Recent restructuring trends and policies in the automotive sector - Background paper

The automotive sector is of immense importance in developed economies. Simply stated, a car is, after housing, the most expensive purchase that practically all consumers buy or aspire to buy. Automotive manufacturing accounts for just under 7% of all manufacturing in the European Union. Together with the extremely valuable supply chain, branch estimates claim that one third of all EU manufacturing relies on this sector. As cars are generally bought on credit, car manufacturing was one the sectors hit hardest and earliest in the current recession. This report is largely a descriptive account of European and Member State initiatives, which focuses on recent employment and restructuring events and – in particular – measures to deal with the reduced demand while maintaining employment levels. Throughout, it highlights measures recently taken at European level.