How Can the Regulatory Framework Help to Improve the Competitiveness of the European Automotive...
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Transcript of How Can the Regulatory Framework Help to Improve the Competitiveness of the European Automotive...
How Can
the Regulatory Framework
Help to Improve
the Competitiveness of the
European Automotive Industry?
Ivan Hodac
Secretary General of ACEA
FEBIAC General Assembly
Brussels, 16 June 2005
ACEA: An Overview
ACEA represents the whole European automotive industry 13 companies, CEOs members of the Board 24 National Associations as associate members 17 million vehicles produced per year 1.9 million direct jobs 19 billion € in R&D investment 33.5 billion € of net trade contribution 340 billion € of tax revenues
Average car Production per 1.000 inhabitants
2005
0
10
20
30
40
50
60
70
80
90
100
BEL CZ J AP SPA GER SK SLO KOR FRA CND SWE UK NL ITA POR USA WOR
Země
Výro
ba v
ozi
del n
a 1
000 o
byva
tel
ACEA Challenges
ACEA represents an industry and a product that is constantly under the spot in many areas:
Environment (emissions, CO2, ELV, noise…) Safety (e-safety, pedestrian, EuroNCAP…) Mobility Intellectual Property (design protection…) Tax, etc.
This means we are constantly under pressure and in the public arena
ACEA Achievements
The European Industry has made significant achievements towards sustainable mobility and
is fulfilling its societal responsibilities:
Reductions in emissions / CO2
Reductions in noise (by 90% since 1970)Recyclability of cars (almost 95%)Active and passive safety (belts, ABS, ESP, airbags, …)e-SafetyMobility (navigation systems, RTTI)
We should speak up about all these achievements!
The competitive development of the European automotive industry depends on a strong and profitable home market, requesting high market acceptance of its products!
A strong home market is crucial for the industry to:Enhance Europe as a high volume and profitable automobile
production location; Safeguard jobs at stake; Enhance Europe’s potential in the field of R&D and
technological innovation.
Economic Situation of the MV Industry
Profitable Home Market
Market acceptance
Growth on third markets
Economic Situation of the MV Industry
Today, the European market constitutes the most competitive and at the same time the least profitable market in the world!
EU Car Price Index : Price indices between 1996 and mid-2003
90
93
95
98
100
103
105
108
110
113
115
Indice : base 100 en 1996
HICP
Nominal Car Prices
Real Vehicle Prices
Estimated Operating Margin by Region 1991 and 2002
-3,0% -2,0% -1,0% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0%
Europe
N. America
Asia
1991 2002
Source: Deutsche BankSource: EurostatHICP: Harmonised Index of Consumer Prices
Economic Situation of the MV Industry
ACEA members have lost market shares in their home market to the benefit of Japanese and Korean makers
Source: ACEA
1990 1995 2000 2003 2004
ACEAJAPANKOREA
88,1%11,8% 0,1%
87,8%10,7% 1,5%
85,2%11,4% 3,4%
84,0%12,7% 3,3%
83,2%13,1% 3,3%
The Issue of Competitiveness
The EU Commission has officially recognized in itsEuropean Competitiveness Report of 2004 that it exists a link between the Regulatory Framework and Competitiveness:
“Clearly, the competitiveness of the automotive industry depends on a coherent and cost-effective regulatory
framework […] Progress is still to be made in reducing regulatory complexity and in designing regulations so as to meet their goals while taking into account possible conflicts between regulations, their cumulative impact and their
external aspects”
EU has a higher number of automotive regulations
EU has not a completed internal market
EU has higher regulatory stringency and demands for the automotive industry
EU has shorter lead times than the US
EU has higher bureaucracy and red tape
EU has a lower economic growth
EU automotive market is less profitable
The Regulatory Burden: A comparison with the US
Factors affecting the Competitiveness of the Industry
Factors affecting the Competitiveness of the Industry The regulatory burden
EU directives & regulations concerning vehicles
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50
100
150
200
250
Numb
er
EU directives & regulations concerning vehicles
Amendments to these EU directives & regulations
Incoherency of EU legal requirements:
Ex.1 : Fuel efficiency versus NOx emissions
Ex.2: Safety requirements versus CO2 emissions
Ex.3: Pedestrian safety versus industrial design protection and CO2 reductions
Consequences:
- Regulatory density increases the costs of doing business in Europe!
- Budget is devoted to meet new regulatory requirements (and updates) rather than to more competitiveness-orientated investments (R&D,…) - Cumulative cost resulting from legislative pressure
Industry performance suffers from numerous and often un-coordinated and unbalanced EU regulations, that are interpreted and implemented differently in the various Member States!
Unfavourable market acceptance of EU legislation Customers are not willing to pay for features which are not
for their direct interest: environment, recycling, pedestrian safety (ex.: low success of the green models of several B-cars in EU)
Introduction of non-technical legislation which has or will reduce the profitability of the industry: Design protection of spare parts, distribution system, warranty
New policy of the Commission to promote ratings, labels or transport policies which will add costs to the vehicle or its use (Euro-NCAP, green purchasing, road pricing,…)
Factors Affecting the Competitiveness of the Industry
The Regulatory Issues
CARS 21
In January 2005, the Commission has launched CARS 21, an innovative initiative to address
competitiveness of the automotive sector:
HLG composed of EU Commissioners, MEPs, National Ministers, Industry (auto, suppliers, oil), NGOs, Trade Unions and MotoristsMeetings throughout 2005, leading to a final report with recommendations to improve competitiveness, reduce costs and avoid cumulative effects of regulation, draft a new regulatory framework for the next 10 yearsFocus on: Competitiveness, better Regulation, Environment, Safety
CARS 21 is a recognition by decision-makers that regulatory issues do affect competitiveness
Define an efficient and competitive automotive policy process and framework
Support the full and rapid completion of the Internal Market
Promote an efficient R&D and innovationframework
Promote an efficient European Transport Policy
Promote a dynamic trade and investmentenvironment in third countries
Reinforce the Competitiveness Council so that it can more effectively and coherently fulfil its mandate
CARS 21ACEA Priorities (Horizontal)
CARS 21ACEA Priorities (Vertical)
CO2 emission reductions (incl. Integrated approach)
Future legislation on emission standards (PCs and CVs)
Safety (incl. integrated approach)
Design protection for visible spare parts
Taxation
WVTA Framework Directive for CVs
Example: Design Protection
The proposal to abolish design protection rights on visible spare parts, adopted by the EU Commission in September 2004, is a good example of « bad regulation »:
No proper impact assessment done and little consultation with the industry
No respect of review procedures contained inprevious legislation
Inconsistent with EU overall policy on intellectual property
No proven price benefits for consumers
Open door to quality and safety issues (compliance with pedestrian protection rules?)
A 2,5 billion Euro present for parts producers outside the EU
Example: Digital Tachographs
The date of entry into service of Digital Tachographs(5 August 2005) has been confirmed, but Member States and suppliers are not ready: National legislation not in place in 12 MS Tachographs Cards not in place in 15 MS Workshop Authorisation not in place in any MS Enforcement Agencies not in place in 17 MS 3 out of 4 digital tachograph producers have still not started deliveries
To date the EU Commission has taken no steps to clarify the situation, despite an EP vote calling for a moratorium. Commission must have the means and the will tocorrect such a situation!
Example: CO2 Reductions
So far, CO2 reductions have been achieved exclusively through technological measures put inplace by manufacturers, while significant and lesscostly progress could be made through an integrated approach comprising:
Vehicle Infrastructure Driver Other Stakeholders
Situation is similar for Road Safety !
Example: China
China is becoming an increasingly important market in the global automotive scene. European manufacturers play a key role in China, but are faced with a number of specific issues:
Chinese Compulsory Certification Joint-Ventures Local Content Emissions Intellectual Property Rights
This penalizes access to Chinese market. Support from the Commission is needed.
Prioritazion and coordination of EU policies
Proper IA methodology and processes
Proper and timely consultation of the industry
Holistic approach to legislation
Technology neutrality
Split-level approach
Art. 95 as legal basis
Global harmonisation of technical rules
Sufficient lead-time
Simplification of EU legislation
ACEA Better Regulation Principles
ACEA Three Pillars Approach
Better Regulation
Develop better Regulation principles
on which to base effective EU automotive policy (incl. review of regulatory process)
Pending Legislation
Review, applying better Regulation principles, pending legislation proposals
Reduce cost of legislation
Future Legislation
Apply better Regulation principles & pro-competitive regulatory process to all future legislation
Put on hold any legislation proposal not respecting these principles
Conclusions
CARS 21 is the first test case for a new, holistic approach to sectorial regulation
Competitiveness must becomes a guiding principle
of EU industrial policy and must be translated into concrete actions ! Cars need to remain affordable !
The EU needs to take into account the global dimension of the automotive market and its future challenges (China, India)
Only a competitive and healthy automotive industry can continue to prosper and innovate, and to
contribute to European economies and sustainable mobility !