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EU to give more power to consumers

European Commission

The European Union have announced a proposal to give more powers to consumers to sue firms such as the Volkswagen Group after the diesel-emissions scandal showed the limits of consumer protection.

Wednesday’s proposal would allow some affected groups to launch collective action and consumer protection authorities higher sanctions for rule breakers.

“Consumer authorities will finally get teeth to punish the cheaters,” Europe’s Justice Commissioner, Vera Jourova, said to Automotive News. “It cannot be cheap to cheat.”

EU regulators say that, after VW was caught using software to cheat emissions test by U.S. authorities, they lacked the tools to ensure EU car owners received the same kind of compensation offered to US clients.

Jourova said only two national consumer protection authorities imposed fines on VW, amounting to 5.5 million euros.

“This is nothing in comparison to what Volkswagen paid in the United States,” she said.

The European Consumer Organisation (BEUC) said the move was long overdue but cautioned that judges and national authorities would still hold sway over what may be a laboriously lengthy process.

Business groups said the plan, which still need approval from national governments and the European Parliament, could lead to a proliferation of lawsuits, saying EU citizens already enjoy some of the world’s strongest consumer protection rules.

Defending the draft rules, Jourova said they would not allow US-style, profit-seeking class action suits. 

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Free trade deal announced

Japan and the European Union, EU have concluded negotiations on a giant free trade deal.

Shinzo Abe said Japan and the EU will join hands and build an economic zone based on free and fair rules.

The deal, which the EU has called its biggest ever, must be signed and ratified on both sides. The broad outlines of the deal were agreed to in July. Once completed, it will forge an economic zone of 600 million people worth 30 percent of global GDP.

Prime Minister Shinzo Abe and European Commission chief Jean-Claude Juncker said earlier that the agreement, which was four years in the making, had “strategic importance” beyond its economic value.

“It sends a clear signal to the world that the EU and Japan are committed to keeping the world economy working on the basis of free, open and fair markets with clear and transparent rules fully respecting and enhancing our values, fighting the temptation of protectionism,” the pair said in a statement released in Brussels.

Through the deal, the EU hopes to get better access to one of the world’s richest markets, while Japan hopes to jump-start an economy that has struggled to find solid growth for more than a decade.

This will include opening up the EU market to Japanese cars and auto parts.

The two sides were aiming to finalise the specifics in the hope of signing the deal next summer and putting it into effect in 2019.

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EU investigates possible auto cartel

Volkswagen will hold a supervisory board meeting labelled “extraordinary” by Reuters on Wednesday following allegations that major German car makers operated a cartel.

German magazine Der Spiegel first reported on Friday that Volkswagen, Daimler and BMW may have colluded to fix prices on components, including diesel emissions systems.

The European Commission announced on Saturday that antitrust regulators were investigating a possible cartel in the auto industry in Germany following a tip-off from a source.

The Commission will investigate whether Volkswagen, Audi, Porsche, Mercedes and BMW used auto industry committees to discuss pricing of components and technologies, and if these discussions could be defined as anti-competitive behaviour.

A Volkswagen spokesperson confirmed the planned board meeting on Wednesday to Reuters, but declined to provide further information.

The industry has been hit with fines totalling billions of dollars in both Europe and America in the past for parts-related cartels.

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France to ban petrol, diesel cars by 2040

Air pollution has become a major problem in Paris

France’s new ecology minister, Nicolas Hulot, has pledged to ban the sale of all petrol and diesel cars in the country by 2040.

Hulot made the announcement at a presentation on Thursday night, outlining how the European nation intents to fulfil its commitment to the Paris climate agreement and become carbon neutral by 2050.

Hulot said that he recognised the target would be a tall order for French car makers, but that they were developing technologies which “can fulfil that promise.”

As part of the plan, poorer households will receive a premium to assist in the purchase of clean alternative vehicles, The Independent reports.

Air pollution is a massive problem in French urban centres, particularly Paris. Within the EU, it experiences the fourth-highest rate of early deaths from nitrous oxide (NO2) pollution behind Italy, the UK and Germany.

The minister also said France will stop using coal to produce electricity by 2022, and the government will invest up to $6.3 billion to help boost energy efficiency.

“We want to demonstrate that fighting against climate change can lead to an improvement of French people’s daily lives,” he said. 

Several other countries have already announced their intention to ban combustion-powered cars – The Netherlands and Norway previously said they wanted to ban petrol and diesel vehicles by 2025, and Germany and India want to cease the sales by 2030.

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New customs agreement to build EU trade

The agreement means accredited companies will eventually be allowed faster clearance into NZ

A new Customs Cooperation Agreement between New Zealand and the EU was signed on Tuesday.

The agreement will “strengthen cooperation with the European Union in such areas as Customs procedures and supply chain security and risk management,” according to a statement released by the Minister of Customs, Tim Macindoe.

The general objective of the agreement is to “develop and intensify cooperation and mutual administrative assistance in customs matters with New Zealand,” and is intended to improve the legal framework and existing supply chain between the EU and New Zealand.

Similar agreements have been signed between the EU and the US, China, Japan, Korea, India, Canada, and Hong Kong.

“The Agreement also represents a necessary first step towards agreeing a mutually recognised secure trade scheme, which will ultimately allow accredited companies faster clearance of exports into the European Union and New Zealand,” said Macindoe.

The EU is New Zealand’s third-largest trading partner, and was the top imports provider to New Zealand last year, worth $11.7 billion. Vehicle imports totalled $1.9 billion in 2016, and the EU imported nearly 45,000 cars into the country.

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UK auto industry at record high

The UK automotive industry posted a record turnover of $136.6 billion, marking its seventh consecutive year of growth, according to figures released by the Society of Motor Manufacturers and Traders (SMMT)

Productivity, production output and vehicle sales increased. Light vehicle output grew 8.3 per cent to 2.54 million vehicles, and the report noted a rise in premium and luxury vehicles.

Exports also rose, with 78 per cent of vehicles produced were bound for foreign markets.

Car production in 2016 was at its highest level since 1999, but the SMMT warned in the report the industry shouldn’t get too comfortable with the status quo, and said “it is expected that the industry will change more in the next five years than in the past 50.”

New car registrations rose 2.3 per cent in 2016. Diesel registrations grew 0.6 per cent, and petrol increased 2.7 per cent. Alternatively fuelled vehicles had the largest growth, up 22.2 per cent to 88,919 vehicles registered, representing 3.3 per cent of the total market.  

Employment has grown 11.9 per cent to 109,890 employees, and the number of jobs dependent on the automotive sector in the UK remained stable at 814,000 people. Direct employment in automotive manufacturing jobs also remained stable at 169,000.

“Today’s results demonstrate how UK Automotive is delivering growth across the UK, boosting productivity and improving environmental performance. This has been driven by massive investment, in new models, plants, innovation and one of the world’s most skilled workforces,” said SMMT chief executive Mike Hawes.

“However, for UK auto manufacturing to continue to thrive, we need clarity on the future, post Brexit, to encourage ongoing investment and growth.”

The report follows fresh uncertainty about the future of the UK auto industry. As talks begin to withdraw Britain from the EU, where it trades freely with 27 other member states, auto industry figures have warned that without an interim deal, this export market, which accounts for 43 per cent of the UK’s vehicle production in 2016, could collapse.

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Brexit could cripple UK auto industry

Nissan’s manufacturing plant in the UK

Senior executives have warned that the British automotive industry could be permanently damaged if an interim deal isn’t met when Britain withdraws from the EU.

The industry, which employs over 800,000 people in the sector, is set to reach a record output in 2020 in its production of vehicles such as Jaguar Land Rover, Nissan and MINI.

“The greatest threat to that progress is Brexit,” Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) told Reuters.

“To leave in 2019 without a deal would put the industry in peril, defaulting to WTO tariffs and customs barriers would damage our industry permanently.”

The automotive sector has repeatedly warned lawmakers that tariffs and constrained access to its biggest export market following Britain’s withdrawal from the EU could threaten the future of huge car factories in the country.

British prime minister Theresa May has proposed a clean break from the single market of the EU, which maintains free trade across all member states, in favour of a special deal.

However, any delay at the border would be hugely damaging for manufacturing operations in England. Only 44 per cent of vehicle parts in the UK come from Britain.

“Put very simply the supply chain will start to seize up with obvious impacts on our ability to manufacture vehicles efficiently,” Honda Europe senior vice president Ian Howells told Reuters. Honda manufactures eight per cent of the 1.7 million cars produced in Britain last year.

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London, Paris to launch new emissions system

Paris Mayor Anne Hidalgo and London Mayor Sadiq Khan jointly announced yesterday that they are working together to creating a vehicle rating system which would score new cars based on real-world emissions and their impact on air quality.

Current schemes, such as the EU standards, only regulate some noxious emissions and require vehicles to meet laboratory condition standards, despite the fact that actual on-road emissions have been proven to exceed this limit by up to 15 times.

Recent scandals have destroyed public confidence in the current emissions legislation, and a study conducted by the German transport ministry in 2016 showed that some diesel cars that meet the highest EU environmental standards, rated Euro 6, actually release more nitrogen oxide and nitrogen dioxide than a modern heavy-duty truck.

The new scheme allocates each model of car with a score based on the air pollutants they release during real-world, on-road conditions, which will be available to the public through dedicated websites.

Paris and London have committed to launch this online data by the end of 2017.

 “For too long, some vehicle manufacturers have been able to hide behind inconsistent regulation and consumer uncertainty about the damage their cars are causing,” said Hidalgo at the meeting.

“This announcement is a wake-up call to car companies that they need to act now.”

 “My scheme will put an end to the smoke and mirrors that have been employed in official emissions tests. It will provide Londoners with an honest, accurate and independent evaluation of the emissions of most new cars and vans on our roads and on the showroom forecourt,” said Khan.

“By having ‘on the road’ testing, I believe we will help Londoners make an informed choice and incentivise manufacturers to build cleaner vehicles sooner.”

“The toxicity of the air in London and many other big cities is an outrage, and schemes of the type we are introducing in London and Paris have the potential to make a massive difference to the quality of the air we all breathe.”

Several other cities, including Seoul, Madrid, Mexico City, Milan, Moscow, Oslo and Tokyo have all committed to work to develop a relevant local scoring system and make it available to the public.

“Tackling vehicle emissions is a priority if you are to tackle air pollution in your city,” said Seoul mayor Wonsoon Park. “As cities made significant contributions toward the adoption of the Paris Agreement, the concerted effort shown by cities today to tackle air pollution will make air cleaner for our citizens to breathe.”

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No defeat devices found in Fiat probe

Tests carried out on Euro-5 diesel vehicles sold in Italy have found to defeat devices, according to the Italian transport ministry. A final report on the investigation was published yesterday.

The ministry investigated 18 total diesel vehicles from various manufacturers in the wake of the Volkswagen emissions cheating scandal.

“Based on the tests, no defeat devices not permitted under emissions regulations in force in the European Union were found,” the ministry said in a statement.

The final report comes after a preliminary draft, obtained by Reuters last month, showed some Fiat Chrysler vehicles were initially allowed to skip key emissions tests during the investigation.

Reuters examined the data and found three of the seven Fiat Chrysler models investigated, including the Jeep Cherokee 2.0, Alfa Romeo Giulietta 1.6 and Lancia Ypsilon 1.3, contained missing results for on-road measurement phase and the EU ‘NEDC’ lab test. All seven Fiat Chrylser models also lack data for an ‘Artemis’ test, which adjust the lab test to reflect urban driving styles.

Previous testing by French and German authorities found the Jeep Grand Cherokee emitted between 5.3 and 9.9 times the legal nitrous oxide limit. Another independent road test of a Fiat 500L, which uses the same engine as the Alfa Romeo Giulietta 1.6, found nitrous oxide levels more than 5.6 times the limit.

In January, Germany’s transport minister, Alexander Dobrindt, called for several diesel Fiat models to be pulled from the market amid suspicions they were fitted with defeat devices. The European Commission also expressed concern at the vehicles.

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Japanese car imports hit $2b in 2016

Vehicles, parts and accessories imports from Japan and the EU increased in 2016, according to figures released by Statistics New Zealand. The vehicles, parts and accessories segment remain the top import commodity, and was valued at $7.2 billion last year.

Barring Australia, vehicle imports rose across the board, including the EU, Japan, USA, and South Korea.

Vehicle, parts and accessories imports from the European Union grew 12 per cent in value to $1.94 billion, with Germany providing 27,000 of the 45,000 vehicles imported. Mechanical machinery and equipment imports increased 5.9 per cent to $1.76 billion in 2016. Electrical machinery and equipment imports, however, fell 9.1 per cent to $466 million.

Vehicle imports from Japan increased 9.5 per cent to $2.03 billion, crossing the two-billion-dollar mark for the first time. Mechanical machinery and equipment imports were up 13.5 per cent to $553 million, and electrical machinery imports fell 26 per cent to $104 million.

Petroleum was the highest-value import commodity from South Korea, and grew 12 per cent to $647 million. Vehicle imports grew the most proportionally of the markets Statistics NZ studied, up 19.5 per cent to $515 million.

American vehicle imports also rose, up 4.7 per cent from 2016 to $601 million. It remains the third-largest commodity behind mechanical machinery imports, which decreased 5.6 per cent to $1.2 billion, and aircraft and parts, which fell 13.5 per cent to $1 billion.

Vehicle imports from Australia fell 6.8 per cent to $424 million as Australian prepare to close down for good this October and send production to Europe and Japan. Mechanical machinery imports also dropped 7 per cent to $381 million.

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EU drafts emissions law

The European Union has announced plans for further legal action against governments that fail to police emissions test cheating by carmakers.

The European Commission has drafted a bill that would overhaul current legislation on how vehicles are licensed and tested across the 28 member states. The draft bill was approved by the internal market committee in a vote yesterday, according to Reuters.

The draft law will focus on conflict of interest when national regulators inspect and certify cars made by their own domestic manufacturers and will go to a plenary vote in March.

The EU would also get powers to carry out vehicle spot-checks and levy fines under the reforms, while national authorities would be able to peer-review each other’s decisions.

The EU industry commissioner Elzbieta Bienkowska accused member states of obstructing their efforts to rein in the car industry. “Member states really failed to enforce the law,” she said. “I feel they are still playing for time.”

Brussels first launched legal cases against Britain, Germany and five other EU members in December, accusing the states of colluding with carmakers. Bienkowska said more cases will follow throughout the year.

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