Europe’s carmakers struggling with rising costs

Written by By Misha Panovkar, CNN

Most manufacturers in Europe are “in a labor crunch” as the industry grapples with rising labor costs and costly regulations, according to the European Automobile Manufacturers’ Association (ACEA).

The 2018 European Automobile Manufacturers’ Association Annual Trends report shows a 10.8% increase in global vehicle sales in 2017, compared to 2016, with European sales increasing by 9.6%.

European car sales surge 9.6% in 2017

The report said vehicle sales were strong across Europe, with 85 new car models available to consumers. “European consumers are now in the era of V-Vehicle (digital cars),” the report says.

The European automotive sector has seen a massive contraction since the financial crisis, but sales have now returned to pre-crisis levels.

CEA President Stephen McGlennan said in a statement: “Between 2007 and 2011, total sales volume declined by almost 200,000 vehicles per year. In the last five years, European sales have increased by almost 2 million per year. Those figures have translated into 3.3 million new jobs. European consumers continue to spend billions of euros on new cars every year.”

Strikes, court battles, safety and e-mobility

ACEA also noted that “smog-free mobility is now available to people across Europe.” In the first half of 2018, in Germany, registrations of electric and hybrid cars rose by more than 50% compared to the same period last year.

According to ACEA, sales of electric cars in the European Union peaked in December 2017 with 70,000 registrations, with a growing number of countries introducing electrified models.

In particular, 15 countries have adopted mandatory sales quotas for electric vehicles, with quotas increased throughout the bloc from 2021.

China’s regulatory environment is also a “force to be reckoned with,” according to the report. Three French companies — Renault, Peugeot and GM — are currently involved in a court battle after Chinese carmaker Geely acquired a stake in the French carmaker, which is already merging with GM to create a new automotive giant.

Steve Nicholson, chairman of London’s Mayor’s Urban Mobility Task Force, told CNN earlier this year that “one of the most important things” is ensuring urban drivers will have access to affordable electric vehicles.

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