CLEPA: Member News Flash on COVID-19

CLEPA: Member News Flash on COVID-19


State of the outbreak and reopening, Europe:

  • Of the 5 biggest European countries, the UK remains the only country with around 2,000 new cases on a daily basis, whereas the other 4 are stable around up to 300 new cases a day, according to the WHO.
  • As a sign of further return to normality, Italy, Spain, Portugal and Greece are loosening their quarantine requirements and opening for tourism as of 1 July at the latest, a vital sector of their economies.
  • UK on the other hand announced that from 8 June arrivals from abroad will have to self-isolate for 14 days, but with an exception for truck drivers.
  • Another big question in the coming months is how economies will respond to a slow unwinding of some of the government support measures such as short-term work. A recent study by the IFO Institute showed that in Germany alone 7.3 million employees were in short-time work in May, against 1.5 million at the peak of the financial crisis. Whereas the scheme in Germany runs for at least a year, France will slightly lower the government’s contribution to 85% of wages and the scheme in Spain and other countries may expire over summer.
State of the outbreak and reopening, globally:
  • By the 31st of May, Latin America and the Caribbean accounted for 40% of average global deaths, highlighting the human toll Covid-19 continues to make, while EU and US continue so far to successfully manage the balancing act between containing the virus and reopening the economy.
  • An important step towards recovery of the global automotive supply chain was taken this week in the Mexican state of Puebla, where automotive suppliers can now restart their operations to meet client demand from outside the state on a self-declaration basis. Audi and VW plants will remain closed, but will gradually re-open from 15 June, starting at around 15% of capacity.
Consumer sentiment:
  • McKinsey published Friday the result of its consumer survey in key markets in the period 20-24 May, finding a slight improvement of consumer sentiment in most markets compared to the survey held in the period of 30 April to 3 May.
  • Loss or fear of job loss is typically the main driver of consumer sentiment, and in most key markets a significant share of consumers (40-60%) still believe that their job feels less secure because of Covid-19.

  • A separate McKinsey survey among German consumers who before Covid-19 indicated to be interested to buy a new car, finds that currently 79% is now actively considering buying a car, up from 58% and 68% in early and mid-April, respectively.
  • In Italy vehicle purchasing intentions among interested consumers increased to 75% (up from 48%), in France they increased to 89% (up from 54%), but in UK they fell to 60% (down from 64%).


Industry intelligence:

  • Last week’s webinar with the European Investment Bank (EIB) on “Financing the automotive industry transformation” was very well attended. The presentation slides can be found here.
  • CLEPA and PWC have joined hands to work on an important survey to unearth the dynamics in the automotive value chain post Covid crisis. What will it mean for the layout of the sector? You can take part here until the 12th of June. Don’t miss this opportunity: the results from this survey will provide you with guidance on key structural trends impacting the sector. The online questionnaire takes about 15 minutes to fill out. Results will be shared with members in a special webinar held on 18 June.
  • Save the date! On 5 June, CLEPA will host a webinar with Frost & Sullivan on Growth Opportunities Across Automotive and Automotive Industry Verticals. Invitations have been sent, but let us know of your interest via if you have not received one yet.
  • On 10 June, a further webinar is scheduled with Deloitte and the automotive cluster ACStyria on how to survive the crisis. Invitations per outlook will follow.
  • Mid-June: the next CLEPA Pulse Check survey will be held in cooperation with McKinsey, with a webinar on the results planned for 30 June. Watch your inboxes!

Crisis coordination:  

  • The CLEPA Covid-19 Task Force of members has met once more to take stock of latest developments, coordinate activities and act as sounding board for the CLEPA team. The Covid-19 Task Force is open to all members who wish to take part and contribute.
  • The joint automotive Code of Business Conduct in view of the Covid-19 crisis can be consulted here, and is now also available in ItalianPolish and Portuguese.
  • CLEPA continues its active dialogue with EU policy makers, including the key European Commissioners and their services, as well as members of the European Parliament. CLEPA informs about the situation in the industry, gives feedback on the various support measures, and advises on the way forward to help ensure that the economic impact can be mitigated as much as possible.
  • Many of the CLEPA National Association members have been actively advocating the 25-point Action Plan for a Successful Restart often working closely with their automotive sector sister associations in the country as well.
  • CLEPA has issued another edition of the Future As We Move campaign, this time focussing on skills in the automotive sector. The importance of skills development to future-proof the sector cannot be underestimated and will play a role in exiting the crisis too. CLEPA is part of the EU-funded DRIVES project, a webinar of which was held last week.
  • The CLEPA COVID-19 website is regularly updated with latest news.
  • CLEPA continues to be active on social media via LinkedIn and Twitter. Follow our accounts: @CLEPA_eu@CLEPAsecgen.


New vehicle registrations:

  • Vehicle sales in Spain and Italy showed the first signs of a modest recovery in May, but remained significantly below levels from last year, at -49.6% and -72.7% respectively.
  • Wholesales of personal and commercial vehicles in China increased about 12% to 2.14 million units in May, according to the China Association of Automobile Manufacturers. The total number of deliveries to dealers in the first five months of 2020 now stands at 7.9 million units, 23% below the level recorded over the same period in 2019.
Latest company announcements and reports:
  • German media reported on Friday that the management of BMW is negotiating with the workers council to achieve savings and cut potentially 6,000 jobs. Considered options are to offer earlier retirement to people 2-3 years away from their retirement age and to provide young employees with the possibility to take a break to study with a right to return. Furthermore in consideration is to reduce the holiday allowance and give more holidays in return. The 800 apprentices would still get a contract.
  • Volkswagen announced on Friday that it will invest €2 billion in its EV business in China, increasing its stake in the Joint Venture JAC Volkswagen to 75% and taking a 26% stake in battery manufacturer Gotion. The announcement marks the first significant commitment by a global automaker to China since the outbreak of Covid-19.
  • Renault released that it aims to reduce fixed costs by more than €2 billion over three years, measures include a reduction of 4,600 positions in France and 10,000 in the rest of the world.
  • Reuters reported that ZF plans to reduce its workforce by up to 15,000 by 2025, of which half would be in Germany.
  • Automotive News reported that Honda is adding production days on June 27, 29 and 30 in the US and Canada that had previously been designated as days off for plant workers. The company commented: “Honda has seen a steady climb in customer traffic at our dealerships over the last few weeks. We are expecting a strong sales recovery this month and into the summer sales season.
  • Knorr-Bremse released their Q1 2020 results on Thursday declaring that a buoyant aftermarket business limited the decline in revenues to 7.3%, whereas EBITDA declined to 17.8%, down from 19% in the first three months of 2019.


European Commission, budget and recovery fund:

  • The European Commission proposed on Wednesday a €750 billion recovery instrument named Next Generation EU (previously known as the EU Recovery Fund), and a €1.1 trillion multi-annual budget (MFF).
  • Next Generation EU is aimed to be effective as of 1 January 2021, though the Commission has also proposed an increase of the existing budget by 11.5 billion to ensure some elements can be activated in September already.
  • Expect still a lot of partly public negotiations and amendments to the plans in areas of conditionality and distribution between loans and grants until an agreement may be reached in July at the earliest.
  • Though the automotive sector is not explicitly mentioned in the plans, there are first indications that member state governments may intend to use the additional EU funding for automotive related projects. Italy’s minister Roberto Gualtieri announced that the Italian government is working on a “major reform and investment plan” with specific plans for the tourism and automotive sectors. 
  • An overview of the proposal and elements that could be interesting for our sector, as well as an assessment of its political viability can be accessed via the slides below.
What are the EU plans for the automotive sector?

European Central Bank, additional monetary stimulus:

  • This week the attention will shift from the European Commission to the European Central Bank, which is likely to make further announcements on monetary support to the Eurozone economy.
  • The main focus on the June ECB meeting (this Thursday) will be the expected increase in the size of the Pandemic Emergency Purchase Programme (PEPP).
  • The ECB launched the €750 billion PEPP in March and already spent €210 billion and statements of governing council members, including President Lagarde, suggest the ECB will not hold back because of the ruling by Germany’s supreme court.
  • ING Chief Economist Carsten Brzeski commented on Thursday: “we expect the ECB to increase the PEPP by some €500 billion at next week’s meeting to extend the programme to mid-2021. The ECB could also decide to include so-called 'fallen angels' (companies recently downgraded from investment rating) into the programme, announce that the proceeds from PEPP will be reinvested and could take another look at the tiering system.
Automotive industry support, latest developments:
  • The leaders of Germany’s governing coalition will resume talks over a 80-100 billion euro package of measures to revitalise the economy today, after talks continued until 11 pm last night.
  • The Frankfurter Allgemeine Zeitung reported yesterday that a vehicle purchasing incentive scheme is one of the major points of difference between the governing CDU/CSU and SPD parties.
  • Reuters reported on Friday that Germany’s Ministry of Economics had proposed a 5 billion buyer bonus scheme in an effort to boost car sales, but resistance against a scheme that includes combustion engines remains significant.
  • Following last week’s summary, the full report on the French automotive recovery plan can be accessed here.


Overview of press statements


Public institutions: 


Consultancies and banks:  


Think tanks: