Strategic contract for the automotive sector: what developments?

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The amendment to the strategic contract for the automotive industry was signed on 26 April 2021 by the Minister for the Economy – Mr. Bruno Le Maire, the Minister of Labour, Employment and Integration – Ms Elisabeth Borne, the Minister Delegate to the Minister of the Economy, Finance and Recovery, in charge of Industry – Ms Agnes Pannier-Runacher, the Minister Delegate to the Minister of Ecological Transition, in charge of Transport – Mr Jean-Philippe Djebbari and by Mr Luc Chatel, Chairman of the Strategic Committee of the sector and of the PFA.

Where it started

The Strategic Committee for the Automotive Sector is one of the 10 Strategic Committees decided by the National Industry Council (CNI) in February 2018.

A sector of excellence and a showcase for “made in France” industrial know-how, the automotive industry and services sector brings together 150,000 companies, employing 800,000 people across the country.

On 28 May 2018, the State and the Strategic Committee of the sector, chaired by Luc Chatel, signed the sector contract which defined for the period 2018 – 2022, the shared roadmap for a real transformation of the French automotive sector. It aims to activate one by one the levers of a fast, deep and sustainable transformation: energy, competitiveness, digital, environment and human capital.

This industry contract is based on 4 structuring projects:

  • Be a player in the energy and ecological transition
  • Create the ecosystem of the autonomous vehicle and experiment, on a large scale, to offer new mobility services
  • Anticipate the need for skills and jobs
  • Strengthen the competitiveness of the automotive industry

The implementation of this ambitious roadmap has strongly affected the players in the automotive sector from 2019, and more particularly the companies that supply diesel engines. In December 2019, at the Journée de la Filière, Bruno Le Maire announced a support plan for the automotive industry with €50 million, half of which is dedicated to supporting diversification.

The COVID-19 health crisis, as well as the first containment in March 2020, have increased the pressure on the companies in the sector, already committed to the energy transition.

Thus, on 26 May 2021, the President of the Republic announced a specific recovery plan for the particularly affected automotive industry. This automotive recovery plan has made it possible to support 25 structuring R&D projects in 2020 within the framework of the Automotive and Mobility Research Steering Committee (CORAM) and 303 industrial modernisation projects.

In 2020, the level of new vehicle sales in France fell by just over 25%. Production has fallen by 40% compared to 2019.

The signing of the rider to the industry contract comes at a particular time for the industry.

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While the current discussions on future European regulations (the Green Deal and the Euro 7 standard in particular) are leading to an acceleration of the energy transition in mobility, more and more countries and cities are announcing bans on the sale of or access to combustion engines, both diesel and petrol. Against this backdrop, more and more manufacturers have adapted their strategy and announced a drastic reduction or even a halt to the marketing of combustion engine vehicles by 2030 and 2040. All of this is taking place against a backdrop of tension in the supply chain for maritime transport, semiconductors, metals and certain plastics.

The acceleration of the transformation that the sector is facing is occurring halfway through the sector contract. The rider signed on 26 April adds new ambitious and structuring actions for the sector, so that, as Luc Chatel expresses it: “The scenario of decline is not a fatality. It illustrates the capacity of the sector to amplify its transformation, to innovate and to invest. A scenario of revival is possible, provided it is based on a real industrial strategy”.

Towards greener mobility

With regard to the energy and ecological transition, a particular effort will be made on :

  • The electrification of LCVs, the number of sales of which is expected to triple by 2022.
  • Accelerating the deployment of recharging stations to accompany the increase in sales of electric vehicles.
  • Carbon neutrality by 2050 at the latest for companies in the sector
  • The creation of a task force to support the conversion and upscaling of automotive services from a technological, skills and employment perspective.

For more competitiveness

The second focus provided for by the rider to the sector contract concerns the competitiveness of the sector. And more particularly:

  • The identification of structuring projects for the sector around batteries, hydrogen and power electronics in particular
  • The implementation of a monitoring of the application of the Code of Performance and Good Practices of the sector revised in 11/2020, by the mediation of companies

Skills needs in jobs

The third major issue specified and completed by the rider to the sector contract concerns the anticipation of the sector’s skills and employment needs. In particular, it provides for an update of the sector’s HR roadmap in the autumn of 2021, as well as the deployment of four new Trades and Qualifications Campuses, in addition to the five already planned.

CARA has been working for the past two years to support the industry’s players in this unprecedented transformation in the industry’s history. Because it is together that we will meet the challenges that lie ahead.

Projects never happen on their own.

I wanted to alert the government to the serious risks to the industrial fabric and to employment – direct consequences of the acceleration towards electrification that political decisions, particularly at European level, are drawing.

Faced with these risks, the scenario of decline is not inevitable. The amendment to the strategic sector contract, adopted on Monday, illustrates the will and capacity of the automotive sector to amplify its transformation, to innovate and to invest. A scenario of revival is possible, provided that it is based on a true industrial ambition. This is the meaning of the proposals that we are putting forward.

Luc Chatel, PFA president

For questions

Contact Hélène Fantinutti, Development axis director (CARA)