CLEPA highlights transformative forces during Automechanika 2018 in Frankfurt

CLEPA participates in the 25th edition of Automechanika, presenting how connectivity and digitalisation are changing the automotive aftermarket, as reported in the “Aftermarket 2025” study.

in CLEPA, 10-09-2018


 

The automotive industry is being transformed by megatrends such as electrification, automated driving and connectivity. This is impacting the aftermarket business as well, that represents on average about 15-20% of the total business for automotive suppliers.

CLEPA commissioned the study “Aftermarket 2025” from the Danish agency QVARTZ and Stern Stewart & Co Munich, who conducted numerous expert interviews with decision makers from the automotive supplier’s industry, trade, OEM and insurance companies, to investigate the effects on individual market participants.

The automotive aftermarket has a global market volume of 400 billion EUR and is estimated to grow to EUR 566 billion by 2025, this corresponds to an annual growth of 4.5%. The study shows that the major growth will take place in Asia (+8.6%), catching up with USA and Europe. This growth will no longer take place in the classic segments, but in new developments, such as software, content, data or retrofit solutions which will be offered over the lifetime of a vehicle.

Taking into account the hypothesis that 70% of vehicles will be connected by 2025, this will open the opportunity to new services and business models. New digital players such as mobility service providers, repair platforms, insurance providers or eCommerce are gaining relevance.

The prerequisite for all these services is, user consent provided, the ability to communicate with the vehicle, make use of the data generated in the vehicle and the access to available resources in the vehicle. Sigrid de Vries, CLEPA Secretary General, highlighted the importance of a fair and equal access to in-vehicle data to utilise the full potential of new and innovative data-based business models. “There is a need to ensure a fair and non-discriminatory access for all market participants to facilitate undistorted competition between service providers in this emerging market of data-based mobility services”.

Also, future vehicle ownership models will change the aftermarket. Leasing, re-leasing and mobility services are gaining in popularity and will lead to more decisions on vehicle repair and maintenance being made by professional fleet operators. Both OEMS and independent providers will increase their share in the fleet business by using the opportunities and offering additional services.

The trend towards fleet business, slow market growth in wear and tear parts in combination with a fast consolidating wholesale distribution will lead to increased pressure on automotive parts manufacturers.

In the next years, CLEPA expects an intense discussion on the total costs in the supply chain and on more efficient flows of goods, which will ultimately redefine the go-to-market strategy of some suppliers, also with new providers of platforms in the field of eCommerce, repair management, repair brokerage or fleet management that will find new cooperation models.

“The aftermarket is evolving from a pure maintenance and repair market into a mobility-related service sector. Access to in-vehicle data and changes in vehicle ownership models are bringing both challenges and opportunities. We expect to see more changes in the aftermarket in the next five years than in the previous two decades”, highlighted Frank Schlehuber, CLEPA Senior Advisor Aftermarket, during the Automechanika press conference.

 

 

EU underestimates job losses through EV push, trade group says

The European Union is underestimating job losses linked to the transition to electric vehicles, the European automotive industry association ACEA said in a report, ahead of a key European Parliament vote on Monday over on future emissions standards.

in Automotive News Europe, by Peter Sigal, 06-09-2018


The ACEA said that a “forced push” to EVs to meet emissions standards would have a “profound” impact on EU employment, because the production and maintenance of electric drivetrains is much less labor-intensive than conventional drivetrains. Electric motors and drivetrains have fewer moving parts and less mechanical complexity than internal combustion engines.

The ACEA, which represents 15 major Europe-based vehicle manufacturers, says the industry would be hit hard if post-2021 emissions regulations lead to a rapid shift toward electrification. The EU is expected to call for a further CO2 emissions reduction of at least 30 percent by 2030. That target would be almost impossible to meet without a large increase in electric and hybrid vehicles.

Suppliers are expected to be hit especially hard, according to the report by FTI Consulting commissioned by the automakers group and released this week. The report, citing a study by UBS, said suppliers will produce 38 percent fewer parts and components, while automakers will produce 17 percent fewer components.

Another potential drag on employment is overseas production of batteries, which make up 35 percent to 50 percent of the cost of an electric vehicle, the report said. “Policy makers must face the fact that the EU will become extremely dependent on rare-earth materials and batteries produced outside of Europe,” the ACEA said.

“This report makes it clear that overly stringent CO2 targets, as well as unrealistic sales quota for battery electric vehicles (the so-called ‘benchmarks’), could lead to serious structural problems across the EU,” ACEA secretary general Erik Jonnaert said in a statement.

The European Commission’s Impact Assessment report on future emissions regulations published in November 2017 forecasts job losses and gains by sector, depending on different levels of adoption of low-emissions vehicles, which it defines as having tailpipe CO2 emissions of 25 g/km or less.

As many as 16,600 jobs could be lost by 2030 in the automotive sector, assuming an adoption rate of 13 percent to 30 percent, according to the EU. However, that would be partly offset by higher employment in the electricity sector, the EU said.

The report commissioned by the automakers’ group said that the EU did not adequately explain its employment forecasts, given the large differences in complexity between electric and internal combustion drivetrains.

It said that a switch to electric vehicles could result in a 60 percent reduction in employment in powertrain manufacturing, spare part manufacturing and maintenance. The report cited Daimler as saying that 80 percent to 90 percent fewer jobs are necessary to produce electric motors than internal-combustion engines.

Roberto Vavassori, the present of European supplier organization CLEPA, has raised similar concerns ahead of the coming votes. “It’s a challenging balance between the aims of the general public and what is doable by the industry,” Vavassori said in June at CLEPA’s annual innovation awards ceremony, noting that one-third of automotive sector employment was in powertrains. “We believe electrification is an important and essential part of the mobility of the future, but we need an orderly transition to it in Europe, otherwise we will lose our world-leading advantage in mobility.”

The automotive industry is already facing challenges meeting a fleet standard of 95 g/km, set to go into effect by the end of 2021.

Consumers are turning away from diesel engines, which generally emit lower levels of CO2 than gasoline engines, in the wake of the Volkswagen Group scandal. In addition, SUVs and crossovers, which tend to be heavier and less efficient than equivalent sedans or hatchbacks, are making up an ever-increasing percentage of sales.

The introduction this year of the WLTP bench tests and RDE road tests, which aim to better duplicate real world driving conditions, have found that some manufacturers are farther away from the 95 g/km limit than thought.

 

 

US president announces revised trade deal between US and Mexico

On  27th August, U.S. President Donald Trump announced a common accord between the US and Mexico on key trade terms – a replacement  of the existing 25-year-old North American Free Trade Agreement, which Mr. Trump has   pointed towards  for a decline in US manufacturing jobs.

in CLEPA, 29-08-2018


Negotiators have been rewriting the NAFTA treaty over the past year, but in the past five weeks, Canada has not been part of the discussions.

 

The deal struck between the US and Mexico must be read in the global trading context and especially in light of the US import duties on steel (25%) and aluminum (10%), which the US has imposed on Canada, China, Turkey, (albeit EU is enjoying temporary tariff relief).

 

The specific requirements lay down stringent conditions for the import of products, (vehicles and automotive component parts, alike) from Mexico including:

  • Automotive manufacturing: to receive complete tariff free treatment or almost (possibly at around 2.5%), the new deal would require that 75% of the parts in any car sold in U.S. and Mexico would be produced in those countries. Currently, about 62.5% of parts are required to be produced in the US, Mexico and Canada. However, it is not known, at this stage, what the tariffs may amount to if the required local content of 75% is not reached.
  • Higher labour standards: the new deal would require that 40% to 45% of auto parts in cars sold in the U.S. and Mexico are made by workers earning at least 16 USD per hour (aimed at discouraging firms from locating in lower-wage Mexico).
  • Provisions to govern Intellectual Property, digital trade and investor disputes.
  • The pact will expire in 16 years’ time, it is to be reviewed every six years.

 

The 75% local content requirement is already considered as being challenging to fulfil, in particular because large parts of the automotive supply industry use metal resources in their production, sourced from elsewhere. The costs of metal products will increase and, ultimately, it will be the end-consumer who will pay the price.

 

CLEPA is looking more deeply into the full impact of the EU-Mexico deal, (as it currently stands), taking into account the increased costs, the revision of the EU-Mexico FTA and the provisions of the EU-Canada FTA.

 

MEMA, the North American Motor & Equipment Manufacturers Association, has been advocating for a positive renegotiation of the North American Free Trade Agreement. They highlight the importance on the progress made by the Trump Administration and the Mexican government, but they encourage a renewed focus on a three-party agreement that includes Canada.

They also warn that the potential cap of Mexican motor vehicle parts exports into the U.S. may serve to decrease American manufacturing jobs and exports and put U.S. businesses at a global disadvantage — all while increasing costs to consumers.

 

Casting doubt on Canada’s inclusion, Mr Trump said: “We will see whether or not we decide to put up Canada or just do a separate deal with Canada”. He also stated that he wanted to get rid of the name NAFTA, as it has “bad connotations”.

Canadian Prime Minister Justin Trudeau’s office published a note saying that both leaders  “had a constructive conversation” and “look forward to having their teams engage this week with a view to a successful conclusion of negotiations.”

The next steps foresee a deal to be taken before the newly elected Mexican President, Mr. Lopez Obrador, who takes office in December 2018. In order to meet that deadline, the Trump Administration must present the U.S. Congress with a deal at least 90 days in advance, i.e. Friday, 31 August.

Mr. Obrador has said that a two-way agreement with the US was just the first step in, expressing interest “in remaining a three-country deal”. In which case, all three legislatures would have the final say over the trade pacts.

 

Background:

  • The North American Free Trade Agreement covers more than $1tr (£780bn) in annual trade.
  • NB the U.S. has threatened to place tariffs on vehicles and automotive parts on cars imported from Europe, Canada and Asia. The outcome of the US Section 232 investigation is still pending.
  • The United States’s imposition of tariffs on metals, as mentioned above, has prompted global countermeasures, with retaliatory measures on US goods coming from Mexico, Canada, EU, China, India and Turkey.
  • The US has also imposed tariffs on $50 billion worth of Chinese imports, as punishment for alleged Chinese technology transfer. China is levying retaliatory tariffs on 50billion USD worth of US imports..

 

 

Source: CLEPA, MEMA

 

 

Positive and constructive dialogue in transatlantic trade

European Commission President Jean-Claude Junker and U.S. President Donald Trump agreed yesterday to work towards strengthening the bilateral trade relationship, including the elimination of tariffs as well as reducing non-tariff barriers to trade and subsidies.

in CLEPA, 26-07-2018


Roberto Vavassori, President of CLEPA, the European automotive supplier’s association comments positively on the results of the meeting:

“It is very positive to see the U.S. and EU talking constructively again. The comments by Presidents Trump and Juncker are promising, specifically that both sides agree to hold off further tariffs and to reassess existing tariffs on steel and aluminium in the context of negotiations. The words from President Trump about resolving the steel and aluminium tariff and the retaliation of tariff are of special importance for our industry.

The announced dialogue on standards would be crucially important for the automotive industry where high standards of vehicle safety, environmental performance must be maintained, supported by convergence between our two different regulatory systems. CLEPA positively encourages both sides to revisit the chapters already included in transatlantic trade negotiations, including existing tariffs on cars and car parts.

It is important to note that even a reform of the WTO seems to back on the agenda. Challenges such as intellectual property theft, industrial subsidies and the conduct of state-owned enterprises are best dealt with in the framework of multilateral rules.

The EU and the U.S. combined are the most important markets in the world and of crucial importance to the automotive industry. We have always supported talks to facilitate trade between the two partners and will continue doing so. We hope that the meeting between President Trump and President Juncker marks the start of a renewed and lasting dialogue and constructive negotiations.”

 

 

CLEPA on the vote on opinions on CO2 standards: Tough balancing act

The committee for Transport and Tourism in the European Parliament has voted yesterday to confirm the Commission’s proposed reduction targets for cars and vans, to call for more flexible rules on eco-innovations and to request the Commission to introduce Life-Cycle Analysis and Well-to-wheel data in emissions regulation. The committee for Industry, Research and Energy did not adopt a position after a vote which overall had produced contradictory results.

in CLEPA, 11-07-2018


CLEPA Secretary General Sigrid de Vries comments:

“Today’s vote reflects the tough balancing act policy makers are tasked with: Defining ambitious but realistic CO2-reduction targets while balancing environmental, consumer and economic interests at the same time. The European Commission has put a highly demanding proposal on the table, which will contribute to the Paris climate goals and to a transformation of the industry. Elaborating on this proposal is a complex task and today’s votes show that policy makers intend to take a detailed and critical look at the Commission’s proposal and the suggestions of stakeholders.

The proposed ambition level will drive the rapid transformation of the automotive landscape, both on the roads with a significant amount of electric and hybrid vehicles, as well as in the automotive industry where alternative propulsion technologies will become a major part of daily manufacturing. Together with digitalisation, decarbonisation constitutes the main transformational force in the sector.

The automotive suppliers support realistically ambitious reduction targets and stress the importance of a technology neutral approach to reduce emissions in the most efficient as well as least disruptive way. In that respect, CLEPA welcomes the support for eco-innovations reflected in the position of the committee for Transport and Tourism as well as for the inclusion of synthetic fuels in the scope of the legislation and a stronger recognition for hybrid technology in the so called ‘benchmark’.

Automotive suppliers are fully part of the transformation process manufacturing everything from electric drivetrain, to advanced combustion engine solutions to hydrogen and other alternative fuels-based technologies. Long-standing innovation and solution providers, they industrialise those technologies that help make transport safe, smart and sustainable. “

The opinion of the committee for Transport and Tourism will be taken into consideration by the leading committee for Environment, Public Health and Food Safety in the preparation of its vote in September and subsequently the vote in the Plenary of the European Parliament (EP), which is scheduled for October. Once EP and Council have decided on their respective positions, interinstitutional negotiations to adopt the regulation will start.

CLEPA statement on the applicability of End of Live Vehicle (ELV) Directive

CLEPA has just published the statement on the applicability of “End of Live” (ELV) Directive vs the “Restriction of the use of certain hazardous substances in electrical and electronic equipment” Directive (RoHS)/ “Waste electrical and electronic equipment” Directive (WEEE) in the automotive industry.

in CLEPA, 04-07-2018


EU WEEE directive 2012/19/EU (“Waste electrical and electronic equipment directive”) opens its scope by 15th of August 2018. WEEE applies to electrical / electronical equipment (EEE) and excludes specific EEE for the means of transport, that concerns vehicles, which are in scope of ELV.

 

As a consequence the directive covers further EEE, which were not in scope before. Exemplary examples of EEE new in scope include, but are not limited to clothes and furniture with installed electrical / electronical function such as:

  • Bathroom cabinets with installed illumination
  • Desks, which are adjustable by height through electrical function
  • Shoes with installed blinking lights.

 

The EU “End of Life” (ELV) Directive 2000/53/EC applies to vehicles, including components and materials of vehicles, as defined in article 3(1).

 

The CLEPA statement shall help CLEPA companies to define, which directives apply to their parts, either ELV directive or RoHS / WEEE directive. The statement is supported by JAPIA, the “Japan Autoparts Industry Organization”.

 

You can check the statement below

CLEPA STATEMENT

Industry4Europe coalition publish a new Joint Paper calling for an ambitious industrial policy in Europe

The Industry4Europe coalition, of which CLEPA is a member, has today published a new Joint Paper to inform the EU debate on an new, ambitious industrial policy for Europe.

The Joint Paper makes recommendations with regard to the governance structure for such policy, which should facilitate dialogue as well as concrete implementation of actions.

by CLEPA, 03-07-2018


 

he Joint Paper was presented this morning to the Austrian Chairman of the Council High-Level Group on Competitiveness and Growth and will be shared with all Permanent Representations as well as with the European Commission.

 

With its first Joint Paper “For an ambitious EU Industrial Strategy: Going further” (October 2017), the Industry4Europe coalition called for a long-term vision for Europe’s industry which demands a long-term governance structure going beyond the 6-month EU Presidency cycle and the 5-year mandate of the current European Commission. Such a governance structure should enable the Commission, the Council and the European Parliament, together with industry stakeholders, to develop a common vision for a smart, innovative and sustainable industry.

Existing policies, initiatives and tools, addressing the challenges and gaps, including those described in the Commission’s Communication “Investing in a smart, innovative and sustainable Industry: A renewed EU Industrial Policy Strategy” of September 2017, should be reviewed in order to develop and implement a long-term comprehensive EU Industrial Strategy as well as for monitoring its progress on a regular basis.

 

Download the Joint Paper 2018-07-Industry4Europe – Joint Paper on Governance

Automotive Industry Guideline (AIG) on REACH has been published

Version 4 of the Automotive Industry Guideline on REACH (AIG) has been published by the Automotive Task Force on REACH (TF-REACH)

by CLEPA, 02-07-2018


Task Force-REACH (Registration, evaluation, authorisation and restriction of chemicals) comprises representatives of all the major vehicle manufacturers and the automotive supply chain, including CLEPA.

The Task Force recommends a common schedule and external communication strategy in order to harmonise the sector’s response to REACH and avoid duplication and confusion by taking into consideration the automotive industry’s specific criteria and tools.

The TF’s approach and recommendations are outlined in the new Automotive Industry Guideline (AIG) on REACH.

The European REACH Regulation 1907/2006 came into force on 1 June 2007 and affects all industries. The Regulation requires immediate and ongoing action from automobile manufacturers and suppliers. Under REACH, substances manufactured or imported on their own or in mixtures, as well as substances intended to be released from articles, need to be registered according to the REACH timeline once a certain yearly tonnage is exceeded.  Additionally, Substances of Very High Concern (SVHCs) may require authorisation or may be restricted. SVHCs listed on the Candidate List need to be identified in articles and communicated throughout the supply chain and to the consumer if certain criteria are met. Companies that do not comply with REACH have no market, so continued REACH compliance is critical to maintain business continuity for any company doing business, or having customers or suppliers doing business, in the European Economic Area (EEA).

 

Version 4 of the Automotive Industry Guideline builds on the comprehensive automotive industry recommendations regarding numerous aspects of the REACH Regulation in the previous version 3.1, but includes significant changes to the following chapters:

 

  • Glossary of terms; Notification of Candidate List substances in articles; Communication requirements for Candidate List substances in articles; Authorisation procedure.

New annexes were also added:

  • REACH Substance Scrutiny – From PACT Onwards; REACH Annex XVII Impact Evaluation List; Practical Application of the O5A Principle for CL Substances in Articles; Sustainable Substitution Criteria; History of amendments to REACH Regulation; List of changes to AIG.

The AIG will be translated into Chinese, French, Japanese and Korean, so as to assist the global automotive supply chain in understanding their REACH obligations while also providing useful recommendations.

For more information and to download version 4 of the AIG free of charge, check 2018-07-AI guideline on REACH 4.0

CLEPA June 2018 Newsletter editorial: The business model of integration and coordination

The automotive industry is a textbook example of how cross-border cooperation fosters competitiveness, jobs and innovation. Illustrations of this rule of thumb are plentiful these days, as is the realisation that this business model has come under threat.

in CLEPA, 27-06-2018


ake Brexit: CLEPA member SMMT warned this week that investments are at risk because of unclarity around the future trading conditions between the UK and Europe. Parts and components cross borders multiple times before being assembled into the final product, a vehicle. Car manufacturers joined in the chorus warning that just-in-time delivery is endangered, with multiple days of delays in shipments predicted caused by administrative and customs burdens once EU membership ends. Negotiators need to end the uncertainty, first of all, but also find a solution that sustains frictionless trade.

Similar worries are voiced in response to President Trumps imposing of tariffs on steel and aluminium, and potential further measures to hit cars and automotive parts. Vehicle parts suppliers operate in an integrated, intricate global supply chain. The industry’s growth in the last century has been fostered by the expansion of new markets due to public policy that supported international trade. This has resulted in wealth creation across regions, as economies of scale and boundless logistics could be merged with local manufacturing strategies close to the customer, underpinning the competitiveness of the industry and its products, facilitating the creation of highly skilled jobs, and lowering prices for consumers.  Forging positive trade relations with key global partners, therefore, remains an important objective to pursue.

A point in case was presented by a coalition of downstream users of steel – including the automotive, construction equipment, agriculture machinery, home appliance and technology industry sectors – writing this week to the European Commissioner for Trade, Cecilia Malmström, to express concerns on the EU safeguard investigation into steel products launched in March. The application of ever greater layers of protection for it will ultimately only have a negative impact on downstream users of these products, the letter argues.

Another important enabler of the global value chain concerns harmonisation and cooperation in the field of technical requirements. Here, more positive news is there to report. CLEPA, founding member of the European Automotive and Telecom Alliance (EATA), participated in the 3rd Ministerial High-level Meeting on Connected and Automated Driving last month, to assess progress and challenges to getting connected and automated vehicles on Europe’s roads in a far-reaching, coordinated manner.

Importantly also, the UN-ECE World Forum for Vehicle Regulations (WP.29) last week adopted a new structure to give the highest priority to activities on automated, autonomous and connected driving, recognising the need to timely address the fast pace of technological developments in that field. CLEPA will provide the secretariat role in the newly established Task Force on Automated Vehicles “TF AutoVeh” of WP.29, dedicated to the development of a global vision and set of principles for safety assessment and certification of highly automated vehicle functions. This will be a completely new assessment regime to provide reassurances concerning highly automated vehicle safety performance under real life traffic conditions.

Cooperation is a key ingredient, too, in research & innovation, as was demonstrated during the 3rd CLEPA Innovation Awards Gala earlier this month in The Hague. For the first time, special recognition was given to high-flying SMEs, recognising ingenuity and resourcefulness among smaller- and mid-sized companies, that are equally an integral part of the global value chain. Ultimately, innovation remains at the heart of the automotive suppliers’ strategies to maintain their leadership and competitiveness.

 

Sigrid de Vries

CLEPA Secretary General