Transformation and Choices of European Automobile Industry Post-Global Financial Crisis

The financial crisis is finished for the banks in most of European countries. But it continues by the financial crisis of some States and by the economic crisis that probably only start. Such is the context in which auto industry has evolved in Europe since two years. The effects of the crisis cannot be dissociated from the effects of the actions that were immediately taken to limit the consequences of the crisis. Concerning the market, two essential decisions were made. The banks of the manufacturers, financing the automobile credit in particular, received loans enabling them to continue their activities, as well as the investment and deposit banks. "Scrappage premiums", supplemented or not by premiums for the purchase of less polluting vehicles, were granted to individual buyers by the countries that were in the same time the largest markets and the largest automobile producers. Concerning work, the annual full number of payable hours in temporary layoff with the State contribution was increased. The maintaining of the plants had these public additional financing as counterparts. Concerning the investments, the manufacturers obtained also loans. The States and the European Union however required that the capitals obtained by these loans be dedicated in preference to develop cleaner vehicles. Thanks to the purchase premiums and thanks to the limited number of countries being converted to “the new economy”, the European market resisted better and dropped less than the North-American market. The crises created opportunities for the manufacturers and the equipment suppliers who were able to resist: to increase competitiveness, to take-over companies in difficulty or to tie alliances, to develop its activities in the most promising markets, to prepare the launching of new products corresponding with the new demand structure and with the requirements of drastic pollution reduction. Perhaps the Crisis of 2008 will appear in a few years as an episode that accelerated the advent of a Second Automobile Revolution. The electric vehicle is not indeed only a new motorization. It allows a new automobile architecture, increasing the possible uses and styles of cars and simplifying considerably the design, the production and the distribution of the vehicles. The geography, the economy and the sociology of world auto industry simply will not evolve according to the development of new markets and new producing countries, but certainly and more strongly according to the new types of vehicles which the irresistible rise of the oil price, and the will of some great emerging countries, not only to create their own auto industry, but also to change the terms of competition by new automobile types. Whereas the crisis is not yet overcome, a hard battle is starting.