COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS CARS 2020: Action Plan for a competitive and sustainable automotive industry in Europe
Date: 2012-11-08
Institutions: European Commission
Subjects: competitiveness, free-trade agreement, harmonisation of standards, industrial conversion, innovation, motor vehicle industry, motor vehicle pollution, research and development, single market, sustainable development

EUROPEAN 
COMMISSION 

Brussels, 8.11.2012  
COM(2012) 636 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

CARS 2020: Action Plan for a competitive and sustainable automotive industry in 
Europe 

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TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

A KEY SECTOR AT A CROSSROADS ................................................................. 3 

CARS 21: A JOINT STRATEGIC VISION FOR THE INDUSTRY IN 2020 .... 4 

A CHALLENGING ECONOMIC SITUATION .................................................... 6 

AN ACTION PLAN TO BOOST COMPETITIVENESS...................................... 7 

4.1. 

Investing in advanced technologies and financing innovation............................... 7 

Research, development and innovation........................................................................ 7 

Access to finance.......................................................................................................... 9 

Lowering CO2 emissions............................................................................................. 9 

Pollutant and noise emissions .................................................................................... 11 

Road safety................................................................................................................. 12 

Alternative fuels and infrastructure............................................................................ 13 

4.2. 

Improving market conditions.................................................................................. 14 

A stronger internal market ......................................................................................... 15 

Smart regulation ......................................................................................................... 16 

4.3. 

Enhancing competitiveness on global markets...................................................... 17 

Trade policy ............................................................................................................... 17 

International harmonisation ....................................................................................... 18 

4.4. 

Anticipating adaptation and managing restructuring.......................................... 19 

Human capital and skills ............................................................................................ 19 

Dealing with industrial adjustment ............................................................................ 20 

5. 

MONITORING AND GOVERNANCE................................................................. 21 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

CARS 2020: Action Plan for a competitive and sustainable automotive industry in 
Europe 

In  the  past  months,  the  European  automotive  industry  has  been  facing  an  increasingly 
difficult  period,  with  the  EU  market  for  new  cars  declining  for  the  fifth  consecutive  year. 
This  situation  creates  a  strong  pressure  on  some  companies  to  restructure  their  operations, 
and  several  manufacturers  have  recently  announced  closures  of  assembly  plants  with 
consequent job losses. At the same time, however, the European industry continues to face the 
medium and long-term challenge to remain a leader in providing future mobility solutions 
in an extremely competitive global environment. Therefore, the Commission considers there 
is an urgent need to come forward with an Action Plan to support the automotive industry in 
facing these challenges. 

1. 

A KEY SECTOR AT A CROSSROADS  

The  automotive  industry1  is  of  strategic  importance  to  the  European  economy  and  its 
products  and  services  impact  the  life  of  European  citizens  on  a  daily  basis.  The  sector 
represents  around  12  million  direct  and  indirect  jobs  and  delivers  a  sizeable  positive 
contribution  to  the  EU  trade  balance  (growing  over  the  last  few  years  and  reaching  €  90 
billion  in  2011).  The  industry  records  the  biggest  private  spending  on  research  and 
innovation (€ 28 billion in 2009) and is an essential  driver for technological innovation. It is 
an  important  multiplier  of  growth,  due  to  strong  economic  linkages  with  many  industrial 
sectors.  These  links  are  present  both  upstream,  such  as  with  the  steel,  chemical  and  textile 
industries, as well as downstream, with ICT, repair and mobility services. It produces most of 
the  vehicles  used  by  citizens  for  their  personal  mobility  and  for  the  transport  of  goods. 
Therefore, the automotive industry will be a key actor in the new industrial revolution that 
aims inter alia at the gradual substitution of hydrocarbons as the main source of energy and a 
more efficient and sustainable use of our resources. 

The automotive sector is today at a historic turning point: the coming decade is expected to 
lead to important changes in several areas that are likely to profoundly reshape the industry 
and its markets worldwide. First of all, production and trade patterns are shifting. While 
the European market is considered mature, several third markets are growing fast, changing 
the trade flows and the automotive value chain. The intense competitive pressure is growing 
further  and  EU  companies  are  increasingly  being  challenged  in  their  home  market,  while 
developing  opportunities  in  third  markets.  Secondly,  the  climate  agenda  becomes  more 
urgent  and  even  more  is  expected  from  technological  progress.  To  meet  long-term 
greenhouse  gas  emissions  targets  as  well  as  air  quality  objectives,  the  internal  combustion 
engine  will  be  further  improved,  being  accompanied  by  the  development  and  progressive 

1 

The term automotive industry is meant to cover the entire supply chain, covering vehicle manufacturers, 
suppliers, distribution and after-market services. Products include passenger cars, light- and heavy-duty 
commercial vehicles and powered two-wheelers, three-wheelers and quadricycles. 

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implementation of breakthrough technologies, such as electrified propulsion. Sizeable efforts 
will also need to be made with the further development and distribution of sustainable fuels 
which  can  be  alternatives  to  traditional  diesel  and  gasoline.  At  the  same  time,  road  safety 
remains an important concern. 

The  automotive  sector  is  one  of  the  priority  action  lines  where  investment  in  new 
technologies  and  innovation  should  be  facilitated,  as  is  set-out  in  the  Commission 
Communication which recently updated the EU Industrial Policy2. Giving further impetus 
to  the  EU  2020  objectives  of  smart,  sustainable  and  inclusive  growth,  the  Communication 
calls for a stronger European industry for growth and economic recovery. The important role 
of this industrial sector in creating growth and jobs, also in related services, has been clearly 
recognised. We must therefore take a proactive approach. 

This Communication presents an Action Plan for the automotive industry, highlighting the 
Commission's commitment to support the sector's competitiveness and sustainability. It is the 
first  concrete  example  of  the  application  of  our  updated  vision  for  industrial  policy  in  a 
sectoral  setting,  i.e.  the  automotive  industry.  It  defines  concrete  policy  actions,  based  on  an 
analysis of the sector carried out by the CARS 21 High Level Group, which was re-launched 
in 2010. This Action Plan is articulated around the following four pillars:  

– 

– 

– 

– 

Investing in advanced technologies and financing innovation through a range of 
regulatory initiatives and support to research and innovation 

Improving market conditions through a stronger internal market and the consistent 
implementation of smart regulation 

Enhancing  competitiveness  on  global  markets  through  an  effective  trade  policy 
and the international harmonisation of vehicle regulations 

Anticipating adaptation by investing in human capital and skills and softening the 
social impacts of restructuring 

With  this  strategy,  the  Commission  intends  to  support  the active  role  the  automotive  sector 
will play in seeking to reverse the declining share of industry in Europe from its current level 
of  around  16%  of  GDP  to  as  much  as  20%  by 2020.  The  reinforcement  of  this  industry's 
competitiveness in the EU, the support in seizing growth opportunities in global markets, as 
well as the promotion of clean, safe and efficient vehicles, embedded in an integrated policy 
approach will be instrumental to that effect. 

2. 

CARS 21: A JOINT STRATEGIC VISION FOR THE INDUSTRY IN 2020 

At the end of 2010, the Commission decided to re-launch the CARS 21 High Level Group, 
which  was  originally  set-up  in  2005,  as  a  follow-up  of  the  Commission  Communication 
"European  strategy on clean and energy-efficient vehicles3", adopted on  28 April 2010. The 
objective of the Group was to make policy recommendations to support the competitiveness 
and sustainable growth of the European automotive industry.  

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COM (2012) 582 final, adopted on 10 October 2012 
COM(2010)186 final, 28.04.2010 

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The  Group  included  seven  Commissioners,  nine  Member  State  representatives,  and  a  broad 
and  balanced  group  of  stakeholders  (including  industry  representatives  and  NGOs),  and 
adopted its Final Report4 on 6 June 2012. This Report presents the Group’s consensual view 
on  the  strategic  vision  for  the  automotive  sector  in  2020  and  sets  out  specific 
recommendations on a number of relevant policy areas. 

The  analysis  provided  in  the  Report  clearly  shows  that  the  status  quo  for  the  European 
automotive  industry  cannot  be  maintained:  current  production  capacities  will  have  to  be 
adapted, new production methods devised, further sources of raw materials secured and used 
more efficiently, and new clusters and business models developed. Just as importantly, new 
skills profiles are required and possible changes in employment needs will have to be tackled. 
In  this  context,  it  is  particularly  important  to  ensure  a  smooth  and  balanced  economic  and 
social  transition  via  the  anticipation  of  skills  and  training  needs,  as  well  as  managing 
restructuring in a well prepared way, which will foster business adaptation and employment 
transition. 

Against this background, the Group has defined a common view on key characteristics of a 
strong and competitive automotive industry and progress towards sustainable mobility 
for EU society in 2020 as follows: 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

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An automotive sector which remains of strategic importance and a cornerstone 
for  the  EU  industry  and  economy,  providing  quality  employment  to  millions  of 
workers in the EU; 
A  sector  which  is  central  to  many  other  economic  activities  while  delivering 
affordable  and  desirable  products,  meeting  consumer  demands,  based  on  a 
competitive market for automotive products and services, including the aftermarket;  
A  strong  manufacturing  base  in  the  EU  for  road  vehicles  and  components, 
manufacturing a sizeable part of the vehicles and parts sold on the EU market; 
A strong industrial network with a flexible and integrated supply and distribution 
chain; 
A  sector  exporting  a  larger  portfolio  of  high-quality  and  high-technology 
vehicles to third markets; 
Global  markets  which  offer  a  genuine  level  playing  field  to  all  players  in  the 
sector, with fair chances for all technologies,  
An automotive industry that is leading in technology, in coordinated action with the 
fuel  supplier  industry,  producing  vehicles  which  are  attractive  to  EU  consumers, 
clean  in  terms  of  regulated  pollutants,  more  fuel-efficient,  safe,  quiet  and 
connected; 
A  portfolio  of  propulsion  technologies,  dominated  by  advanced  combustion 
engine  technology,  though  increasingly  electrified.  In  addition,  the  deployment  of 
vehicles  with  alternative  powertrain  concepts  (such  as  electric5  and  fuel  cell 
vehicles) is becoming significant;  
Appropriate  refilling  and  recharging  infrastructure  for  alternative  fuel  vehicles 
being built, in line with their market potential; 
A workforce in both manufacturing, R&D and servicing that is trained and prepared 
to work with a multitude of technologies. 

Available on http://ec.europa.eu/enterprise/sectors/automotive/files/cars-21-final-report-2012_en.pdf  
including battery electric, plugin hybrid and extended range electric vehicles 

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An  integrated policy  approach needs to be systematically put into practice. This approach 
therefore must include the following elements: 

– 

– 

– 

– 

private sector and public policy actions at EU, Member State and regional level that 
complement each other;  

measures  addressing  vehicles  to  be  effectively  combined  where  appropriate  with 
others focusing on infrastructure and the user; 

cost-effective  regulatory  and  alternative  policy  measures  which  are  effectively 
implemented and enforced, in order to reach long-term societal objectives and drive 
innovation; 

all policy areas having an impact on the automotive sector to be closely coordinated 
among the relevant authorities in charge, including trade, industrial, environmental, 
energy, information and communication technologies, road safety and public health, 
transport and competition policy, innovation and internal market, so as to ensure the 
cost effective achievement of the policy objectives. 

The Commission fully recognises these challenges and the need of an ambitious industrial 
policy  strategy  for  the  automotive  sector.  The  Commission  will  orient  its  policies  to  this 
objective  and  calls  on  other  Institutions,  public  authorities  and  stakeholders  to  follow  the 
same approach, within their respective area of responsibility. 

3. 

A CHALLENGING ECONOMIC SITUATION 

The CARS 21 Final Report provides a thorough analysis of the current economic situation of 
the  EU  automotive  industry.  In  the  first  half  of  2012,  the  situation  deteriorated  and  this 
trend  is  likely  to  continue  until  the  end  of  the  year.  Sales  in  EU  markets  have  been 
declining  (6.8%  decline  for  the  first  half  of  2012  for  passenger  cars  and  10.8%  decline  for 
commercial  vehicles)  -  compared  to  the  already  low  levels  of  2011.  The  current  forecasts 
indicate  a  7.9%  year-on-year  decline  in  the  EU  market  for  passenger  cars  with  sales 
amounting  to  12.1  million  units.  The  EU  market  for  commercial  vehicles  is  expected  to 
decline  by  8%  this  year,  following  a  previous  period  of  recovery  in  2010  and  2011,  but 
remains at historically low levels. For powered two-wheelers, new registrations are suffering 
from the debt crisis and amounted in 2011 to 1.6 million units, which is 40% below the level 
of 2007. 

Vehicle  production  has  been  in  a  slightly  better  shape  (assembly  of  16  million  units  of 
light  duty  vehicles,  i.e.  1m  units  more  than  the  2009  levels)  boosted  by  exports  as 
demonstrated  by  a  positive  trade  balance  of  € 45  billion  in  the  first  five  months  of  2012 
(mostly  due  to  exports  to  the  US  and  emerging  markets).  There  are  however  important 
downside  risks  to  the  production  levels  linked  to  a  slowdown  in  the  emerging  economies. 
Several  manufacturers  have  reported  financial  losses  on  the  EU  market  mostly  due  to 
declining  sales  combined  with  the  long-standing  structural  issue  of  overcapacity6.  Some 
manufacturers have announced significant restructuring actions which will have repercussions 

6 

Precise  data  on  overcapacity  are  subject  to  discussion,  as  it  depends  among  others  on  the  number  of 
shifts  used  in  a  given  factory.  Analysts  agree  that  some  overcapacity  is  actually  needed  for  business 
flexibility, but that excess capacity is problematic. 

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on their supply chain as well as on employment and recovery prospects in several European 
regions.  

The  responsibility  for  dealing  with  the  issue  of  restructuring  lies  mainly  with  the 
industry,  but,  at  the  same  time,  industry  is  claiming  that  more  coordination  and  support  at 
European level is desirable.  

This Action Plan, based on the CARS 21 recommendations, sets long-term goals of keeping 
the  manufacturing  base  in  Europe,  ensuring  competitiveness  and  sustainability  and 
constituting a complete industrial policy roadmap for the automotive industry in 2020.  

4. 

AN ACTION PLAN TO BOOST COMPETITIVENESS 

The Commission is planning the following key actions across different EU policy areas: 

4.1. 

Investing in advanced technologies and financing innovation 

In the automotive industry, as in other sectors, a range of new, clean and safe technologies are 
being  developed,  which  are  expected  to  make  significant  inroads  into  the  market  in  the 
coming  years.  Starting  from  a  leadership  position  in  today's  technology,  it  is  essential  that 
Europe  stays  at  the  forefront  by  developing  tomorrow's  solutions,  delivering  sustainable 
mobility. This should be fostered by well-targeted and coordinated public support for research 
and innovation, which is fit for the needs of industry and society, aiming at developing longer 
term technologies. A holistic policy approach, complementing regulatory initiatives at the EU, 
national  and  local  levels  accompanied  by  infrastructure  and  demand  measures,  needs  to  be 
taken to trigger investments in the coming years.  

Research, development and innovation 

Investment  in  Research,  Development  and  Innovation  (RDI)  ensures  competitiveness. 
Moreover, European financing for RDI under the 7th Framework Research Programme (FP7) 
and  the  loans  and  loan  guarantees  of  the  European  Investment  Bank  (EIB)  aimed  at 
stimulating the development of clean transport technologies were identified in the CARS 21 
Report  as  key  instruments  for  crisis  recovery  in  2008-2009,  and  for  tackling  the  current 
competitive pressure in terms of technology leadership. Importantly, European funds provide 
a substantial leverage to the EU automotive industry, which needs to finance simultaneously 
the RDI on several powertrain technologies (continuous improvement of combustion engines 
as well as development of electric, fuel cells and hybrid powertrains) - in line with the 2020 
perspective  of  a  diverse  portfolio  of  fuels  necessary  to  meet  the  climate  change  objectives. 
Road safety development is another field where there is still large scope for evidence-based 
enhancement  of  vehicle  safety.  The  European  Green  Cars  Initiative  (EGCI)  Public-Private 
Partnership (2009-2013) has been very positively evaluated by the CARS 21 Final Report as 
well  as  the  lending  activity  of  the  EIB,  especially  under  the  European  Clean  Transport 
Facility. There is a strong consensus that both instruments should continue to be used.  

The Commission has: 

– 

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proposed  Horizon  20207  as  a  framework  for  research  and  innovation  funding  for 
2014-2020 with a total budget of € 80 billion –  a significant increase in comparison 

COM (2011) 808 final, 30.11.2011, COM (2011) 809 final,30.11.2011.  

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– 

– 

– 

– 

to FP7 – including a commitment to achieve a resource-efficient and environmentally 
friendly European transport system. Pending the final decisions which will be taken 
in  the  context  of  the  next  Multi  Annual  Financial  Framework,  it  is  considered  that 
automotive  research  and  innovation  funding  should  take  into  account  its  economic 
and social importance. 

proposed  the  COSME  (Competitiveness  of  Enterprises  and  SMEs)  Programme8, 
with a budget of € 2.5 billion for the period 2014-2020.  

proposed  that  both  programmes  should  support  EU  financial  instruments  that  will 
potentially  enable  SMEs  and  larger  firms  in  the  automotive  sector  to  benefit  from 
improved  access  to  debt  and  equity  finance.  Through  COSME,  automotive  SMEs 
should also be able to benefit from actions to improve access to markets and through 
Horizon 2020, to measures to improve their attractiveness to investors. 

adopted  its  Communication  on  Research  and  Innovation  for  Europe's  future 
mobility9,  proposing  the  development  of  a  European  Transport  Technology 
Strategy.  The  strategy  foresees  in  2013-2014  the  definition  with  stakeholders  of 
technology roadmaps focusing on the deployment of technologies and innovation in 
ten  critical  areas  of  transport  including  clean,  efficient,  safe,  quiet  and  smart  road 
vehicles. This will help to optimise the contribution of research and innovation to the 
ambitious  objectives  of 
the 
implementation of Horizon 2020.  

the  White  Paper  on  Transport10  and  support 

started the implementation of the Strategic Energy Technology Plan (SET Plan) 11 
which  addresses  the  research  and  innovation  agenda  of  several  fields  of  strategic 
importance  to  the  transport  sector  in  particular  smart  electricity  grids,  alternative 
fuels  such  as  bio-energy  and  hydrogen  and  fuel  cells  as  well  as  energy  storage.  In 
this  respect,  appropriate  linkages  will  be  ensured  with  the  transport  technology 
strategy. 

While  Horizon  2020  will  provide  the  general  framework  for  transport  research  and 
innovation, it is of key importance to spell out in more detail the priorities and operation of 
financing for research and innovation development in the automotive industry. Based also on 
the Report of the CARS 21 Group, the Commission is convinced that financing should cover 
activities closer to the market such as public procurement, standardisation and demonstration 
activities. The form of PPPs should be favoured as the leanest and fastest tool and synergies 
should be sought with national funding. 
In  addition,  potential  synergies  between  the  sector  and  EIT12  should  be  further  explored,  in 
particular  within  the  context  of  the  planned  future  KICs13  in  the  areas  of  added-value 
manufacturing and urban mobility. 

The Commission will: 

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COM (2011) 834 final, 30.11.2011 
COM (2012) 501 
COM (2011) 144 final 
http://setis.ec.europa.eu/ 
European Institute of Innovation and Technology 
Knowledge and Innovation Communities 

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– 

work together with industry to develop a proposal on the European Green Vehicles 
Initiative (as a follow-up to EGCI PPP) under Horizon 2020, including a platform to 
develop  clean  and  energy-efficient  vehicle  technologies,  as  announced  in  the  2010 
Industrial  Policy  Communication14.  The  initiative  will  leverage  private  funding  to 
help address the key challenges proposed for Horizon 2020.  

Access to finance 

Alongside  the  European  research  programme,  EIB  financing  (loans  and  loan  guarantees) 
played  a  key  role  among  the  recovery  measures  for  the  automotive  sector  during  the  2008-
2009 crisis. By supporting major investments related to clean technologies, the EIB helps to 
ensure the competitiveness of the industry in the years to come. At the time of the previous 
crisis, the EIB increased its lending volume to the automotive industry from an average of €2 
billion/year  to  almost  €14  billion  for  th e  period  2009-2010.  The  current  loan  volumes 
declined in 2011 reflecting, among others, better access to finance from the commercial banks 
at  that  time.  As  companies  are  completing  their  research  and  innovation  projects  currently 
financed  by  the  EIB  and  new  projects  appear  necessary  in  order  to  reach  the  2020  fuel-
efficiency targets, the EIB is well equipped in order to meet this new demand. The recent €10 
billion capital increase of the EIB agreed by the European Council could also be expected to 
translate  into  more  opportunities  for  the  automotive  sector  (for  innovation  and  resource 
efficiency in particular). 

The Commission will: 

– 

– 

– 

continue  working  with  the  EIB  in  order  to  ensure  that  financing  for  automotive 
research and innovation projects is available especially in order to meet the 2020 
fuel-efficiency  targets  while  maintaining  necessary  appraisal  procedures  to  ensure 
the viability of investments in the long term. 

support the EIB in its efforts to facilitate access for SMEs and mid-caps. Though 
the  administrative  burden  is  considered  to  be  low,  the  Commission  will  further 
investigate  which  tools  could  improve  accessibility  to  the  financing  for  SMEs, 
especially if SMEs experience difficulty accessing credit from commercial banks, 
once again. Provision of trade finance or of a global credit line for suppliers in one 
country and possibly other options could be explored. 

explore  with  the  EIB  the  possibility  of  financing  projects  linked  to  electro-
mobility,  including  the  support  through  dedicated  technical  assistance  as  with  the 
existing ELENA facility.15  

Lowering CO2 emissions 

Promoting  new,  less  energy  intensive  technologies  on  board  vehicles  delivering  lower  CO2 
emissions, deployed in a cost-effective way, will support the creation of added value and jobs 
in  the  automotive  industry  as  well  as  reduce  the  EU's  energy  dependency  by  curbing  oil 
imports. 

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COM(2010) 614 
ELENA  (European  Local  ENergy  Assistance)  technical  assistance  facility  for  projects  on  sustainable 
energy in towns and regions. 

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The 2007 EU strategy embraced a comprehensive approach to reducing CO2 emissions from 
light-duty vehicles16. This included both demand and supply measures with actions on engine 
technology  being  complemented  by  other  measures,  targeting  alternative  fuels,  driver 
behaviour and other technological improvements. Also for future policy, as proposed by the 
Commission  in  its  recent  White  Paper  on  Transport  Policy,  defining  the  most  appropriate 
measures  to  reduce  road  transport  CO2  emissions  in  a  holistic  way,  based  on  a  careful 
assessment  of  costs  and  benefits,  addressing  as  appropriate  vehicle  efficiency,  the  use  of 
vehicles and infrastructure, is crucial.  

Fuel  consumption  and  emissions  can  also  be  substantially  reduced  through  large  scale 
deployment of more aerodynamic vehicles. The Commission is currently preparing to review 
Directive 96/53/EC on maximum weights and dimensions of road vehicles which will, inter 
alia,  allow  fuel  savings  of  up  to  10%  through  retrofitting  existing  trucks  and  redesigning 
future ones for the purpose of improving aerodynamics.  

For  light-duty  vehicles,  the  respective  CO2  Regulations  have  defined  2020  targets  at  95  g 
CO2/km for cars and 147 g CO2/km for vans. The Commission has as a result of the review of 
these Regulations proposed modalities for reaching, by 2020, these targets in a cost-effective 
manner.  

To enable the automotive industry to carry out long-term investments and innovation it is also 
desirable  to  provide  indications  on  the  likely  form  and  level  of  ambition  of  CO2  reduction 
targets  beyond  2020  in  a  timely  manner,  taking  into  account  the  Union's  long  term  climate 
change goals. 

The Commission: 

– 

– 

– 

– 

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18 

recently adopted proposals to implement the 2020 CO2 targets for cars and vans17. 
In  terms  of  modalities,  the  proposals  foresee  a  continuation  of  the  eco-innovation 
provisions,  supercredits  for  low-CO2  emitting  vehicles  and  an  exemption  for  the 
smallest manufacturers.  

will start a broad consultation on CO2 regulatory policy for cars and vans beyond 
2020  setting  out  a  number  of  aspects  on  which  views  will  be  sought,  and  then  the 
responses to which will feed into the determination of the form and level of ambition 
of future policy in the context of the envisaged review18. The Commission will take 
into  account  issues,  such  as  cost-effectiveness,  the  expected  development  of  CO2 
reduction technologies and other relevant factors. 

will embed the above policy measures in a wider and integrated policy on CO2 
reductions from road transport, through the implementation  of  the  White  Paper  on 
Transport  Policy,  covering  vehicle  technology,  infrastructure,  driver  behaviour  and 
other measures. 

will propose a review of Directive 96/53/EC at the beginning of 2013 to allow for a 
more aerodynamic design of trucks. 

COM (2007) 19 final 
COM/2012/393 and COM/2012/394  
COM(2012)393 final 

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Pollutant and noise emissions 

In recent years, it has become clear that the current procedures used for measuring pollutants, 
CO2 emissions and fuel consumption of light-duty vehicles (cars and vans) are not sufficiently 
representative of real-world driving. A revision of the driving cycles and the test procedure is 
therefore envisaged and currently being prepared at a global level, based on data collected on 
real-world  driving  behaviour.  Improving  the  test-cycle  and  establishing  clear  testing 
conditions resulting in comparable and representative values is important in order to deliver 
the expected reductions from regulatory measures, financial incentives and in order to provide 
reliable information to consumers. 

In  addition,  many  Member  States  do  not  comply  with  the  requirements  set  in  air  quality 
legislation and are facing significant problems with ambient NO2 concentrations. In particular, 
regulatory air quality requirements defined by Directive 2008/50 EC fail to be met in urban 
areas  ("hotspots"),  mainly  for  particulate  matter,  nitrogen  oxides  and  ozone.  This  situation 
occurs in part due to the NOx (NO + NO2) emissions of local traffic road vehicles, which are 
likely  to  be  significantly  higher  under  real  driving  conditions  than  the  regulatory  emission 
limits measured on a test cycle, particularly for diesel vehicles.  

Given the pressing air quality problems, there is a need to proceed with the implementation of 
Euro  6  as  foreseen  and  to  identify  measures  as  soon  as  practically  possible  to  enhance  the 
emission reductions of vehicles on the road. 

The Commission recognises the importance of ensuring an effective reduction of real driving 
NOx emissions in order to meet current and future objectives set out in air quality legislation. 
As  a  result  and  in  order  to  implement  the  requirements  of  Regulation  (EC)  715/2007,  the 
Commission  launched  in  January  2011  the  development  of  a  future  test  procedure,  to  be 
integrated in the type approval framework, directly assessing the NOx emissions of light duty 
vehicles under real driving conditions.  

Real driving emissions (RDE) of NOx measured by this "RDE procedure" should be recorded 
and  communicated  as  from  the  mandatory  Euro  6  dates  (in  2014).  At  the  latest  three  years 
after  these  dates,  the  RDE  procedure  should  be  applied  together  with  robust  not-to-exceed 
(NTE)  emission  limits,  which  will  ensure  a  substantial  reduction  of  real  driving  NOx 
emissions  with  respect  to  the  emission  level  expected  if  such  RDE  procedure  would  not  be 
applied.  These  three  additional  years,  given  in  order  to  introduce  binding  NTE  limits,  are 
considered necessary since the Commission is aware that in many cases a significant redesign 
of  diesel  vehicles  will  be  required  to  achieve  Euro  6  NOx  emission  limits  under  normal 
driving conditions. 

Further,  the  legislation  on  noise  emissions  from  vehicles  is  being  reviewed,  based  on  an 
impact assessment. Noise related health impacts will be reduced through more stringent limit 
values. A new test procedure has been developed and tested in recent years. This procedure is 
more  representative  of  real-world  driving  and  can  now  be  implemented.  Together,  these 
provisions will contribute to a reduction in road traffic noise levels. 

The Commission: 

– 

will  actively  support  the  development  and  implementation  of  a  new  driving  test-
cycle and test procedure to measure fuel consumption and emissions from cars and 
vans  that  is  more  representative  of  real-world  driving,  taking  account  of  the 
characteristics of the EU market. The modalities for the inclusion into the EU legal 

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framework  of  the  new  cycle  and  test  procedures  should  be  defined  before  2014, 
including the methodology for correlation of the CO2 targets established on the basis 
of the old cycle and procedure. For the emission testing, the implementation of the 
new  cycle  and  procedure  should  ensure  compliance  with  the  Euro  6  limit  values 
under real driving conditions, with appropriate transitional arrangements from 2014 
up  to  2017.  For  CO2  testing,  the  implementation  of  the  new  cycle  and  procedure 
should take into account and be consistent with the environmental objectives already 
defined and avoid imposing any unnecessary burdens on stakeholders. The definition 
of the driving range for electric vehicles will also be considered. 

– 

– 

will  propose  before  2014  complementary  measures  controlling  vehicle  pollutant 
emissions in use, based on a thorough analysis, with the aim of delivering a timely 
reduction  of  real-world  pollutant  emissions,  hence,  contributing  to  improved  air 
quality. 

has in December 2011 proposed a new vehicle noise emissions Regulation19, as part 
of an  integrated policy approach to ambient noise reduction, including a new noise 
measurement  test  procedure  and  a  further  reduction  of  vehicle  noise  levels. 
Appropriate 'lead-time' should be provided to industry, consistent with the extent of 
the required technical adaptations.  

Road safety  

Road safety has been and will remain an EU and national policy priority for many years. It 
offers  an  interesting  example  of  the  effective  implementation  of  the  integrated  policy 
approach.  The  EU  is  a  world  leader  in  the  area  of  road  safety,  and  our  vehicle  fleet  is 
comparably  new  and  safe.  Car  design  plays  an  important  role  both  for  crash  avoidance  and 
crash protection, not least with the help of safety devices mandated via the EU type approval 
framework.  

Important progress has been achieved in the reduction of road fatalities by a combination of 
measures, tackling the vehicle, the driver and the infrastructure, applied at EU, national and 
local levels. These encouraging results should, however, not give rise to complacency and a 
new  target  for  2020  of  a  further  reduction  of  road  fatalities in the EU  by 50% compared to 
2010 was proposed20. 

The Commission: 

– 

will  continue  to  implement  road  safety  work  in  line  with  the  focus  areas  and 
objectives  of  its  Policy  Orientations  2011-202021,  covering  actions  on  vehicles, 
infrastructure  and  driver  behaviour.  The  right  policy  mix  needs  to  be  found, 
combining regulatory and other measures and will be defined based on an in-depth 
impact assessment. Priorities include motorcycles, safety of new vehicle technologies 
(EVs)  and  technologies  supporting  driver  behaviour  and  enforcement  of  road  rules 
(intelligent speed management devices, seat belt reminders, ITS, ecodriving). 

19 
20 
21 

COM/2011/856 final 
COM (2010) 389 final 
Idem. 

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– 

– 

will  further  promote  the  deployment  of  Intelligent  Transport  Systems  (ITS), 
including  cooperative systems, in particular the EU-wide in-vehicle  emergency call 
system "eCall". Appropriate legislative measures ensuring strong coordination and a 
timely  and  complete  deployment  of  all  elements  related  to  eCall  are  being  put  in 
place in order for this life-saving system to function effectively from 2015. 

calls  on  Member  States,  local  authorities  and  stakeholders  to  cooperate  in  a 
constructive  and  coordinated  way  to  develop  the  most  promising  measures  to 
improve road safety and to deploy ITS. The Commission is also carrying out an in 
depth-assessment  of  the  most  appropriate  in-vehicle  safety  systems  to  improve 
further  road  safety  and  vehicle  safety  in  the  EU,  preparing  a  roadmap  for  the 
deployment planned for the end of 2013. 

Alternative fuels and infrastructure 

An  appropriate  diversification  of  the  energy  sources  used  for  transport  will  contribute  to 
meeting  the  EU's  climate  goals  and  improve  its  energy  security.  While  there  are  still 
substantial  hydrocarbon  reserves,  it  is  likely  that  prices  could  become  increasingly  volatile 
while surplus capacity decreases. In parallel to the improvement of energy efficiency, this also 
requires the marketing of alternative fuels, such as electricity, hydrogen, sustainable biofuels, 
methane (natural gas and biomethane), LPG. For the overall policy framework, the merits of 
each  fuel  and  powertrain  combination  should  be  assessed  on  a  well-to-wheel  basis22, 
including also life cycle aspects. Given the novelty of many fuels, their performance should 
be kept under continuous review.  

Market penetration of alternative fuels requires the build-up of appropriate infrastructure. This 
as well as the subsequent development of a market for the relevant vehicles would also serve 
to  promote  economic  growth  and  job  creation.  The  roll-out  of  alternative  fuel  infrastructure 
should  be  in  step  with  technology  development  and  market  penetration  rates  of  vehicles 
powered  by  alternative  fuels,  bearing  in  mind  their  cost-effectiveness.  Different  forms  of 
public  support  for  infrastructure  are  possible:  pilot  projects,  standardisation,  investment 
support and legislation. Public policy can support market introduction but thereafter markets 
must decide on the best solutions themselves, within the given policy framework, taking into 
account any economic and social impacts.  

The Commission is currently preparing the Clean Power for Transport package which should 
provide a framework to guide investments and technological development in this area. It aims 
to  facilitate  the  development  of  an  internal  market  for  alternative  fuel  vehicles  and  vessels 
including  the  necessary  infrastructure,  by  removing  technical  and  regulatory  barriers  across 
the EU. 

With respect to electric vehicles, in 2010, the Commission gave a mandate to the European 
Standardisation  Organisations  (ESO)  to  adopt  new  standards  with  the  aim  of  ensuring 
interoperability  and  connectivity  between  the  electricity  supply  point  and  the  charger  of 
electric vehicles. The standardisation process has not yet delivered a satisfactory result on the 
infrastructure  side.  The  CARS  21  Report  called  for  the  adoption  of  a  single  standard 
throughout the EU. The Commission will investigate the connection between the vehicle and 
the grid and also monitor new business models that may emerge that promote the synergies 

22 

Integrating  emissions  generated  over  the  life-cycle  of  the  fuel,  including  extraction,  production  and 
actual use 

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between electricity storage that electric vehicles provide and the flexibility that the electricity 
system needs, including common standards and protocols for the connection between electric 
vehicles and grids, as well as interoperability for communication and payment. 

The  provision  of  clear  information  for  consumers  on  fuels  and  their  compatibility  with 
vehicles,  such  as  labelling,  requires  further  attention.  The  Commission  will  closely  monitor 
the issue with a consumer market study currently being conducted on the functioning of the 
market for vehicle fuels from a consumer perspective.23 

The Commission will: 

– 

– 

– 

– 

– 

propose  within  the  coming  months  an  Alternative  Fuels  Strategy,  as  part  of  the 
Clean  Power  for  Transport  package,  supporting  the  need  for  a  range  of  alternative 
fuels in the context of delivering the EU climate and environmental objectives and in 
relation to security of the EU's energy supply.  

adopt, as part of the Clean Power for Transport package, a legislative proposal on 
alternative  fuel  infrastructure,  concerning  the  deployment  of  a  minimum 
refuelling/recharging  infrastructure  and  common  standards  for  certain  fuels, 
including electric vehicles. 

propose  a  legislative  measure  at  the  latest  by  2013  to  ensure  that  practical  and 
satisfactory  solutions  for  the  infrastructure  side  of  the  recharging  interface  for 
electric  vehicles  are  implemented  throughout  the  EU,  in  case  no  agreement  is 
reached  on  a  voluntary  approach  among  stakeholders  involved  through  the 
standardisation process. It will take into account the synergies between the electricity 
system and the electric vehicles.  

pursue the dialogue with relevant stakeholders on a fuel labelling scheme consistent 
with  the  relevant  European  standards  with  a  view  to  ensure  that  the  consumer  has 
easy-to-understand  information  about  the  compatibility  of  his/her  vehicle  with  the 
different fuels offered at refuelling stations.  

monitor  the  implementation  of  the  National  Renewable  Energy  Action  Plans,  in 
particular the effective biofuel blending rates used in different Member States and 
the compatibility of fuels with vehicle technologies. 

4.2. 

Improving market conditions 

Maintaining an automotive manufacturing base in the EU can only be ensured if favourable 
business  conditions  are  provided.  For  several  of  these  conditions,  such  as  labour  law,  this 
relies  heavily  on  national  policies.  However,  EU  policy  also  has  a  clear  influence  on 
framework  conditions,  notably  through  regulatory  policy.  It  remains  a  priority  for  the 
Commission  to  improve  business  conditions  for  industry  in  Europe  by  providing  a  reliable, 
predictable  and  favourable  framework  and  to  implement  the  principles  of  smart  regulation, 
such as cost-effectiveness, lead times, long-term targets and stakeholder consultation. 

23 

The study will give an insight on whether consumers are able to make informed purchasing decisions 
including issues related to understanding and transparency of information, for example understanding of 
information  on  labels,  understanding  of  differences  between  fuels  and  understanding  of  suitability  of 
fuels for cars. The results will be published by end 2013. 

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A stronger internal market 

A well-functioning internal market with a level playing field is a key contributor to a strong 
and prosperous European car industry in the long run. This is particularly true in the current 
difficult economic context, where manufacturers are under pressure to adapt capacity. 

The European automotive industry represents a multitude of small and big companies, active 
in  different  parts  of  the  distribution,  supply  and  service  chain.  This  enormous  diversity  is 
considered  a  strength  and  an  asset  for  the  future,  as  small  companies  today  may  deliver 
strategic innovation tomorrow and grow into major players. Therefore, it is important to foster 
constructive, transparent and respectful relations among the different actors in the automotive 
sector, including the repair, maintenance and customer service sector. 

The  changes  in  the  competition  law  framework  for  the  distribution  of  motor  vehicles  in 
Europe (further to the expiry of the Motor Vehicle Block Exemption Regulation 1400/2002) 
may  have  an  impact  on  the  organisation  of  the  vertical  relations  between  vehicle 
manufacturers and distributors. In order to manage this transition in a balanced way, a self-
regulatory  initiative  is  encouraged  by  the  Commission.  Furthermore,  the  Commission  will 
continue to ensure the respect of EU rules on competition in the markets for the distribution of 
motor  vehicles  and  for  the  provision  of  repair  and  maintenance  services  as  well  as  the 
distribution of spare parts. 

Another important objective of vehicle regulation is to strengthen the EU internal market for 
motor vehicles. One must recognise that today, while the regulatory requirements are identical 
throughout  the  EU,  market  conditions  are  very  diverse  in  different  Member  States.  The 
measures to influence demand, such as financial incentives, put in place to promote clean and 
energy  efficient  vehicles  do  not  all  follow  the  same  approach.  This  fragmentation  can  be 
expected to reduce the potential for development and placing on the market of such vehicles. 
Therefore, stronger coordination of such measures is deemed necessary. 

For consumers, the second hand car market is also important. A consumer market study will 
be carried out on the functioning of the second hand car market. 

The Commission will: 

– 

– 

set  up  by  2013  a  dialogue  between  stakeholders,  encouraging  them  to  work 
towards  common  principles  on  vertical  agreements  on  the  distribution  of  new 
vehicles.  Stakeholders  are  invited  to  participate  constructively  in  this  dialogue, 
aiming at a balanced outcome. 

to  maximise 

put  forward  in  2012  guidelines  for  financial  incentives  for  clean  and  energy-
efficient  vehicles  put  in  place  by  Member  States  in  order  to  promote  stronger 
the 
coordination, 
fragmentation  of  the  market24.  Such  incentives  should  avoid  being  technology-
specific,  instead  relying  on  objective  and  commonly  available  performance  data, 
such as the CO2 emissions from the vehicle. Member States will be invited to take 
these guidelines duly into account when designing their incentive schemes. 

their  environmental  effectiveness  and 

limit 

24 

Measures constituting State aid will continue to be assessed under the relevant State aid rules. 

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Smart regulation 

A  healthy  and  dynamic  internal  market  also  needs  appropriate  regulation,  which  avoids 
unnecessary burdens for stakeholders and offers an investment-friendly climate. Automotive 
products  are  essentially  regulated  through  the  EU  legislative  framework  for  type-approval. 
Although this system seems to generally function in a satisfactory way, continuous evaluation 
remains necessary to identify ways of improvement. In particular, a revision of the procedures 
for the surveillance of the automotive products placed on the EU market is needed, in order to 
make sure that vehicles are safe and citizens can fully trust the regulatory framework put in 
place.  This  will  contribute  to  establishing  a  level  playing  field  among  all  actors  and  to 
increased  trust  of  consumers  in  effective  product  regulation,  while  limiting  administrative 
burdens. 

The principles of smart regulation have been the key deliverable in the first CARS 21 exercise 
and  they  have  been  reaffirmed  in  the  re-launched  process.  The  Final  CARS  21  Report 
furthermore stressed the importance of taking into account the current competitive pressure on 
costs, the cumulative effect of the legislation and the situation of SMEs. A comprehensive and 
consistent application of principles of smart regulation will be ensured, integrating an in-
depth  assessment  of  the  impacts  on  industry,  society  and  other  stakeholders,  notably  the 
associated costs and benefits, considering also that the affordability of buying and owning a 
car is a fundamental pre-requisite so as to maintain a strong market. On that basis, the impact 
assessments for policy proposals relevant for the automotive industry, such as those referred 
to in other parts of this Communication, should systematically include also a competitiveness 
proofing  exercise  in  order  to  determine  the  impact  of  new  measures  on  the  automotive 
industry. The application of these princples will ensure that the Commission proposals will be 
well-targeted and cost-effictive.  

The Commission will: 

– 

– 

carry  out  an  extensive  and  in-depth  evaluation  (fitness  check)  of  the  vehicle  type-
approval framework. In 2013, it will adopt a proposal to enhance the type-approval 
framework  to  include  provisions  for  market  surveillance  in  areas  where  a  need 
has  been  identified,  in  order  to  ensure  vehicles  and  their  components  are  safe  and 
compliant  with  relevant  legal  requirements,  and  that  this  framework  effectively 
achieves the relevant policy objectives.  

within  its  impact  assessment  system,  carry  out  a  rigorous  competitiveness 
proofing  exercise  for  relevant  major  future  initiatives,  including  those  with  a 
significant impact on the automotive industry. The competitiveness proofing will 
consider the economic situation and what impact a new initiative is likely to have on 
the  industry's  competitive  position,  especially  on  global  markets.  The  future  Free 
Trade  Agreements,  safety  and  emissions  and  other  initiatives  having  a  significant 
impact  on  vehicles  will  be  subject  to  competitiveness  proofing  -  in  line  with  the 
operational  guidance  for  assessing  impacts  on  sectoral  competitiveness  within  the 
Commission's  impact  assessment  system25,  which  also  takes  into  account  the 
broader,  overall  societal  and  economic  impacts.  These  principles  have  been  very 
recently reiterated in the updated Industrial Policy Communication. 

25 

Staff Working Paper SEC(2012)91 final, 27.01.2012 

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– 

explore the possibility and added value of carrying out a proportionate economic 
analysis for some implementing acts,  based on existing  vehicle legislation, such 
as  the  proposals  on  the  revision  of  evaporative  emissions  requirements  for  Euro  6 
and  anti-tampering  measures  for  L-category  vehicles  (powered  2-  and  3-  wheelers 
and  quadricycles).  However,  if  these  acts  are  expected  to  have  significant  impacts 
they  will  be  accompanied  by  impact  assessments  in  line  with  the  Commission's 
Impact Assessment guidelines.  

4.3. 

Enhancing competitiveness on global markets 

The automotive industry is clearly global. Trade in automotive products is increasing steadily 
and  third  markets  are  becoming  ever  more  important  for  the  EU.  The  European  automotive 
industry has a very strong position in international trade and clearly benefits from the market 
opportunities on both mature and emerging markets, which partly offsets the difficult situation 
in  the  European  market.  The  current  situation,  cannot  however  be  taken  for  granted. 
International competition intensifies rapidly with new entrants and the constant evolution of 
technology.  At  the  same  time,  ensuring  an  open  global  market  place  remains  a  challenge  - 
especially  because  of  the  existing  and  new  non-tariff  barriers  (NTBs).  While  the  industry 
strives to keep its competitive edge, the role of public policy is to ensure a level playing field 
in  terms  of  market  access.  With  that  objective  in  mind,  the  CARS  21  Report  advocates  for 
action  via  trade  policy  in  the  broadest  sense,  including  market  access  and  regulatory 
harmonisation. 

Trade policy  

Thereis a need for trade and industrial policies to be closely coordinated.  

Concerning  the  various  trade  instruments,  Free  Trade  Agreements  (FTA)  are  considered  an 
important means to improve market access in third countries. The acceptance of international 
regulations under the 1958 UNECE Agreement26 is the best way to remove non-tariff barriers 
to  trade.  There  is  also  a  need  to  strengthen  bilateral  regulatory  cooperation  with  third 
countries, such as those which are not Contracting Parties to this agreement, with a view to 
eliminating non-tariff barriers in the automotive sector. 

The Commission will: 

– 

– 

26 

take  full  account  of  the  importance  of  maintaining  a  strong  and  competitive 
automotive  manufacturing  base  in  Europe  when  conducting  its  trade  policy,  using 
both multilateral and bilateral tools. Both should be used to tackle the key issues of 
removing  tariff  and  non-tariff  barriers.  FTAs  should  aim  at  full  tariff 
dismantling and removal of Non-Tariff Barriers. The overall impacts of each trade 
negotiation will be assessed in a thorough and comprehensive way.  

assess  the  impacts  of  trade  agreements  as  well  as  their  cumulative  impact  on  the 
competitiveness of this industry by launching a study into already concluded  FTAs 
and  those  likely  to  be  concluded  in  the  near  future.  The  study  will  be  launched 
shortly  by  the  Commission  and  concluded  by  the  end  of  2013.  The  results  will  be 
discussed with the relevant stakeholders. 

The  1958  Agreement  of  the  United  Nations  Economic  Commission  for  Europe  (UNECE)  on 
international technical harmonisation in the motor vehicle sector 

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– 

complement  multilateral  regulatory  cooperation  under  the  UNECE  framework  with 
bilateral regulatory cooperation in particular with key new players, but also with, 
for example, the United States - under the Transatlantic Economic Council - and with 
Japan. 

International harmonisation  

International harmonisation of vehicle regulations has been a priority for the Commission for 
many years. Agreeing common regulations with other major markets around the globe offers 
the  benefit  of  lower  compliance  costs,  generates  economies  of  scale  and  reduces  technical 
barriers  to  trade.  The  overall  objective  must  be  to  establish  the  principle  of  "tested  once, 
admitted  everywhere",  whilst  ensuring  the  promotion  and  maintenance  of  the  highest  safety 
and  environmental  standards.  The  final  CARS21  Report  concludes  that  the  most  effective 
instrument  for  international  regulatory  harmonisation  is  the  UNECE  1958  Agreement, 
provided it is modernised to accommodate the needs of emerging economies and to the extent 
that it enables the mutual recognition of international whole vehicle type approvals (IWVTA) 
starting  with  the  category  of  passenger  cars.  The  Commission  is  committed  to  carrying  out 
several actions in the coming years. 

The Commission will: 

– 

– 

promote  and  actively  support  further  international  harmonisation  of  vehicle 
regulations  along  the  lines  set  out  below.  The  reform  of  the  1958  UNECE 
Agreement  is  a  key  element  of  this  strategy  and  will  aim  to  make  adoption  and 
implementation  of  international  regulations  more  attractive  for  third  markets. 
Member States and stakeholders are invited to support this effort. The Commission 
will  steer  the  development  of  a  first  proposal  for  the  revised  1958  Agreement  in 
March 2013. 

contribute  to  the  development  of  a  first  proposal  for  a  new  Regulation27  on 
IWVTA  by  November  2013.  The  IWVTA  Regulation will substantially reduce the 
administrative  burden  related  to  the  introduction  of  the  same  vehicle  model  in 
countries which are Contracting Parties to the 1958 Agreement. 

In  parallel  to  the  work  on  the  1958  Agreement,  the  Commission  will  also  work  to  obtain 
concrete results under the 1998 Agreement28. With the recent political momentum created by 
the EU-US High Level Working Group on Jobs and Growth and the Los Cabos statement29 
acknowledging  the  potential  benefits  of  a  comprehensive  free  trade  agreement  between  the 
EU-US, there is more potential for keener engagement of the US and more successful work 
under  the  1998  UNECE  Agreement.  The  most  promising  areas  of  work  are  breakthrough 
technologies, notably  hydrogen and electric powertrains. The  Commission together with the 
US  agencies  has  taken  leadership  in  2011  in  the  framework  of  the  Transatlantic  Economic 
Council to launch the work on electric vehicles. Consequently, two informal working groups 
were set up, the first on regulatory requirements for safety and the second on environmental 
performance  of  electric  vehicles.  The  groups  quickly  attracted  interest  from  many  other 

27 

28 
29 

According  to  the  established  principles  of  the  58  Agreement,  Contracting  Parties  applying  the  most 
stringent version of the IWVTA Regulation will not have to accept type-approvals issued according to a 
less stringent version.  
In the framework of 1998 Agreement Global Technical Regulations are developed. 
MEMO/12/462, 19.06.2012 

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contracting parties and have grown into multilateral fora under the 1998 Agreement. Concrete 
results should be available in the next few years. 

The Commission will: 

– 

– 

steer  the  work  of  the  two  informal  working  groups  on  (1)  safety  and  (2) 
environmental performance of electric vehicles with a view to agreeing a Global 
Technical Regulation (GTR) on the safety of electric vehicles in 2014 and a common 
approach in terms of policy on environmental performance of electric vehicles. Both 
informal working groups were launched on the initiative of both the EU and the US 
but have already attracted a broad membership, including Japan, China and Canada. 
The agreement on a GTR on electric vehicle safety will be of key importance so as to 
ensure economies of scale for manufacturers and reassure consumers on the adequate 
level of safety of electric vehicles. 

promote,  based  on  input  from  stakeholders,  stronger  international  cooperation 
between  standardisers  to  achieve  common  or  compatible  standards  on  electric 
vehicle safety, infrastructure and interoperability. 

4.4. 

Anticipating adaptation and managing restructuring 

Economic  and  social  parameters  evolve  over  time,  changing  the  competitive  position  of 
production locations. Companies, workers and economies that are quickest to adapt to the new 
situation  are  the  ones  gaining  an  advantage  in  the  global  marketplace.  The  strengths  of  the 
European economy are based on knowledge and excellence. This means that Europe needs to 
invest in its human capital and adapt its production capacities to the new realities, including 
new  technologies  and  evolving  markets.  Public  intervention  should  be  targeted  to  help 
workers  and  companies  carry  out  this  adaptation,  safeguard  the  internal  market  and  a  level 
playing field and ensure that the negative social consequences of any restructuring are kept to 
a minimum. 

Human capital and skills  

The investment in human capital via skills development and training is absolutely essential in 
order to keep a manufacturing base in Europe. The availability of a skilled workforce is a key 
factor for growth and competitiveness of the automotive industry and it will be indispensable 
in order to build up leadership in break-through technologies. On the other hand, industry is 
already  faced  with  existing  qualified  labour  shortages  and  the  need  to  correctly  identify  the 
skills  needed  in  the  future.  Appropriate  qualifications  for  workers,  as  well  as  vocational 
training and life-long learning have to be ensured.  

Skill shortage is a critical issue. Quick actions with long-term goals are needed at the national 
level  to  fundamentally  modernise  education  and  training  systems  in  order  to  upgrade  the 
supply of skills, through, inter alia, new curricula, opening up education and training through 
ICTs  and  new  forms  of  partnership  with  employers.  At  the  European  level,  this  problem 
relates  not  only  to  the  automotive  sector  but  to  other  sectors  as  well.  The  Commission  will 
shortly outline a set of strategic priorities for addressing these issues in its communication on 
"Rethinking  Education:  Investing  in  skills  for  better  socio-economic  outcomes".  As  a 
horizontal  issue  it  is  also  tackled  within  Europe's  employment  policy,  notably  by  the  recent 
Employment  Package30.  In  addition,  the  following  sectoral  initiatives  will  be  of  key 

30 

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importance.  Given  the  changes  in  skill  needs  witnessed  in  the  EU  labour  market  a 
complementary  solution  to  the  shortages  could  be  also  to  attract  the  necessary  skills  from 
outside the Union. 

The Commission will: 

– 

– 

following the recently completed feasibility and added value assessments, support in 
2013  the  creation  of  a  European  Automotive  Skills  Council31,  which  will  bring 
together  existing  national  organisations  conducting  research  on  skills  development 
and  employment  in  the  automotive  sector.  The  Skills  Council  will  also  involve 
employers’  and  workers’  representatives  at  European  and  national  levels  and 
education  and  training  providers'  organisations.  The  Skills  Council  will  encourage 
peer  learning  based  on  the  exchange  of  information  and  good  practice  as  well  as 
providing  a  platform  for  dialogue.  It  will  start  by  analysing  trends  in  automotive 
employment  and  skills,  which  will  form  the  basis  of  recommendations  aimed  at 
policymakers, education, training providers and other stakeholders.  

encourage  the  use  of  European  Social  Fund  (ESF)  for  workers'  retraining  and 
re-skilling. Without prejudice to the decisions that will be taken in the Multi Annual 
Financial Framework on the ESF, Member States will be encouraged to make more 
use of the systemic projects addressing skills needs, skills matching and anticipation 
of change and propose life-long learning opportunities. 

Dealing with industrial adjustment  

While  on  the  one  hand,  the  automotive  industry  faces  the  problem  of  availability  of  a 
qualified workforce, on the other hand there is a need to deal with the social consequences of 
restructuring,  when  job  losses  are  unavoidable.  Some  restructuring  decisions  have  already 
taken place reflecting declining sales on the European market and more adjustments may be 
necessary.  It  is  of  the  utmost  importance  to  avoid  a  situation  in  which  plant  closures  or 
downsizing provoke a ripple effect throughout the regional economy because of redundancies. 
Companies have to observe the EU Directives on collective redundancies and information and 
consultation of workers as well as the good practice of anticipating change32. In this regard, 
good social dialogue at all levels (company, local, national and EU levels) is a key element in 
the anticipation and good management of restructuring processes. The restructuring process is 
mainly  the  responsibility  of  the  industry,  yet  there  is  a  complementary  role  for  the 
Commission, Member States and local authorities. 

The Commission adopted early 2012 a Green Paper on restructuring with the aim to identify 
successful practices and policies in the field of restructuring and adaptation to change33. 

The Commission has also proposed to continue the European Globalisation Adjustment Fund 
(EGF)  over  the  period  2014-2020,  improve  its  functioning  and  to  expand  its  scope,  in 
particular  to  new  categories  of  workers  (e.g.  temporary  workers).  Until  now,  the  EGF  has 

31 

32 

33 

Project  run  by  the  social  partners  and  supported  by  the  European  Commission  /  DG  Employment, 
Social Affairs and Equal Opportunities 
These good practices notably include the text of 2003 entitled "Orientations for reference in managing 
change and its social consequences" which, however, was not formally adopted by ETUC. 
COM(2012) 7 final 

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provided support in 16 cases in the automotive sectors and almost 21 000 automotive workers 
have been targeted by EGF assistance worth EUR 113 million. 

The Commission will: 

– 

– 

– 

– 

– 

continue  to  monitor/review  restructuring  activities  as  regards  to  their  strict 
compliance  with  EU  legislation,  in  particular  concerning  state  aid  and  internal 
market rules. 

identify good practice and promote an anticipative approach in restructuring in 
consultation  with representatives  of  the  automotive-intensive  regions,  employment 
authorities and the sector's stakeholders, including the social partners. 

re-launch  the  inter-service  task  force  to  study  and  follow  up  the  main  cases  of 
automotive  plant  closures  or  significant  downsizing.  The  task  force  has  been 
active and highly efficient in past cases in the automotive industry34. The task force 
would  streamline  the  use  of  the  relevant  EU  Funds  (by  providing  technical 
assistance,  reducing  waiting  time,  advising  on  the  most  effective  use  of  resources, 
monitoring and reporting). 

for the cases of plant closures and significant downsizing, invite the Member States 
to consider using the European Globalisation Adjustment Fund (EGF).  

encourage Member States to make use of labour flexibility schemes and their co-
financing by ESF in support of the suppliers who might need additional time to find 
new clients following a closure/downsizing of an automotive plant. 

5. 

MONITORING AND GOVERNANCE 

The  constructive  discussions  in  the  CARS  21  High  Level  Group  have  highlighted  the 
usefulness  and  the  need  to  continue  the  dialogue  among  major  stakeholders  (from  both  the 
private and the public sector, as well as from civil society) in this strategic industrial sector. In 
addition, the updated Industrial Policy Communication called for the creation of a Task Force 
for clean vehicles. 

The Commission proposes to launch the CARS 2020 process to monitor and take stock on a 
regular basis of the implementation of the CARS 21 recommendations and the Action Plan. 
This process would entail an informal annual high-level meeting, prepared by a Sherpa group. 
In  order  to  ensure  coherence  and  continuity,  the  composition  of  this  group  would  remain 
similar to the one of CARS 21, without prejudice to possible adaptations. 

Also,  dedicated  meetings  at  expert  level  could  be  set  up  on  an  ad-hoc  basis  with  a  view  to 
enhancing the knowledge base of the Commission and broaden stakeholder consultation.  

The Commission will: 

– 

34 

set  up  in  2013  a  high-level  process  called  CARS  2020,  in  order  to  monitor  the 
implementation of the CARS 21 recommendations, as well as the measures set out in 
this Action Plan.  

For example, the cases concerning VW Forest and MG Rover in West Midlands; 

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– 

organise ad–hoc expert meetings on economic and competitiveness issues for the 
automotive sector. 

It will be up to the new College to consider whether this process should be maintained in its 
proposed format, or whether adjustments or adaptations may be necessary.  

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