EU-China investment agreement is hopeful sign, but clarity on substance is critical

Europe’s automotive suppliers welcome the conclusion of negotiations between the EU and China on a Comprehensive Agreement on Investment

in CLEPA, 30-12-2020


Sigrid de Vries, CLEPA secretary general, comments: “China is our industry’s second most important investment destination and European automotive suppliers are the biggest foreign investors in the sector in China. There are growing concerns that investment and market access conditions in China are uncertain and do not reflect the openness of the European market. A deal that secures and improves reciprocity in market access and investment conditions is therefore crucial for our industry and the protection of hundred thousands of jobs across the EU and China.”

European suppliers would support a deal that eliminates hurdles for investment in so-called new energy vehicles, provides enhanced protection of intellectual property and introduces more transparency and disciplines on state aid to establish a level playing field and reduce market distortions. Lastly, the deal could provide a meaningful institutional underpinning for cooperation between the EU and China to achieve climate neutrality and address human rights concerns.

CLEPA wants to acknowledge the efforts on both sides over the past seven years to come to an agreement. De Vries: “With the political decision to conclude negotiations being taken, it is now critical that the European Commission engages with all stakeholders to provide more clarity on the substance of the agreement. European suppliers currently lack sufficient detail on the Comprehensive Agreement on Investment to assess whether the sector’s concerns are sufficiently addressed. CLEPA is ready to scrutinise the agreement in principle and contribute to the next steps.”

 

Automotive suppliers comment on the EU-UK trade deal

The European Association of Automotive Suppliers, CLEPA, welcomes the Christmas trade agreement between the EU and UK and thanks all parties involved for their commitment to getting a deal agreed. This deal represents the starting point to ensure the continuation of the cooperation for both sides.

in CLEPA, 24-12-2020


Sigrid de Vries, CLEPA Secretary General, commented: “This deal avoids what would have been a worst-case scenario for European suppliers and the many jobs depending on the EU-UK trade relationship. Businesses and customs authorities now need The European Association of Automotive Suppliers, CLEPA, welcomes the Christmas trade agreement between the EU to work around the clock to get ready for the new trading conditions only one week before its implementation. We ask policy makers to engage with us to ensure trade in components is not needlessly being hit by tariffs and to avoid disruption at the border.”

CLEPA will analyse the technical details of the deal as soon as all the material is published to assess the extent into which this deal will serve the interests of the highly integrated EU/UK automotive supply chain, and refrain from commenting on the substance of the deal before then. Already certain is though that the deal will not avoid the resurrection of many trade barriers. We will therefore continue to work constructively with our partners in the EU and the UK to ensure that this free trade agreement proves a first building block rather than an end point.

 


 

About CLEPA

CLEPA, the European Association of Automotive Suppliers based in Brussels, represents over 3.000 companies, from multi-nationals to SMEs, supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over 30 billion euros yearly in research and development. Automotive suppliers in Europe employ about five million people across the continent.

A manageable transition to climate neutrality rests on competitive technologies

Sigrid de Vries, Secretary General of CLEPA comments on the Strategy for Sustainable and Smart Mobility, adopted today by the European Commission:

in CLEPA, 09-12-2020


“A manageable transition, for the climate, industry and employment, rests on competitive technologies such as the internal combustion engine, plug-in hybrids, fuel cell and battery electric vehicles. Only a transformation that is industrially successful and socially accepted can be sustainable politically and achieve the climate neutrality objective. A strategy that builds exclusively on battery and fuel cell electric vehicles contradicts the principle of technology openness and will neither achieve carbon neutrality nor support European competitiveness.”

The automotive suppliers in Europe, associated in CLEPA, support the Paris Agreement and the objective of climate neutrality for 2050. They are convinced that the way to climate neutrality is through a technology open environment that balances environmental, social as well as economic goals.

De Vries: “The question is not if, but how to best achieve climate neutrality. Climate policy must strive for effectiveness and efficiency in order to achieve the objective at a minimum cost to society. We underline, that an approach taking life-cycle or well-to-wheel emissions into account will create incentives for all technologies to reduce emissions and increase efficiency.”

CLEPA welcomes the Commission’s work on exploring an approach, including impact assessment, that takes into account the potential contribution of fuels from sustainable renewable sources including the option of a voluntary crediting mechanism. It is positive that the Commission considers increasing targets for renewable energy and sustainable renewable fuels in the Renewable Energy Directive (RED II) to ramp up their development and deployment.

De Vries: “Climate-neutral internal combustion with fuels from sustainable renewable sources is a viable option. Supplying renewable energy and fuels for mobility along with the necessary infrastructure must be a priority for policy makers, including for road transport and not limited to other sectors. It is positive that the Communication recognises this, and we are keen on working further on the rules and conditions to make deployment of renewable energy and sustainable fuels from renewable sources a success. The targets of 3 million public charging points by 2030 and 500 hydrogen stations by 2025 are welcome. But the need will by far exceed these numbers, specifically if the CO2 emission targets for vehicles for the year 2030 were to be made tougher.”

CLEPA stands ready to contribute to the detailed design of the rules, regulations and definitions shaping the path ahead. For one, it will be important to keep the clear distinction between pollutant emissions and carbon emissions and to maintain the focus of the respective regulations.

CLEPA welcomes the Commission’s objective of designing a clear framework for artificial intelligence (AI).  “Artificial intelligence is a key enabler for the automotive industry’s digital transformation. AI can also contribute to reducing the impact of transport on the environment, and significantly improve road safety”, says De Vries.

CLEPA supports a horizontal AI legislation addressing only high-risk AI applications and ensuring a level playing field for all actors. These principles can be complemented with technical requirements in sector-specific regulations (either new or by modifying existing legislation), if deemed necessary.

Availability and access to data from connected vehicles is still often hampered, as the strategy correctly points out. A European Common Mobility Data Space is welcome in principle but further details on the design and objectives are required to assess its added value.

CLEPA welcomes the objective of automated mobility being deployed on a large scale by 2030 and calls on the European Commission to speed up processes to create a harmonised EU legal approach for highly-automated applications as a precondition for reaching this goal.

 

 

Stakeholders’ joint letter: Sustainable renewable fuels should be included in the EU mobility legislation

ON 30 NOVEMBER 2020, CLEPA TOGETHER WITH 38 ASSOCIATIONS AND COMPANIES, COLLABORATIVELY SIGNED AND SENT A LETTER, CALLING ON THE EUROPEAN COMMISSION TO INCLUDE SUSTAINABLE RENEWABLE FUELS IN EU MOBILITY LEGISLATION.

The signatories of this joint letter represent a crucial part of the automotive, fuel, energy industry and civil society in Europe, i.e. a combined force behind the transformation of EU mobility towards climate neutrality in a smart and sustainable way.

The European Union has set itself the ambitious objective of becoming climate neutral by 2050 and consequently raised its 2030 climate target. Whether the objective will be achieved and what impact this will have on EU competitiveness and employment strongly depends on the design of a suite of climate policies for the coming years. Transport and future mobility will be a central element of these policies. The EU’s long-term climate strategy cannot rely solely on the development of new technologies and infrastructures; it must embrace a diverse portfolio of solutions in parallel, including existing sustainable renewable liquid and gaseous fuel solutions that can reduce greenhouse gases starting today.

Against this ambition, the EU Commission will outline the Sustainable and Smart Mobility Strategy and revise important mobility and energy legislations, such as CO2 emissions standard for cars, vans and also heavy-duty vehicles. These upcoming revisions are the timely opportunity to implement a truly technology neutral approach by including the contribution to emissions reduction achieved using sustainable renewable fuels.

This recommendation aligns with the following principles, crucial to achieve a carbon neutral road transport sector in Europe:

  • Technology and fuel diversity towards 2050 – With increased climate targets there is added urgency for transport to accelerate its path towards net-zero emissions. To facilitate this acceleration, a broad portfolio of solutions is necessary to support the full spectrum of geographic, economic and vocational market demands. Considering the lack of a “one-size-fits-all solution”, it is imperative that all low carbon options, including alternative and renewable fuels, play a role in the energy transition not only on the existing fleet but also for new vehicles to curb the GHG emissions from the road transport sector across all the EU countries.
  • Coupling the efforts for the expansion of the sustainable renewable fuels market with further improvement of vehicle efficiency – Despite gains in fuel efficiency, increased demand for personal mobility and freight transport have led to increased CO2 emissions from road transport. It is necessary to leverage all available solutions to reverse this trend and accelerate the decarbonisation of the sector. Accelerating the production of sustainable renewable fuels, accompanied by continued development of a range of new vehicles optimised for these fuels, can have a climate-positive impact today via the existing and future vehicle fleet for both passenger cars and heavy-duty vehicles.
  • Enabling a competitive, sustainable market till 2050 – Many publications have shown that relying on full electrification alone will not result in climate neutrality in 2050. Products and solutions need to be placed according to their mission profile, where they are more necessary and accommodating the market demand. Conventional fuels and engine technologies provide a stream of revenues for vehicle manufacturers that can continuously be invested into alternative powertrains and solutions, according to the mission segment. As global players, vehicle manufacturers will maintain a central role in delivering innovative products, also in other parts of the world.
  • Integrating a growing rate of renewables in the market to practice the circular economy while seizing industrial opportunities – Sustainable renewable fuels technologies offer sectorial integration with the waste management and the agricultural sectors. This enables a clever approach to treat waste materials, which would have otherwise been disposed with the consequent emissions, while producing sustainable energy and, at the same time, high quality by-products like bio-fertiliser. This is a landmark example of circular economy targeting emissions in agriculture and waste. At the same time, the production of sustainable renewable fuel technologies involves a long value-chain, from renewable energy systems to components, taking place mostly in Europe. Sustainable renewable fuels value chain can contribute to create many new jobs and to maintain industrial leadership, while strengthening the cooperation with third-countries on innovative energy projects to speed up the energy transition.
  • System affordability – It is key to avert mobility poverty and to avoid a two-speed Europe while heading towards a carbon neutral mobility system. Being based on proven engine technologies and an already structured distribution network, sustainable renewable fuels are the most cost-efficient way to contribute to the decarbonisation process at the lowest possible cost to society. Besides the cost in relation to emission reductions, it is important to consider the impact on industrial competitiveness, innovation, affordability, and employment to ensure a fair transition for all European citizens.

Our industries are ready to contribute to a technology-open, ambitious but pragmatic regulatory framework to drive the decarbonisation of EU road transport.

 

Read the full letter here

 

2030 Climate plan: Technology openness holds key to climate neutrality

  • Automotive suppliers are in full support of climate neutrality by 2050
  • Any changes to vehicle targets for 2030 must take form in more comprehensive approach to regulating CO2 emissions
  • Disruption rather than transformation puts jobs and competitiveness at risk

in CLEPA, 16-09-2020


Sigrid de Vries, Secretary General of CLEPA, the association of the Automotive Suppliers’ Industry in Europe comments on today’s presentation by Commission President von der Leyen of the EU climate ambition until 2030:

“The automotive supply industry in Europe is a major force behind the transformation to sustainable, safe, and smart mobility. We support the Paris agreement and strive for a reliable, technology-neutral and ambitious regulatory framework to achieve its objectives.”

“Companies need the adequate conditions to manage the transformation that is unfolding. The magnitude and frequency of changes to these conditions and increasing regulatory interventions are a concern to industry. We are worried that the transformation will turn into a disruption of the sector’s capacity to innovate, invest and maintain employment. The risk of a substantial loss of employment is real. Suppliers are keen on delivering the technology solutions but stress the need for an honest debate about the effects of policy decisions.”

“The existing CO2 targets for vehicles have only been adopted in 2019 after a long and substantial debate. Planning and investment decisions have been taken with confidence in the reliability of the regulatory framework. An increased level of ambition for 2030, if coupled with stricter tailpipe targets for vehicles or possibly a ban on technologies, hampers industry competitiveness, requires massive public investment in infrastructure and makes mobility more expensive for citizens.”

“The Commission has not said much yet in concrete terms about the expansion of recharging and refuelling infrastructure. The programme for one million charging points is by far not enough, it would need to be upgraded along with the programmes in member states. Targets for e-fuels are missing. Already now, the deployment of charging and refuelling infrastructure does not keep pace with market penetration of alternative vehicles. We see many actions, but perhaps not enough strategy.“

“Suppliers have consistently argued for a more comprehensive approach to regulating emissions. In road transport all efficient and low or zero carbon solutions will be necessary and have to be effective in new vehicles but also the existing vehicle fleet. This includes battery electric vehicles, fuel cells, plug-in hybrids and efficient combustion engines, along with the necessary charging infrastructure and availability of renewable energy but also refuelling infrastructure and availability of renewable fuels, e-fuels, and hydrogen. Advanced renewable fuels are key to reducing emissions in the existing fleet and therefore a potentially much more effective lever than the regulation of new vehicles.”

“The economic and health challenges of the past months have reemphasised the role that transport has for society at large. We need to guarantee that the future will provide accessible and affordable mobility for all. Europe should make full use of its strengths, reinforcing its competitiveness, supporting its advanced technology competence and autonomy while securing its high value industrial base and employment. An open dialogue on how to best achieve the climate ambition, supported by a technology neutral and effective regulatory framework that rewards efficiency is necessary.”

 


 

About CLEPA

CLEPA, the European Association of Automotive Suppliers based in Brussels, represents over 3.000 companies, from multi-nationals to SMEs, supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over 30 billion euros yearly in research and development. Automotive suppliers in Europe employ about five million people across the continent.

 

 

Only weeks left to save EU and UK auto sectors from €110 billion ‘no deal’ Brexit disaster

  • EU and UK automotive leaders unite to call for urgent agreement of an ambitious free trade deal before the end of the transition period in just 15 weeks’ time.
  • New calculations show the catastrophic impact of ‘no deal’ with WTO tariffs putting production of some 3 million EU and UK built cars and vans at risk over next five years.
  • ‘No deal’ would mean combined EU-UK trade losses worth up to €110 billion to 2025, on top of around €100 billion in lost production value so far this year because of coronavirus crisis.
  • To avoid second economic hit to sector employing 14.6 million people, industry calls for negotiators to secure a deal urgently that delivers zero tariffs, modern rules of origin and avoids different regulations across the channel.

in CLEPA, 14-09-2020


With just 15 weeks before the Brexit transition period expires, European automotive industry leaders have today joined forces to call for the EU and UK to secure an ambitious free trade agreement (FTA) without further delay. Negotiators on both sides must now pull out all the stops to avoid ‘no deal’ at the end of the transition, which according to new calculations would cost the pan-European automotive sector some €110 billion in lost trade over the next five years,putting jobs at risk in a sector that supports 14.6 million livelihoods, representing one in 15 of EU and UK jobs.2

The lead organisations representing vehicle and parts makers across the EU, the European Automobile Manufacturers Association (ACEA) and the European Association of Automotive Suppliers (CLEPA), along with 21 national associations, including the Society of Motor Manufacturers and Traders (SMMT), German Association of the Automotive Industry (VDA), Comité des Constructeurs Français d’Automobiles (CCFA),  La Plateforme automobile (PFA) and the Portuguese Manufacturers Association for the Automotive Industry (AFIA), are today warning that the sector could face severe repercussions. Indeed, economies and jobs on both sides of the channel are at risk of a second devastating hit in the shape of no deal coming on top of around €100 billion worth of production lost so far this year due to the coronavirus crisis.3

Without a deal in place by 31 December, both sides would be forced to trade under so-called World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks.4 Such tariffs – far higher than the small margins of most manufacturers – would almost certainly need to be passed on to consumers, making vehicles more expensive, reducing choice, and impacting demand. Furthermore, automotive suppliers and their products will be hit by tariffs. This will make production more expensive or will lead to more imports of parts from other competitive countries.

Before the coronavirus crisis hit, EU and UK production of motor vehicles was running at 18.5 million units a year. This year some 3.6 million units have already been lost across the sector due to the pandemic. New calculations suggest that, for cars and vans alone, a reduction in demand resulting from a 10% WTO tariff could wipe some three million units from EU and UK factory output over the next five years, with losses worth €52.8 billion to UK plants and €57.7 billion to those based across the EU. Suppliers would also suffer from these changes.

This combined loss in trade value would seriously harm revenues for a sector that is one of Europe’s most valuable assets, employing millions of people and generating shared prosperity for all, with a combined trade surplus of €74 billion with the rest of the world in 2019. Collectively, the EU27 and UK automotive sector is responsible for 20% of global motor vehicle production and spends some €60.9 billion on innovation per year, making it Europe’s largest R&D investor.

Achieving an ambitious EU-UK FTA with automotive-specific provisions is critical to the European automotive industry’s future success. Any deal should include zero tariffs and quotas, appropriate rules of origin for both internal combustion engine and alternatively fuelled vehicles, plus components and powertrains, and a framework to avoid regulatory divergence.

Crucially, businesses need detailed information about the agreed trading conditions they will face from 1 January 2021 to make final preparations. This, combined with targeted support and an appropriate a phase-in period that allows for greater use of foreign materials for a limited period of time, will ensure businesses are able to cope with the end of the transition period.

Eric-Mark Huitema, ACEA Director General, said: “The stakes are high for the EU auto industry – we absolutely must have an ambitious EU-UK trade agreement in place by January. Otherwise our sector – already reeling from the COVID crisis – will be hit hard by a double whammy.”

Sigrid de Vries, CLEPA Secretary General, said: “A ‘no deal’ Brexit would disrupt the integrated automotive supply chain and hit industry at a critical moment. The impact will be felt far beyond the bilateral trade streams alone, translating into a loss of jobs and investment capacity. The automotive sector is the EU’s largest private R&D investor with €60 billion invested each year. We need a deal that maintains the sector’s global competitiveness.”

Mike Hawes, SMMT Chief Executive, said: “These figures paint a bleak picture of the devastation that would follow a ‘no deal’ Brexit. The shock of tariffs and other trade barriers would compound the damage already dealt by a global pandemic and recession, putting businesses and livelihoods at risk. Our industries are deeply integrated so we urge all parties to recognise the needs of this vital provider of jobs and economic prosperity, and pull out every single stop to secure an ambitious free trade deal now, before it is too late.”

Hildegard Müller, President of VDA, said: “The automotive industry needs stable and reliable framework conditions. It would be to the great disadvantage of both sides if the UK withdrawal were to end with the application of tariffs in mutual trade. This would jeopardise closely linked value chains and possibly make them unprofitable. Our member companies have more than 100 production sites in the United Kingdom. We hope that the EU and the UK will continue their close partnership – with a comprehensive free trade agreement.”

Thierry Cognet, President of CCFA, said: “A ‘no deal’ situation on 1 January 2021 would be particularly challenging for manufacturers. What we need from negotiators, in an economic context already very affected by the COVID crisis, is a substantial deal protecting us from tariffs, quotas and regulatory divergence.”

José Couto, President of AFIA, said: “The automotive industry needs an agreement that maintains competitiveness and allows companies to continue trading with their UK partners. The UK is the 4th largest customer for automotive components manufactured in Portugal”.

The 23 automotive association signatories include:

  • ACAROM – Romanian Association of Automobile Builders www.acarom.ro
  • ACEA – European Automobile Manufacturers Association www.acea.be
  • ACS – Automotive Cluster of Slovenia www.acs-giz.si/en
  • AFIA – Portuguese Manufacturers Association for the Automotive Industry www.afia.pt
  • AIA – Czech Automotive Industry Association www.autosap.cz
  • ANFIA – Italian Association of the Automobile Industry www.anfia.it
  • AUTIG – Danish Automotive Trade & Industry Federation www.autig.dk
  • BIL SWEDEN – Swedish Association of Automobile Manufacturers and Importers www.bilsweden.se
  • CCFA – Committee of French Automobile Manufacturers www.ccfa.fr
  • CLEPA – European Association of Automotive Suppliers www.clepa.eu
  • FEBIAC – Belgian Federation of Automobile and Motorcycle Industries www.febiac.be
  • FKG – Scandinavian Automotive Supplier Association www.fkg.se
  • FFOE – Austrian Association of the Automotive Industry www.fahrzeugindustrie.at
  • ILEA – Luxembourg Automotive Suppliers Association www.ilea.lu/
  • MGE – Hungarian Vehicle Importers Association www.mge.hu
  • PFA – French Association of the Automotive Industry www.pfa-auto.fr/
  • RAI – Dutch Association for Mobility Industry www.raivereniging.nl
  • SDCM – Polish Association of Automotive Parts Distributors and Producers www.sdcm.pl
  • SERNAUTO – Spanish Association of Automotive Suppliers www.sernauto.es
  • SIMI – Society of the Irish Motor Industry www.simi.ie/en
  • SMMT – Society of Motor Manufacturers and Traders www.smmt.co.uk
  • TAYSAD – Automotive Suppliers Association of Turkey www.taysad.org.tr
  • VDA – German Association of the Automotive Industry www.vda.de
  • ZAP – Automotive Industry Association of the Slovak Republic www.zapsr.sk

 


Notes to editors

1: SMMT calculations covering cars and LCVs. Ave FX rate of Aug 2020 of £- € @1.110715. Based on imposition of 10% tariff = 6.3%
price rise = 18.9% drop in demand. Uses average new car and LCV prices based on JATO data.
2: ACEA pocket guide 2020 / 21
3: SMMT & ACEA calculations, IHS Markit LV Production Recovery Tracker (July 2020)
4: UK Global Tariff (10% for cars / vans) & EU Common External Tariff (10-22% dependent on category and tonnage)
5: ACEA pocket guide 2020 / 21 includes cars, vans and HGVs
6: ACEA pocket guide 2020 / 21 (passenger vehicles and LCVs only)
7: SMMT calculations covering cars and LCVs. Ave FX rate of Aug 2020 of £- € @1.110715. Based on imposition of 10% tariff = 6.3%
price rise = 18.9% drop in demand. Uses average new car and LCV prices based on JATO data.
8: ACEA pocket guide 2020 / 21

 

About the EU sector

  • 14.6 million Europeans work in automotive, accounting for 6.7% of all EU jobs.
  • Motor vehicle taxation brings in €440.4 billion for governments in major European markets
  • The automobile industry generates a trade surplus of €74 billion for the EU.
  • The turnover generated by the automotive industry represents over 7% of EU GDP.
  • Investing €60.9 billion in R&D annually, the automotive sector is Europe’s largest private contributor
    to innovation, accounting for 29% of total EU spending
  • EU leads the world when it comes to self-driving vehicles, responsible for more than 30% of all global
    patent applications.

 

About CLEPA

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 30 billion euros yearly in research and development. Automotive suppliers in Europe directly and
indirectly employ nearly five million people across the continent.

 

 

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.