The effects of the economic crisis on the European car industry and its supply chain are the subject of a cross-party resolution adopted by the EP during this week's Strasbourg plenary. The car industry is a key sector of the European economy, which directly employs 12 million European workers or 6% of the employed population of Europe. MEPs are calling for measures to support job creation in the industry, and to encourage the development of green technologies.

The industry has been particularly badly hit by the economic crisis, and has seen a significant drop in demand during the last quarter of 2008 and the first of 2009. This has led to a consequent decrease in production which puts "inevitable pressure on employment and investment levels in the EU." The UK is facing significant problems in this industry, with the Society of Motor Manufacturers reporting that the number of new car registrations fell by 30.9% in January.

Support for job creation

The automotive industry is vital for the European economy because of its "multiplier effect for other sectors and industries", particularly for small and medium sized businesses. In the UK alone, more than 800,000 jobs are reliant on the car industry. The Commission is therefore called on "to ensure best use of European Funds available in support of jobs" to provide training and retraining schemes for workers. Financial support could be made available to the automotive industry through the European Investment Bank, and by ensuring simplified access to low-interest loans, especially for SMEs.

An end to protectionism

It is also important for the EU to "deepen the dialogue and on-going discussions" with its trading partners and third countries to ensure that there is a fair playing field for European manufacturers. If auto industry is to recover, then the global car market needs to refrain from adopting protectionist or discriminatory policies. The resolution specifically mentions the need to "secure a balanced and fair deal between the EU and South Korea before the conclusion of the Free Trade Agreement."

MEPs are also concerned with some of the short-term measures adopted at national level by Member States, which could ultimately result in a distortion of competition within the single market. They are calling on Member States to ensure that any future measures are "coherent, efficient and coordinated."

Use of environmentally-friendly technologies

The European car industry is the largest private investor in research and development in the EU, due to the high regulatory and market requirements in terms and safety and particularly the transition to low-emission transport. Continued investment in greener technology has been supported by the new package of renewable energies and climate change agreed on in December. Not only will this benefit our environment, but environmentally-friendly technologies also represent a significant potential for new job creation.

The use of green technologies should also be extended to fleet renewal and scrapping schemes. Here, the EP calls on the Commission to draw up guidelines and recommendations to reinvigorate the automotive leasing market and to monitor the internal market to ensure that there are no distortions.