BorjaEsteban AN INTEGRATED INDUSTRIAL POLICY FOR THE GLOBALISATION ERA. Madrid, 21 October Institutional Relations Spain

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1 European Economic and Social Committee Consultative Commission on Industrial Change (CCMI) BorjaEsteban Institutional Relations Spain AN INTEGRATED INDUSTRIAL POLICY FOR THE GLOBALISATION ERA Madrid, 21 October

2 INTRODUCTION: The PSA PEUGEOT CITROËN Group in numbers: Sevelnord Vigo Poissy Rennes Madrid Mangualde Aulnay Mulhouse Sochaux Vesoul * Val di Sangro (Sevelsud) Kolin Trnava Kaluga Wuhan Porto Real Buenos Aires 2nd large car manufacturer in Europe Present in 160 countries Employees Turn over in 2010 of 56 1 billion ; billion in net profit 3 6 millions vehicles sold worldwide of which 40% outside Europe

444 Employees it means 8% from total Group s Employees (198.000).

3 INTRODUCTION: PSA in Spain All PSA s Group companies are placed in Spain: PSA Group companies employees in Spain by the end of 2010 (without Faurecia): Employees it means 8% from total Group s Employees ( ). Peugeot Citroën AutomóvilesEspaña, Peugeot España, AutomóvilesCitroën España, Banque PSA Finance, GEFCO, ATESA, Faurecia.

4 Figures 2010 Industrial brand PSA Group companies employees in Spain by the end of 2010 (without Faurecia): Employees it means 8% from total Group s Employees ( ). Peugeot Citroën Automóviles España(industrial company) Two plants, Vigoand Madrid. Production vehicles (Vigo ; Madrid ) kits (Vigo) It means 21 86% of total vehicles production in Spain ( ) and 14 5% of PSA s sales (3 6 Millions) Exclusive production vehicles for PSA splants in Spain; Vigo: Citroën C4 Picasso and C4 Grand Picasso, Madrid: Peugeot 207 CC. Shared with other Group s plants production vehicles; Vigo: Citroën Berlingo and Peugeot Partner, Madrid: Peugeot 207 Saloon and Break.

5 Figures 2010 Commercial brands Peugeot España Registrations, it means 9 08% of the market ( PV; 8 4% of the market LDV; 14 7% of the market) Automóviles Citroën España Registrations: ; leader brand with a market s share of 9 39%. Leader on LDV market since ( PV; 8 27% of the market LDV; 18 81% of the market)

The Group ambitions A step ahead (CO 2 ) : Nearly 800 000 vehicles

its combustion engines (new 3cylinder engine & Stop & Start) and

2015,targeted markets (China, Russia, Amlat ).

core of the Group strategy: Partnerships, Toyota, Mitsubishi, FORD,

6 The Group ambitions A step ahead (CO 2 ) : Nearly vehicles sold in 2010 with less or 120gr/km PSA is improving continuously its combustion engines (new 3cylinder engine & Stop & Start) and working on new technologies (electric, hybrid and rechargeable hybrid vehicles). Global player: objective of 50% of sales outside Europe by 2015,targeted markets (China, Russia, Amlat )... Responsible development (climate change, safety ) Issues at the core of the Group strategy: Partnerships, Toyota, Mitsubishi, FORD, BMW (Joint venture). premium product development (premium product development), Competitiveness of production in Europe, specifically in the small cars segments.

7 MARKET SITUATION EU Market decrease by -3% during 1rst 8 months 2011 Low margins Hesitant consumers / low consumer confidence High pressure on prices (discounting) Perspectives do not seem to be better as the prospect of growth marginal, if not negative, in the near and mid-term future. Spain: Same forecast with severed effects Market decrease by -20 5% during 1rst 8 months 2011

PSA PRIORITIES There s a need to reinforce the competitiveness of the automotive industry in a global

directly involved in sector s initiative CARS21[1](as member of the High Level Group together with the

8 PSA PRIORITIES There s a need to reinforce the competitiveness of the automotive industry in a global perspective and to have reliable and favorable framework conditions and continuous improvement of these at all levels. At present the EUindustrial policy contributes insufficiently to strengthening the competitiveness of automotive manufacturing. PSA Peugeot Citroën has high expectations concerning the new European industrial policy, and is therefore directly involved in sector s initiative CARS21[1](as member of the High Level Group together with the other institutional & economic, social and environmental stakeholders). [1]CARS21: A Competitive Automotive Regulatory System for the 21rst Century. Mission: The group shall develop a realistic vision for a competitive EU automobile industry and sustainable growth in 2020 and beyond.»

9 PSA PRIORITIES PSA Priorities for an EU competitive automotive framework Obtain recognition by EU institutions (Including Member States) of the importance of automotive industry[2], and an engagement towards the competitiveness of the sector/keep European manufacturing base Apply better/smart regulation principles to legislative roadmap: competitiveness impact, burden limitation, cost-effectiveness, cumulative effects of all pieces of legislation, consistency among policies, lead-times... Examples/test case: Energy taxation: Proposals based on carbon & energy content -Impacts on diesel price and therefore on competitiveness (75% diesel world market is European) & environment (rise in CO2 emissions/danger for CO2 objectives diesel 20% less diesel). Need of consistency with climate change policy. Other legislative proposals: Noise (cost-effectiveness, lead-time), Ecall(backwards compatibility, costeffectiveness- ) [2]Automotive industry: 3% EU GDP, 7% EU total manufacturing output, employs 12 million (2 direct; 10 indirect, and amounts 7% European manufacturing employment), 232billions in RDI investment (20% total EU manufacturing RD), important sources of fiscal revenues(8%), 5% EU manufacturing exports.

10 PSA PRIORITIES PSA Priorities for an EU competitive automotive framework Integrate the European policies with a direct impact on the competitiveness of the industry, namely Innovation(financial support + EV standardisation) and Trade(recognize as pillar industrial policy due to impact global competitiveness + ensure market access without penalising EU manufacturers reciprocity, balanced, consideration of economic & social impacts, including cumulative effects of agreements + Europe should define red lines for FTAsagreements ex : UE-India : 0x0 dismantling) Examples/test case: The preparation of the Horizon 2020 proposal (=FP8) and linked framework : PSA faces great challenges technological mutation by 2020; leadership in CO2 emissions; great investment in RDI -2bn year. Expectations : FP: Increase financial support (from 500m to 5bn) to reflect economic and social importance of industry and investment in RDI[3]; coverage of activities closer to the market (demonstration projects should be already included); simplification of procedures (shorten instruction to 6 months, reduce burden reporting), Funds (including Structural Funds) dedicated to training in new car technologies, EIB support at nowadays level (continuity actual support policy to automotive sector) State aids framework adaptation to RDI needs (recognition as societal challenge (jobs, mobility), intensity of aids, support of innovation projects closer to market) The EU-India FTA negotiations (currently Indian offers are not acceptable : not ready to significantly reduce tariffs on cars peaks for small vehicles-, exclude components, against recognition UNECE Rather no agreement than a bad agreement) [3] 25 billions invested annually in RDI by EU automotive industry (largest private investor in absolute terms).

11 BorjaEsteban Institutional Relations Spain THANK YOU Madrid, 21 October

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