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02 October, 2015

Power of car industry lobby makes scandal inevitable

Corporate Europe Observatory

The car manufacturing industry is traditionally one of Brussels' strongest, and has a particularly German flavour. But the recent scandal engulfing Volkswagen (VW – who also make Audi) and potentially others shows that if Europe is serious about regulating the car industry and protecting public health and the climate, it needs to stand up to the car lobby rather than allowing those resisting regulation to write it.

In 2014, car manufacturers and their trade associations spent more than €18 million lobbying in Brussels. [...] the top three industry spenders are well-known German manufacturers Volkswagen, BMW and Daimler. Volkswagen is by far the biggest spender, with almost €3.5 million spend in 2014, almost five times the spending of the biggest non-German manufacturer, Fiat-Chrysler (€700,000).

The big German car manufacturers have also been increasing their lobby efforts over the years. A look at the historical data in the transparency register shows that both spending and the number of lobbyists employed have massively increased since 2010. At the start of the decade VW declared only a quarter of its 2014 spending (€800,000), while 2013 spending still only reached just over half-way (€1,250,000). We can expect 2015 to be even higher – reputational management doesn't come cheap in the Brussels Bubble. Daimler has been declaring relatively stable lobby spendings (actually steadily decreasing by €300,000), while BMW, like VW, doubled its spending between 2013-2014, from €800,000 to €1.5m.

Car manufacturers' trade associations are also important lobbyists in Brussels. The European-level association, ACEA (Association des Constructeurs Européens d'Automobiles), has 16 dedicated lobbyists and spent up to €2.5m last year on the activity. ACEA represents all the big brands currently engulfed in the emissions-cheating scandal – either as guilty (VW) or forced to claim their innocence (Daimler and BMW). Between it and its members, ACEA accounts for 80% of all car manufacturers lobby spending in Brussels and almost half of all the industry's lobbyists. Tellingly, the German car manufacturers' association, Verband der Automobilindustrie (VDA), has the same budget as ACEA (€2.5m) and almost double the number of lobbyists (31). But VW, BMW and Daimler are all also corporate members of BusinessEurope, one of the most influential lobby groups at the EU level, giving them extra lobby firepower.

Car industry lobbyists are also very present in the Commission's advisory groups, formally known as expert groups, which have drafted important legislation. VW sits in five different groups, often with other manufacturers or trade associations. VW, Daimler and ACEA sit in the Working Group on Motor Vehicles, while all three are joined by BMW and VDA in the iMobility Forum. ACEA also sits on the Review of EU Air Policy Expert Group.

The European car industry has been successfully flexing its muscles for decades: back in the mid-90s it successfully lobbied against binding emissions targets, instead proposing a voluntary, industry-led scheme. The scheme failed – industry did not meet its voluntary target – but managed to delay binding targets for a decade.

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