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The European Automotive Aftermarket: The impact of the economic crisis and of the protection of

competition principles of the SMEs of the sector

EESC meeting on SMEs, Crafts and Professions Category 05 March 2013

Sylvia Gotzen FIGIEFA Secretary General

Joint presentation by

Servizi alla Comunità

AUTORIPARAZIONE

AUTORIPARAZIONE

The European automotive aftermarket

The automotive sector is more than only the car

industry!

The European automotive economy encompasses

the production of cars…

but also their operation throughout their working lives/the services that

keep them on the road

The European automotive aftermarket

Repairers

Roadside patrols

Parts manufacturers

Parts wholesalers Remanufacturers

Tool manufacturers

Data publishers

Training institutes

Europe’s aftermarket is a

chain of operators:

848 000 companies

4,7 Million employees

SMEs are the backbone of the aftermarket

Companies on the aftermarket are predominantly SMEs:

• Example: 93,7% of all parts distributors on the European automotive

aftermarket are small, 5,6% medium and only 0,7 % large

companies (Wolk Aftersales Experts, 2012)

• SMEs owners or company managers are generally highly involved in

all steps of the business/work processes

• Direct and long-term relations with suppliers/clients and their staff

• They are sustainably managed for the long term

• SMEs create and retain local and regional employment

SMEs on the aftermarket should receive the same promotion by

the European policy as SMEs in other sectors.

Structure of the Aftermarket

The economic crisis and the aftermarket

Overall financial and economic crisis

1) ~2008 - 2010

• General crisis of the automotive industry

• Car manufacturers and OEM-related first equipment suppliers highly

affected by the crisis

• Many EU Member States reacted with financial support (scrapping

schemes)

• Aftermarket less severely affected

• As a consequence, vehicle manufacturers have i.a. intensified their

aftermarket business activities

The economic crisis and the aftermarket

Overall financial and economic crisis

2) 2011 onwards: A varied picture

• OECD: “Even though the European car industry clearly has

problems, it does not seem justified to speak about a European-wide

crisis of the car industry as some car manufacturers are doing

reasonably well”.

• Aftermarket is affected as well, e.g. Italy recorded a drop of 30% in

repair and maintanance services

• Consumer purchasing power has strongly decreased, with the

consequence that repair and maintanance is postponed or not

carried out at all.

Problems with current policies

• The current European industrial policy and CARS 2020 focus their

activities very strongly on the car manufacturers

• They make the vehicle manufacturing industry look more important

than it is: “12 million jobs”

• The aftermarket is distinct from the new vehicle market, it is also its

indispensable complement.

• The whole of the European automotive economy must be taken into

account

Design a „good“ industrial policy which takes an holistic approach of

the automotive sector and supports the entire lifecycle of a vehicle

EU Policy Framework

Problems with current policies

Figures provided by vehicle manufacturers

Contribution to EU’s economy and competitiveness

• Maintain effectiv ecompetition and provide freedom of choice in

repair and maintanance services-close to the consumer

• Ensure affordable mobility for 260 million motorist consumers during

the entire life of a vehicle

• Contribute to Europes competitiveness

• Support keeping 4,7 million jobs local and sustainable

The functions of the aftermarket

Suggestions by CNA / ADIRA / CONFARTIGIANATO / FIGIEFA

EU measures to soften impact of the crisis for SMEs

in the automotive aftermarket

Competition policy

• Enforcement of Automotive Block Exemption Regulation 461/2010:

Help SMEs to enforce prohibition of (contractual) clauses which

oblige or lead car owners to exclusively use the authorised network

for the repair and maintenance operations (e.g. misleading warranty

conditions)

• Ensure that the insurance industry respects the car owner’s freedom

of choice for repairs for the workshop of his or her preferrence.




Fiscal policy

• Reduction of VAT for the repair and maintenance sector (e.g. 10%)

• Possibility of fiscal deduction for repair and maintenance expenses

Promotion of environmentally friendly technologies in the entire

value chain

• Incentivise the installation and use of fuel gas equipment in vehicles.

Short term beneficial effect for reduction of emissions and creation of

jobs




Cutting red tape

• Type-approval legislation for aftermarket products (e.g. test

equipment) are still defined by EU Member State bodies who add

national clauses thus hampering the marketing and free trade of our

products.

Better access to finance

• With increasing technological complexity of vehicles, a continuous

investment in tools, test equipment, information and training is

crucial for survival. However, access of SMEs to bank credits is

currently difficult and must be eased.

• That the impact assesment for any new European legislation would

not only consider the competitiveness effects for the vehicle

manufacturers but also its effects on the aftermarket

• Design a „good“ industrial policy which takes an holistic approach of

the automotive sector/ Support the entire lifecycle of a car




Improve functioning of existing legislation: Access to technical

information

• Despite the Automotive Block Exemption Regulation or the ‘Euro 5’

legislation, there are still major deficiencies in the availability/release

of technical information by vehicle manufacturers (see Report of

October 2012 the French Competition Authority on the Functioning of

Competition in the Aftermarket): SMEs need support for

enforcement activities.




Impact assesment for new legislation

• The impact assesment for any new European legislation sould not

only consider the competitiveness effects for the vehicle

manufacturers but also its effects on the aftermarket

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The European Automotive Aftermarket: The impact of the economic crisis and of the protection of

competition principles of the SMEs of the sector

Thank you very much!