corrosion. However, the  
problems of the present generation of ceramic materials, such as weak shock

-33-
resistance, and the difficulties of high temperature powder technologies are  
also well known. The Commission's R&D programme is aimed at exactly these  
problems. The total cost of the programme will be shared, the contribution  
from the EC budget being in the order of 3.5 million ECU. It is to involve  
about 40 different research contracts, out of which two thirds should be of  
interest to the automobile sector. Both car manufacturers and components  
manufacturers will be among the contractors.
The other branch of the R&D programme, i.e. substitution of metals, is less  
important for the automobile sector, although windfalls are always possible.  
The EC contribution to this part of the programme totals 6 million ECU.
8.2.2 From 1978 to 1982 the Commission of the European Communities
promoted biomechanical research in Europe by means of a coherent programme of
financial participation in individual studies, investigations and  
71experiments. The EC contribution to this programme was 3 mio ECU or
roughly 40% of its entire cost. The objective of this programme was to  
establish a scientific basis for a new generation of Community Directives 
within the framework of the EEC-type approval procedure for motor vehicles,  
in view of a further improvement of the safety of car occupants and other  
road users. Hence, utmost importance was given to projects aiming at  
completing the knowledge of human tolerances to accidental constraints and at  
the development of human substitutes ("dummies") necessary for the assessment 
of the safety features of complete motor vehicles.
The following six priority themes have been defined and were covered by a  
total of 37 specific projects:
- vehicle occupant tolerance and injury criteria in frontal impact;
- vehicle occupant tolerance and injury criteria in side impact;
- pedestrian injury mechanisms in impact by car front structures;

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- development of a standard dummy for side impact testing;
- mathematical models of impact and injury prediction;
- occupant behaviour and interaction during vehicle impact.
The results were presented to and discussed with experts, including  
representatives from the ECE,  US and Japan, during a symposium in March 1983.  
The conclusions reached were to the effect that further research is necessary  
on certain topics (e.g. the development of mobile barriers for accident  
simulation), but consideration can also now be initiated on how to lay down  
the results of research in performance-oriented safety regulations. The  
principles of the "global approach" described above (point 3.5) will have to  
be taken into account. Furthermore, questions to be studied include e.g.  
which changes in testing methods for type approval purposes may be necessary  
given that prototypes will probably have to be subjected to full-scale  
testing leading to the destruction of the vehicle.
The proceedings of the symposium will be published before the end of the year  
to provide more detailed information.
8.2.3 Particular efforts are being undertaken to promote research into  
technologies which would help to reduce fuel consumption by motor-cars.
The Commission has sponsored a first programme including six projects in  
1975-1979  and for which approximately 417 000 ECU had been spent. In the  
second programme (1979-1983), some of these projects were again included for  
continuation.
The improvement of internal combustion engines is a continuation of work  
carried out in the first programme. Research on different new fuels was  
added to this programme. Also recovery of waste heat and its use (e.g.  
bottoming cycle) are now being studied. Of the new concepts, the rectiliner 
engine and the Stirling engine with electro-magnetic coupling are studied.  
Finally international co-operation was set up in the field of  
composite/metal jointing for vehicle weight reduction. Electric vehicle  
traction systems are being developed in order in the long term to increase  
the flexibility and diversification of fuel use and to reduce the

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environmental problems in urban transport. The lack of economically viable 
advanced batteries is the bottleneck for large scale commercialization bf 
electrical vehicles. Research is therefore done to develop advanced  
batteries with a high power and energy density
Some 1.4 million ECU have been made available for the projects.
A survey of the results (1975-1979) and a compilation of selected new
projects (1979-1983) including those mentioned above are published in the
Commission's booklet "The Community's Energy R&D programme: Energy
72Conservation"
In addition to these research projects, the Commission has given support to a  
number of demonstration projects for electrically powered vehicles and other  
fuel-saving technologies. A total budget of approx. 2.2 million ECU is  
allocated to these projects. In each case, Community financing presents 40%  
of the total cost of the project involved. A survey of the results is  
published in the Commission's booklet "Evaluation of the Community  
demonstration programmes in the Energy Sector".
73The Community furthermore participates in the work of COST which includes  
as projects particularly relevant to the automobile sector:
N° 302 - Technical and economic conditions of utilization  
of electric road vehicles
N° 303 - Technical and economic evaluation of programmes 
concerning bi-mode trolley buses
N° 304 - Utilization of substitute fuels by road vehicles
8.3 The Commission is highly conscious of the fact that the
competitiveness of the European motor vehicle industry is adversely affected  
by its lack of access to a wide range of multisectoral technologies more  
easily available in competitor countries. Research into these technologies  
and their applications, essentially research at the precompetitive phase is

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considered to be appropriate for further Community action particularly where 
Community programmes can assist in the co-ordinatin and rationalization of  
research across the national boundaries.
The Commission has recently proposed a European Strategy on Science and
74Technology in the form of a framework programme on R&D in 1984-87. The
framework programme, the main objectives of which have been endorsed by the
Council of Ministers, proposes a marked increase in R&D related to the  
improvement of the competitiveness of European industry and provides a
programming guide for future R&D actions.
8.3.1 In the case of basic technological research, the Commission has
submitted to the Council and the European Parliament a major research  
programme (C0M(83)350 of 20.6.1983) which includes a number of subjects of  
interest to the automobile industry, such as: reliability, wear and
deterioration, surface science and technology, laser technology, joining 
techniques, new testing methods, polymers, composites and other new
materials, and certain aspects of computer-aided design and computer-aided  
manu f ac turi ng.
8.3.2 The car manufacturing industry has also shown interest in the
Commission's projects for precompetitive co-operative R&D in information
technologies. (European Strategic Programme for R&D in Information
Technologies - ESPRIT). The fields covered by this programme include, in
particular, computer integrated manufacturing which is becoming ever more
important in car manufacturing and which is certainly just as important as
product engineering in order to maintain and improve competitiveness. The
Statement 1981 had emphasized the development potential in the Community car
75industry under this aspect and work under the pilot projects ,  already under 
way, includes much which could in time be applied to this sector.
9. STRUCTURAL DEVELOPMENT OF THE INDUSTRY
Considerable attention has been devoted in the Statement 1981 to the large  
fragmentation and the low degree of concentration in the EC automotive  
industry. Particular reference has been made, along with the analysis, to  
the Commission's responsibilities in this area, notably to its powers in the  
field of competition and in the use of EC financial instruments.

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9.1 In following the evolution of the structure of the industry, the  
Commission has examined the adjustment problems with the aid of two major  
studies which will provide better understanding of the present shape and  
performance of the automotive industries, along with the prospects in this  
sector. The main study "Concentration, Competition and Competitiveness in  
the Automobile Industries and in the Automotive Components Industry of the  
European Community" is on sale. It offers a detailed and comprehensive  
survey of the Community market, production, foreign trade, competitiveness  
and prospects for the EC automobile industry. The relations between  
automakers and components manufacturers are also analysed.
The other study deals, on a comparative basis, with the perspectives of the  
European automotive components industry. Together with an economic analysis 
undertaken earlier on, it establishes long-term prospects for the sector.  
The particular aspects covered by the study include component technology and  
the auto production process, economic consequences of different component-  
producer relationships, the impact of new technology on the structure of the  
component industry and adjustment pressures and strategic responses.
It should be noted, however, that the Commission does not necessarily agree
76with the conclusions suggested in any study.
With the latter study (as well as with some other study projects, cf. below 
point 10.2 as regards employment issues), the Commission gives an incentive  
to automobile—related research at European level, since several national  
research teams are involved in this.
779.2 As announced in the Statement 1981, the Commission has taken  
steps to set up an "a posteriori" monitoring system covering both specific  
national aids to the motor industry and other general aids insofar as this  
industry benefits from them.
The Commission's overall policy is to increase the transparency of national  
aid to industry,  and thus to help avoid the appearance of surplus capacity 
arising which could subsequently lead to protectionist measures and state  
aids liable to distorte competition and to interfere with free movement.

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The Commission has entered into a dialogue with the Member States concerned, in an  
effort, first of all, to identify the practical problems, particularly of a  
statistical and administrative nature, which may arise as the system is set up. The  
content and the final form in which the information is to be supplied will be defined  
as a next step.
9.3 The Commission has also informed Member States that it has included the
motor vehicle industry among those sectors to which its Directive on the transparency
78of financial relations between Member States and public undertakings will be first  
applied. This choice, primarily motivated by the comparatively widespread nature  
of public financial participation in the sector, will enable the Commission to  
ensure equal treatment of private and public undertakings where the application of  
Community aid rules is concerned.
9.4 Interventions from EC financial instruments (excluding the Social Fund) have  
become smaller in quantity and less important as a contribution to overall investment  
in the automobile sector in 1981/82, than during the period 1975-80 referred to in  
the Statement 1981. The largest part of the loans and grants went to Italy,  
followed by France and the United Kingdom.
As regards the total of grants from all Community funds, the amount was approximately  
15 million ECU in 1981 and 16 million ECU in 1982.
7«
The Regional Fund has remained the most important source for the automobile industry  
although by way of its objectives and structure (reimbursement of national aid) it  
cannot be used in favour of any particular industrial sector. Commitments for the  
automobile sector were in the order of 15 million ECU both in 1981 and 1982. In  
1981 in particular, concerning projects worth more than 10 million ECU, manufacturing  
of motor vehicles and components presented the sector of manufacturing industries  
from which the biggest number of projects has been sponsored.
As regards loans, the total amount was in the order of 19.5 million ECU in 1981, and
Oq86 million ECU in 1982 .  The greater part of these loans has come from the EIB,
and to a lesser extent from ECSC and NCI.

-39-
In 1982, almost 70 million ECU were given by the EIB to this industry in Italy.
Most of these loans served for energy saving measures, or were given to assisted  
regions, or contributed to the introduction of advanced technologies in the  
production process.
81As far as the New Community Instrument (NCI) is concerned, the Council decisions
82of April 1982 and June 1983 authorized the Commission to grant a single tranche  
of borrowings under NCI II and an initial tranche of borrowings under NCI III.
These decisions have gradually extended the use of the NCI in favour of the  
manufacturing industry and have marked priority to be given to investment undertaken  
by SME. Producers of car components should therefore be able to benefit from
83possible NCI interventions, provided they are small or medium-size enterprises .
A breakdown by number of Loans between automobile components and car manufacturing  
shows that more than half of all projects sponsored concerned car components. Due  
to smaller amounts per project in these cases, however, the share of the  
components subsector in total allocations to the automobile sector in value terms  
was in the order of 15-20% only.
10. EMPLOYMENT AND WORKING CONDITIONS
10.1 Besides general policies aimed at reducing unemployment. Commission efforts  
devoted to employment questions in the automobile sector are influenced by a basic  
lack, still in 1981, of information about the effects on employment and working  
conditions that the changes which the industry is currently undergoing will have.
A number of studies into various aspects of size and structure of employment,  
location, training, working conditions, etc. have therefore been launched.
As regards the introduction of new technologies, the Commission has found broad  
consensus on the need to accept and encourage technological progress whether it be  
in the form of new manufacturing techniques (like robotics), or at product level.  
Those concerned with the matter have also agreed on the need to anticipate its  
effects on employment and to take whatever steps are necessary ahead of time so  
as to ensure that workers do not have to bear the brunt of changes when they occur  
without preparation or assistance, but rather that they may be given a fair share  
of the fruits of the changes they are faced with.

-40-
Thus building on exchanges of views with the European Parliament, and the  
European Metalworkers' Federation, the Commission has initiated, and partly 
received, a number of studies which will, together, provide for a thorough  
assessment of the present situation and of employment prospects in this  
sector:
(1) The EMF itself established a report on working conditions in the  
European automobile industry which provided for comparative tables  
concerning employment structure,  wage systems,  working hours and  
supplementary systems of social security.
(2) A study in train, contracted to "Economist Intelligence Unit  
(Europe) SA", analyses the regional impact of EC policies in the  
automobile sector, with a particular emphasis on employment.
(3) An assessment of the changes in quality and quantity of 
employment associated with, and required by, the present process of  
industrial change in the automobile industry is being undertaken by  
the Wissenschafszentrum Berlin, in conjunction with research teams  
from France, Italy, U.K., and Sweden as well as the US and Japan.
(4) A forecast for sectoral employment in the EC up to 1990 was  
undertaken by the Netherlands Economic Institute.
(5) The particular impact of robotics on employment, with special  
reference to the motor vehicle industry, is one of the topics dealt  
with in the November/December 1982 bulletin of the European Pool of  
Studies (EPOS),85 available through the Directorate-General 
Employment, Social Affairs and Education.
(6) Changes in employment in the automobile industry may also need
to be taken into account, insofar as the automobile industry is a
major user of machine tools,  in the context of the Commission s
considerations for support to recovery strategies in the Community
8 6machine tool industy.

-41-
10.2 During 1981, approximately 157 000 jobs were lost in the automobile 
industry of the Community (EC-9). Total employment in this sector (including  
car manufacturing and production of components) has thus gone down, within a
an
year, to the lowest level since the early 1970's.
As regards regional developments, there was a particular loss of jobs in the  
UK automobile industry. It amounts to nearly 25% over the period 1975-81,  
and losses in 1981 alone, compared to 1980, were of the order of 75 000.  
Thus almost half of all job cuts in the Community in 1981 were made in the  
UK.
Compared with 1975, the level of employment in this sector is still higher  
than in manufacturing as a whole; and this is so despite the over-  
proportionate speed at which jobs have been cut in the automobile sector in  
1981 (cf. Table 24 in the Annex).
Future employment growth prospects in the industry should be treated with  
caution despite signs of an upturn of car sales in many national markets.  
While assembly operations will probably continue to be fairly labour-  
intensive, given the current state of the art in technological innovation,  
other areas will probably open to greater automatization and robot 
operations, thus limiting the potential employment growth. This  
consideration must however be tempered by the trend to reduce work—time in  
key sectors, including auto manufacturing.
10.3 Persons occupied in the automobile sector have continued to be among  
the beneficiaries of the Social Fund. The amounts involved and the number of  
persons, as far as is identifiable for 1980/1982, are indicated in Annex 28.  
However, it is certain that for training and retraining in the automotive 
industry, more than the stated figure has been allocated from regional  
appropriations, which cannot be quantified because they are part of general  
framework programmes.
As regards the job effect of other EC financial instruments (see chapter  
9.4), the Regional Fund also has a certain impact, the employment effect  
being relevant in case of each particular project.

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11. TRADE POLICIES
During the past two years, automobile issues have been part of wide-ranging  
Commission contacts with third countries under a considerable number of  
aspects. The leitmotiv, in accordance with the Statement 1981, has been to  
keep automobile markets open and to arrive at stable and balanced trade  
relations. The particular issues involved vary, however, from country to  
country, so that the following survey should preferably deal with the  
Community's trading partners one by one.
11.1 JAPAN
11.1.1 The question of Japanese car exports to the Community has been one
of the major aspects of the Commission's discussions with the Japanese
authorities. Japanese cars do in fact account for the bulk of extra-EC car  
imports. In order to provide a realistic picture of the share held by
Japanese cars, EC imports from Spain, which mostly consist of cars locally  
produced by EC-based manufacturers, may be neglected.
The Japanese share in EC imports excluding those from Spain has been  
declining from the level of 74.9% in 1980, to 71.8% in 1981 and to 68.3% in  
1982 (cf. Annex 11).
The Commission is also aware of the growth of Japanese car exports to third  
markets, and of the extent to which Community producers have lost their share  
of certain export markets under pressure from Japanese competition. In  
summary, if the markets of the EC and Japan are excluded, Japan's world 
market share went from 5% in 1970 to 19% in 1981, while the Community's  
declined from 19% to 10%.
11.1.2 The Commission's position vis-à-vis Japan is geared to obtain a
88Community—wide moderation of Japanese exports. Automobiles belong to the  
product group for which Japan has given explicit assurances to that effect.
The automobile issue remains part of the Community's discussions with Japan.  
The EC requests have been transmitted to the Japanese authorities most  
recently in the form of "request lists" which were handed over in December

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1981 and November 1982. The discussion goes on in particular in the  
framework of regular semi-annual consultations on high level and on other ad  
hoc occasions.
EC car imports from Japan have also been the subject of an "a posteriori"
89statistical surveillance system, since 1981. The system has been extended
for 1983 with the addition, among others, of light commercial vehicles and  
90motor-cycles. It works on the basis of national import statistics and does  
therefore not in itself represent an obstacle to trade.
In applying this approach, the Commission follows the principles of a number  
of Council statements on EC-Japan relations, particularly those of 22 March
1982 and 13 December 1982.
Discussions with the Japanese Government were particularly intensive during
1981, as there was rising concern in Europe about the effects of the Japanese
self-limitation measures vis-à-vis the US and Canada, and about the need to
work out a genuine strategy for the EC as a whole. The Japanese undertook
91that Japanese car exports to the Community in 1981 would be moderate. In
June 1981, in particular, both sides reached agreement on the following 
92points :  the Japanese side recognized the considerable efforts which the
European car industry was making to modernize and adjust; Japanese car  
exports to the Community would be stabilized in 1981 as a result of a
moderation in exports to the Benelux countries and the Federal Republic of
Germany, and because of existing restrictions on imports into some Member
States and also recent exchange rate movements between the yen and European  
currencies; consequently, following measures taken by Japan vis-à-vis the  
United States and Canada, car exports which would have gone to the United 
States and Canada should not be deflected to the Community; discussions
between Japan and the Commission regarding future prospects would also be  
pursued.
In February 1983, the Government of Japan renewed its undertaking to the  
effect that in 1983 exports to the Community of motor vehicles would be  
moderate, as a consequence of an extension of policies applied in 1982 and 
due to the economic situation in the Community. Light commercial vehicles,  
forklift trucks and motorcycles are covered along with passenger cars.

-44-
Readiness was indicated to enter into consultations with the Commission,  
should any particular problem emerge in the course of 1983. The two parties 
also agreed to hold regular consultations at ministerial level.
11.1.3 Japanese passenger car exports to the Community have in fact
started to decline since 1981, from the very high level in 1980 (  790 000
93
units). The decline for the year 1981 as a whole was 5,8% (744 000  
units),but within that year, there were sharp fluctuations from the still  
considerable increases in the first half to significant declines in the  
second half. The year 1982 began positively with further declines in  
Japanese exports, but more recently, some significant growth rates were again  
recorded. The level of Japanese penetration by the end of 1982 was  
therefore not far from the 1981 level (8.1% in 1982, compared to 8.3% in  
1981).
11.1.4 Similar preoccupations also arose mainly in 1981 about Japanese
94
exports of light commercial vehicles (lev's). In this sector the EC 
manufacturers have suffered set-backs in Europe and losses in third markets,  
coinciding with major Japanese advances.
Lev's constitute a rather important segment of the EC motor vehicle market on  
the whole. Although the share of all commercial vehicles in use in the total  
number of vehicles in use was only 9.4% in 1981 for the Community,  the share  
is much higher in some Member States, such as Greece (32.3%), Luxembourg  
(16.9%), Denmark (15.8%) and France (11.8%). Furthermore, as the  
manufacturers are largely the same as for passenger cars, any deterioration  
in the lev market segment adds to the difficulties on the side of passenger  
cars.
The situation has developed along the lines described for passenger cars.
Japanese exports of commercial vehicles to the EC were at a peak in 1980  
with 136 000 units. Their share in new registrations in the EC then was  
11,7%. In 1981, a small decline came about (131 000 units) and the downward  
trend has continued in 1982 (1982: 118 600 units = -9,5% compared with
1981). Their market share declined from 11.6% to 10.6% during these periods.
M)

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11.1.5 Some of the Member States maintain specific rules on imports of
Japanese cars. The official import restrictions (mainly Italy) on motor
vehicles are listed in the Annex to Regulation 288/82 of 5.2.1982 on common
96rules for imports. Besides, other restraints are also known to exist as  
regards the car markets in France and the UK.
Import restraints, and the question therefore of further harmonization of
national trade policies vis-à-vis Japan received further consideration in
1981/82, after the Commission had developed specific proposals in 1980. In
November 1980, the Council had stated that some possibilities in relation to,
liberalization on both sides could be explored, subject to tangible progress
on a number of other points. Developments in trade during 1981 were however
unfavourable to the idea. In June 1981, the European Council emphasized that
the Community should make the fullest possible use of its bargaining power,
97as an entity, in its dealings with Japan. At its meeting on 23 June 1981 in  
Luxembourg, the Council took note of an overall report made by the Commission  
on EC-Japan relations, as a result of which it was agreed a.o. that the  
position regarding imports should be clarified more fully.
Quantitative restrictions on direct imports can be backed up,according to  
Community law, by exclusion of the product in question from free circulation  
of goods within the Community. Italy, in particular, has had recourse to  
this possibility, according to Article 115 of the EEC Treaty. It may be  
recalled that, under this Article, Member States having direct import quotas  
may ask the Commission's authorization to prevent third country products  
circumventing the direct import quota by "indirect" imports through other
Member States. Italy obtained authorization in 1981 and 1982 for passenger
98 99 100cars, trucks and buses and four-wheel-drive cars in relation to Japan.
There is, furthermore, an implication caused by the possibilities under  
Article 115, concerning the origin of the product in question. Only cars of 
Japanese origin, e.g. in the case of the Italian import quota, can be  
subjected to the quota itself or to the request for exclusion from free  
circulation of goods. The question of origin has arisen when Italy claimed,  
in early 1982, that the BL Acclaim was not a British but a Japanese car.  
Some of its major components are in fact imported from Japan under the BL- 
Honda Agreement. This problem was solved through Commission contacts on both  
sides.101

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There are no "local content" rules under EC law in respect of Japan. Any car
for which any tariff duty payable has been paid can freely circulate in the
Community market. The only case in which problems can arise at present
concerns the Italian market because of the official restriction on direct
imports. The rules on origin applicable in this case are general in wording
102with no reference to any specific level of local content.
The Commission does not intend to initiate a discussion on such rules for the  
Community. Any efforts to tighten the existing rules could divert Japanese  
investment projects from the Community to other countries where the rules 
would be softer yet still providing access to the Community market.  
Furthermore, any move towards specific local content requirements could be  
dangerous, be it under GATT aspects, or by promoting protectionist tendencies  
in other countries from which the Community would suffer.
11.1.6 In the follow-up to the Council decision of March 1982, the  
Permanent Representatives Committee established a high level working party to  
consider the issues involved, from the point of view of the structural  
adjustment of industry linked with trade policy, in completing a Community  
policy within which European firms would be better able to develop positive  
strategies to meet Japanese competition. The working party focussed its  
attention on three case studies on the products already recognized as  
"sensitive"to imports from Japan, and among which passenger cars. After  
having met several times during the year, the working party has presented its  
report to the Council in December 1982. It states the common opinion that  
the industry itself has to promote its restructuration. However, the task of  
the public authorities would be to create a favourable economic environment.  
No agreement was found on some of the modalities to that effect, and in  
particular whether the existing differences concerning car imports from Japan  
should be eliminated.
11.1.7 Another major aspect of automobile-related trade policies with Japan  
concerns the opening of the Japanese market to EC car exports. There are in  
fact not many European Community cars imported into Japan, and their numbers 
dwindled from 41.943 in 1979 to 26.626 in 1981, a decline of 36,5%. However,  
there was an increase in 1982, with imports rising by 17,2% to 31.205 units.  
Thus EC makes took just over 1% of the Japanese market.

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The Commission does not of course seek any bilateral balance with any given
country in any particular sector. However it is regarded as essential for
smoothing tensions in trade with Japan that there should be better potential
access to the Japanese market. Thus, streamlining of the Japanese car
homologation procedures has been the subject of discussions for several years
now. Japan which has eliminated tariffs on cars, has also removed a number
104of administrative barriers in its car homologation procedures; these and  
other measures taken in early 1982, and in January and March 1983 as part of  
packages aimed at improving market access have therefore been appreciated as  
steps in the right direction. Discussions on other, sometimes detailed,  
problems continue.
It is to be observed that the commitment of EC manufacturers to the Japanese 
market is increasing with one European model having received type approval in  
Japan (VW Rabbit), and two producers having established wholly-owned  
distribution networks (BMW, BL).
11.1.8 In accordance with its position on the link between stabilization of 
trade relations and external investment/industrial co-operation, as explained 
in the Statement 1981, the Commission considers that industrial co-operation  
and Japanese investment in the Community are both welcome provided that  
similar opportunities for co-operation and investment exist for European 
undertakings in Japan. Japanese investment in the Member States should be  
encouraged in particular in so far as it may have a positive effect on the  
employment situation in the Community and on exchanges of technology.
The major co-operation ventures and investment projects involving the  
Community and Japan^^ include:
- British Leyland is already producing the Honda Ballade under  
licence in the United Kingdom and selling it, with some  
modifications, as the Triumph Acclaim. British Leyland and Honda  
have also reached agreement whereby both will build a jointly 
designed executive car to be sold in Europe and Japan.

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- Nissan has considered the possibility of setting up a 200 000 car  
per year plant in the United Kingdom. No decisions have yet been 
reached. If the scheme goes ahead, it will be the largest Nissan 
plant outside Japan.
- VW and Nissan have reached an agreement to produce the Santana  
model in Japan. Production will begin in 1983 on a level of  
approximatively 60 000 units per year.
- Alfa Romeo and Nissan have agreed to establish a joint venture  
named ARNA for the production of small cars in southern Italy.  
Nissan will supply the bodies from Japan and they will be matched  
with Italian engines and other mechanical equipment. The cars will  
be sold mainly through the Alfa networks in Europe - they are for  
Europe only - after production begins in 1983 at the rate of 60 000  
a year.
Japanese manufacturers have also become active in Spain. Nissan, in  
particular, has acquired an interest in Motor Iberica held by Massey Ferguson  
in 1980.It has increased its share in Motor Iberica from 36% to 54,7% in  
1982.
11.2 UNITED STATES
There are no genuine bilateral trade issues with the United States in the
automobile sector. However, the Commission has sought to keep close contacts
with the US authorities in order to compare the moves towards adjustment and
strategies adopted on both sides, to meet Japanese competition. In this
106context, the Japanese commitment for self-limitation vis-à-vis the US of 
May 1981 forced the Commission to request the Japanese authorities that there  
should be no deflections to the Community of cars which would otherwise have  
been shipped to the US. The Commission is now closely following the  
discussions on "local content rules". The purpose of the bills providing  
such rules is to force foreign manufacturers to locate manufacturing in the  
US, and to keep local manufacturers away from purchasing abroad. The  
administration strongly opposes the bill and its chances seem to remain  
slim, especially in the wake of the agreement between General Motors and

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Toyota for joint car production in the US, of February 1983, and in case of a  
renewal of the Japanese self-restraint measures vis-à-vis the US. The Commission  
has explained its reservations to the US authorities for reasons of GATT  
conformity and economic consequences.
In the area of technical regulations, there are frequent contacts in particular  
with the US National Highway Traffic Safety Authority (NHTSA) on matters such as  
safety, environment protection, etc.
11.3 ENLARGEMENT - IRELAND, GREECE, SPAIN, PORTUGAL
11.3.1 IRELAND
According to Protocol No. 7 of the Act of Adhesion, Ireland has to ensure full  
compliance in the automobile sector with EEC rules and more particularly with the  
principle of free circulation, from the beginning of 1985 onwards. Under the  
present transitional period, imports of fully built-up vehicles are still tied  
to a specific level of local assembly. Whereas this system has temporarily led  
to substantial assembly operations and exports, numerous producers (European  
and Japanese) have successively decided to close down their operations in Ireland.
11.3.2 GREECE
107Greece has been allowed, under the Act of Adhesion, to maintain quantitative
import quotas on buses both from EC-9 (Article 36 of the Act) and from certain
third countries (Article 115 of the Act). The transitional period during which
these measures may be maintained, is scheduled to end on 31 December 1985, and
the quotas are to be increased annually until 1985. In order to make the
situation more transparent on this point, the list of import quotas annexed to
108Regulation No. 288/82 has been amended in Regulation 899/83 by a more-specific
109indication of the products involved. Certain adaptations of the Greek import
110quotas are also imminent, e.g. as regards Tunisia.
Furthermore, the adhesion of Portugal to the Community would require certain  
changes in the transitional arrangements with Greece (cf. below).

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11.3.3 SPAIN
Trade in automobile products between the Community and Spain has increased  
substantially over the last few years. Among the factors enhancing this  
development, particular reference should be made to the Spanish  
restructuration plan of 1979111 which basically seeks to encourage large  
vehicle manufacturers to produce a smaller range of models, by enabling them  
to import models they do not produce in Spain and by allowing them to buy  
more components from abroad.113 Spain now enjoys a considerable surplus in  
automobile-related trade with the Community. It stood at over 550 mio ECU in  
1981, compared with 45 mio ECU in 1976. However, in 1982, a considerable  
increase in EC exports to Spain meant that this surplus was reduced to just  
under 375 million ECU. Broken down between cars and commercial vehicles on  
the one hand and car parts on the other, however, there are two different 
developments: whereas Spain records a surplus in shipment of completely
built-up vehicles,113 the balance in trade of car parts is in favour of the
„ - 4.  114Community.
It follows from this pattern that Member States whose car manufacturers have  
invested in Spain generally have a less marked one-sidedness in automobile 
trade with Spain.
There has been growing concern in the Community, particularly in the United115
Kingdom, about the imbalance of these trade flows. Widespread attention
has been drawn to the disparities in import duties on both sides, as110
established under the preferential trade agreement of 1970, as well as to  
the 60% local content rule in Spain.
In March 1983, Spain offered to open a tariff quota for 1983 for two  
categories of passenger cars, in an effort to bring more balance into its car  
trade balance. For 5000 units in the 1300-1600 cc bracket (including  
1275cc), the import duty would be 19%, and for 10.000 units in the 2000-2600  
cc bracket (including 1994cc) the tariff duty would be 25%. This represents 
in both cases a reduction from the normal duty of 36.7%.

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11.3.4 PORTUGAL
The Commission's discussions with the Portugese authorities center on the 
implementation of the 1979 protocol on automobiles, under which Portugal has 
maintained a number of import quotas on cars from the Community. The 
protocol is scheduled to expire at the end of 1984.
Consideration is also given in this context to car trade between Portugal and 
Greece, Greece itself maintaining transitional import rules until December 
1985, under Article 36 of the Act of Adhesion (cf. above point 11.3.1), 
concerning buses. The Commission intends to propose an expansion of the 
Greek import quota in order to make it include Portugal if necessary.
11.4 AUSTRALIA
The Community has been involved in bilateral and multilateral discussions and 
negotiations with the Australian authorities since 1975, following the 
introduction in Australia of special protective measures (quotas, tenders, 
additional duty of 12.5%) to supplement the duty of 45% (bound in GATT). The 
level of the quota is fixed on a yearly basis to give Australian producers 
80% of the Australian market - the remaining 20%, which is left for imports, 
is mostly supplied by Japan whose share of the Australian import market has 
gradually incrased and is around 85%. Because of the cumulative, impact of 
these protective elements, the Community's share of the Australian import 
market has been eroded, and is now around 12%.
In December 1981, the Australian Government announced its policy for post- 
1984 assistance arrangements- these were to comprise a tariff quota (duty of 
57.5%) and a tariff duty, beyond the basic quota of 150%. In addition a 
Part the tariff quota is to be allocated by tender.
Although the size of the basic quota was to be increased, the level of 
protection and the incidence on Community cars (high-priced) is excessively 
high. The new Australian Government has not yet decided regarding the 
future level of assistance to industry in general and to motor cars in 
particular. The Commission has recently reiterated its preoccupation to the 
Australian authorities to the effect that the position of EC exports to 
Australia should be safeguarded.

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11.5 REGULATORY MATTERS - SWEDEN, SWITZERLAND
Both neighbouring countries, linked to the Community by Free Trade 
Agreements, present important markets for the EC car manufacturing industry 
and important links exist, in particular with Sweden's car manufacturers 
(e.g. Renault-Volvo). Besides following the development of industrial co­
operation and the evolutions in the market place, the Commission has paid 
particular attention to the policies in the area of standards. As regards 
Switzerland, the focus has been on exhaust emission standards which have
become more vigorous in October 1982 and will do so again in 1986 following
117decisions made in October 1981.
Discussions with Sweden also concern air pollution standards and more 
particularly intentions in the country to introduce lead-free petrol. In 
both cases, as large a degree as possible of conformity in standards is being 
sought in order to minimize the negative impact on free trade in automobiles.
11.6 IMPORTS FROM STATE TRADING COUNTRIES
Registrations of COMECON cars in the Community rose from about 85.000 in 1980 
to 119.000 in 1982, an increase of 40%. Given that the total EC market 
remained stable over this period, COMECON penetration went up from 1% to 
1.4%. Markets shares vary however, at national level, and they are 
particularly high in Denmark, where the increase was from 7% in 1980 to 15.3% 
in 1982, and in Belgium, with the corresponding figures being 3.2% and 5.4%. 
As almost all cars originating from COMECON countries are of less than 1500 
cc, their significance as competitors to EC models must furthermore be seen 
against the size of the small car market segment only.
Prices of COMECON cars are normally considerably below those of comparable EC 
models, and they tend to be technologically lagging behind. The prices have 
increased less, in many cases, over recent years, according to BEUC
publications. The most important makes are LADA (USSR) and SKODA (CSSR).
Import arrangements applicable to imports of cars from the COMECON
H R  '  119countries sire laid down by Regulation 3286/80 . According to this
Regulation, quantitative restrictions only apply to imports into Italy,

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whereas imports into other Member States of the Community are liberalized, 
except for certain specific provisions that apply to Ireland under Protocol 
No. 7 of the Treaty of Accession.
The import quotas to be opened for 1983 are specified in Council Decision No. 
12082/971/EEC, according to which Italy must open quotas for motor vehicles 
and parts imports from Hungary, USSR, CSSR, Roumania.
Italy has received the authorization from the Commission to exclude cars of 
USSR origin from free circulation of goods under Article 115 of the Treaty. 
The Coiranission's decisions are published together with those concerning 
Japanese cars (cf. above point 11.1.5).

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1) C0M(81)317, published as Supplement 2/81 to the Bulletin of the
European Communities.
2) O.J. No. C 28 of 9.2.1981.
3) O.J. No. C 230 of 10.9.1981.
4) On imports of Japanese cars into the EC; on the Community car 
industry; on competition in the automobile market; cf. O.J. No. C 42 
of 14.2.1983.
5) Bioreau Europ6en des Unions de Consommateurs.
6) cf. Written Question No. 1361/82 by Mr. Rogalla, O.J. C 58 of 2 March 
1983.
7) Directive 70/156/EEC of 6 February 1970, 0J L 42 of 23 February 1970,
p. 1.
8) cf. Written Question No. 1515/81 by Mr. Michel, O.J. C 118 of
10.5.1982.
9) cf. Written Question No. 361/82 by Mr. Normanton, O.J. C 225 of
30.8.1982.
10) cf. Written Question No. 1527/81 by Mr. Collins, O.J. C 98 of 
11.4.82.
11) "Differences between car prices in the UK and Belgium", Ashworth,
Kay, Scharpe, Institut for Fiscal Studies, Oxford, Report Series No. 
2, 1982.
12) cf. Written Question No. 101/82 by Mr. Welsh, O.J. C 188 of
22.7.1982.
13) Based on figures included in the 1982 BEUC report.
14) In 1982 57.7% of all new cars sold in the UK were produced outside 
the Country.
15) cf. Written Question No. 1585/81 by Mr. Hord, O.J. C 92 of 13.4.82. 
and Written Question No. 1829/82 by Sir James Scott-Hopkins,  O.J. C 
111 of 25.4.1983.
16) cf. Written Question No. 1961/81 by Mr. Batterby, O.J. C 221 of
25.8.1982.
17) cf. Written Question No. 1589/82 by Lord Douro, O.J. No. C 100 of
13.4.1983.
18) O.J. No. L 256 of 2.9.1982.
19) O.J. No. L 258 of 2.10.1982.
20) O.J. No. C 295 of 11.11.1982.
21) Court of Justice of 13.11.1975, in Case No. 26/75 (ECR 1367 - General

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Motors Continental).
22) cf. Written Question No. 2351/82 by Mr. Hume.
23) cf. Written Question No. 2188/82 by Mr. Glinne.
24) cf. Written Question No. 573/82 by Mr. Couste, O.J. C 266 of
11.10.1982.
25) cf. Written Question No. 393/81 by Mr. von Hassel and Mr. Muller- 
Hermann, O.J. C 338 of 28.12.81. Also cf. Written Question No. 
1299/82 by Mr. Bonde, O.J. C 25 of 31.1.1983.
26) Draft Commission Regulation (EEC) on the application of Article 85(3) 
of the Treaty to certain categories of motor vehicle distribution and 
servicing agreements, O.J. C 165 of 24.6.1983.
27) O.J. L 29 of 3.2.1975.
28) On windscreens, O.J. C 119 of 16 November 1972, tyres, O.J. C 37 of 
14 February 1977, weights and dimensions of certain motor vehicles, 
O.J. C 15 of 20 January 1977.
29) There is a total of 20 Directives pending, cf. Written Question No. 
778/82 by Mrs. Boot, O.J. C 287 of 4 November 1982 and Written 
Question No. 1498/81 by Mr. Moreau, O.J. C 85 of 5 April 1982.
30) O.J. L No. L 14 of 19.1.1980.
31) Article 7, para 1 cf Directive 70/156/EEC, O.J. L 42 of 23.2.1970.
32) An example of this is the Commission's proposal for a Council 
Directive amending Directive 76/756/EEC on the approximation of the 
laws of the Member States relating to the installation of lighting 
and light-signalling devices on motor vehicles and their trailers 
(O.J. C 279 of 22.10.1982) which goes beyond what Member States have 
made obligatory at national level. The European Parliament has 
emphasized the practical advantages which this device would have, in 
a resolution adopted on 11 February 1983.
33) O.J. No. L 47 of 18.2.1977.
34) Communication to the Council COM(83)58 of 9.2.1983.
35) Both aspects have been included in the Community's Third Action 
Programme (1982-1986) on the Environment (Council Resolution of 3 
December 1982). O.J. No. C 46 of 17 February 1983.
36) In the context of the adoption of the Amendment Directive 77/212/EEC
37) Directive 78/1015/EEC, O.J. No. L 349 of 13.12.1978.
38) Directive 81/334/EEC, O.J. L 131 of 18.5.1981.
39) Directive 78/665/EEC, O.J. L 223 of 16.8.1978.
40) O.J. C 181 of 19.7.1982.

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41 O.J. No. C 346 of 31.12.1982.
42) O.J. No. L 197 of 20.7.1983.
43) O.J. L 197 of 22.7.1978.
4 4) cf. Written Question No. 1588/81 by Mr. Seefeld, O.J. C 85 of 
5.4.1982.
45) O.J. No. C 184 of 11.7.1983.
46) Directive 82/884/EEC, O.J. L 378 of 31.12.1982.
4 7) Comission Directives No. 82/318/EEC and 82/319/EEC of 2 April 1982, 
O.J. No. L 139 of 19.5.1982; and Council Directives 81/575/EEC, 
81/576/EEC and 81/577/EEC of 20 July 1981, O.J. No. L 209 of
29.7.1981.
4 8) cf. Written Question No. 366/82 of Mr. de Ferranti, O.J. C 262 of 6 
October 1982.
49) cf. Written Question No. 1299/82 of Mr. Bonde, O.J. C 25 of
31.1.1982.
50) cf. Written Question No. 683/82 by Mr. von Wogau, O.J. C 271 of 
14.10.82.
51) cf. Written Question No. 679/82 by Mr. von Wogau, O.J. C 225 of
30.8.1982 and No. 1767/81 by Mr. Cecovini, O.J. C 126 of 17.6.1982, 
as regards special taxes imposed by France on heavy passenger cars of 
foreign origin.
52) cf. Written Question No. 22/82 by Mr. Rogalla, O.J. C 262 of
6.10.1982 ;  Written Question No. 66/82 by Mr. JUrgens, O.J. No. C 
198 of 2.8.1982; Written Question No. 1597/82 by Mr. Schieder, O.J.
C 62 of 7.3.1983.
53) O.J. C 267 of 21.11.1975.
54) O.J. C 53 of 8.3.1976.
55) O.J. L 105 of 23.4.1983.
56) C0M(83)870 final of 25.1.1983.
57) cf. Written Question No. 1730/82 by Mr. Megahy and Mr. Seal, O.J. C 
100 of 13.4.1983.
58) O.J. No. L 103 of 2.5.1972.
59) O.J. No. L 87 of 30.3.1974.
60) O.J. No. L 6 of 10.1.1975.
61) O.J. No. C 214 of 21.8.1980.
62) cf. Written Question No. 1676/81 by Mr. Jackson, O.J. No. C 98 of

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19.4.1982.
63) O.J. L 375 of 31.12.1980.
64) O.J. C 149 of 18.6.1980.
65) Directive No. 80/1268 of the Council, O.J. No. L 375 of 31.12.1980.
66) O.J. C 229 of 2.9.1982.
67) cf. Written Question No. 1494/81 by Mr. Moreau, O.J. C 92 of
13.4.1982.
68) O.J. No. L 174 of 21.6.1982.
69) O.J. C 163 of 30.6.1982, as regards technical ceramics and O.J. C 171 
of 9.7.1982, as regards the other research areas.
70) cf. Written Question No. 1047/82 by Mrs. Quin, O.J. C 298 of
15.11.1982.
71) cf. Written Question No. 1348/81 by Mr. Moreland, O.J. C 38 of
15.2.1982.
72) EUR 7389 EN, 1982.
73) COST: (European Co-operation in the Field of Scientific and Technical 
Research), created in 1971, forms a framework and forum for research 
co-operation at European level beyond the Community.
74) COM(82)865 of 21.12.82 and C0M(83)260 of 24.5.1983.
75) cf. the advance notice for participation in ESPRIT pilot projects, 
O.J. C 276 of 19.10.1982 and the Commission's Communication to the 
Council COM(83)258 of 2.6.1983.
76) Further studies on the present strategies of car manufacturers and on 
the long-term prospects world-wide, and in which the Commission takes 
a certain interest, include: - Long-Term Perspectives of the World 
Automobile Industry (OECD); — Transnational Corporations in the 
International Auto Industry (UN Centre on Transnational Corporations 
1982).
77) cf. also the Eleventh Report on Competition Policy, point 215.
78) Commission Directive No. 80/723/EEC of 25.6.1980, O.J. L 195 of 
29.7.1980; cf. also Tenth Report on Competition Policy, point 235.
79) cf. also the Annual Report of the Regional Fund, and the publication 
of sponsored projects in the Official Journal, e.g. O.J. C 246 of
20.9.1982, C 347 of 31.12.1982 and C 85 of 28.3.1983.
80) Not including sub—loans from EIB global loans allocated to the 
automobile sector.  Sub—loans are included however in the sectoral 
breakdown given in the EIB Annual Reports.
81) Council Decision 78/870/EEC, O.J. L 298 of 25.10.1978.

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82) Council Decision 82/268/EEC, O.J. L 116 of 30.4.1982, and Council Decision 
83/308/EEC of 13 June 1983.
83) cf. Written Question No. 1496/81 by Mr. Moreau, O.J. C 118 of 
10.5.1982. The preference to be given to small and medium-size 
companies is also enshrined in Council Decision 83/200/EEC (O.J. L 
112 of 28.4.1983) concerning new NCI loans.
84) The EMF created a working group on automobile industries which met in 
October 1981 and in December 1982 with the Commission services 
present; the EMF has also organized, together with the Socialist 
Group of the European Parliament, a symposium on the future of the 
European automobile .Industry, in April 1982.
85) Robotics - Current events in the Federal Republic of Germany, France, 
Italy, Ireland, Scandinavia and the United Kingdom (Social Change and 
Technology in Europe, Information Bulletin No. 10 of
November/December 1982).
86) The European Machine Tool Industry - Commission Statement, SEC(83)151 
of 3.2.1983.
87) cf. also Written Question No. 1617/81 by Mrs. Hoffmann, O.J. C 129 of 
19.5.82; and Written Question No. 363/82 by Mr. Fernandez, O.J. C 333 
of 20.12.82.
88) A detailed account of the Commission's discussions with the Japanese 
authorities up until June 1981 is given in the reply to Written 
Question No. 1852/80 by Mr. Seal, O.J. C 247 of 28.9.81.
89) Regulations: No. 535/81, O.J. L 54 of 28.2.1981; No. 3595/81, O.J. L 
361 of 16.12.1981; No. 3385/82, O.J. L 356 of 17.12.1982.
90) Regulation No. 653/83, O.J. L 77 of 23.3.1983.
91) cf. Written Question No. 1101/81, Mr. Beyer de Rijke, O.J. C 345 of 
31.12.81.
92) cf. Written Question No. 938/81 by Mr. Radoux, O.J. C 323 of 
10.10.1981.
93) This figure represents Japanese exports (recorded at customs) and 
does not correspond to the registration figure used elsewhere.
94) It must be pointed out that, since there is no uniform definition of 
an lev in the Community, the figures for registrations supplied by 
the Member States, which are used to calculate the Japanese market 
share, do not refer to the same weight categories. They do not at 
all tally with the Japanese export figures. An additional problem is 
that the Japanese figures are expressed in loading capacity, which 
cannot be accurately converted to gross vehicle weight.The 
Commission, in co-operation with outside experts, is making strenuous 
efforts to resolve this problem and to harmonize the weight 
categories for statistical purposes.
95) Source: Japan Automobile Manufacturers Association (JAMA).
96) O.J. No. L 35 of 9.2.1982.

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97) cf. Written Question No. 2119/80 by Mr. Damseaux, O.J. C 303 of
23.11.1981.
98) O.J. No. L 46 of 19.2.1981; O.J. No. C 243 of 7.9.1982; O.J. No. C 
14 of 18.1.1983.
99) O.J. No. L 301 of 22.10.1981.
100) O.J. No. L 88 of 2.4.1981 and O.J. No. C 243 of 7.9.1982.
101) cf. Furthermore, as regards Italy's requirement for a certificate of
origin for car components: Written Question No. 680/82 by Mr. von
Wogau,  O.J. C 239 of 13.9.1982.
102) O.J. No. L 148 of 28.6.68. Articles 5 reads: "A product in the 
production of which two or more countries were concerned shall be 
regarded as originating in the country in which the last substantial 
process or operation that is economically justified was performed, 
having been carried out in an undertaking equipped for the purpose, 
and resulting in the manufacture of a new product or representing an
important stage of manuf ac tiare. "
103) A 60% local content rule is included, on a mutual basis, in 
preferential rules of origin agreed between the Community and EFTA 
countries and Spain, and under the Community's General System of 
Preferences. Korea is the main car exporter benefitting from GSP, 
cf. O.J. L 363 of 23.12.1982, p. 47. As from 1 April 1983 onwards, 
alternative and simpler rules of origin apply vis-à-vis the EFTA 
countries, cf. O.J. L 385 of 31.12.1982.
104) For details, cf. the reply to Written Question No. 1497/81, by 
Moreau, O.J. C 126 of 17.5.1982.
105) For other EC-Japan co-operation projects, also in other sectors, cf. 
reply to Written Question No. 2100/80 by Mr. Couste, O.J. L 186 of
27.7.1981.
106) 1.68 mio units in April 81-March 82, renewed for April 82-March 83, 
and for April 1983-March 1984.
107) O.J. L 291 of 19.11.1979.
108) O.J. L 35 of 9 February 1982.
109) O.J. L 103 of 21 April 1983.
110) cf. O.J. C 115 of 28.4.1983.
111) Décret-loi No. 816/79 of 5.4.1979, cf. Written Question No. 1495/81 
by Mr. Moreau, O.J C 98 of 19.4.1982.
112) cf. Written Question No. 376/81 by Mrs. Lizin, O.J. No. C 222 of 
2.9.1981 (including particular references to the investment project 
of General Motors in Spain).
113) Spanish passenger car exports to the EC, 1982= 390 000 units; Spanish 
passenger car imports from the EC, 1982 = 54 000 units.

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114) The EC surplus with Spain was 504,7 mio ECU in 1982 (EC exports:
855,3 mio ECU, EC imports: 350,6 mio ECU).
115) cf. Written Question No. 1118/82, Mr. Jackson, O.J. C 43 of
14.11.82, and Written Question No. 1552/82, Mr. Megahy, O.J. C 43 of
14.2.1983.
116) Preferential import duties are: for cars: 36.7% in Spain; 4.2% in the 
EC. For car components; 16.3% in Spain; 4.0 or 2.5% in the EC.
117) cf. Written Question No. 1087/81 by Mr. Catherwood, O.J. No. C 12 of
18.1.1982.
118) cf. Written Question No. 2230/82 by Mr. Jackson.
119) O.J. L 353 of 29 December 1980.
120) O.J. L 387 of 31 December 1982.
(5)

-1-
PART TWO:  PERFORMANCE OF THE EC CAR MANUFACTURERS AND
MARKET DEVELOPMENTS
This chapter serves to illustrate the importance of the automobile 
industry to the EC economy, and also to show that the last two years 
have been somewhat difficult ones for the industry.
During this period, the adaptation process has continued to require 
heavy investment, coinciding with stagnant and sometimes declining 
demand, and with stiff import competition. In this difficult
environment, the EC car manufacturers introduced a large number of new 
models, partly involving new production processes, management 
practices, and components supply strategies, at a cost of very roughly 
500 m $ per model. Their profit situation was on the whole accordingly 
difficult, and about half of them scored net losses in 1981.
Expenditure programmes will continue, with yearly amounts estimated to 
be in the order of 2.5-3 bn ECU in Germany, 1.5-2 bn ECU in France, 3- 
3.5 bn ECU in the U.K. and 4—4.5 bn ECU in Italy (Source: Marketing
Systems).
The immense efforts made by the industry, since a couple of years, 
started bearing fruits in 1982 when market shares were won back from 
Japanese makes in the Community and some extra-EC markets. 
Improvements in sales were however not big enough to make good for on­
going expenditure programmes and for difficulties overseas in certain 
cases. The overall financial situation in the auto industry has not 
therefore seen a substantial recovery, although some companies have 
come nearer to the break-even point and expect to reach it soon.
Demand was in fact down by 5.1% in the EC car markets in 1981 (on which 
the EC manufacturers rely to a proportion of some 80% of their total 
sales), and world demand slumped by 3% in that year.

2·
In 1982, the situation improved a little in the Community whereas world  
demand declined again, with some positive regional developments,  
especially in Scandinavia and some other non—EC countries of Western  
Europe.
As for the Community's main competitors, the USA went through, a very 
difficult period, with car production falling sharply and sales·  
declining as well. After a slow start to 1982, Japan almost maintained  
its 1981 level of car production although commercial vehicle output  
decreased considerably. Japan's exports of all vehicles were down  
considerably in 1982. (
1. Production, demand in 1981/82
1.1 Passenger cars
In general terms, one can speak cautiously of a slight recovery in the  
Community passenger car sector in 1982. Production has increased and  
exports have been maintained in a shrinking world market. However,  
many problems still remain, notably the lack of any real increase in  
demand during the year.
At the level of the Member States, the improvement of French and German  
car production and exports has meant that the EC car output has  
increasingly centred on these two Member States, given the continuing  
decline of UK production and the fall in output in Italy.
1.1.1 Production (qf. Annex 1)
Production of passenger cars fell by 5.1% in the EC during 1981 to just  
under 8.7 million vehicles. However, the Community was not alone in  
suffering decline, since output fell by 2.1% in the USA, 0.9% in Japan  
and 4% in the world as a whole. The EC accounted for 30.3% of the  
world's production, as against 30.7% in 1980.

3-
Among the Member States, the only major producer to increase its output  
was Germany, with a 1.6% rise in production. France and Italy suffered  
considerable decline (11 and 13% respectively), while the fall in UK  
output continued (down by 3.6%).
However, in 1982, the fall in EC production was reversed and output 
rose by 4% to 9.06 million units. This was mainly due to a rise of  
more than 5% in Germany's production, generated by increased exports  
(see below), and by 6% increase in French output, over the low level of
1981. These two countries accounted for 72% of EC car production.  
However, British production continued to fall, to below 900.000 in
1982.
The rise in EC output contrasted sharply with the 19% fall in US  
production during the period, while output in Japan remained more or  
less stable (falling by 1%, but showing an increase during the second  
half of 1982).
1.1.2 Demand (cf. Annex 2)
New registrations in the Community were down by 2.3% in 1981 to just 
over 8.4 million units. This was less than the 3.3% overall decline in  
the world and meant that in 1981 the EC had exactly 30% of the world's  
car demand, a rise of 0.3% on 1980. During 1981, demand in Japan  
remained fairly stable, while in the USA it declined by 3.5% to 8.44 
million vehicles.
At the level of the Member States, the only major market to register an  
improvement was Italy (1.5%). Germany (-4%) and France and the UK (-  
2%) underwent a fall in demand. There was a considerable fall in new  
registrations in the Benelux countries (14% fbr the Netherlands and 6% 
for Belgium).

-4-
In 1982, there was a 1% increase in EC demand. A stimulation of demand  
in France has led to an increase of more than 12% in new registrations  
and in the UK market demand increased by 5%. However, this has been  
evened out by the increasingly depressed state of the German market (- _  
7.5%) and a slight decline in sales in Italy.1 The Benelux market has  
remained at the 1981 level, while the small Member States present a  
volatile pattern in car demand. In Greece demand is recovering from
the low level of 1980 which was caused by an increase in taxation.  
Conversely, in Ireland, a prebudget rush to purchase new cars at the  
end of 1981 has contributed to a relatively sluggish level of sales in  
1982, in the wake of higher taxes.
However, when compared to the USA, the EC did not fare too badly. Here  
domestic demand fell by 8.2% during 1982, despite a big improvement  
during the fourth quarter. On the other hand, there was a marked rise  
in Japan (6%), and this contributed to a reduction in Japanese exports.  
(See below.)
1.2 Commercial vehicles
Although most attention has so far been focussed on the light 
commercial vehicle sector, with particular reference to Japanese  
penetration, the aim of this section is to cover the whole range of  
commercial vehicles.
The sharp fall in production of commercial vehicles in the Community in  
1981 was not reversed in 1982. Demand has remained sluggish and  
exports showed no marked increase despite a fall in Japanese shipments  
abroad. In fact, the Japanese increased their exports to the EC  
towards the end of 1982 and maintained a high share of the light  
vehicle market for the year as a whole.
1)Sales (not new registrations) figures are used here for
Italy, since they reflect the up-to-date state of the
market.

-5-
The Community is still a very successful net exporter of commercial  
vehicles (the export/import ratio is considerably superior to that of  
cars) (see Annex 19) and exports a higher proportion of heavier  
vehicles.
I
At the level of the Member States, the most encouraging sign during  
1982 was the increase in UK production, which still enables it to be 
considered along with France and Germany as a major producer·
In the United States, production and demand have started to pick up  
following the drastic slump of 1980, but in Japan a combination of a  
decline in home demand and a depressed export market has led to a  
considerable fall in output during 1982, after a successful year in  
1981.
1*2.1 Production (cf. Annexes 4 and 6)
In 1981, production in the Community declined by 16.2* in 1981,  
standing at 1.18 million vehicles. The biggest falls occurrred in the  
0-2 ton sector (-26*), and the 4-8 ton group (-25X). The overall fall  
in Community output was mainly due to a 41* decline in British  
production, which fell to 230.000. There was also a decline in output  
in Germany and France, and only Italy (+5.9%) increased its production.  
Japan is the world's main producer of commercial vehicles, especially  
of light vehicles, and its production rose by 5* in 1981 to over 4.2  
million vehicles (43* of world production)· This was mainly due to a  
rise of 24* in "light van" production. In the USA, however, a sluggish  
home market, and pressure from Japanese imports, led to a collapse of  
commercial vehicle production in 1980, when it fell to 1.67 million  
units. Despite a 2* rise in 1981, output stood at less than half the  
1977 level.

-6-
1982 did not bring about an upturn in commercial vehicle production in  
commercial vehicle production in the EC, unlike in the passenger car  
sector. Output has fallen more slowly (— 2,9% ), but the only bright
spot has been a recovery of production in the UK (up 17%). Production  
has continued to fall in the other Member States.
In contrast, US production seems to be pulling itself up from the low  
levels of 1980/81, and showed a 12% rise during 1982. However, Japan's 
production decreased by 8% over the same period, in the wake of a  
depressed home market and a decline in exports. (See below.)
\
1.2.2 Demand (cf. Annexes 5 and 7)
In 1981 new registrations of commercial vehicles declined by 6% to 1.01  
million units. The majority of EC markets were in decline in 1981,  
with the exception of Italy (where registrations jumped by 17%), France  
and Greece. The other Member States registered a sharp fall in demand,  
particularly the UK (-20%) and Germany (-15%).
In the US, there was a fall of 12% in demand, while in Japan it
increased by 4.6%. The overall rise in demand in Japan was due to a
27% rise in registration of "midget" vehicles, which now account for
almost half the Japanese market. Similarly, in the EC the smallest
decrease in demand occurred in the 0—2 ton class (—2.7%)· Demand for
commercial vehicles in Japan has risen more rapidly than for cars' over
recent years and commercial vehicles now occupy 38% of the vehicle pare2
there, as against 9% in the EC and 22% in the USA.
In 1982 there was a 2% increase in EC demand for commercial vehicles.  
Most Member States, notably France (+8%) and the UK (+6%) have shown a  
growth in demand, with the exception of Germany, where the market 
continues to be very depressed and registrations have dropped by 17% to  
124.000 units, and the Benelux countries.
2) L 1Argus (1982).

-7-
Unlike in the passenger car sector, commercial vehicle demand in Japan  
fell during 1982 (by 256). However, United States' demand had picked up 
considerably - new registrations showing an 11% increase during this  
period.
2. Trade in automobile products (cf. Annex 19)
2.1 The EC remains a huge net exporter of automobile products  
(exports of 24 billion dollars and an export :iniport ratio of 3:1 in  
1981). However, it was overtaken by Japan as the world's major  
exporter in 1981, and Japan's trade surplus is almost twice as high as  
that of the Community because of the paucity of its imports. By 
contrast, the United States had a 12 billion dollar trade deficit in  
this sector in 1981.
2.2 Importance of automobile products in total extra-EC trade
3
Exports of automobile products accounted for 8.5% of extra-EC exports  
in 1981, compared to 8.356 in 1980. The upward trend has continued in  
1982 (8.756).
On the import side, the corresponding figures are considerably smaller,  
namely in the order of 2.556.
By comparison with the US and Japan, the Community stands in the  
middle. For the US, the export Bhare was 6.856 and the import Bhare  
10.1%, in 1981. Automobile exports of Japan accounted for 1956 of total  
exports, whereas the figure for the import share was 0.356.
3) For the purpose of this section defined as SITC 781-4 or
NIMEXE 87.02-87.06 (engines therefore not included).

-8-
2.3 The importance of the Internal Market (Annex 18)
Another aspect of EC automobile trade is the relative importance of  
Intra-trade (i.e. trade between the Member States) and Extra-trade  
(with non-EC countries).
The development of trade during the period 1979-82 (Annex 18) enables  
the following conclusions to be drawn:
(i) The Community as a whole has retained a high share of  
its internal market. In 1982, over 77% of imports of EC  
Member States were from other Member States.
(ii) The Community has considerably increased its exports to  
third countries. Between 1979-82, "Extra-EC" exports rose  
by 46%. However, "Intra-EC" exports still accounted for 52% 
of total exports. (In ECU value).
4
2.4 Exports and imports of passenger cars
Exports (cf. Annex 9) ■
The EC's exports, in the wake of its fall in production, were 3% down 
in 1981, totalling 1.79 million, and represented 20.6% of production.
The Community's share of third markets on the whole remained at just  
over 10%.
Germany is the main exporter of passenger cars among the Member States.
In 1981, its exports amounted to 809.000 vehicles, but this still-  
represented a fall of 5% on 1980. The extra-EC exports of Italy fell  
by 24%, while French and U.K. exports rose, by 2% and 8% respectively.
4) in the case of EC, references to ''imports'· or "exports"
always imply "extra"-EC imports or exports (i.e. to  
countries outside the Community).

-9-
It should be noted that the structure  of UK car exports Is unique among 
the Member States,  since about 60% are destined for countries outside
the Community.
i
In 1982, EC exports remained at the 1981 level. German exports rose by  
5% to regain their level of 1980, and French shipments continued to  
rise (by 8%), helped by exports of the Renault Alliance to the USA. On 
the debit size, Italian exports continued to slide, and UK exports fell 
by nearly 20%.
Japan's exports remained at 3.95 million in 1981, and it is far and  
away the world's largest exporter (47% of total in unit terms). Its  
share of third markets went up to 19.3% from 18,2% in 1980, since it  
maintained exports in a declining market.
However, in 1982 Japan's exports declined by 5% to 3.77 million units.
The USA is less important than the Community or Japan as a car  
exporter. Shipments abroad (including those to Canada), declined by  
12% in 1981 and by 34% in 1982, totalling 360.000 units.
Imports (cf. Annex 10)
EC imports fell by Just over 5% in 1981, due mainly to sluggish  
domestic demand and a reduction of shipments from Japan. The Community  
took about 16% of world imports. Germany, France and the UK are the  
main EC importers - Germany and the UK because of their high level of  
Japanese imports and France because of the large number of cars re­
imported from Spain.
Sales of imported makes in the USA dropped by 2% in 1981, while Japan's  
imports fell by 33% to only 32.000.
The level of import penetration in 1981 was: EC - 15,4%, USA - 28,8%,
Japan - 0,9%.

-10-
In 1982, EC imports continued to fall by 1.5%, thanks to a 26% decline  
in German imports. Other Member States' imports (especially France -  
+32%) rose. However, for the Community as a whole there was a slight 
decline of import penetration.
The USA's imports also declined in 1982 by 5,7%, while in Japan they  
increased slightly to over 36.000 cars.
2.5 Exports and imports of commercial vehicles
Exports (Annexes 14 and 16)
k
EC exports of commercial vehicles stood at 276.000 in 1981 (an increase
of 1.3% on 1980) of which Germany and France accounted for 90.000
vehicles each. In value terms, Germany is the most important, since  
70% of its exports are of heavier vehicles.
Japan is by far the world's largest exporter of commercial vehicles 
with 2.02 million units in 1981, a rise of 3% on 1980.
However, there is much less difference between the EC's and Japan's  
exports when they are examined in value (5.2 billion dollars for the  
EC, 7.2 billion for Japan in 1981). This is due to the higher  
percentage of heavier vehicles in the Community's exports. The average 
unit value of the EC's exports was 19.000 dollars, compared to 3.500 
for Japan and 14.000 for the USA, in 1981.
Using a distinction based on engine capacity one can say that only 55%  
of EC exports were of light vehicles, while these accounted for 82% of
Japan's exports. EC exports of heavier vehicles rose by 18% in 1981,
while those of light vehicles dropped by 9%. Around 40% of heavy
vehicle production was exported, against 20% of light vehicles. Heavy  
vehicles accounted for 83% of the Community's commercial vehicle  
exports in value.

-11-
Indeed, a comparison of Annexes 6 and 7 confirms that the EC is a net 
exporter of 100.000 vehicles of over 8 tons G.V.V.
US exports in 1981 stood at around 168.000 (including exports to  
Canada).
During 1982, EC exports fell by 6%. Italy's exports were badly hit -
down by 27% and only the UK was able to increase its exports (by 11%).
Exports from Japan declined by 12% during 1982.
S
Imports (cf. Annexes 15 and 17)
In 1981 the EC imports fell by 8% to 135.000 vehicles, and took just  
over 13% of the market in unit terms. Over 90% of the imports were  
light vehicles, mainly coming from Japan. The main importer in 1981  
was Greece, with over 31.000 vehicles, mainly from Japan, a number of  
which are sent in kit form for assembly. The other two major markets 
are France and the UK. Germany imported 36.000 Japanese light vehicles  
in 1981, but most of these are counted as passenger cars.
EC imports rose by 15% in 1982, with France (+38%) showing a  
particularly marked increase.
In unit terms, the EC's export/import ratio is only 2:1. However, if  
the value of trade is taken into account, the Community's considerable  
export of heavy vehicles brings the ratio up to 6:1.
As in the case of passenger cars, Japan's market is virtually closed to  
imports - these did not even attain 1.000 units in 1981, and fell by  
45% during 1982. Consequently, Japan is a huge net exporter of  
commercial vehicles.

-12-
In the United States, sales of imported makes rose by 2.6% in 1981 and  
by 7% in 1982. The USA became a net importer of commercial vehicles 
(in both value and units) for the first time in 1981.
2.6 Increasing importance of components (cf.  Annex 19)
Over the last few years, the structure of the Community's automobile  
trade by product has changed. The components sector has grown in  
importance and in 1980 became the main source of the EC's export  
earnings in the sector. Despite a decline (in dollar value) in 1981,  
component exports still accounted for 37% of the EC's sectoral trade  
surplus, and for 32% of total sectoral exports, compared to 27% of both  
in 1975. The general increase in components exports can be put down  
to increasing international co-operation between car '  manufacturers and  
to the growth of production and assembly operations of EC manufacturers 
in third countries. This is illustrated by the main export markets for  
EC companies being the US (16% in 1981), Spain (9.4%, cf. point 10.3.3  
above) and Sweden (8%). 61% of all exports went to industrialized
countries.
In contrast to the above developments of exports, EC imports of  
components have shown themselves to be less important. In 1975 spare  
parts accounted for 28% of EC automobile imports, by 1981 only 24%.  
The Community's imports of complete vehicles (passenger and commercial)  
have progressed more quickly than those of components.
These trends were confirmed to some extent in 1982, when EC components  
exports rose by 38%, compared to a 30% increase in exports of all  
automobile products.
5) SITC 783 excluded.

-13-
PART THREE - ANNEXES  
No.
1 Production of passenger cars - 1981-82
2 New registrations of passenger cars - 1981-82
3 Japanese penetration of the EC passenger car market -  
1970-82
\
A Production of commercial vehicles - 1981-82
5 New registrations of commercial vehicles - 1981-82
6 Commercial vehicle production by gross vehicle weight -  
EC, USA, Japan - 1977-81
7 Commercial vehicle new registrations by gross vehicle  
weight - EC, USA, Japan - 1977-81
8 Japanese penetration of EC light commercial vehicle  
markets - 1980-82
9 Passenger car exports - 1981-82
10 Passenger· car imports - 1981-82
11 Passenger car imports from Japan as a percentage of
total extra-EC imports, 1980-82 1

-14-
12 Geographical breakdown of Japanese vehicle exports - 1982
13 EC and Japanese market shares in third countries -  
1970-81 - passenger cars
14 Exports of commercial vehicles - 1981-82
15 Imports of commercial vehicles - 1981-82
16 EC exports and imports of light and heavy commercial
vehicles - 1980-81
17 EC trade balance in light and heavy commercial vehicles -  
1980-81
18 EC automobile exports/imports to Extra/Intra-EC,  1979-82
19 Automobile trade in value - EC, Japan, USA - 1975-81
20 Automobile trade of EC Member States in value - 1982
21 Retrospective table on world passenger car production,  
demand and trade - 1970-81 ·
22 Retrospective table on distribution of automobile exports -  
EC, USA and Japan - 1971-80
23 The world's top 25 vehicle producers - ranked by 1981  
production units
24 Employment in the automobile industry - 1975-81

-15-
25 EC automobile Industry employment relative to total  
industrial employment - 1975-81
26 Indices of employment in automobile industry compared to  
manufacturing industry as a whole - 1980-81
27 Allocations from EC financial instruments to the Automobile  
Sector, 1981/82
28 European Social Fund - Beneficiaries from the automobile  
sector, 1980/82

Annex 1 ’  Passenger car production 1981-82
Country 1981 X Change 
81/80 1982X Change 
82/81
EC8.695 - 5/19.056 + 4-/1
of which: 6ermany 3.577 + 1/6 3.761 '  + 5/1
France 2.612 - 11/1 2.777 + 6/3
Italy 1.257 - 13/0 1.297 + 3/2
U.K. 955 - 3/6 888 -  7/0
Japan 6.974 - 0/9 6.887 - 1
USA 6.280 - 2/15.097 -19
Annex 2 Passenger car registrations 1981-82
Country 1981 X Change 
81/80 1982X Change 
82/81
EC 8.378 - 2/3 8.460, + 1/0
of which: 6ermany 2.330 - 3/9 2.156 - 7/5
France 1.835 - 2/0 2.058 + T2/2
Italy 1.735 + 1/5 1.685 - 3 / 0
Netherlands 387 - 14 407 + 4/5
Belgium/Lux 382 - 6/1 370 - 0/9
U.K. 1.485 - 1,9 1.555 + 4,7
Ireland 106"+ 13/3 73 - 30,8
Denmark 72 - 2/6 85 + 18/8
Greece 47 + 31/4 .72 + *53/2
Japan 2.866 + 0/4 3.038 + 6
USA8.444 - 3/5 7.754 - 8,2
Units: 000's vehicles Sources: Marketing Systems/CLCA/
MVMA/JAMA

Annex 3
Japanese penetration of the EC automobile market 
1) Passenger cars
1970 1975 1976 1977 1978 1979 1980 1981 .  1982
Germany 0.1 1.7 1.9 2.4 3.7 5.6 10.4 10.0 9.8
France 0.2 1.5 2.7 2.6 1.8 2.2 3.1 2.7 2.9
Italy 0.02 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.1
Nether lands 3.2 15.6 16.8 19.8 18.8 19.5 26.4 24.5 22.4
Belgium/Lux. 5.0 16.5 18.0 19.3 17.8 17.7 25.8 24.8 21*0
United Kingdom 0.4 9.0 9.4 10.6 10.9 10.8 11.9 10.9 11.0
Ireland- 11.6 12.7 19.7 23.9 26.7 30.5 29.7 26.9
Denmark 0.4 16.1 19.0 17.4 18.0 14.4 30.9 24.2 25.3
Greece 14.6 10.8 15.1 19.1 13.8 16.4 49.4 48.3 45.0
EC 10 0.6 4.8 5.4 7.0 6.3 6.9 9.0 8.3 8.1
Source: Marketing Systems/National Associations Units: % of total market (based on unit value)

Commercial Vehicle Production 1981-82 Annex 4
1981 X change 
81/80 1982X change 
82/81
EC 1.177 - 16,2 1.143 - 2,9
of which: Germany 319 - 10,3 301 - 5,6
France 408 - 7,4 372 - 8,8
Italy 176 ♦ 5,9 156 - 11,4
U.K. 230 - 41,0 269 + 17,0
Japan 4.206 + 5,0 3.783 - 8
USA 1.701 + 2,0 1.909 + 12
Sources: Marketing Systems/CLCA/JAMA/MVNA
Commercial Vehicle Registrations Annex 5
1981 X  change 
81/80 •  1982X change 
82/81
EC 1.009 - 6,0 1.027 + 1,8
of which: Germany 149 - 15,3 124 - 16>8
France 335 + 3,5 363 ♦ 8,4
Italy 143 ♦ 16,6 151 + 7,9
Netherlands 44 - 7,4 39 - 8,6
Belg./Lux. 29 - 12,6 28 - 5,9
U.K. 225 - 19,7 231 ♦ 6,0
Ireland 12 - 7,7 13 + 5,7
Denmark 17 - 17,4 18 + 13,1
Greece 60 ♦ 12,3 60 ♦ -
Japan 2.261 4,6 2.201 - 2
USA 2.186 - 11,8 2.430 * 11,2
Sources: Marketing Systems, CLCA, JAMA, MVMA
Units: OOO's vehicles

Breakdown of production of commercial vehicles by gross vehicle weight EC, USA and JapanAnnex 6
European Communities Japan United States
Class G.V.W. 1977 1980 1981 Class G.V.W. 1977 1980 1981 Class G.V.W. 1977 1980 1981
0-2 456 500 370 Light vans 523,2 668,0 828,6 0-2.73 1.325,7 592,3 629,0
2-4 381 444 416 0-4 1.899,7 2.360,0 2.345,5 2.73-4.55 1.723,1 794,2 816,4
4-8 112 125 94 4-8 499,6 745,3 794,2 4.55-8.86 29,3 9,0 3,6
8-16 154 127 103 8-16 58,1 68,5 69,88.86-15.00 204,9 150,0 136,8
16+ 91 104 101 16+ 44,3 55,2 51,515.01+ 157,3 121,8 114,6
Road
Tractors
Buses
TOTAL CV56
57 
1.30654
53
1.40453
42
1.177" ß & t ö r s  
Buses 
TOTAL CV7,2
48,5
3.083,510,4
91,6
4.004,88,1
102,8
4.205,8 TOTAL CV 3.440,3 1.667,3 1.700,5
Sources: EC - Marking Systems
i  Japan - JAMA
USA - MVMA -Units: G.V.W. Metric Tonnes (gross vehicle weight)
No of vehicles 000's
In the case of Japan, G.V.W. is estimated by doubling the
loading capacity.

Breakdown of new registrations of commercial vehicles by gross vehicle weight ECr USA and JapanAnnex 7
European Community Japan United States
Class G.V.W. 1977 1980 1981 Class G.V.W. 1977 1980 1981 Class G.V.W. 1977 1980 1981
0-2 346 374 395 Midget 507,4 839,3 1.064,3 0-2.73 1.193,5 1.130,1 1.094,0
2-4 287 340 332P 1 1 0“4Small 1.031,8 1.144,2 1.046,4 2.73-4.55 1.887,4 1.078,1 863,6
4-8 84 90 904-8 68,6 74,0 61,0 4.55-8.86 78,3 10,6 14,3
8-16 66 65 588-16 7,2 8,5 5,98.86-15.00 178,5 143,5 118,1
16+ 42 47 4216+ 40,6 47,3 36,6 15.01+ 127,5 113,7 95,5
Road
Tractors 28 32 32^i^ctors/ 15,6 24,7 23,3
Jeeps
Buses 28 29 21Buses 22,9 23,4 22,9
TOTAL CV 9091.019 1.009 TOTAL CV 1.694,1 2.161,2 2.260,9 TOTAL CV 3.465,2 2.476,8 2.185,5
Sources :  EC - Marketing Systems
USA - MVMA
Japan - JAMAUnits: G.V.W. Metric Tonnes (Gross Vehicle Weight)
No of vehicles 000's
In the case of Japan, G.V.W. is estimated by doubling
the loading capacity.

Annex 8
Japanese Penetration in EC Automobile Market 
(2) Light Commercial Vehicles
Country 1980 1981 1982
Germany 4,7 8,0 7,2
France 3,4 2,9 2,9
Italy 0,4 0,9
Nether lands 13,6 24,1 24,5
Belgium/Lux. 17,8 20,5 29,8
United Kingdom 11,8 18,8 11,6
Ireland 34,2 54,1 59,5
Denmark 33,3 36,3 37,6
Greece 61,3 67,1 77,o
EC-10 10,5 11,6 10,6
Source: CLCA/National Associations Units: % of total market
(based on unit value)

Annex 9
Passenger car exports 1981-82
i l
.  I .' ! :  1  « 1981 X 81/80 1982 X 82/81
EC 1.790 - 3/3 1.790 -
‘  aof which: 6er*any 809- 4/9 849 + 5/0
1i  France 595♦ 2/1 640 ♦ 7/6
' 11  Italy 158- 24/4 114 - 28/8
!  U.K. 168♦ 8/4 135 -19/6
!  i'Japan 3.947• 4 
mm 3.770 - 4/5
USA 545 - 11/7 360 - 34
Units: OOO's vehicles Source: Marketing Systens/JAHA/HVMA
Note: The fioures for the EC countries are taken fro*· industry*sources; nofcuStoas
statistics.
Annex 10
Passenger car iwports 1981-82
1981X 81/82 1982X 82/81
EC 1.481/6 - 5/31.459/8 - 1/5
of which: Germany 326/9- 1/1 242- 25/9
France 276/3♦ 9/3 364+ 31/6
Italy 164/8- 24/1 180♦ 9/2
U.K. 281/4- 10/6 288+ 2/4
Japan. 32- 31 36+ 15
USA 2.432 - 1/5«•  ·  *  ·•I2.293 - 5/7
Units: 000's vehiclesSources: Eurostat/JAMA/Autoaiotive News
·*> .
Note: Custoas statistics used for EC countries.
Annex 111  * •
laports, 1980-82
<45
(3) a s X of
(2)
74/9
71/8
68/3Passenoer car laports froa Japan as a percentage of total extra-EC
------------ “------------------  <T5 ----------------  <2) (15
Ye
ar Total Extra-EC Less laports Iaports froa  
laports froa Spain Japan
1980 1.547/6 1.131/6 847/1
1981 1.481/6 1.121/9 805/5
1982 1.459/8 1.062/2 725/5
Source: Eurostat  
Units: 000's veHicles

Table 1?
Geographical Breakdown of Japanese Vehicle Exports 198?
Passenger Cars LCV'STT5
Destination of 1982X82/81X share1982 X82/81X share
exports 8281 8281
EC 10 641,4-9,1 17,017/9118,6 · -9,5 8,37,9
Germany
France
Italy
Netherlands 
BeIg./Lux.
UK ^  
I  re land 
Denmark 
Greece171.6
58.0 
0,5
77,5
85,8
159.6 
18,2 
26,4
44.0+
+
+
+27,0
33,3
16.7
24.8
14.9 
7,4
41.7
34.7 
90,54,6
1/5
2,1
2/3
4/2
0/5
o;7
1/26/0
1,1
2,6
2/6
3,8
0,8
0,5
0,624,7
10,6
0,9
7,9
9.6 
22,6
5.6
3.7 
33,0- 32,2 
+ 26,2 
+125,0
- 34,2 
+ 1,1
- 24,4
- 7,5 
+ 33,11,7
0,7
0,1
0,5
0,7
1,6
0,4
0,3
2,32,2
0,5
0,7
0,6
1,8
0,3
0,2
1,5
Rest of W. Europe 262,1 +10,6 6/96,273,6-11,8 5,15,1
East Europe 0,5-92,9 -0,2-
North America 1844,7 -6,0•  48,9 49,7415,0 -21,8 28,932,1
USA
Canada1691,8 
152,9 . -4,0
23,544,9
5/144,6
5,1381,2
33,8-22,4
14,626,5
2,329,7
2,4
Latin America 139,4 -31,8 3/75,263,9 41/2 4,46,6
Africa 85,5-41,1 2/33,7139,3 -33,6 9,712,7
Middle East 341,9 +50,7 9,15,7255,4 +44,5 . 17,810,/
East Asia 222,8 -0,2 5,95,9238,0 -16,8 16,717,3
Oceania 222,5 +1,1 5,95,6131,8 +3/8 9,2 M
World 3770,0 -4,51001001437,0 -13,1100100
Units: 000's vehicles/X
Source: JAMA
H )  LCV = Small + midget vehicles

Annex 13. EC and Japanese market shares in third countries (passenger cars) 1970-81
DestinationJapanese exports EC exports Japan market share EC market share
1970 1981 X2081 mr* 1970 1981 X2)81 noCi 1970 1981 1970 1981
Austria 3,2 46,2+27,4 131,5 131,7- 2,2 23,3 90,7 66,3
Finland 18,0 28,1+4,1 63,8 43,5 -3,4 17,1 26,8 60,5 41,4
Norway 7,0 38,4+16,7 50,1 58,8 +1/5 10,5 36,7 75,2 56,2
Portugal 6,9 7,0+0,1 57,7 41,2 -3,0 10,6 8,8 88,8 52,0
Spain- 6,7 - 13,4 166,0 +25,7 - - 2,7 32,8
Sweden 1,1 27,5+34,0 111,5 88,5 -2,1 0,5 14,6 43,5 46,9
Switzerland 16,1 79,9+15,7 198,5 186,2 -0,6 2,1 27,4 87,8 63,8
Non-EC W. Europe 52,7 239,4 +14,8 641,3 722,4 +1,1 4,2 16,0 51,3 48,1
East Europe 0,4 6,9+29,5 79,2 49,4 -4,2 - 0,3 8,8 2,1
North America 404,5 2.013,8 +15,7 993,9 354,9 -8,1 4,5 21,9 11,0 3,9
- USA 339,5 1.813,8 +16,4 909,5 323,6 -9,0 4,0 21,5 10,8 3,8
- Canada 65,0 200,0 +10,8 84,4 31,6 -8,6 10,2 24,9 13,3 3,9
Latin America 29,8 152,0 +16,0 108,1 122,0 +1,1 3,7 11,7 13,5 9,4
Asia (ex. Japan) 63,9 462,6 +19,7 144,6 178,6 +1,9 19,9 37,5 45,0 14,5
Afri ca 39,6 138,5 +12,0 269,3 275,2 +0,2 9,9 23,1 67,3 45,9
Oceania 86,3 220,1 +8.8 123,3 28,8 -12,4 17,3 36,7 24,5 4,8
Uorld1J 677,2 3.240,4 +15,3 2.414,7 1.726,7 -3,0 5,2 18,9 18,7 10,1
(European
Community) 44,6 706,1 +28,5_ - 0,7 8,4 97,8 84,6
(Japan) - - — 13 21 +4,4 99,2 99,1 0,6 0,7
1) Excluding EC and Japan 2) AnnuaL change Source: Marketing Systems

Explanatory notes
1. Calculation of "market share". This is done simply by. dividing the exports of 
the EC and Japan into either the total new registrations or total imports of 
the country or region concerned/ whichever is more appropriate.
2. Problems of definition 
Ca) Japan
By no means all the cars exported from Japan are complete vehicles. Many of them 
are exported in kit form for assembly, and when the value of these kits is less 
than 60% of the final value of the vehicle, they are no longer counted as "cars" 
in the JAMA statistics, but given separately as knock-down kits, and not included 
in these figures.
The "real" market share of Japan in Oceania 
and Africa (in unit terms) would be considerably higher if these "CKD's" were taken 
into account.
(b) EC
The EC exports to Spain (166.000 in 1981) reflect largely French vehicles exported 
in kit form for assembly in Spain. Many of these are re-exported.
This high level of exports to Spain (including CKD's) means that the EC's share 
of the non-EC Western Europe market is possibly rather inflated in 1981, compared 
to the Japanese share.

Commercial Vehicle Exports Annex 34
Country 1981X Change 81/80 1982 iX Change 82/81
EC- 276♦ 1,3 260,1 - 5,8
of which: Germany 91,1♦ 20,2. 86,8- 4,7
France 93,6- 3,7 84,6" 9,6
Italy 23,1+ 2,2 16,9- 26,8
U.K. 55,1- 15,6 61,3•  + 11,3
Japan 2.018+ 3,3 1.774 - 12
USA 168,8- 10,8 139 - 18
Commercial Vehicle Imports .Annex 15
Country 1981X change 81/801982X change 
82/81
EC 135- 7,7 155 + 14,8
of which: Germany 8,0♦ 27,0 18,6 + 7,5
France 29,8- 19,9 41,0 + 37,6
Italy 14,0♦ 1,* 18,6 + 32,9
U.K. 25,7- 15,2 30,4 + 18,3
Japan 0,8 0,4 - 45
USA (sales of imported 320,0♦ 2,6 342 + 6,9
makes)
/ *
Units: 000's vehicles Sources: Eurostat/JAMA/MVHÀ

Annex 16
CEE Exports and Imports of Light and Heavy Commercial Vehicles 1980-81
(a) Exports
Member States Light CV's1) Heavÿ CV.  2)X Heavy CV's
1981 X 80 1981 %80 1981 1980
Germany 28/2 ~ 13,5 62,9 +45,8 69 57
France 78,7 “ 5,4 14,9 +7,0 16 14
Italy 8,7 - 25,0 14,3 +31,2 62 48
U.K. 31/3 “ 7,8 23,8-24,2 43 48
EC Total 152,8 - 8,9 123,1 +17,5 45 38
(b) Imports
Member States Light CV's1) Heavy CV',  2)'s. X Heavy CV's
1981 X 80 1981 X80 1981 1980
Germany 6,6 + 31,9 1,3 +6,8 16 19
France 29,1 - 17,9 0,7-59,3 2 5
Italy 9,6 - 7,6 4,4 +28,4 31 25
U.K. 24,2 - 12,5 1,5-44,1 6 9
Netherlands 7,2 + 14,3 1,2-16,0 14 18
Belg./Lux. 7/0 + 7,7 1,4-29,1 17 24
Ireland 4,3 + 16,5 - - - 5
Denmark 4,8 - 6,7 1,0-28,6 17 21
Greece 29,6 n/a 1,5 n/a 5 -
EC Total 122,4 - 5,6 13,0-16,4 10 12
Units: 000's vehicles/X Source: Eurostat
1) Light CV corresponds to NIMEXE 87.02.86 i.e. a commercial vehicle with petrol 
engine of less than 2800 cc or a diesel engine less than 2500cc.
Heavy CV corresponds to NIMEXE 87.02.81 i.e. with engine of above 2800 cc or 
2500 cc.

Annex 17
Community Trade Balance in Light and Heavy Commercial Vehicles
Light CV's1J Heavy CV's^
1980 1981 1980 1981
Export 652,6 669,9 2011,6 3166,7  
Import 290,5 401,4 259,9 254,5  
Balance + 362,1 +268,5 +1751,7 +2912,2  
E/I Ratio 2*3:1 1,7:1 7,7:1 12,4:1
Units: Million ECU Source: EUROSTAT
1) See Annex 16 for definitions

Annex 18
EC automobile exports to Intra and Extra-EC
·.*1 )
YearExports
Ratio:
Intra-EC Extra-EC Total Intra/Extra
1979 22.732 18.037 40.769 55,8 : 44,2
1980 22.664 19.796 42.460 53,4 : 46,6
1981 21.947 20.213 42.160 52,1 : 47,9
1982 28.274 26.317 54.591 51,8 : 48,2
% Chang 
82/79*
+ 24,4 + 45,9 + 33,9
EC automotive imports from Intra and Extra-EC
YearImports
Ratio:
Intra-EC Extra-EC Total Intra/Extra
1979 22.333 5.663 27.996 79,8 : 20,2
1980 21.900 6.390 28.290 77,4 : 22,6
1981 23.962 7.415 31.377 76,4 : 23,6
1982 27.827 8.240 36.067 77,2 : 22,8
% Chang 
82/79k
+ 24,6 + 45,5 + 2 8 , 8
1) SITC 781-4 Source: Eurostat
Units: mi Ilion ECU

Value of automobile trade of EC Jara« «"d USA W 5"81TArtE (A)Annex 19
\  ■  ·  * 1975 1979 . 1980 1981
Tabi« 1 lA) Passenner cars •
‘  <6>Corcnercial veh. •  ' ·
Imports Vu ' 1.246,5 5.004,8 5.846,8 5.352,1
· ·  ·  .  *  ·  IJapan 236,9 575,0 452,0 325,7
,  USA 7.548,4 16.016,0 .  18.017,3 18.878,7
Exports 1)EC 6.628,8 11.839,5 12.354 11.173,4
*•  .Japan 4.030 11.964,0 16.114,6 18.445,4
'USA 2.892,2 4.743,3 .4.030,9 4.025,6
*  * ■  .  *  '  · * .  ' %  
Balance - 1)EC ♦ 5.382,3 ♦ 6.834,7 ♦ 6.507,2 + ·  5.820,3
Japan _.. · . , ♦ 3.793,1 . ♦ 1.1.389,0 ♦ 15.662,6 »  18.119,7
.  .  ·  '  *
,  ·USA
■  i . —.  .  ^  · .- 4.656,2 - 11.272,7 - 13.986,4'
t- 1,4.853,1
• ■  »  ·  '  ·  * / 
Table 2 (A)Spare Parts;•
" . . ;  .'(B) All auto. Ind.*  '  V *•  » ’  .
Imports 571,6 1.594,3 1.910,5 1.946,0
• ». ;Japan 45,5 93,7 101^5 106,6
'» ■ »'  USA ; 2.507,2 5.920,8 5.510,3 4.419,8
Exports 1>EC 3.806,3 7.284,2 9.187,3 '7.910,3
*  ^Japan 637,6 1.737,4 2.168,4 2.760,8
•  ' .  VUSA 4.384,3 7.367,4 7.572,2 8.9$5,1
Balance 1,EC ♦ 3.234,7 ♦ 5.690 ♦ 7.276,8 + 5.964,3
Japan 592,1 ♦ 1.643,7 + 2.066,9 ♦ 2.654,2
USA ♦ 1.877,1 ♦ 1.446,6 ♦ Γ.061,9 ♦ 4.505,3■illion US Hollars 
TABLE (3)
1975 1979 1980 1981
204,7 798,7 941,0 865,9
7/0 24,0 29,2 22,2
596,5 1.769,3 2.092,5 3.999,2
3.703,7 4.091,3 4.832,3 5.225,8
5.019,4 4.563,6 6.434,4 7.163,2
2.628,5 2.231,5 2.135,2 2.417,2
♦ 3.499,0 ♦ 3.292,6 _ ♦ 3.891,3 + 4.359,9
♦ 5.012,4 ♦  4.539,6 ♦ 6.405,2 . ♦ 7.141
♦ 2.032/ ♦ 462,2 -42,7
^ »
a  -
1- 1.582,0
2.022,8 7.397,8,  ·  *  ·  t  * *
r · ’  %
8.698,3 8.164,0
289,4 697,7 582,7.  454,5
10.652,1 23.706,1 25.620,127.297,7
14.138,8 23.215,0. 26.373,6 24.308,5
6.707,2 18.265,0 24.717,428.369,4
9.905,0 14.342,2 13.738,315.367,9
Î2.116,0 ♦ 15.817,2 ►  17.675,3 ♦  16.144,5
♦ 6.417,8 ♦ 17.567,3 »  24.134,727.914,9
- 747,1 - 9.363,9 -  11.881,811.929,8
Sources’ :  OECD/EUROSTAT 1) Extra-EC

Annex 20
Automobile trade in value by Member State. 1982
EC10D I INLB/LUKIRLDKGR
Import8.2401.6031.705 842 5331.0451.825125237325
Export26.31715.2254.606 1.892 2958113.352,3110532
Balance+18.077 +13.622+2.901+1.050 -238-234+1.527-124-132-293
Source: Eurostat Units: million ECU
SITC 781-4
DS III/A/1 
SG/sl 
XII.1982Annex 21
WORLD PASSENGER CAR PRODUCTIONDemand and Trade 1970-1981
VARIABLE
PRODUCTION
Annual Growth 
Räte 1970-81
NEW
REGISTRATION
Annual Growth 
Rate 1970-81
EXPORTS
Annual Growth 
Rate 1970-81
IMPORTS
Annual Growth 
Rate 1970-81YEARQuantity in OOP's vehiclesX share of world total
EC
1970
1975
1980
1981119.423  
II 8 .3 28  
ii 9.167  
118.695
III I
" -  ft 7
i iUSA
1970
1975
1980
1981II 6.832  
Ü  7 .0 67  
Ü  8.603  
II 8.402
II
II
"+19
I I  T  '  ty
1970
1975
1980
1981II 2.253  
II 1 .9 32  
jj 1.831  
Ü  1.704
II
IIu  - 2 5i l  ‘ ■r?
1970
1975
1980
1981153
630
1.445
1.297
+ 21 #46.550
6.741
6.417
6 .2 8 0
-  0,4JAPAN
8 .3 8 8
8.262
8 .7 48
8 .4 44
+ 0,1
285
640
617
545
♦  6 ,13 .1 7 9
4 .5 6 8
7 .0 3 8
6 .9 74
+ 7 ,4
2 .3 7 9
2 .7 3 8
2 .8 54
2.866
+ 1 ,7OTHERS
3 .6 5 3
6.085
7 .2 69
6.731
♦  5 ,7
4.531
7.607
8.791
8.317WORLD I I  EC
22.805
25.723
29.890
28.680
♦  2,14 1 .3
3 2 .4  
3 0 ,7  
3 0 ,3
2.007
2 .0 77
2 .9 6 0
2.731
+ 2 ,8726
1 .8 27
3 .9 47
3 .9 4 7
+ 1 6 ,6
18
43
38
25
+ 3 ,0+ 5 ,7
1.307
1.808
2.034
2 .2 43
+ 5>0
2.275
3.414
4 .2 0 3
4 .3 0 0
+ 6 ,025 .674 |]  
28 .9 9 6  jj  
2 8 .029 jj3 0 ,9
2 7 ,5
2 9 ,7
3 0 ,0
+ 2 ,2
4 .7 7 6  jj  
6 .3 25 jj  
8 .4 4 7  jj  
8 .4 3 9  jj
+ 5 ,34 7 ,2
3 0 , 5
2 1 , 7
20,1
4 .4 4 9  jj
I I
8 . 4 4 2  II 
8 . 3 5 3  jj
I I
I I
f  S  9  "r II
_ _ _ _ _ _ _ _ 1 L3 ,
4
1 0 ,3
17,1
1 5 ,5USA
2 8 ,8
2 6 .5
2 1 .5  
2 1 ,9
3 8 .0
32.1
3 0 .2  
30,1JAPAN OTHERS
1 4 .0
1 8 .0  
2 3 ,5  
2 4 ,3
10,8
10,6
9 ,8
10,2
6,0
10,1
7 ,3
6 ,5
45.1  
3 3 ,9
35.1  
3 2 ,71 5 ,2
2 8 ,9
4 6 .7
4 6 .8
0 ,4
0 ,7
0 ,5
0 ,31 6 ,0
2 3 ,7
2 4 ,3
2 3 ,5
20.5
2 9 .6  
3 0 ,3
2 9 .7
27 ,4
2 8 ,6
24,1
2 6 ,6
51,1
5 5 .7
4 9 .8  
51 ,5WORLD
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
SOURCE : MARKETING SYSTEMS

Annex 22
Retrospective tables on distribution of automobile exports
(a) Passenger cars (SITC 781)
Country/RegionX ofworld exports
1971 1976 1980
■ kEC 57,7 54,4 52,5
J apan 13,3 19,1 27,4
USA 8,8 10,4 7,2
USA & Canada 24,4 22,1 13,9
(b) Commercial vehicles (SITC 782)
Country/RegionX ofworld exports
1971 1976 1980
EC* 40,9 39,7 39,8
Japan 12,8 19,9 29,5
USA 19,8 19,2 - 9,8
USA + Canada 38,7 31,0 20,6
Cc) Spare parts (SITC 784)
Country/RegionX ofworld exports
1971 1976 1980
★EC 45,8 46,3 52,4
Japan 2,8 4,9 6,6
USA 31,3 28,3 23,1
USA & Canada 45,7 41,1 3! ,4
* including intra—Community trade Units; X based on dollar value
Source: United Nations

Annex 23
The World's Top 25 Vehicle Producers - Ranked by 1981 Production Units
NoProducteur/Rank 1981 1975 1979 1980 1981
1General Motors (USA) 4.650 6.445 4.753 4.628
2Toyota 2.336 2.996 3.293 3.220
3Nissan 2.281 2.705 3.118 3.101
4Volkswagen-Audi 1.940 2.530 2.529 2.210
5Ford Motor (USA) 2.500 3.075 1.888 1.937
6Renault 1.427 1.945 2.132 1.810
7PSA 1.379 2.126 2.051 1.594
8Ford Europe 1.099 1.664 1.395 1.435
9Fiat Group 1.232 1.534 1.554 1.210
10Toyp Kogyo 643 971 1.121 1.177
11Mitsubi shi 520 939 1.105 1.095
12Honda 414 802 957 1.009
13Chrysler Co. 1.509 1.429 883 1.002
14Opel 675 1.014 834 855
15Lada 690 830 825 830
16General Motors (Canada) 599 845 764 757
17Daimler-Benz 556 693 717 712
18Suzuki 184 345 469 579
f  19Isuzi 245 425 472 457
20British Leyland 738 504 396 427
21Ford Canada 481 491 434 357
22B.M.W. 221 337 341 352
23Volvo 331 336 286 302
24Polksi-Fiat 135 305 330 286
25Moskvi tch 300 325 230 235
World Production 33.332 41.885 38.673 37.603
% held by Top 1 
5
10
2514.0
41.0
61.1 
81,915.4
42.4 
63,1 
85,012,3
40,9
61,6
85,012.3 
40,1
59.4 
84,0
Source;  VArgus

DG III/A/1 SG/sl XII.1982
EMPLOYMENT IN THE AUTOMOBILE INDUSTRY 1975-81Annex -24
Unit : 000's persons
Country 197519761977 1978 1979 1980 1981 % Change 
1975/81
WEST GERMANY 591,5 589,7 619,5646,9 672,8 692,0 657,7+ 11,2
FRANCE 446,7463,7486,8 488,7 489,5 479,7453,4 + 1,5
UNITED KINGDOM 478,3448,3464,2 473,9 458,5440,6 366,0 - 23,5
ITALY 242,5240,6230,6 234,4241,5 260,4240,4 - 0,9
BELGIUM 46,4 50,552,5 54,6 56,0 57,555,9 + 20,5
NETHERLANDS 21,821,422,4 22,7 24,1 24,424,3 + 11,5
IRELAND 6,36,0 6,4 6,4 6,3 6,26,1 " 3,2
DENMARK 4,03,9 5,1 5,2 6,0 6,46,1 + 52,5
LUXEMBOURG 0,70,8 0,8 0,8 0,8 0,8o,8 + 14,3
EUROPEAN COM.. (9) 1.838,2 1.825,01.888,41.933,6 1.955,41.968,0 1.810,7 - 1,5
GREECE 12,0 
EUROPEAN COM. (10) 1.823,7 
U.S.A. 792851891 997990763 723 - 8,7
JAPAN 601622629 638651 671C690) + 14,8
SPAIN 120 126123121119 - 0,8
CANADA 113119 109102108 - 4,6
SWEDEN 616266 68 + 11,5
Sources : EUROPEAN COM. 'i ElWOSTAT / U.S.A. : Dpt. of Commerce / JAPAN  : M.I.T.I. 
OTHER COUNTRIES  : F.E.M.

Annex 25
AUTOMOBILE INDUSTRY EMPLOYMENT RELATIVE TO TOTAL INDUSTRIALEMPLOYMENT
MemberEmployment 1981 X change 75-81Auto industry as X  
all industrial employm.StateAutoIndustry AutoIndustry 1975 1981
Germany 657/710,537/3 + 11/8 - 1/0 5/6 6/2
France 453/46.784/4+ 1/4 - 8/8 6/0 6/7
Italy 240/46.598/2- 0/9 - 0/2 3/7 3,6
U.K. 366/08.010/5- 23/5 - 16/9 5/0 4,6
Belgium/Lux. 56/71.147/6+ 20/4 - 16/2 3/3 4/9
Netherlands 24/31.454/8+ 11/5 - 8/0 1/4 1/7
Ireland 6/11)302,6*'- 3/2 + 6/3 2/2 2/0
Denmark 6/12)600/0*'+ 52/5 + 5/3 0/7 1/0
EC 9 1810/435.435/4 - 1/5 - 7/3 4/8 5/1
1)
2)1980 figure 
Provisional figureUnits;  000's persons
Source;  Eurostat (Employees in  
Employment)
Automobile Industry = NACE 35  
All industry = NACE 1-5

Annex 26
Indices of employment in automobile industry compared to manufacturing as a  
whole (1975 = 100)
1980 1981 % '81/80
All
manufacturing
Industry
(NACE 1-4) 93,7 89,4 -4,6
Automotive
Industry
(NACE 35) 106,1 98,6 -7,1
Source: Conjunctural Indicators (No. of Employees), Dec. 1982!

Table 27a
grants to the automobile sector in 1981 and 1982 (1)
F U K I D LUX CK NL IKL T O M .
E C S C  grants 1 9 8 1  
(in te re st rebates 1 9 8 2  
on loans)247 500 495 000 - 306 000 1 9 0  000 - - 1  238 500
E R D F  grants 1 9 8 1  
1 9 8 28 865 09 3  
730 34 7 1  1 0 0  0401  316 815 
1 1  099 92 13  607 5 5 1  
932 7 9 1 - 40 583 800 493777 2 6 1  
316 1 5 0
347 8901 4  566 720
1 5  020 325
Energy grants 1 9 8 1  
1 9 8 2 959 1 1 0 3 6 910375 445
-5 0  655 773 990 
996 020
Total 1 0  802 050 1  6 3 1  950 1 2  792 1 8 1 4 846 34 2 1 9 0  000 9 1  238 800 493 1  441 3 0 1 32 595 555
(i) Figures concern com m itm ents m ad e

Loans"Table 27b
to the automobiTe^sector in 1981 and 1982
F UK I D LUX TOTAUX
ECSC reconversion loans 1981 1059091 1059 091
198230664263600000 21783741  874 484 10719 284
EIB loans (1) 1981.11600000__11600 000
1982 69000000 69000 000
NCI loans (2) 1981_•
—
1982 - —5400000 — —5400 000
Total ? 306642646590918600000021783741  874 484 97778 375
- the accounts refer to contracts signed
- Figures do not include sub-loans for the automob’ i le sector from EIB global loans and the NCI
- The value of the ‘ECU, as regards EIB and NCI toans, is that of the last workvng-day of the trimestre before signature  
of the loan. 
Notes:
(1) concerning Loans for energy saving or for regional development
i(2) concerning loans for energy saving

Annex 28
European Social Fund
Beneficiaries in the automobile and auto components sector
Year Persons Ecu
1980 6000 7.403.000
1981 3980 3.931.000
*  1982 4419 9.554.000
Note: These figures do not fully reflect the total expenditure (cf. point 10.5)
I