The automotive industry is crucial for Europe’s prosperity. The sector provides jobs for 12 million people and accounts for 4% of the EU’s GDP. The EU is among the world’s biggest producers of motor vehicles and the sector represents the largest private investor in research and development (R&D). To strengthen the competitiveness of the EU automotive industry and preserve its global technological leadership, the European Commission supports global technological harmonisation and provides funding for R&D.
Why the automotive industry is so important
- Links to other sectors – the automotive industry has an important multiplier effect in the economy. It is important for upstream industries such as steel, chemicals, and textiles, as well as downstream industries such as ICT, repair, and mobility services;
- Employment – around 12 million people work in the EU automotive sector. Manufacturing accounts for 3 million jobs, sales and maintenance for 4.3 million, and transport for 4.8 million;
- Economy– the automotive sector accounts for 4% of European GDP. Motor vehicles account for almost €396 billion in tax contributions in just 15 EU countries.
- Growth – 80% of the growth in the sector is expected to occur outside the EU. The EU’s efforts should focus on concluding and enforcing preferential trade and investment agreements. These will make it easier for European companies to access third markets and continue benefiting from economies of scale.
- Environment – Europe’s cars, vans, trucks and buses are the cleanest, safest and quietest in the world. Europe leads the way in clean production, with decreasing quantities of water and energy used to manufacture a vehicle, and much less CO2 and waste produced in the process.
- Positive spill-over – The automobile industry has ripple effects throughout the economy, supporting a vast supply chain and generating an array of business services.Core industry – Vehicle manufacturing is a strategic industry in the EU, where 19.2 million cars, vans, trucks and buses are manufactured per year.
- Global positioning – The European auto industry is a global player, delivering quality ‘Made in Europe’ products around the world, and bringing in a €90 billion trade surplus.
- Spurring innovation – The auto industry is the largest private investor in R&D in Europe, with more than €50 billion invested annually. In 2016, about 8,000 patents were granted to the automotive sector by the EPO.
The auto sector – including car and component production – is a core sector of the Portuguese economy. It represents 4% of total GDP, is represented in 29 000 companies, is responsible for 124 000 direct jobs and a business volume of 23, 7 thousand millions of euros and 21,6 % of the total fiscal revenues in Portugal. The automobile sector is responsible for 11% of total exportations. Portuguese technical skills in this field, the highly competitive set up and running costs and our great logistic infrastructures have been a driving force in this sector.
In 2017, productions increased 23% and the number of vehicles produced hit 175 thousand, out of which 96% were exported. There are currently 4 major car-manufacturers in Portugal: Toyota/Salvador Caetano, PSA Peugeot/Citroën, Mitsubishi FUSO Trucks and Volkswagen AutoEuropa and the cluster was recently consolidated through the installation of Mobinov.
This strategic sector is of uttermost importance to Portuguese economy – fundamental for the future of the Portuguese economy due to its diversity, capacity of creating qualified jobs, dynamiting multiple sectors, contribute to make exports grow, and also for being an important incentive for innovation, development and knowledge in Portugal.
Naturally, the incorporation of technology and knowledge in this economic sector is highly linked to the higher education and research centers in Portugal, which creates a unique value chain that starts with knowledge and ends in qualified jobs and wealth, throughout the country’s regions.
Although the challenges linked to security, climate and energy are high for the automobile sector, the room for innovation and creativity is big – areas in which modern Portugal has a proven track record.
The automobile sector is therefore of high political priority and an area of strong public investment in Portugal. It’s a sector where private and public partnerships are frequent and fruitful.
Two public programs of interest are Interface and Indústria 4.0, importante public incentives to support innovation in this sector. On a European level, Europe 2030 program will be determinant for the automobile sector, in Portugal and in EU27.