Tag: SUPPLIERS

CLEPA | Automotive suppliers cautiously optimistic despite continuing pressure on profit margins

adminafia Leave a comment
  • CLEPA and McKinsey’s semi-annual survey shows nearly half of suppliers expect profits to remain low, with nearly one-quarter expecting losses in 2023
  • General outlook is more positive compared to 6 months ago; 35 percent of suppliers are optimistic about the future, while 35 percent remain concerned
  • Business activities in China are both a strategic priority and challenge, with 45 percent of European suppliers involved from a moderate to great extent

in CLEPA, 23-05-2023

Europe’s automotive suppliers are regaining some of their optimism about the future, according to the latest Pulse Check survey conducted by CLEPA and McKinsey in February 2023. While almost half of the surveyed suppliers anticipate low profit margins, the general outlook is good, with 35 percent expecting positive market growth.

This indicates a significant shift in sentiment from the last survey conducted in the fall of 2022, when 70 percent of suppliers had a pessimistic outlook. This mood change is mainly due to the prospect of higher revenue, expected by two thirds of suppliers surveyed. At the same time, profits remain a source for concern, as nearly half (43 percent) of suppliers expect a low EBIT margin of just 1 to 5 percent with only one quarter expecting their profits to climb higher.

“Despite the overall improvement in sentiment compared to six months ago, the pressure on supplier profits remains a key concern for the industry,” says Andreas Venus, Senior Partner at McKinsey. “After two difficult years, the mood in the industry is lifting a bit but it’s too early to assume the risks have been completely overcome.”

To address this, many suppliers remain focused on improving profits by exploring three levers: having manufacturers compensate added costs to the suppliers, monitoring direct and indirect costs even better, and adapting their product portfolios. Although many companies have managed to adjust their prices and enhance supply-chain resilience while also shifting towards e-mobility, there are still persistent concerns among industry players regarding the potential for a recession and an uncertain inflationary environment. However, an increasing number of suppliers are actively pursuing long-term challenges and are exploring new investment opportunities to foster future growth.

“The results of the Pulse Check affirm the automotive supply industry’s dedication to investing in innovation,” states Benjamin Krieger, CLEPA Secretary General. “The shift in mobility and the transition towards green technologies present exciting prospects for automotive suppliers. However, the competitiveness of the EU as an investment destination and the accessibility and adequacy of capital to fund these investments remain significant concerns.”

Investment needs and access to skilled workers are a major strategic challenge. Despite profitability pressures, a minority of suppliers is looking to reduce investments (37 percent) or R&D expenses (18 percent). In terms of personnel acquisition, engineers remain the most sought-after group – 76 percent of suppliers say that finding and hiring these employees has become more difficult in the last five years. Demand is also still high for software developers (38 percent) and sourcing experts (35 percent).

The importance of establishing and expanding business relationships with customers in the Chinese market continues to increase, adding an additional layer of complexity and opportunity for automotive suppliers. Doing business in China is a top strategic priority for suppliers, with 45 percent involved from a moderate to great extent, and accounting for around 10 percent of business revenue. If supply chains are considered, two thirds of companies are highly dependent on China. However, just under 40 percent of suppliers have taken concrete steps to manage the potential risks of doing business in the country.

 

 

About CLEPA

  • CLEPA represents over 3,000 companies supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over €30 billion yearly in research and development. Automotive suppliers directly employ about 1.7 million people in Europe.

About McKinsey

  • McKinsey is a global management consulting firm committed to helping organizations accelerate sustainable and inclusive growth. We work with clients across the private, public, and social sectors to solve complex problems and create positive change for all their stakeholders. We combine bold strategies and transformative technologies to help organizations innovate more sustainably, achieve lasting gains in performance, and build workforces that will thrive for this generation and the next.

 

 

Innovation is key to preserve Europe´s leadership in the mobility sector

adminafia Leave a comment

CLEPA, together with the European Forum for Manufacturing, hosted a dinner debate at the European Parliament yesterday, focusing on the importance of innovation for preserving and boosting European leadership in the mobility sector.

in CLEPA, 06-12-2018

The dinner-debate “Driving innovation forward” hosted by Members of the Parliament John Procter and Andor Deli, was attended by several other MEPs, European Commission officials and industry representatives, among others. The two winners of the CLEPA 2018 Innovation Awards – Plastic Omnium in the category Environment and Bosch in the category for Safety — were among the speakers that highlighted the benefits of continuous investment in research and development.

 

Innovation is crucial in the mobility sector as it contributes to sustainable and efficient transport and supports European competitiveness. Over the last years, European automotive suppliers have invested more than €22 billion per annum in innovative technologies putting them at the forefront of developments.

 

Innovation is closing the gap to achieve society’s 2050 environmental and safety targets. Automotive suppliers support a holistic approach that rewards innovation and efficiency and brings synergies between technologies, policies, infrastructures and sectors. Safety innovations are an equally essential and rich avenue for development, contributing to support Europe´s industrial competitiveness.

 

CLEPA organises the yearly Innovation Awards competition, that recognises the accomplishments made by European automotive system and component manufacturers in the areas of Environment, Safety, Connectivity, Automation and Cooperation.

 

Sigrid de Vries, CLEPA Secretary General commented: “It is increasingly important to develop new technologies and systems for an ever-higher performance in terms of safety, sustainability, connectivity and seamless mobility. Companies largely carry these investments themselves, injecting substantial revenues back into their product development. However, support from funding programmes remains highly important to boost pre-competitive and collaborative research involving universities, research organisations, industry, SMEs, and other actors research. Here, Europe can continue to play an important role in support of global leadership.”

 

On his opening speech, MEP John Procter highlighted “There is clear need for supporting R&D In Europe. The development of research, supply, processing and production strategies into light-weight component construction developments is crucial for advancement in a low-carbon transition in the automotive sector”. Also, MEP Andor Deli commented “technology neutrality must prevail, based on a ?well-to-wheel? approach on vehicle emissions. There is a request to the European Commission to propose a methodology for this by the end of 2022” also, he subscribed the importance of having an innovation strategy on the CEE countries that “aims to attract the research and development teams of the automotive OEMs for not just traditional but also autonomous driving”

 

——————————————————————–

More information about CLEPA Innovation Awards here

2018 Awarded innovations brochure 

Videos from the winners in our YouTube channel

 

The policy papers and pictures from the event will be available next week at the European Forum for Manufacturing website   http://www.euromanuforum.com/

 

 

 

Automotive suppliers urge co-legislators to stay with CO2 targets proposed by European Commission

adminafia Leave a comment

“The European Commission proposal of a 30% reduction is a challenging yet realistic target, based on a thorough evaluation of the various elements at stake, environmental priorities prevailing”, comments Roberto Vavassori, President of CLEPA, the association of the automotive suppliers’ industry. “We call on the co-legislators not to go beyond the original proposal. Any target above 30% is exposing our industry to a concrete risk of disruption.”

 

Member States are expected to take a decision on their position on October 9 at the Environment Council. Once both institutions have adopted their respective positions, tripartite negotiations will resume with the aim of agreeing and adopting the legislation.

 

“Automotive suppliers fully support the goal of decarbonising mobility and produce a wealth of technologies to achieve this. Technology neutrality is an important compass which regulators should not abandon, as it enables the deployment of the broadest spectrum of solutions. Today´s vote, however, favours Battery Electric Vehicles (BEVs) at the expense of other solutions, such as hybridisation and alternative fuels, which have a major potential to contribute to decarbonisation as well,” adds Vavassori.

 

“It is our declared aim to remain globally competitive with a large variety of smart, safe and green mobility-related technologies, supporting the jobs of five million people in Europe today. Competitive regulation supporting both the environment as well as employment is a key to Europe’s success”, says Vavassori.

 

“It is crucial too that the boundary conditions for the regulation will be improved in the weeks to come”, says Sigrid de Vries, CLEPA Secretary General. “Today, MEPs not only voted for a stricter regime for ‘eco-innovations’, technology solutions which reduce emissions without being recognised by the test cycle. They also supported a ‘malus’, a penalty for vehicle manufacturers which fail to achieve a benchmark of mostly battery electric vehicles as a proportion of their overall sales. This amounts to a de facto prescription of technology. It is disappointing that proposals for a better recognition in the benchmark of hybrid technology have been rejected.”

 

The Parliament also calls on the Commission to develop a methodology for the life-cycle analysis of embedded emissions in fuel and energy production as well as in the manufacture of vehicles and parts. “This is important to level the playing field for combustion engines, electric vehicles and the many variants in between. Making the step towards well-to-wheel or life-cycle analysis is a welcome approach for future legislation”, says De Vries.

 

Members of the European Parliament approved the report 389 in favour, 239 against and 41 abstentions and adopted the mandate for the rapporteur to begin tripartite negotiations with the Council and the Commission.

 

 

US president announces revised trade deal between US and Mexico

adminafia Leave a comment

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

in CLEPA, 29-08-2018

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

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

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

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

 

Background:

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

 

 

Source: CLEPA, MEMA

 

 

Positive and constructive dialogue in transatlantic trade

adminafia Leave a comment

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

in CLEPA, 26-07-2018

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

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

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

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

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

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

adminafia Leave a comment

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

in CLEPA, 11-07-2018

CLEPA Secretary General Sigrid de Vries comments:

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

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

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

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

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

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

adminafia Leave a comment

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

by CLEPA, 04-07-2017

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

 

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

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

 

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

 

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

 

You can check the statement below

CLEPA STATEMENT

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

adminafia Leave a comment

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

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

by CLEPA, 03-07-2018

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

 

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

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

 

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

Automotive Industry Guideline (AIG) on REACH has been published

adminafia Leave a comment

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

by CLEPA, 02-07-2018

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

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

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

 

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

 

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

 

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

New annexes were also added:

 

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

 

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

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

CLEPA President: Smart policy avoids dependency on one technology

adminafia Leave a comment

CLEPA General Assembly confirms work programme and reaffirms leadership team

in CLEPA, 22-06-2018

CLEPA President Roberto Vavassori, speaking at the Association’s General Assembly last week, stressed that CLEPA will continue to make the case for technology neutrality, reaching out to policy makers, other sectors and societal stakeholders alike to build alliances for a holistic approach to decarbonise transport worldwide.

 

“CLEPA favours any and every technology that brings more sustainability to Europe, its citizens, its employees and its companies”, said Vavassori. There is the clear need to adopt an holistic approach to the decarbonisation of mobility. Europe’s automotive suppliers are part of the solution: we are at the same time concerned citizens wanting the best environment, critical consumers looking for the most convenient way to move around, as well as highly engaged employees in the mobility value chain”

 

“As it has been for the last century, we need to assure that the technologies for the mobility of the future continue to come from Europe. There is the need to define what I call the ‘European Way’, where a competitive regulation is an important part of the ecosystem, and the geopolitical context is taken into account. Smart policy avoids dependency on one technology, follows the circular economy principle and directs investments in a sustainable way.”

 

The CLEPA Annual General Assembly, taking place in The Hague, confirmed the activities and work plan of the association, and reaffirmed its leadership team with the election of two new vice-presidents as well as a number of Board of Director mandates. CLEPA members also reinforced the association’s operational structure, updating its governance rules and setting framework conditions to deliver on the organisation’s mission and vision.

The CLEPA focus in 2018 and 2019 will continue to be on the main regulatory dossiers currently going through the EU institution’s. These include the CO2 emission reduction proposals for both passenger cars and trucks, as well as the revision of the General Safety Regulation, which is essential to maintain the EU road safety record and prepare the way for automated driving. In addition, matters related to access to data, research & innovation, type approval, repair and maintenance, materials and substances, international trade developments and many other market access requirements are closely monitored by the association. Several of these topics will move over to the new Parliament and Commission terms, after the European elections in May of next year.

 

Since June 2017, CLEPA has added seven new members, reaching a total of 119 corporate members, 13 national associations and 11 associated members.

The next General Assembly meeting will be organised in Brussels in June 2019.