EU business and finance ministers have met in Brussels to work out ways to help the struggling European car industry hard hit by the credit crunch and a drop in consumer spending.
The EU’s Industry Commissioner Guenter Verheugen said the outlook is brutal and not all major European manufacturers can survive the recession. The meeting came as industry figures show that in 2008 new car sales, year on year, were down 62 percent in Ireland, 50 percent in Spain, Britain was down 21 percent, France almost 16 percent, Italy 13.3 percent and Germany 6.6 six and a half percent. For the entire region, car sales fell 7.8 percent last year. Added to the problem of weak consumer confidence is European car makers’ production over-capacity. The region’s governments are concerned because the crisis affects millions of workers. More cars are made in Europe than any other region of the world. The industry employs 2.3 million people and indirectly – including suppliers – accounts for 12 million jobs. At the meeting, it was agreed the European Union’s lending arm – the European Investment Bank – will do more to help provide financing to car makers. Other measures will be announced in March, including the possibility of drivers getting cash or tax breaks when they scrap their old car to buy a new one.