1. The economic situation of the automotive industry Ivan Hodac Secretary General Brno, 5 June 2009

2. I. Current economic situation (1) Vehicle Production Europe World* 2007:19.7 million 2007: 69 million 2008: 18.4 million (-7%) 2008: 63 million 4th quarter 2008: -26% 1st quarter 2009: -37%2009: 55 million**  Forecast Europe 2009:  Passenger cars: 11.9 million (-25%)  Commercial vehicles: 1.2 million (-50%) *Source: Global Insight ** ACEA remark: forecast very optimistic

3. I. Current economic situation (2) PC registrations EuropeCzech Republic  2008: 14.7 million (-8.0%)0.14 million (+8.4%)  Q4 2008: -20.0% +2.4%  Q1 2009: -17.2%-5.9%  April 2009: -12.2%+19.0% CV registrations EuropeCzech Republic  2008: 2.4 million (-8.9%) 0.07 million (-3.8%)  4th quarter 2008:-23.9%-30.0%  1st quarter 2009:-35.4%-40.1%  April 2009:-40.3%-69.9% NOTE: Vehicle production figures differ from registration figures because  part of the European production is exported outside the EU  registrations in the EU include vehicles imported from outside the EU

4. II. Industry demands to the EU in the economic crisis Safeguard level playing field  More coordination of support measures Framework conditions  Avoid unnecessary administrative burden  Respect better regulation Access to finance  Solve problem of access to finance for OEMs and suppliers Stimulate demand  More fleet renewal measures needed Social adjustment  Make use of European funds

5. III. National government support measures: examples (1) Germany  Fleet renewal scheme: € 2 500 for scrapping old car and buying one <1 year old  Tax exemption for cars >Euro4  € 500 million for R&D on alternative powertrains France  Fleet renewal scheme: € 1 000 for scrapping old car and buying new one; can be combined with CO2 bonus- malus system  € 6.5 bn state loans to manufacturers  € 2 bn re-financing facility for automotive financing companies  Fund for the modernisation of the supply chain

6. III. National government support measures: examples (2) Spain  €4 bn government support for the automotive sector (“Plan Integral del Automovile en Espana”)  €680 mil to be used for loans to manufacturers and suppliers in production facilities  €120 mil support for R&D investment and training  €10 mil for electric vehicles pilot programme  €950 mil investments in improving transport by road, rail and sea  About €650 mil financing facilities for automotive SMEs  New fleet renewal scheme: €2 000 for scrapping old car and buying new one or used car maximum 2 years old

7. Campaigns underway B S DK SK LT PL H F E I GR D NL A N FIN UK P IRL EST LV CH CZ SLO L CY M RO BG HR TR Discussions A: €1 500 > 13 years New car min Euro 4 €45 Mn 9 months 2009 D: €2 500 further tax rebate for Euro 5/6 cars > 9 years Min Euro 4, max 1 year €1.5 Bn 1 year 2009 RO: €1 000 > 10 years Max 60,000 vehicles 11 months 2009 P: €1000/1250 > 10 years, >15 years New car max 140 gCO2/km 1 year 2009, extension? I: €1 500 – 3 000 cars €2 500 – 6 500 LCVs > 9 years New car max 130-140 gCO2/km 11 months 2009 SK: €2 000 > 10 years €22.1 Mn 9 months 2009 UK: £2 000 > 10 years £300 Mn 10 months 2009-10 F: €1 000 + staggered tax rebate up to € 5 000 > 10 years New car max 160 gCO2/km (staggered) €220 Mn 1 year 2008 – 2009 L: €1500/1750 > 10 years New car max 150 gCO2/km 1 year 2009 NL: €750-1 000 cars €750-1 750 LCVs > 13 years (petrol) > 9 years (diesel) €65 Mn 2009 – 10 E: Plan 2000E: €2 000 Plan VIVE: interest free loan (€10 000 max) > 10 years, or 250,000 km car max 5 years, max 140 gCO2/km 1.5 years 2008 – 2010 III. Fleet renewal schemes in the EU

8. IV. Support measures at EU level (1) The EU and the Commission lack instruments and powers…  for financial support (small EU budget, use very restricted)  for other incentives, such as tax incentives … and could do more on regulation  Consider high cost of regulation on automotive industry  Respect for better regulation and use of impact assessments  Follow Competitiveness Council conclusions

9. IV. Support measures at EU level (2): 29 May Competitiveness Council Regulation  Simplify legislation, reduce administrative burden  Utmost caution with new legislative measures  Impact assessment and cost-effectiveness analysis, including non-regulation options for all new legislative and non-legislative proposals  Impact assessments to reflect economic situation  Compliance with new requirements should not cause excessive costs to businesses European funding  More effective use to be made of the instruments of the EIB and of the Structural Funds

10. IV. Support measures at EU level (3): Finance and demand European Investment Bank: Clean Transport Facility  Loans for investment in fuel-efficient and clean technologies  About € 7 bn will become available in 2009  Good start, but more funding will probably be needed Stimulate demand  Fleet renewal schemes in 12 countries (scrapping, tax measures)  help bridge downturn (production, employment)  Additional measures needed for commercial vehicles (public procurement, renewal of bus fleet, investment in infrastructure)

11. IV. Support measures at EU level (4): Social adjustment European Globalisation Adjustment Fund  for job search assistance  Adopt new rules quickly  Do not to establish additional criteria (bankruptcies, closures of production sites) European Social Fund  for training and retraining  significant resources, but lack of transparency and complex procedures Make use of the instruments available at European level

12. V. Conclusions The industry  faces the biggest downturn in recent history  remains viable in the long term  needs quick, short-term support for financing, stimulating demand and social adjustment What the EU and Member States can do  Framework conditions: Scrutinise new and existing regulation regarding better regulation, avoiding unnecessary administrative burden  Roadmap of envisaged legislative and non-legislative initiatives  Access to finance: increase EIB funding  Demand stimulus: Fleet renewal schemes  Use European Globalisation Adjustment and Social Fund

13. Backup I: Fleet renewal schemes CountryIncentiveVehicle ageDuration Austria€ 1,500> 13 years01.04.2009- 31.12.2009 France€ 1,000> 10 years04.12.2008- 31.12.2009 Germany€ 2,500> 9 years14.01.2009- 31.12.2009 Italy€ 1,500-5,000 (cars) € 2,500-6,500 (LCVs) > 9 years07.02.2009- 31.12.2009 (registration until 31.03.2010) Portugal€ 1,000 (petrol) € 1,250 (diesel) > 10 years > 15 years 01.01.2009- 31.12.2009 Romania€ 900 approx.> 10 years01.02.2009- 31.12.2009 SpainInterest-free loan up to € 10,000 (Plan VIVE) € 2,000 (Plan 2000E) > 10 years or > 250,000 km > 10 years (purchase new) > 12 years (purchase used) 01.12.2008- 01.10.2010 18.05.2009 CountryIncentiveVehicle ageDuration Luxembourg€ 1,500-1,750> 10 years22.01.2009 – 01.10.2010 Cyprus€ 675 - 1,700> 15 yearsOngoing Slovakia€1,000-1,500 € 2,000 > 10 years 09.03.2009 - 25.03.2009 06.04.2009- 31.12.2009 The Netherlands € 750 – 1,000 € 1,000- 1,750 > 13 years > 9 years 2009-2010 Exact date TBD

14. Backup II: Vehicle production Czech Republic and Skoda Vehicle Production Czech RepublicSkoda 2007: 0.94 million2007: 0.62 million 2008: 0.95 million (+0.9%)2008: 0.60 million (-3.1%) Q4 2008: 0.20 million (-22.5%)Q4 2008: 0.11 million (-39.0%) Q1 2009: 0.21 million (-23.0%)Q1 2009: 0.10 million (-45.5%)