Only innovation can keep European car factories open

Athens - ECG confirmed Costantino Baldissara as president for the third time at its annual meeting in Athens at the end of last week.

di Alberto Quarati

Athens - A recovery in the automobile sector will only be confirmed if observers of this constantly changing marketplace say so. The companies that have been incorporated under ECG, the Association of European Vehicle Logistics, are just such a market observer. ECG confirmed Costantino Baldissara as president for the third time at its annual meeting in Athens at the end of last week. Baldissara is the sales and logistical director of the Grimaldi shipping company. Baldissara’s analysis points to a return to confidence in geographical areas that have long remained at the margins of the international economic scene.

Citing the IHS predictions that were presented at FCA Investor Day in Chicago, Baldissara pointed out that a strong increase in sales is expected in Europe, the Middle East and Africa - in the 2013-2018 period - in the segment in which the car manufacturers are battling it out the most, which is SUVs, but the other segments are also expected to increase: small cars (+13%), compact (+4%), medium and large sizes (+4.1%), and other segments too. This data implies that there will be a radical change in European production in the coming years. According to Justin Cox, the chief European production analyst at LMC Automotive, one of the crucial issues for Europe will be the major increase in productive capacity in North America, since all the major European automobile producers are opening new plants there. If BMW and Daimler alone were producing cars in the United States in 2012, and Volkswagen in Mexico, at the rate of about a million vehicles per year, in 2019 the productive capacity of European brands could reach two million per year, with the opening or full utilisation of plants - especially those in Mexico - by all the big German producers, Audi included. And Asian productive capacity - still considering only European brands - will be another two million vehicles through 2019.

“The factors that will allow Europe to maintain its production volumes,” Cox said, “will be determined by the decision of the automobile manufacturers to maintain the production of their new models here.” Basically, in Europe, even a massive industry like the car industry (7% of Europe’s GDP), one can see a path familiar to many other sectors, in which continuing production is only guaranteed by innovative processes. Proposals to standardize the length of car carriers at 20.75m throughout Europe remain a high priority on the ECG agenda - this will be achieved alongside the shipowners - the possibility of having at least a regulatory framework that is clear about the reduction of sulphur emissions from ships, since the first restrictions will take effect in 2015.