Pricing in the Automotive Industry

Abstract

The automotive industry is one of the most important industries in the Europe Union. This industry sector provides direct and indirect jobs to 13.8 million Europeans, representing 6.1 percent of the total EU employment. 2.6 million people work in direct manufacturing of motor vehicles, representing 8.5 percent of EU employment in manufacturing. 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 harmonization and provides funding for research and development (R&D). 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 information and communications technology (ICT), repair and mobility services. Around 13.8 million people work in the EU automotive sector. Manufacturing (direct and indirect) accounts for 3.5 million jobs, sales and maintenance for 4.5 million and transport for 5.1 million. The turnover generated by the automotive industry represents over 7 percent of EU GDP. Eighty percent 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 (European Commission 2020). Figure 11.1 displays the largest car makers in the industry in Europe. The Volkswagen Group is the largest maker, followed by the PSA and Renault groups.