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

 

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 

 

 

Automotive suppliers brace for impact of Covid-19 crisis, call for coordinated support measures

The European automotive supply industry is bracing itself for the impact of the Corona-19 crisis, with activities coming to a standstill due to supply shortages and falling demand and, most importantly, to protect the health of employees and the community at large. The industry stresses the need for strongly-coordinated support measures taken across Europe.

in CLEPA, 25-03-2020


CLEPA, with the support of McKinsey, has polled its members over the past few days on the impact of the Covid-19 crisis. While it is difficult to make firm predictions at this stage, 60% of respondents expect to lose 20% or more of revenue. Over half of respondents count on a full recovery time of at least 6-12 months. 95% of respondents call for fiscal support by governments, 80% support labour market measures including temporary work time reduction and 76% call for cash infusion and measures to increase access to liquidity.

“The automotive supply industry needs strongly-coordinated support in Europe a number of areas, including financial and labour related measures”, said Sigrid de Vries, CLEPA Secretary General. “Relaxing state aid rules and providing tax breaks, investment guarantees, loans and other means are essential to help ensure the survival of many healthy companies which are hit by the crisis. Transparency, coordination and the availability of easily accessible information across the EU are a clear need as well.”

“The period beyond the immediate health crisis must already be in focus too, to help ensure that the economic impact can be mitigated as much as possible. Early planning, coordination and synchronisation across borders and supply chains will again be crucial. Steps must also be taken to strengthen the global competitiveness of the automotive industry, keeping in view the twin ambition of a carbon-neutral and digital society”, she added.

Automotive suppliers large and small are taking numerous initiatives to help the manufacturing of essential medical equipment and protective gear, as well as to provide support in other ways such as sharing health & safety practices or supporting local community initiatives. “Many of our members contribute to containing the virus and to saving lives by producing ventilators, providing safety masks and through other means”, said De Vries.

Covid-19 will undoubtedly have a major impact on the economy, including the automotive industry. Automotive suppliers have announced temporary closures of manufacturing plants at a large scale. “In most cases only limited production and core functions will continue to uphold essential operations and services, as well as to secure the availability of spare parts for repair and maintenance. It is expected that 90% of activity will come to a halt for at least a number of weeks and also non-manufacturing work is increasingly scaled back. Some companies are already in economic distress and need support.”

CLEPA informs its members on a regular basis and has set up a Covid-19 Task Force composed of member companies and associations. In times where strong cooperation is needed, CLEPA is also collaborating with other organisations and stakeholders in Brussels.

 

Industrial reinassance? Why automotive is a critical technology for Europe

Does Europe’s automotive industry lag behind, supposedly stuck in producing “state-of-the-art technology that is however no longer wanted”? Or is Europe’s automotive industry a key asset in the quest for carbon neutrality, digital leadership and a sustainable, globally competitive economy?

in CLEPA, by Sigrid de Vries, 05-03-2020


Regardless of what might seem popular belief, it’s high time general mindset adapted to the latter. The upcoming new Industrial Strategy offers a key opportunity to do so.

It’s not a matter of ‘if’ but of ‘how’ to achieve the ambitious objectives of carbon neutrality, digitalisation and sustainable growth. And for that to happen, Europe must play to its strengths. The European automotive industry, and in particular the automotive parts and components industry, has strong assets to this regard.

Automotive is a prime example of a strategic value chain, and mobility is a booming business

The sector ranks among the most competitive, innovative and resilient, employs a highly-skilled workforce of 5 million and invests more in R&D than any other private party. Automotive is also a prime example of a strategic value chain, with a long string of companies and activities linking the products’ coming about from cradle to grave and back, and with a wide ripple effect into other parts of the economy. One job in vehicle manufacturing creates on average 3 more in the direct supply chain and a further 3 to 5 in the wider economic fabric.

Mobility, furthermore, is a booming business with further growth and demand expected. With the face of mobility changing to connected, automated, shared, seamless and multimodal, products and services become increasingly smart, linked, usage rather than ownership centred, and technologically complex. There is a lot of value to be had in mobility, with new players from tech to telecoms eagerly wanting a piece of the growing pie.

Why is China investing so heavily in growing its own competitive automotive industry? Because of the high value-add and trigger effect for broader economic activity. How does China try and secure a place at the global automotive stage? By putting massive efforts in automotive R&D aiming for advanced quality products, mimicking the strategies of its strong EU competitors.

The sensors in your smart phone that measure your steps or ambient temperature were designed for use in cars first, not phones

Does China limit itself to electric vehicles? No doubt electric is where the offensive started, rooted in cheap access to battery production as much as in trailing competence in combustion-engine technologies. But China is also the world largest producer of ‘traditional’ vehicles and powertrain components (20% of Europe’s imported automotive parts come from China, as the impact of the Corona virus has vividly brought to attention), and the country is massively eying hydrogen-based solutions as well. Because mobility doesn’t allow a one-solution focus: urban buses are a key target, as is long-haul transport.

Will it then, ultimately, be the large tech companies that make their automotive competitors obsolete? At least for now, the tech-meets-automotive encounters don’t point in that direction.

Tesla’s positioning itself as a tech company can be seen also as an acknowledgement that understanding and mastering whole-vehicle architecture is a competence in itself. A vehicle is a complex system of systems which need to work in an integrated, secure, safe, clean and steady manner for years on end. The sensors in your smart phone that measure your steps or ambient temperature were designed for use in cars first, not phones, and by automotive suppliers who are used to design against extreme circumstances, be it vibrations, weather events or others.

Together with the vehicle manufacturers, automotive suppliers combine expertise in technology, vehicle architecture and manufacturing that is second to none in the world. They lead in system integration which allows manufacturing of a complex good like a car on industrial scale, at highest quality level at competitive cost. Integration of advanced technology at ‘automotive grade’ level represents an excellence, a critical knowledge and strategic knowhow that are precious and enviable.

There is no alternative to climate change or digitalisation. What’s needed, is a business case that works

The challenge now, for Europe, is to allow European industry to thrive in order to meet the ambitious targets society has set. The justification is a given; there is no alternative when it comes to climate change or digitalisation. What is needed, is a business case that works—a model to earn a revenue by serving customer demand, upholding the values we all hold dear, supporting economies and jobs in Europe in successful competition with other regions in the world.

In business terms this means two things: if Europe is serious about leading the world, this must also entail that others actually follow. If they don’t or adopt a different pace, Europe risks losing crucial parts of its value chain and the ultimate goals won’t be achieved either.

The second reality is that current technology pays for new technology. Hence, innovative transitional technologies are an essential asset and lever to establish a mass-market for the more disruptive solutions, in an ecological, affordable and economically sustainable way.

We have high hopes for the new EU industrial strategy which is to accompany the Green Deal and the Digital Agenda. The signals from the Digital Strategy and Data Strategy are positive. As regards the ambition to turn the Green Deal into a growth strategy, CLEPA will work with policy makers and stakeholders to ensure a supportive regulatory framework that is free of technology bias, promotes innovation, invests in education and skills, and applies a holistic approach. We are keen on looking at the broader picture of both the vehicle and the system it is embedded in, including infrastructure, energy sources and carriers, and the link with related strategic value chains.

 

Sigrid de Vries, CLEPA Secretary General

CLEPA Press Release | EU Climate Law: “Long-term planning essential, regular check against delivery too”

The Commission adopted yesterday the proposal for a Climate Law, containing the “binding objective of climate neutrality in the Union by 2050”, the right for the Commission to adopt the post 2030 trajectory in comitology, as well as a framework to implement corresponding policies and to assess progress on Union and member state level.

in CLEPA, 05-03-2020


Sigrid de Vries, Secretary General of CLEPA, the association of automotive suppliers’ in Europe:  “We consider the climate law as one instrument of several within a comprehensive strategy on mitigating climate change, reaching climate neutrality in 2050. We support the development of a long-term EU strategy to reduce GHG emissions because of the inherent opportunity to provide planning certainty for companies. It should be built on a clear definition of what constitutes climate neutrality and on an assessment of the impact of such a law on the citizens and companies within the EU to ensure that we maintain the balance of ecologic, economic and social aspects.

“The reduction of GHG emissions depends largely on technological innovation, its deployment and acceptance by citizens. It is not possible to forecast reliably such progress or prescribe it by policy in the long-term perspective up to 2050, making regular reviews of the effectiveness of the strategy and potentially adjustments necessary. Similarly, GHG emissions will have to be reduced substantially outside the EU as well for the policy to be effective. Such reduction should be considered in the review of the EU climate policy.”

“In the Climate Law, there is no reference to policy developments in other important regions of the world, such as China or the US. The Climate Law foresees to assess progress towards climate neutrality but not the policy approach itself, whereas a regular check of being on the right track would benefit from such assessment too.”

The automotive suppliers’ industry in Europe is a driving force behind the transformation to sustainable, safe, and smart mobility. We support the Paris agreement and are ready to contribute to a reliable, technology-open, and ambitious regulatory framework to achieve its objectives. We urge the European legislators to build on Europe’s strengths—the single market, the continent’s advanced technology competence, its high value-add industrial base and global competitiveness—and to provide the coordinated and comprehensive regulatory framework needed to master the monumental tasks unfolding.”

 

European Commission’s digital package outlines regulatory and policy actions for connected and automated driving

Commission President Ursula von der Leyen presented today three publications setting out the Commission’s priorities on digital issues: “Europe for the digital age,” “A European Strategy for data,” and a White Paper on Artificial Intelligence. The Commission also sets out to adopt in 2020-2021 a number of legislative proposals which will directly influence the deployment of connected and automated driving, such as a revised liability framework to address safety and liability for automated cars and a review of the type approval legislation for motor vehicles to open it up to more car data based services.

in CLEPA, 19-02-2020


CLEPA supports the European Commission’s overall approach outlined in today’s publications, and stresses the importance of digitalisation in the automotive sector’s transformation. Sigrid de Vries, Secretary General of CLEPA, the association of the automotive suppliers’ industry in Europe, comments:

“Connectivity, higher levels of vehicle automation, and the move towards near or full autonomous driving are megatrends that are transforming mobility, and the automotive suppliers of Europe are a driving force behind this transformation towards sustainable, safe and smart mobility. We support the Commission’s objective to provide the supportive regulatory framework needed to make this transformation a success for Europe.”

In its European strategy for data, the Commission states its intention to make more data available in order to help data-driven businesses to emerge, grow, and innovate. CLEPA shares the Commission’s views on the value of data for the European economy and society. Therefore, we warmly welcome this approach and, in particular, support the idea of developing a “common European mobility data space” in order to make it easier to use data produced by connected cars, while ensuring that citizens remain in control of their personal data. Sigrid de Vries comments:

“Connected and automated vehicles will generate large amounts of data, which holds great potential for the automotive industry. Under the right framework conditions, the availability of automotive data will allow the development of new business models that help finance the innovation that will assure continued European leadership in the global mobility market. For the success of new services, especially in repair and aftermarket, independent and unmonitored access to in-vehicle data and resources must be ensured for third parties.”

CLEPA also welcomes the Commission’s proactive and supportive approach towards the development of Artificial Intelligence (AI) and its objective to make Europe a frontrunner in this new technology. We support the incentives proposed to boost the development and uptake of AI across the EU economy. We also agree that ensuring citizens’ trust and acceptance is crucial. However, automotive suppliers believe that a balance must be achieved to ensure that this goal does not stifle innovation, which could reduce the safety benefits that automated vehicles can bring. Sigrid de Vries says:

“Advanced driverless technology needs to be embedded in a regulatory framework, and public acceptance of future driverless cars and trucks needs to be increased. CLEPA fully supports the Commission’s objective to review existing EU legislation and adapt it to better address the risks of safety and liability in the context of AI. The risk-based approach adopted by the Commission is the right one to prevent the regulatory framework from being overly prescriptive and disincentivise innovation in this emerging field. However, automotive suppliers must also caution against one-size-fits-all approaches: AI for automated cars is highly complex and must make quick real-time decisions. This differs widely from AI applications for other fields, and should be reflected in any regulatory or policy approach.”