NextGenerationEU: reality and ambition are bound to collide

EU leaders will gather next week for an additional EU Summit to try and come closer on the next 7-year EU budget and the additional special funds to be channelled into economic recovery. Dubbed NextGenerationEU, resilience seems to be the key concept behind much of the measures proposed, with the magic ingredient being investment.

in CLEPA, 10-07-2020


It is crucial that governments agree soon, because most of the funds will become available only next year or later, and further delay would be detrimental. The crisis is hitting the economy hard, and viable companies are already incurring serious damage.

Resilience—making Europe more self-sufficient and future proof—is used as explanation for why the proposed recovery package has all the features of a fundamental restructuring programme, aimed at propelling the EU’s environmental and digital transformation.

Are we talking recovery or reform?

“Are we talking recovery or reform”, asked a diplomat the other day, admittedly rhetorically. Many in industry had quietly thought the same. While the visionary appeal of the approach may be apparent and no-one questions the overarching need for going digital and green, the challenge remains to make it all work on the ground, where economies are in disarray.

The risk is that recovery and crisis relief are losing relevance as objectives in their own right, with their own set of requirements and, particularly, their need for speed.  How grave the situation is, can be illustrated well with the measure of global car sales which is predicted to remain 23% below last year in Europe and -17% globally: the equivalent of 14 million cars, which is more than the entire volume of new cars sold annually in European markets.

Risk is that recovery and crisis relief are losing relevance as objectives in their own right

These are unprecedented drops in sales and the underlying economic activity will take at least 2 to 3 years to recover. The latest CLEPA Pulse Check, taking the temperature of the European automotive supply industry specifically, shows that half of European suppliers expect revenue declines of more than 20% in 2020 and a further third reckon with a drop of more than 30%. Although profit estimates have slightly improved compared to April, only 39% of suppliers are confident in achieving a profit in 2020.

European suppliers are increasingly taking long-term measures, with 62% indicating their implementation of such measures has started and 13% saying they’re already completed. Cutting investment and headcount rank as number one and two, but suppliers are also increasingly looking at shortening supply chains, sourcing in, optimising the manufacturing footprint, and opting for partnerships, mergers and takeovers and adapting their product portfolios.

 

Heavy pressure on investment capacity does not bode well for ability to drive necessary transformation

The heavy pressure on investment capacity does not bode well for the ability to drive the necessary transformation, which industry had started full throttle before Covid hit. The revenues to finance these investments will have to materialise, and this is where reality and ambition are bound to collide. Industry needs the framework conditions to thrive and invest.

NextGenerationEU, the European Green Deal and the Digital Agenda are declared economic growth strategies, designed to invest public money as a lever for even larger sums of private investment. Because this is clear: the green and digital transformation needs industry to deliver them, and most of the funding will have to come from businesses. Careful management by both policy makers and business will be necessary to get it right.

The European Commission has firmly put the ball in the court of the member states. While the heads of state must still agree on the actual sums to be allocated, national capitals are already asked to hand in their national recovery plans by October, in order to start discussions on approval of the content soon. National packages, hence, will decide the level and scope of support for truly European industries, such as automotive.

Need for European approach on levels below the visionary as well

No doubt, the EU is a complex animal. Most funds come from national pockets, and many policy competences are still national. Yet, the Commission is the guardian of the EU project and has many instruments at its disposal, including soft policy such as guidance on and coordination of best practices, that can make a difference in putting the framework right, especially but not only in support of smaller and mid-sized countries.

The automotive industry is crucial for the economic fabric of Europe. The sector is vast, innovative, with long value chains and strong eco-systems; a textbook example of how European integration and the internal market have helped make the European economy more competitive and, yes, resilient. What is needed now, is leadership and clearer directions for ensuring a European approach on levels below the visionary as well.

 

Sigrid de Vries, CLEPA Secretary General

 

CLEPA Innovation Awards 2020: application deadline extended until July 10th, 2020

Taking into consideration the extraordinary circumstances we are living, CLEPA has decided to prolong the deadline for applications for the CLEPA Innovation Awards 2020 to allow more companies to submit their initiatives. The new deadline will be extended until the 10th July.

in CLEPA, 08-06-2020


The European Association of Automotive Suppliers, in cooperation with Deloitte, highlights for the 5th consecutive year, the outstanding achievements made in the automotive supply industry in the fields of Environment, Safety, Connectivity & Automation and Cooperation.

This year, given the impact of COVID-19 at a global scale, CLEPA will make a public special recognition to supplier initiatives that have contributed to the relief of the virus.

The contest is open to all companies–including SMEs and startups–, research centres, educational institutions, other organisations, and stakeholders participating in the development of mobility technology. And, to acknowledge the role of small and mid-sized companies in the industry’s achievements, the Innovation Awards also contain a special prize for SMEs in each category.

The CLEPA Innovation Awards 2020 ceremony will be held on the 25th of November in Brussels, where the winners will be announced.

 

CLEPA Innovation Awards 2020

 

IndustriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA call for an ambitious recovery plan for the automotive sector

Saving jobs while reducing emissions

in CLEPA, 26-05-2020


For many decades, the European automotive sector has been one of the key pillars of the economic and social welfare of Europe. Indirectly, the sector provides employment to 13,8 million workers. The European assembly plants still produce 1 in every 4 cars worldwide. The sector is highly innovative and accounts for 20% of industrial research funding in Europe. Europe’s automotive sector has become a global leader with a strong export orientation. It is a stronghold of European industry and a driver for jobs and economic growth across Europe. As a result of the substantial economic interlinkages with other sectors along the value chain, its importance for employment and growth for the whole economy is clear.

COVID-19 provoked an unprecedented crisis in the sector with an effective standstill of car production and distribution in Europe for several weeks. Sales came to a halt, investments have plummeted and the market introduction of new clean models has been postponed. At the same time, post-pandemic work organisation is increasing production costs.

The economic and social impact of the COVID-19 crisis on the automotive sector is particularly severe. Workers, although supported by short-time work arrangements, have seen their incomes reduced, and companies are facing cash drains as their revenues have disappeared. Currently, there is little visibility on what the future holds. If this situation persists, the sector risks a meltdown with large-scale bankruptcies and restructuring.

During the financial crisis (2008-13), the automotive sector lost 440.000 jobs (in car production and the aftermarket). If no measures are taken, this number risks being dwarfed by the current recession which may be much deeper.

Therefore, industriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA, the European business organisations and the trade unions for the sector call on the European Commission for a bold industrial recovery plan. Such a plan should be based on two objectives. First of all, bringing the industry back on track by stimulating sales and reviving production, and secondly, supporting the industry in its journey towards a carbon-neutral future, based on the Green Deal and Europe’s climate objectives.

To date, the sector has been substantially investing in its transition towards the new paradigm of a carbon-neutral and digitalised economy: including, alternative powertrains, batteries, connected cars, mobility services, and automated driving. The industry can make a real contribution to the Green Deal and mitigating the climate emergency. But due to COVID-19, strong support from the national governments and the Commission is needed in order to help the sector to make the necessary investments in transitioning to decarbonisation while supporting European jobs and keeping its contribution to EU exports and the social welfare of European citizens.

To bring the sector back on track and enable it to emerge from this recession, the European automotive sector urgently needs:

  • Coordinated measures to support the relaunch of the industry incl. the aftermarket with harmonised guidance on preventive health and safety measures for the workplace; coordination is also needed to avoid further disruptions in the sophisticated automotive supply chains.
  • Support for viable companies to maintain their resilience. To avoid stranded assets liquidity support has to be maintained as long this is needed: state aid, investment guarantees, tax breaks, soft loans
  • Support for companies in maintaining/developing their human capital while the income and job security of workers must be preserved e.g.  through continuation of short-time work arrangements connected to skills upgrading
  • Introduce/reinforce temporary demand stimulus measures by vehicle renewal schemes that are coordinated on EU level and financially supported by the Commission. These measures should be eligible for latest technologies and in addition be differentiated according safety and environmental performance based on certified CO2 emissions.  Demand stimulus is needed to re-start the assembly lines and to preserve jobs. It should also restore the capacity of companies to generate the cash flows they need to invest in a sustainable future.
  • Take into account these extraordinary circumstances when assessing the impact of regulatory reforms on the sector.

To support the sector in delivering on the digital and low-carbon transitions, we request that the European Commission takes the following actions:

  • Develop and maintain technological leadership by means of ambitious technology programmes to support both digital and low-carbon transitions
  • Provide investment support (grants, loans, equity) for the market introduction of new sustainable technologies
  • Accelerate the roll-out of charging and re-fuelling infrastructure for cars, vans and commercial vehicles in public, as well as private, places, and deliver at least 2 million charging points and refuelling stations across the EU for all vehicle types as indicated earlier.
  • Introduce/reinforce market incentives to promote the uptake of alternative powertrains
  • Promote industrial collaboration and industrial alliances to share the cost of the development and market introduction of new low-carbon technologies
  • Facilitate investments in the next generation digital infrastructure as a key enabler for more reliable connectivity between vehicles
  • Make use of innovative public procurement to support demand and to bring new innovations to the market
  • Boost investment in the research and developments as well in the production of batteries, hydrogen, and low-carbon liquid fuels, within the European Union.
  • Develop the circular economy connected to the automotive supply chain (recycling, re-manufacturing, re-use)
  • Support the many automotive SME’s in redefining their value chain positioning in a fast-changing automotive landscape

As the COVID-19 crisis has serious ramifications for jobs, industriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA, call for the organisation of a just transition for every worker affected by restructuring.  Solutions have to be found through timely anticipation of change, an effective social dialogue at all levels, active labour market policies, up-and re-skilling, and support to redevelopment plans for automotive regions.

industriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA insist that the upcoming European recovery plan pays due attention to a sector that has already invested heavily in its transition and that has the ambition to continue these investments once it has overcome the COVID-19 crisis.  To save jobs and companies, it is important to act decisively to ensure the continuity of economic activity, to stave off bankruptcies and to prevent mass layoffs. The EU must maintain the ambition to keep the full automotive value chain inside the EU. This would allow the EU to keep a strong European automotive sector and to maintain our global leadership in clean vehicles, to deliver on its climate objectives and to maintain/create high quality jobs. Finally, a recovery of the automotive sector will generate positive knock-on effects for the overall economy.

 


Note to editors: EU’s automotive sector

  • 13.8 million Europeans work in automotive, accounting for 6.1% of all EU jobs.
  • 11.4% of EU manufacturing jobs – some 3.5 million – are in the automotive sector.
  • Motor vehicle taxation brings in €440.4 billion for governments in major European markets
  • The automobile industry generates a trade surplus of €84.4 billion for the EU.
  • The turnover generated by the automotive industry represents over 7% of EU GDP.
  • Investing €57.4 billion in R&D annually, the automotive sector is Europe’s largest private contributor to innovation, accounting for 28% of total EU spending.

The EU motor vehicle fleet is getting older year-on-year. Passenger cars are now on average 11.1 years old, vans 11 years and heavy commercial vehicles 12 years.

 


 

About the organisations:
IndustriAll European Trade Union is the federation of independent and democratic trade unions representing workers in the metal, chemical, energy, mining, textile, clothing and footwear sectors and related industries and activities. IndustriAll Europe represents 7 million working men and women united within 180 national trade union affiliates in 38 European countries.
Contact: Andrea Husen-Bradley, press & communication, +32 473 73 43 63, ahb@industriall-europe.euwww.industriall-europe.eu

ACEA, the European Automobile Manufacturers’ Association, represents the 16 major Europe-based car, van, truck and bus manufacturers: BMW Group, CNH Industrial, DAF Trucks, Daimler, Ferrari, Fiat Chrysler Automobiles, Ford of Europe, Honda Motor Europe, Hyundai Motor Europe, Jaguar Land Rover, PSA Group, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars, and Volvo Group.
Contact: Cara McLaughlin, Communications Director, +32 485 886 647, cm@acea.bewww.acea.be

CECRA is the European federation bringing together national professional associations which represent the interest of motor trade and repair businesses and European Dealer Councils. CECRA represents on a European scale 336.720 motor trade and repair businesses. Together they employ 2.9 million people.
Contact: Bernard Lycke, Director General, +32 475 932 693, bernard.lycke@cecra.eu, www.cecra.eu

CLEPA, the European Association of Automotive Suppliers, represents over 3.000 companies supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over 25 billion euros yearly in research and development. Automotive suppliers in Europe directly and indirectly employ nearly five million people across the continent.
Contact: Pilar Pérez, Communications Director, +32 478 949 159, communications@clepa.be, www.clepa.eu

ETRMA, the European Tyre & Rubber Manufacturers Association represent nearly 4.400 companies in the EU, directly employing about 370.000 people. The global sales of ETRMA’s corporate members represent 70% of total global sales, have a strong manufacturing and research presence within the EU and candidate countries, with 93 tyre-producing plants and 17 R&D centres.
Contact: Fazilet Cinaralp, Secretary General, +32 475 34 83 71, f.cinaralp@etrma.org, www.etrma.org

Ceemet represents the metal, engineering and technology-based industry employers in Europe. Member organisations represent 200,000 companies in Europe, providing over 17 million direct and 35 million indirect jobs. Ceemet is a recognised European social partner at the industrial sector level, promoting global competitiveness for European industry through consultation and social dialogue.
Contact: Chetan Corten, Head of Communications, +32 472 25 02 28, chetan.corten@ceemet.org , www.ceemet.org

 

CLEPA and ACEA Press Release | CEOs and European Commission discuss recovery plan that bolsters economy and Green Deal

COVID-19: Automotive CEOs and European Commission discuss recovery plan that bolsters economy and Green Deal

in CLEPA, 14-05-2020


CEOs from across the automotive value chain came together for a meeting with the European Commission to align on the priorities for a solid recovery plan for the automotive sector, with a view to stimulating the wider economy and bolstering the transformation to a carbon-neutral society.

CEOs of vehicle manufacturers and component suppliers, as well as their respective associations – the European Automobile Manufacturers’ Association (ACEA) and the European Association of Automotive Suppliers (CLEPA) – held constructive discussions with Frans Timmermans, the Commission’s Executive Vice-President for the Green Deal, and Thierry Breton, Commissioner for Internal Market, during a conference call yesterday evening.

With extended factory closures across Europe, a loss in production of 2.4 million vehicles so far and car sales down by more than 95% in major EU markets last month, the whole sector is at risk of liquidity shortages and sees its performance threatened for some time to come. The situation in the automotive industry has a significant knock-on effect on other parts of the economy.

“The number one priority of the industry is to re-launch the market, thereby enabling production to resume at manufacturing sites across the EU,” stated ACEA Director General, Eric-Mark Huitema. “Given the near-total collapse in sales, it will be crucial to provide a strong market stimulus to enable vehicle makers to fully re-open production facilities and keep people in jobs.”

During the meeting, ACEA and CLEPA called on the European Commission to coordinate national fleet renewal schemes to ensure that the market conditions are harmonised across the continent, and to supplement these with the EU budget.

“As we work on putting the wheels back in motion, we must look for win-win solutions, addressing the pressing environmental, industrial and broader societal needs,” said Sigrid de Vries, CLEPA Secretary General. “The purpose of recovery measures should therefore be two-fold: to re-start the industry and to employ the full range of technology solutions that are available and needed for carbon-neutrality. Hand in hand with investments in renewable energy carriers and infrastructure, this will propel the Green Deal as well as safeguard employment and industrial activity in Europe.”

Although vehicle and component production is slowly starting to pick up again, there are huge discrepancies amongst member states. This is hampering the recovery of an industry that depends on supply chains spanning right across the European continent. The CEOs therefore re-iterated their plea for a coordinated re-start of activities and investments along the entire value chain.

 

***

NOTES FOR EDITORS

CEOs and other industry participants present at the meeting:

 

CLEPA

  • Faurecia; Patrick Koller, Chief Executive Officer
  • Robert Bosch; Volkmar Denner, Chairman of the Board of Management
  • ZF Friedrichshafen; Wolf-Henning Scheider, Chief Executive Officer
  • CLEPA; Thorsten Muschal, President (member of the board of Faurecia)

 

ACEA

  • BMW Group; Oliver Zipse, Chairman of the Board of Management
  • CNH Industrial; Suzanne Heywood, CEO
  • Daimler AG; Ola Källenius, Chairman of the Board of Management Daimler AG & Head of Mercedes-Benz Cars
  • Daimler Truck AG; Martin Daum, Chairman of the Board of Management
  • DAF; Harry Wolters, President
  • Ferrari; Michael Leiters, Chief Technology Officer
  • Fiat Chrysler Automobiles; Mike Manley, Chief Executive Officer and President ACEA
  • Honda Motor Europe; Ian Howells, Senior Vice President
  • IVECO; Gerrit Marx, President Commercial and Specialty Vehicles
  • Jaguar Land Rover; Ralf Speth, Chief Executive Officer
  • MAN Truck & Bus AG; Joachim Drees, CEO
  • Scania AB; Henrik Henriksson, President & CEO and Chairman ACEA Commercial Vehicle Board
  • Toyota Motor Europe; Didier Leroy, Chairman of the Board of Management
  • Volvo Car Group; Mårten Levenstam, Head of Product Strategy
  • Volkswagen Commercial Vehicles; Thomas Sedran, CEO and Chairman ACEA Light Commercial Vehicle General Managers’ Committee

About CLEPA

  • CLEPA represents over 3.000 companies and over 20 national associations and sector associations
  • Automotive parts and system suppliers provide state-of-the-art components and innovative technology solutions for safe, smart and sustainable mobility, investing over 25 billion euros yearly in research and development.
  • Automotive suppliers in Europe employ overall nearly five million people across the continent.
  • More information about CLEPA can be found on www,clepa.eu or https://twitter.com/CLEPA_eu.
  • Contact: Clara Guillén, Communications Manager, c.guillen@clepa.be, +32 2 743 91 20.

 

About ACEA

  • ACEA represents the 16 major Europe-based car, van, truck and bus manufacturers: BMW Group, CNH Industrial, DAF Trucks, Daimler, Ferrari, Fiat Chrysler Automobiles, Ford of Europe, Honda Motor Europe, Hyundai Motor Europe, Jaguar Land Rover, PSA Group, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars, and Volvo Group.
  • The ACEA commercial vehicle members are DAF Trucks, Daimler Trucks, Ford Trucks, IVECO, MAN Truck & Bus, Scania, Volkswagen Commercial Vehicles, and Volvo Group.
  • More information about ACEA can be found on www.acea.be or www.twitter.com/ACEA_eu.
  • Contact: Cara McLaughlin, Communications Director, cm@acea.be, +32 485 88 66 47.

 

Automotive industry restarts, but concerns on outlook deepen

COVID-19 is having a major impact on the economy, with an unprecedented halt in retail and manufacturing activity and concerns mounting on consumer sentiment. In April 2020, the Economic Sentiment Indicator in both the Eurozone and EU showed the strongest monthly decline since 1985, with both consumer and business confidence reaching lows last registered in March 2009.

in CLEPA, by Sigrid de Vries, 11-05-2020


This is the dramatic backdrop against which the European automotive industry is trying to ease out of lockdown, carefully ramping up its manufacturing activity. Restarting plants and logistical operations across the EU is a tedious and highly complex process, and ultimately relies on enough demand in the pipeline. It also relies on a functioning internal market, which is far from given today. Member states and regions are at very different stages in the corona crisis, and restart measures would benefit from a much deeper and broader Europe-wide coordination.

CLEPA regularly updates an overview of containment measures in Member States and whether automotive manufacturing and sales activity is resuming or set to restart. The overview includes latest announcements by OEMs on planned production restarts per country, and is part of the weekly COVID-19 news flash the association disseminates to its members.

Volatility of demand is considered the most critical issue for the automotive supply chain at the moment. A CLEPA survey of automotive system and component suppliers in Europe, gauging the impact of the COVID-19 crisis, shows 90% of respondents ranking uncertainty of what and how much to produce as their number one concern. Their future perspective depends very much on consumer sentiment and demand picking up substantially.

Future relies very much on demand picking up

The sector’s outlook has worsened considerably over the past weeks. Over 90% of businesses expect a drop in revenue in 2020 of at least 20%, up from 60% having this expectation in March. Over a third expect a reduction of more than 30%. Profitability will take an even harder hit, with more than half of respondents now expecting to make a loss before taxes. The perspective of a quick recovery worsened significantly as well. Three out of four businesses fear that it will take more than a year to recuperate, whereas four weeks ago the consensus tended towards 6-12 months. One third of respondents foresee a timeframe of two to three years.

CLEPA has urged EU and national governments this week to launch EU-coordinated vehicle renewal schemes to kickstart economic recovery and support the relaunch of the sector. Demand stimulus will help to increase the utilisation of manufacturing capacity and therefore safeguard jobs and investment capacity. The automotive sector will act as an engine of overall economic recovery thanks to the sector’s vast and interconnected ecosystem, significant employment impact and immediate knock-on effect on other sectors of the economy.

This call for action is part of the 25-point Joint Action Plan for a Successful Restart, published by CLEPA this week along with the three other European associations representing the full automotive value chain, from equipment and tyre suppliers, to vehicle manufacturers, to dealers and workshops. Together, the sector wants to contribute to a policy response to COVID-19 that ensures public health, minimises the impact on the economy and maintains focus on the overarching objectives of our time: the digital and carbon-neutral society.

25 points to minimise economic damage and keep focus on digital and carbon-neutral society

Europe needs a strong automotive ecosystem to push ahead with ambitious environmental, digital and road safety targets. Investment in people and R&D remain essential, and yet is under immediate pressure.

To cope with the crisis, a large share of businesses plan to cut investment and reduce their workforce and, according to the CLEPA survey, half of businesses intend to adjust investment and workforce already in the short-term. The remainder foresees such measures being taken in the next 6-12 months. Revision of manufacturing footprint is also considered.

Around five million Europeans work in automotive manufacturing, R&D and supporting operations. In total, the sector accounts for about 13.8 million jobs. With employment Commissioner Nicolas Schmit, first steps are being taken to build a dedicated skills pact for the automotive sector. The crisis is accelerating the transformation of the sector, and industry and policy makers must work together to sustain employment and make the workforce future proof.

To underpin Europe’s long-term competitiveness, the EU should also leverage all instruments at its disposal to support research and innovation. This includes the EU budgets for Horizon Europe, public procurement and financing tools from the EIB. Almost 40% of respondents in the CLEPA survey have already taken steps to cut R&D budgets, with 32% undecided and 30% at this stage having decided against. Supporting the innovative capacity of the sector will be crucial to relaunch from the crisis in a sustainable way. Automotive suppliers are among the largest private investors in R&D, contributing significantly to the competitiveness of the automotive sector in Europe.

 

CLEPA Secretary General

Outlook automotive suppliers worsens considerably, latest survey shows

A survey of automotive supplier companies in Europe to gauge the impact of the COVID-19 crisis shows that the sector’s outlook has worsened considerably over the past weeks.

in CLEPA, 08-05-2020


Over 90 percent of businesses expect a drop in revenue in 2020 of at least 20%, up from 60% in March. 35% percent expect a reduction of more than 30%. Profitability will take an even harder hit, with more than half of respondents now expecting to make a loss before taxes. The perspective of a quick recovery worsened significantly as well. Three out of four businesses fear that it will take more than a year to recuperate, whereas 4 weeks ago the consensus tended towards 6-12 months. One third of respondents counts with a timeframe of 2 to 3 years.

CLEPA, the European Association of Automotive Suppliers, surveyed its membership between April 27 to 30. The input was aggregated by consultancy firm McKinsey this week.

 

90% of respondents rank volatility of demand as the most critical issue for the automotive supply chain

Volatility of demand is considered the most critical issue for the automotive supply chain at the moment, with almost 90% of respondents ranking this topic their number one concern. Often, also, production restarts at very low levels. This makes fixed cost rocket compared to turnover. The further outlook depends very much on demand for vehicles and, hence, for automotive components picking up substantially. In this light, CLEPA together with the other European sector associations representing the automotive value chain, has urged governments to launch EU-coordinated vehicle renewal schemes to kickstart economic recovery and support the relaunch of the sector.

 

On health and safety 85% of respondents indicates to be well prepared and apply proactive risk mitigation measures

To cope with the crisis, a large share of businesses (84%) plan to cut investment and reduce workforce (78%). Almost 40% have already taken steps to cut R&D budgets, with 32% undecided and 30% at this stage decided against. Automotive suppliers are among the largest private investors in R&D, contributing significantly to the competitiveness of the automotive sector in Europe. Revision of manufacturing footprint is also considered.

Half of respondents plan to adjust investment and workforce already in the short-term. The remainder foresees such measures to be taken in the next 6-12 months. To date, the jobs of more than 1,1 million Europeans employed by vehicle manufacturers are affected by factory shutdowns. The wider automotive employment impact is even more critical: the general multiplier counts with 3 jobs in the immediate supply chain and another 3 for the value chain further down the line.

Health and safety on the work floor remains a matter of high priority both during and after the ramping-up of production. 85% of respondents indicates to be well prepared and apply proactive risk mitigation measures. Personal protective equipment (PPE) is seen as the main measure applied on the shop floor, with usage expected beyond the next three months. Distancing measures and decoupling of shifts are widely applied as well.

Automotive sector calls for vehicle renewal incentives to kickstart economic recovery

COVID-19 is having a major impact on the economy, with retail and manufacturing activity crippled without precedence and concerns mounting on consumer sentiment. The European automotive sector, which has been hit particularly badly, proposes a plan comprised of 25 key actions to ensure a strong restart of the sector and the economy at large.

in ACEA, CECRA, CLEPA, ETRMA, 05-05-2020


Targeting decision makers at EU and national level, the action plan lists tangible recommendations to successfully exit from the corona crisis. It is issued by the four associations representing the full automotive supply chain: from equipment and tyre suppliers, to vehicle manufacturers, to dealers and workshops (ACEA, CECRA, CLEPA and ETRMA). Together, they want to contribute to a policy response to C-19 that ensures public health, minimises the impact on the economy and maintains focus on the overarching objectives of our time: the digital and carbon-neutral society.

As part of the action plan, the sector calls for coordinated vehicle renewal schemes for all vehicle types and categories across the EU. This will boost private and business demand, support economic recovery across the board as well as accelerate the rejuvenation of the vehicle fleet on Europe’s roads. Purchase and investment incentives should be based on similar criteria across Europe, drawing on both national and EU funding. Such schemes should be enhanced by scrapping premiums, and should take into account society’s climate ambitions and resource-efficiency objectives in concert with the economic impact.

Eric-Mark Huitema, Director General of ACEA, the automobile manufacturers’ association stated: “It is now crucial to bring the entire automotive value chain back into motion. We need a coordinated relaunch of industrial and retail activity, with maintained liquidity for businesses. Targeted measures will need to be taken to trigger demand and investment. Demand stimulus will boost the utilisation of our manufacturing capacity, safeguarding jobs and investments.”

Bernard Lycke, Director General of CECRA, the association of automotive dealers and workshops says: “To relaunch mobility and economic activity, it will be essential that vehicle dealerships and motor vehicle workshops reopen as soon as possible in the countries where they are still closed. Targeted purchase incentives and scrappage schemes for all categories of vehicles will, in addition to spurring the recovery, make a positive contribution towards carbon neutrality and road safety.”

Sigrid de Vries, Secretary General of CLEPA, the association of the automotive suppliers’ industry in Europe says: “Restarting the automotive sector will act as an engine of overall economic recovery because of the significant employment impact and immediate knock-on effect on other sectors. Investment in people and R&D remains key as well. Europe needs a strong automotive ecosystem to stay competitive and push ahead with ambitious environmental, digital and road safety targets.”

Fazilet Cinaralp, Secretary General of ETRMA, the European Tyre & Rubber Manufacturers Association: “The automotive sector is committed to emerging from this crisis stronger than before. A successful restart requires a supportive regulatory framework that protects public health, minimises the impact on the economy and ensures a transition to a circular, carbon-neutral economy. In close collaboration with the European Commission, we want to contribute to a policy response that brings about a successful COVID-19 recovery.”

For more information, click in the following link:

Europe’s four auto sector associations publish 25-point action plan for successful restart

https://afia.pt/wp-content/uploads/2020/05/25-ACTIONS-for-a-successful-restart-of-the-EUs-automotive-sector.pdf

 

Portugal’s car parts makers resume production as coronavirus spread slows

Portuguese car component manufacturers, among the country’s top exporters, are calling thousands of employees back to work even before a nationwide COVID-19 lockdown is lifted as Europe’s automotive sector resumes production.

in Reuters, by Victoria Waldersee, 17-04-2020


Companies like Bosch (BFREN.IS), Continental Mabor, and Volkswagen’s (VOWG_p.DE) Autoeuropa plant suspended production in March as demand slumped, non-essential businesses were instructed to close and workers stayed at home to care for children after schools closed across the country on March 16.

But with carmakers like Toyota (7203.T) and Volkswagen announcing they will restart production in Europe in the coming week, the export-oriented industry is tiptoeing back to work, even as parliament voted on Thursday to extend the state of emergency in place since March 18 to May 2.

Automaker Bosch, which exports 90% of its output from Portugal to over 50 countries and employs around 5,000 people, has restarted production at all three of its facilities, albeit with just 30% of workers present at its smallest operation in Ovar, a northern municipality badly hit by the outbreak.

Continental Mabor, a tire manufacturing factory also among the country’s biggest exporters, re-opened its production lines on Tuesday, with its 2,300 staff taking turns to work in 15-day rotations.

Volkswagen’s Autoeuropa plant, the country’s top exporter in 2019 employing nearly 6,000 staff, is resuming production in a similar shift pattern on April 27, the company announced on Wednesday, after a month of suspension.

“Clients are slowly restarting production in Europe, and they need parts – so companies are stepping in,” secretary-general of the Association for Producers for the Automobile Industry, Adao Ferreira, told Reuters.

NERVOUS WORKERS

A total of 930,000 workers have been temporarily laid off across the country which has so far reported 18,841 confirmed cases of the novel coronavirus, and 629 deaths.

“Employees are a little apprehensive about it,” Joao Reis, a worker at Autoeuropa, told Reuters. “There’s pressure to get the economy going again, and we know our jobs could be at risk if the company stayed on hold – but we don’t know yet whether the pandemic is really slowing, and that makes some of us nervous.”

Autoeuropa is taking extensive measures to comply with safety regulations, including supplying masks and gloves, ensuring workers keep at safe distance and organising transport to and from the factory, Reis said.

The move represents the beginnings of a return to normality in the export-oriented economy forecast by the IMF to suffer an 8% drop in GDP as a result of the crisis.

Still, whether factories will remain open long-term is unclear. “Things are still very uncertain and measures are being revised daily,” Bosch spokesman Abilio Diz told Reuters, declining to comment further.

As the curve of new infections flattens, the new presidential decree extending the state of emergency by another 15 days opens the possibility of a gradual reopening of services, as long as data continue to show a slow in the spread of the virus.

 

Reporting by Victoria Waldersee; Editing by Emelia Sithole-Matarise

 

FILE PHOTO: An empty assembly line is pictured at Autoeuropa Volkswagen car factory during partial lockdown as part of state of emergency to combat the coronavirus disease (COVID-19) outbreak in Lisbon, Portugal March 30, 2020. REUTERS/Rafael Marchante

CLEPA and ACEA Press Release | Automotive industry signs joint Code of Business Conduct to support re-start of production

CLEPA (the European Automotive Suppliers’ Association) and ACEA (the European Automobile Manufacturers’ Association) have jointly adopted a ‘Code of Business Conduct in view of COVID-19’ to support a rapid and smooth restart of the automotive industry.

in CLEPA, 15-04-2020


The automotive eco-system resembles an intricate clockwork and today’s unprecedented standstill of operations risks doing a lot of damage to an otherwise thriving, innovative and competitive industry. A successful exit from the corona crisis will require timely sharing of critical and appropriate information, making sure that all players in the value chain can plan and act as effectively as possible. The Code of Conduct therefore contains chapters on health and safety in the workplace, timely communication, contractual requirements and coordination of the restart.

“While the safety and wellbeing of our communities remains first priority, a well-coordinated and timely restart of the sector is of utmost importance to mitigate the impact of the COVID-19 crisis for society. The joint automotive industry code of conduct will make a real difference in this process,” said Sigrid de Vries, Secretary General of CLEPA.

“We are committed to emerge from the crisis even stronger, and all partners in the value chain have a shared responsibility in managing the industry re-launch in a sustainable way. The code of business conduct gives manufacturers and suppliers essential guidance on the approach needed to overcome the COVID-19 crisis,” said Eric-Mark Huitema, Director General of ACEA.

13.8 million Europeans work in the directly and indirectly auto industry. As a consequence of the crisis, more than 1.1 million automobile manufacturer employees are on temporary leave, with a multitude of colleagues affected in the supply chain as well as dealerships. The loss of revenue is estimated to run into double digit percentages and uncertainty remains high as to how quickly the sector can recover. Industry, in close coordination with public authorities is seeking to gradually restart manufacturing in the next few weeks.

As stipulated in the code, COVID-19 represents a global health, societal and economic challenge with severe potential impact on individuals, corporations and countries. The minimisation of risks for employees and the community at large should have always highest priority. Navigating the COVID-19 crisis together in a spirit of partnership, in compliance with the applicable competition laws, yields the best possible results towards protecting individuals and minimising economic damage.

 

CODE OF CONDUCT

 


About CLEPA

  • CLEPA represents over 3.000 companies and over 20 national associations and sector associations
  • Automotive parts and system suppliers provide state-of-the-art components and innovative technology solutions for safe, smart and sustainable mobility, investing over 25 billion euros yearly in research and development.
  • Automotive suppliers in Europe employ overall nearly five million people across the continent.
  • More information about CLEPA can be found on www,clepa.eu or https://twitter.com/CLEPA_eu.

Contact: Clara Guillén, Communications Manager, c.guillen@clepa.be, +32 2 743 91 20.

 


About ACEA

  • ACEA represents the 16 major Europe-based car, van, truck and bus manufacturers: BMW Group, CNH Industrial, DAF Trucks, Daimler, Ferrari, Fiat Chrysler Automobiles, Ford of Europe, Honda Motor Europe, Hyundai Motor Europe, Jaguar Land Rover, PSA Group, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars, and Volvo Group.
  • The ACEA commercial vehicle members are DAF Trucks, Daimler Trucks, Ford Trucks, IVECO, MAN Truck & Bus, Scania, Volkswagen Commercial Vehicles, and Volvo Group.
  • More information about ACEA can be found on www.acea.be or www.twitter.com/ACEA_eu.

Contact: Cara McLaughlin, Communications Director, cm@acea.be, +32 485 88 66 47.

CLEPA | Restarting the automotive industry is simply impossible without close coordination and support

Within the space of only a couple of days, the automotive industry in Europe has come to an almost complete standstill and millions of people are at home to either work from there or, more often, bide their time until life returns to normal.

in CLEPA, by Sigrid de Vries, 03-04-2020


First priority for the industry is the health and safety of employees and society at large. The many initiatives to manufacture medical equipment and protective gear pay testament to that. In parallel, the sector is doing all it can to minimise the damage to an otherwise thriving and competitive industry. Driven by a strong wish of all players in the value chain and building also on the lessons from the severe crisis in 2008/9, the automotive industry is determined to overcome the situation in a strong fashion.

The situation is, however, unprecedented and the way ahead looks bumpy. A survey amongst CLEPA members between 20 and 24 March provides a clear view of the potential impact, even without having clarity on the duration of the crisis today. A majority of respondents expect a loss of sales by more than 40% during the next 3 months as well as a 25% reduction of revenues over the entire year. They expect an even larger impact on profitability. The biggest impact is expected in Europe, with a total of €58 billion of revenues considered at risk.

The most immediate need is to ensure liquidity. Automotive parts and components suppliers are faced with the same problem of many other sectors: the almost complete lockdown of operations leads to a collapse in revenue, while running costs still have to be paid. Capital is being used up and companies risk going bankrupt if they run out of liquidity.

The many government support measures announced, from relaxation of state aid rules, to tax breaks, investment guarantees, loans and other measures, are therefore all welcome and needed. Measures such as the reduction of working time with wage compensation, temporary unemployment schemes and other flexibilities in labour rules are also crucial.

Industry estimates that the demand for cash is likely to continue for some time to come, especially if consumer demand will not return to pre-crisis levels for a while. Therefore, once the pandemic ceases, the economy will need continued support in order to avoid a drawn-out depression like that of the 30s. Demand-side measures must be part of the picture too.

An equally manifest concern is the colossal job of getting the entire automotive manufacturing chain up and running again.

The orderly restarting of production across the entire automotive industry value chain is simply impossible without close coordination, both within industry and between industry and public authorities. A successful exit from the crisis will require timely sharing of critical and appropriate information, making sure that all players in the value chain can plan and act as effectively as possible. The automotive eco-system resembles an intricate clockwork of interdependent bits and pieces. Solidarity, partnership, and the need for a post-crisis mindset are words often heard within the sector these days.

Policy makers, too, can contribute by playing in concert, orchestrating measures in a timely and coordinated manner as much as possible.

Automotive suppliers call on the EU and member state governments to coordinate the lifting of restrictions. They urge to define common criteria on when the crisis measures can be reduced, to broker a timeline amongst member states for a smooth exit from the crisis, to coordinate on the conditions, measures and timeline for workplace safety, and to watch over the integrity of the Single Market, by letting goods and people move again as soon as possible, in a safe manner.

Europe should also recognise vehicle maintenance and delivery of spare parts as essential services and exempt these from restrictions. Services supporting passenger transport and logistics were already explicitly included in lists of essential services.

The automotive value chain is deep and long, with a wide ripple effect into other sectors of the economy. The sector plays an important role in the economy as a whole, and is in fact ‘system critical’, to use the policy jargon of today. This should be recognised and kept in mind when elaborating crisis-exit measures.

Interestingly, in the CLEPA Pulse Check survey, over 70% of respondents voiced confidence about the possibility of a recovery within one year. However, 94% are expecting lasting changes to their way of working, with 38% expecting an increase in regional sourcing and 37% expecting an increase in local production. These are major tell-tale signs of the fundamental impact the crisis may have.

Just a few weeks ago, in what now seems a different era, the Commission stressed the importance of critical value chains and technical sovereignty in the New Industrial Strategy for Europe. This has only gained dimension and importance. The crisis is sending shockwaves through society and the economy that we cannot yet fully comprehend today, but on which deeper reflection will soon have to start.

 

Sigrid de Vries

CLEPA Secretary General