Nothing unites Europe more than its cars. Widely credited as the birthplace of the motor car, over the decades Europe has embraced the automobile not only as a means for economic growth and transport but for leisure and fun too.
The road traveled by the car industry in the European Union (EU) may not always have been smooth in the latter part of the last century but, as other heavy industries have fallen victim to competition from Asia and the U.S., car production is one of the region's "most enduring industrial activities," according to the European Automobile Manufacturers' Association (ACEA).
The latest figures from the ACEA published on Friday showed that new passenger car registrations in Europe marked their 31st consecutive month of growth in March, showing that car manufacturing and consumption is one of European Union's most robust and resilient industries.
In March 2016, new car registrations in the EU increased 6 percent compared to March 2015, reaching more than 1.7 million units. In volume terms, this result is close to March 2007 levels, "just before the economic crisis hit the automotive industry," the ACEA noted.
Giving Europe a rare opportunity to gloat, among the major markets, Italy saw a 17.4 percent increase year-on-year, France a 7.5 percent rise and the U.K. a 5.3 percent rise. Car registrations dropped very slightly in Spain and Germany from the same month last year but the ACEA noted that with Easter falling in March this year, the number of sales days had been reduced. Meanwhile, "emerging market" economies such as Latvia and Lithuania saw whopping rises of 25.5 percent and 28.8 percent, respectively and Cyprus saw the largest increases in the EU, with registrations up 37.1 percent.
But while the numbers add up, Europe's car industry is nonetheless a hostage to the economic and political fortunes of the region.
Of course, car production in Europe is nothing new with the industry being one of the region's oldest sources of exports and employment.
The ACEA calculates that 21 percent of all cars in the world are made in the EU and that 12.1 million people in the region (5.6 percent of the EU work force) work either directly or indirectly in the EU's automotive sector producing 17.2 million cars, vans, trucks and buses a year.
The latest available figures from the ACEA show that in 2014, sales of new motor vehicles were 14.4 million in the EU, with European automobile trade experiencing what the body called "a healthy trade surplus of 95.1 billion euros ($106.9 billion)."
But an example of the political headwinds the EU's car industry can sometimes run up against was seen in September last year.
VW, one of the most venerated names in carmaking, was hit by the emissions scandal last year that rocked the company's global reputation and credibility. But after a series of top-level changes and reorganization, the company appears to have weathered the storm. with VW Group sales (which includes the Volkswagen, Audi, Skoda and SEAT brands) in the EU up 8 percent in February from the same month in the previous year.
Likewise, France and Spain have strong car making identities with Peugeot Citroen, Renault and SEAT (despite being a subsidiary of Germany's VW Group) being household names and a key part of the those countries' economic identities.
Take SEAT, for example, a flourishing car company whose history reflects much of Europe's 20th century political and economic upheavals. However, it also reflects the ability for its member states to cooperate in industry and for its industry to survive, adapt and flourish despite the euro zone's financial crisis which, for Spain, caused the partial collapse of its banking sector in 2012.
SEAT was founded in 1950 as a state-owned industrial holding company designed to motorize Spain – a country reeling from Civil War in the 1930s and World War II until 1945 - which lagged behind others with only 3.1 cars per every 1,000 inhabitants at that time.
As such, the "Sociedad Española de Automóviles de Turismo" (the 'Spanish touring Car Company') or S.E.A.T., for short, was born and a partnership with Italy's FIAT - then a more established and experienced company - was signed giving birth to a fruitful partnership that lasted several decades until the 1980s when the relationship began to unravel.
Finally in 1990, having gradually increased its share in the company in recent years, Germany's VW Group increased the amount of shares that it owned in SEAT to 99.99 percent.
Thanks to its foreign ownership, SEAT has solid reasons to be optimistic about the future. Fast forward to 2016 and SEAT has returned to profit after a rocky patch during the crisis years.
"In the last three years, sales have accumulated 25 percent growth, almost 80,000 vehicles more than in 2012," the company told CNBC, and in 2015, sales exceeded the 400,000 vehicle barrier, a result which it said was the result of a sales recovery in Spain and Italy, the fifth consecutive year of growth in Germany, SEAT's main market, and its best-ever sales result in Switzerland, Denmark and the Czech Republic.
The firm's importance to Spain goes beyond its direct contribution in terms of jobs, with SEAT telling CNBC that the company "is one of the Spanish industry main pillars and the main company in the automotive sector."
The company is a crucial employer in Spain and beyond with SEAT Group employing 14,000 people worldwide, with many employed in Spain, particularly at its three production centers in Barcelona, El Prat de Llobregat and Martorell.
SEAT represents around 1 percent of Spanish gross domestic product (GDP), the company said, adding that "many small and medium companies depend on SEAT's production which, directly or indirectly, employs around 70,000 people."
So with car sales booming for manufacturers such as SEAT, what could go wrong? For a start, Europe's recovery – or more specifically, the euro zone's, is not so established that industry experts forecast a smooth ride ahead.
Euro zone countries are seeing growth and employment rates slowly improve but the wider economy is still operating in a low-inflation environment with consumers still cautious about making big-ticket purchases.
SEAT told CNBC that while the automotive sector was "clearly recovering" in Europe, there was no room for complacency, saying it carefully monitors the "economic situation in Europe" although it trusted that the recovery would "remain stable."
"SEAT needs to concentrate its efforts on those markets where it is already present and provide a large contribution margin, and where it still has major growth potential. This means concentration in Europe."
Analysts agree that Europe is not out of the woods yet and while the car industry is one of the more robust sectors, it faces pressures from other areas: Regulation, uncertainty over investment and profitability, global competition and uncertainty over the region's outlook.
For example, European manufacturers have had to comply with EU regulations aimed at reducing greenhouse gases and the latest regulation requires that new cars registered in the EU do not emit more than an average of 130 grams of CO2 per kilometer by 2015. Showing EU car manufacturers could be ahead of the game, the average emissions level of a new car sold in 2014 was 123.4 g CO2/km.
The ACEA states that Europe's cars are now the "cleanest" in the world with the average car engine emitting 28 times less carbon monoxide than 20 years ago. It adds that the average new car today has become more fuel efficient, consuming 15 percent less fuel per 100km than 10 years ago.
While emissions regulation has helped to boost the EU's green credentials, it has become a source of contention for some of Europe's car manufacturers, or rather, their investors, according to one automotive equity research analyst.
George Galliers, from Evercore ISI's Global Automotive Research team, told CNBC that although the industry had proved robust, investors might argue that in terms of profitability and returns on capital, the automotive industry is one "facing a constant struggle" and "one not assisted by ever increasing emissions regulation."
"Clearly the industry is important for national and regional economies, trade and employment but they're all struggling to make money in Europe," he told CNBC.
"You're looking at an industry where operating margins are 1-3 percent in Europe at best," he said, "it's not a very profitable business and it's difficult to see how operating margins can reach circa 5 percent over the cycle...And that's not really that attractive prospect for investors."
Galliers said that "ever-increasing emissions regulation" added to car manufacturers' struggles when it came to profitability with the regulations requiring more technology to be added to the cars themselves at an extra cost.
"All manufacturers are fighting to find savings and cost efficiencies elsewhere and over the long-term, it's hard to see where that battle might end. And in the end, it's the investment community, the shareholders who often end up bearing that burden"
Other potential risks on the car industry's horizon include a referendum on EU membership being held in the U.K. in June. The referendum is casting a shadow over the country's remaining car factories because a vote to leave could lead U.K. car workers and the carmakers they work for, ranging from VW to BMW, Opel to Tata Motors, into uncharted territory.
Despite being German to the core, BMW states on its website that the U.K. is the "only country where BMW Group is represented by production plants for all three premium brands – MINI, BMW and Rolls-Royce Motor Cars."
In addition, it claims that it contributes £1.2 billion ($1.69 billion) per year directly to U.K. gross domestic product (GDP), supports over 46,000 jobs in the U.K. and that it has invested £1.75 billion within the country's manufacturing scene since 2000. Finally, it says that £2.4 billion's worth of car, engine and related exports come from the U.K. every year
A possible Brexit could put a spanner in the works, however. If the majority of the British public vote to leave the EU, the future of EU/UK trade, import and export tariffs, employment rights and production costs could all be subject to a period of uncertainty and change.
BMW does not relish the prospect of a referendum, telling CNBC that it would prefer the U.K. to remain a part of the EU.
"As a major employer, exporter and investor, the BMW Group is committed to the U.K. which is home to two of our brands, MINI and Rolls-Royce Motor Cars," the carmaker told CNBC.
"Our experience shows that the free movement of components, finished products and skilled workers within the EU is extremely beneficial to British-based business. We firmly believe Britain would be better off if it remained an active and influential member of the EU, shaping European regulations which will continue to impact the U.K. whatever the decision in June."
BMW refused to comment on what a Brexit could mean for its operations in the country.
As with most industries, the car manufacturing sector is now looking to stay one step ahead of changing consumer demands and technological advances as well as maintaining profitability, keeping in line with regulations and staying ahead of the competition.
While most analysts are cautiously optimistic about the future of the car production industry in Europe, some, like Anil Valsan, lead automotive analyst at EY, believe that Europe still has a few years to go before it recovers its pre-crisis sales volume.
Valsan told CNBC that while Europe was offering sufficient incentives to encourage innovation and research in technology, with countries like Germany, France and the U.K. encouraging the development of self-driving cars vehicles, manufacturers needed to position themselves for the future of car consumption.
"So far we've been talking about car sales but there's shift going on in what consumers really want and that is to do with access to mobility as a service," he told CNBC.
"Yes, in the future there will be manufacturers of vehicles in Europe but the question is who will be buying them? Will you and I as consumers want to buy a car that sits in the driveway 95 percent of the time or would we rather pay for access to mobility as a service with someone else owning it and running it more efficiently?"
Valsan said that many startups were already targeting new business models when it came to the consumer use of cars and that the major, traditional car manufacturers needed to decide how to position themselves in that changing model of consumption.
"They need to decide whether they want to own that relationship between the consumer and that access to mobility or to be just the manufacturers of those commoditized vehicles," Valsan said.
With many businesses innovating the way cars are accessed and used by society, the car industry needed to be ready to adapt for the future, he added.
"We're not going to see cars going away but we're going to see who owns them and how we interact with them changing. It's an open playing field now."
Writer: Holly Ellyatt
Design, Code and data visualization: Bryn Bache
Editor: Phill Tutt
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