EU Carmakers Rattle Sabers, Want Money, Accept Hyundai
The heads of the European automobile industry are assembling in London for their annual European Automobile Manufacturers’ Association meeting. While they were there, they dropped in with UK’s Prime Minister David Cameron to talk a little politics. Norbert Reithofer of BMW, Sergio Marchionne of Fiat, Carlos Ghosn of Renault, Nick Reilly of GM Europe and their leader Dieter Zetsche, president of the association and chief of Daimler, asked for assistance with fair free trade with major economies such as India and Japan, government support for the swift introduction of breakthrough technologies and less bureaucracy through lean regulations. All noble goals. But the BBC found a fly in the ointment:
“The European motor industry has called for non-European governments to scale back assistance for their own automotive industries.
But at the same time, they say they want more government support at home.”
“Government support for the swift introduction of breakthrough technologies” is a thinly veiled plea for government money to fund (allegedly) research into EVs. Zetsche told Cameron that Europe’s automakers invest over €30 billion into R&D each year. (His ACEA say it’s “over €26 billion, but who wants to quibble about a little change.) And what about a little government help?
“Fair free trade with major economies such as India and Japan,” is likewise easily breakable code. “The Indian market was effectively closed to European car makers due to high tariffs and excise duties,” the association’s Secretary General Ivan Hodac told the Wall Street Journal. The same day, BMW announced a GBP500 million ($812 million) investment into its Mini plant in Oxford. So it was a good time to ask for some reciprocity.
Complaining about trade barriers in Japan (where the custom duty on cars is zero) was a little mistimed, considering that the day before, Ghosn’s Nissan said it would invest GBP192 million in the U.K. to design, engineer and build the next version of the Qashqai.
China wasn’t mentioned. China charges 25 percent duty, but business with China doesn’t give European automakers reason to complain.
At the meeting, the General Assembly of the European Automobile Manufacturers’ Association did at least on good deed: They accepted Hyundai as a card-carrying member. To qualify for association membership, one must have production in Europe. Hyundai has plants in Slovakia and the Czech Republic. Hyundai tried for years to get accepted to the exclusive club, but were repeatedly rebuffed. Now finally, the association welcomed “Hyundai in our midst and are convinced the company will make a valuable contribution to the work of our association”, said Ivan Hodac.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Bertel in general European car makers don't get much state aid do they? In France they certainly get lot's of help, but that's more the exception than the rule. During the financial crisis how much help did the UK government give the British car producers? JLR pleaded for cash and were rebuffed several times. In contrast GM, Chrysler and car makers all over the world got massive tax payer support/ bailouts. Really if we want to show our anger at bailouts we should all buy a Range Rover :-)
How exactly are free trade agreements a noble goal?