Brussels, 30/11/2004 (Agence Europe) - In its annual report on competitiveness published on 25 November, which focuses on the European car industry, the Commission underlined that labour costs posed serious problems to certain European car-makers currently trailing behind their US and Japanese competitors.
Although the Commission report highlights the stability of world exports from European manufacturers, as well as the promising situation for the future in terms of growth and profits, it does, however, underline the fact that certain actors will have to relocate more jobs to new Member States, particularly Hungary, Poland and the Czech Republic, where wages are lower, in an effort to increase their competitiveness. The Commission believes that enlargement of the EU to ten new Member States is bringing and will bring new opportunities for car manufacturers in high wage economies because they benefit from lower labour costs by restructuring and relocating much of their business activities. According to the Commission, this news should help the EU15 car sector remain competitive even if perspectives in terms of jobs are less promising than in the past.
The Commission illustrates three challenges for the European car industry: increasing productivity at work, which in the EU15 is 25% lower than that in the USA and 30% less than Japan's; reduce labour costs in the EU15, which is 10% higher than in Japan and close to that in the USA; continue to develop technologies making vehicles safer and cleaner in order to meet demand for these models. On this point in particular, the European car industry has a vital advantage in the context of its future international viability. The Commission underlines that the strength of the Japanese car industry draws from its innovative efforts on its powerful national market.