How EU policy affects the European Automotive Industry Essay

How EU policy affects the European Automotive Industry - Essay ExampleHowever, during the last five years, there has been a retardation in economic output across the EU, and, while the forecasts are positive, modest growth of 2.0%-2.3% is expected in 2004. Weak growth has led to reduced consumer and business confidence. Industrial production has decreased, including the production of durable consumer goods. Levels of private consumption have fluctuated during early 2003, following modest growth in the previous two years. This is partially due to poor labor market place conditions, with EU unemployment rising during 2003. Economic indicators are weak in some major EU economies such as Germany, France, Italy and Spain. Only the United Kingdom (UK) has managed to resist these trends (Trends and drivers). This has greatly affected the car industry, given the cars status as the ultimate consumer and fashion item, as well as the importance of engineering and design in the manufacturing process. Average profit margins have declined from around 10% in the 1960s to less than 5% today, and some volume car makers are actually losing money (EMCC dossier). disdain increasing competition worldwide, European automotive has maintained a strong position in exports and spherical sales. The strong bond between Europes vehicle manufacturers and the sophisticated customer base in the monolithicst car market in the world constitutes a prominent competitive advantage, while the notable presence of European producers in emerging markets, such as China and the Russian Federation, offers a potential for future growth and shekels (info-crono-archivio). Furthermore, EU enlargement created new opportunities for the European automotive industry. The combination of expertise, affordable labor and the proximity to the large European markets has led to the emergence of a very dynamic cluster in the new member States - especially Poland, the Czech Republic, the Slovak Republic and Hunga ry (info-crono-archivio).Despite these advantages, many challenges remain the EU automotive industry lags behind the US and japan in terms of productivity. Labor productivity in the EU-15 is 25 per cent lower than in the US and 30 per cent lower than in Japan labor costs per hour worked in the EU-15 are comparable to those in the US, but more than ten per cent above those in Japan and almost three times as high as in Korea (data for 2001, converted using buying power parities). Annual working time in the automotive industry in EU-15 is more than 20 per cent shorter than in the US (in 2001) there are major technological challenges ahead, most prominently the burn cell (info-crono-archivio). Influences of EU policies European mandate is one of the main drivers of the European automotive industry. Emissions and recycling legislation have a strong impact both(prenominal) on vehicle technologies and construction (Trends and drivers). EC, industry and consumer concerns for environmenta l sustainability, road safety and mobility have led to a number of significant technological developments. These have both positive and negative effects on profitability. For example, a limited number of specialist high engine room suppliers might prosper while vehicle makers see their already narrow profit margins cut evening further. Such a development would make vehicle makers vulnerable to further consolidation and restrict