beyond overcapacity: the new rules of the european
TRANSCRIPT
Beyond overcapacity: the new rules of the European automobile game
Tommaso Pardi (IDHES-CNRS / Co-Director GIS GERPISA)
Transnational strategies in the automotive industry workshop Centre for Innovation Management Research (CIMR) Birkbeck, University of London 6th February 2015
Introduction
• The past: the European automobile industry balanced development up to the 2000s à reflected specific political rules of the automobile competitive game
• The present: since the 2000s destabilisation of the European automobile industry (German hegemony + Eastern relocation) à new political rules of the automobile competitive game
• The focus: the integration in the EU of Central European Countries (CEE) and their “missing markets” for new cars: • Why the expected markets for new cars in CEE have failed to emerge?
• Why the main stakeholders of the European automobile industry (in particular in France and Italy) have not even tried to protect those markets against massive imports of second hand cars?
• Is there a new balance emerging, and how does it look like?
The historical balance (up to 2000)… is destabilised
33% 36%
33% 32% 35% 39% 47% 48% 27%
23%
24% 23%
20% 23%
16% 15%
13% 12%
13% 11%
10% 5%
5% 3%
8% 9%
8%
9% 7% 7%
4% 4%
9% 9%
9%
11% 11%
12%
11% 13%
10% 11%
12% 15%
17% 15%
16% 15%
0
2
4
6
8
10
12
14
16
1980 1985 1990 1995 2000 2005 2010 2013
Mill
ions
Spain
UK
Belgium
Italy
France
Germany
Passenger cars national production (Western EU)
• The historical balance was based on the subordination of the European economic integration to the preservation of national industries and national champions
• à Old “rules” aimed at preserving this balance: • Indirect competition • The double exemption in
distribution • State aids and ad-hoc
fiscal policies • Comité des
Constructeurs du Marché Commun (CCMC)
Source: CCFA / OICA
First destabilising trend: German hegemony
• Fast growing market share of German carmakers (direct competition) à eviction of French and Italian carmakers from the premium segment + exports to China
• à New “rules” are build around the principle that « salvation is upmarket » à to preserve domestic production in high wages countries / to export to emerging markets / to introduce expensive green technology
Source: CCFA
• Massive relocations of production from France, Italy (to less extent from Belgium and Spain) to CEE after their 2004 integration in the EU
• New “rules” are built around the notions of competitiveness and overcapacity à political and economic support to FDI in CEE / A-B segment production cannot be profitable in high wages countries… unless…
33% 36%
33% 32% 32% 34% 37% 37% 27%
23% 24%
23% 18% 20%
13% 12% 13% 12%
13% 11%
9% 5%
4% 3%
8% 9%
8%
9% 6% 6%
4% 3%
9% 9%
9% 11%
10% 10%
9% 10%
10% 11%
12% 15%
15% 13%
13% 12%
9% 12%
21% 23%
0
2
4
6
8
10
12
14
16
1980 1985 1990 1995 2000 2005 2010 2013
Mill
ions
CEE
Spain
UK
Belgium
Italy
France
Germany
Second destabilising trend: Eastern relocation
Source: CCFA / OICA
Focus: The « missing markets » in CEE
* Poland, Hungary, Czech Republic, Slovakia, Romania and Slovenia Sources: CCFA
“Most of the specialists anticipate a regional demand of 2,4 million new cars for 2010. In the long term, and taking into account the population of these countries, the region has a potential of 4 millions new car sales per year. […] The region represents a strategic stake in the medium term where the die has not been cast yet.” (Boillot & Lepape 2004).
Tho
usan
d
0
500
1000
1500
2000
2500
3000
3500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
CEE* Passenger cars production
CEE* Passenger cars domestic sales
Focus: The « missing markets » in CEE
* Poland, Hungary, Czech Republic, Slovakia, Romania and Slovenia Sources: CCFA
“Most of the specialists anticipate a regional demand of 2,4 million new cars for 2010. In the long term, and taking into account the population of these countries, the region has a potential of 4 millions new car sales per year. […] The region represents a strategic stake in the medium term where the die has not been cast yet.” (Boillot & Lepape 2004).
Tho
usan
d
0
500
1000
1500
2000
2500
3000
3500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
CEE* Passenger cars production CEE Passenger cars forecsted sales CEE* Passenger cars domestic sales
0
50
100
150
200
250
300
350
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Poland real GDP per capita
Poland new cars per capita
Poland
EU Entry
Sources: World Bank / CCFA / OICA
Base 100 in 2000
0
50
100
150
200
250
300
350
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Poland real GDP per capita
Poland new cars per capita
0
100
200
300
400
500
600
700
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Romania real GDP per capita
Romania new cars per capita
Poland Romania
EU Entry
EU Entry
Sources: World Bank / CCFA / OICA
Base 100 in 2000
0
50
100
150
200
250
300
350
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Poland real GDP per capita
Poland new cars per capita
0
100
200
300
400
500
600
700
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Romania real GDP per capita
Romania new cars per capita
0
100
200
300
400
500
600
700
800
900
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Russia real GDP per capita
Russia new cars per capita
Poland Romania
Russia
EU Entry
EU Entry
Sources: World Bank / CCFA / OICA
Base 100 in 2000
0
50
100
150
200
250
300
350
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Poland real GDP per capita
Poland new cars per capita
0
100
200
300
400
500
600
700
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Romania real GDP per capita
Romania new cars per capita
0
100
200
300
400
500
600
700
800
900
2000
20
01
2002
20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
Russia real GDP per capita
Russia new cars per capita
Poland Romania
Russia
EU Entry
EU Entry
2013 Real GDP per Capita
New cars sold per 1000 people
Poland 13648 $ 7,5
Romania 9499 $ 2,9
Russsia 14611 $ 18,1 Sources: World Bank / CCFA / OICA
Base 100 in 2000
Poland T
hous
and
0
200
400
600
800
1 000
1 200
1 400
1 600
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Annual increase of Passenger cars on the road
Sales of new cars
Imported second hand cars
Source: Polish Automotive Industry Association
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
0%
10%
20%
30%
40%
50%
60%
70%
80%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Passenger cars fleet
< 5 years (all cars %)
> 10 years (all cars %)
Poland
Article 37 of the EU Charter states that “a high level of environment protection and the improvement of its quality must be integrated in the EU politics according to the principle of sustainable development” The EU treaty also states that “the construction of the Common Market is based both on the development of competition policy and the reinforcement of environmental protection”
Polish passenger cars fleet
12% 12% 12% 12% 11% 11% 10%
25% 22% 20% 19% 17% 12% 12%
26% 27% 28% 28%
28% 32% 29%
34% 35% 35% 35% 36% 37% 39%
4% 5% 6% 7% 8% 9% 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012
>31 years
16-30 years
11-15 years
6-10 years
< 6 years
Source: Polish Automotive Industry Association
• Before 2004: ban on imports of second-hand cars not compliant with Euro II standards and 22% VAT
• January 2004: introduction of an excise duty on the imports of second-hand cars (up to 65%)
• September 2006: the General Advocate of the EU tribunal states that the excise duty discriminates customers
• December 2006: reduction of the excise duty by the Polish government
• January 2007: the ECJ rules against the excise duty with retroactive effect
• February 2007: withdrawal of the ecological tax bill by the Polish government
• 2009-2011:the impact of the crisis pushes the Polish lobby of foreign carmakers and suppliers to demand from the government new measures to develop domestic sales (« Poles deserve newer cars! »)
Poland: some attempts to resist, systematically neutralised by Brussels
Romania: the failed alternative
0
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900
2000
2001
2002
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2004
2005
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2008
2009
2010
2011
2012
2013
Poland Passenger cars production
Poland Passengers cars domestic sales
Romania Passenger cars production
Romania Passengers cars domestic sales
POLAND EU ENTRY
ROMANIA EU ENTRY
Source: CCFA / OICA
• The alliance between Dacia-Renault and the Romanian State • The launch in 2004 of a 5 000 € family car (the Logan) – around 40% of
the market
• Registration tax in 2004 (declared in infringement of the article 90 of the EC treaty by the EU in 2004 and 2006)
• Pollution tax in 2010 (declared illegal by the ECJ in 2011)
à A failed attempt to defend an alternative “fordist” path
Romania: the failed alternative
The elephant in the EU « Cars21 »’s room
• The issue of second-hand cars imports in the CEE is nonexistent at the EU level
• The 2012 final report of “Cars21” (DG enterprise) 1. Consensus on “overcapacity” 2. Key targets: reduction of CO2 emissions and improvement of road safety 3. Renault, PSA and Fiat participate to the consensus / trade unions and
environmental NGOs too
• Why? • The new rules consolidate the German (Northern) hegemony and the southern
Europe restructuring: • Exports of second hand cars are mainly from Germany (>50%) • The new car sales left in the CEE are dominated by VW (30%) • ACEA is not effective to raise such an issue and Fiat, Renault and PSA see
relocation as an opportunity to reduce capacities in high wages countries, to transform their employment relationships and maximize short-term profitability according to the upmarket strategy…