The
Automobile Industry in Europe - An Industry with Strength
& Breadth
A Report by European Automobile Manufacturers Association
(ACEA)
This is the fifth part in the series on European Automobile
Industry. The articles earlier published in the Journal
touched upon the European automobile industry's endeavours
on reducing CO2 emissions, improving air quality, clean
vehicle production processes & recycling, sustainable mobility,
road safety, European transport policy and economy, innovation,
research & development, international trade and the regulatory
framework governing European Automobile Industry.
This concluding part of the Report covers the importance
of streamlining Regulation and Technical standards in boosting
automobile industry competitiveness and providing a sound
basis to European Investors.
Harmonisation of Rules and Standards
The automotive sector is global in nature. National boundaries
define production bases, but do not reflect the myriad export
opportunities that exist across international borders.
In
Brief
Common standards and regulations are essential to
the competitiveness of the European automobile sector.
They reduce costs, improve economies of scale and
boost export opportunities in markets across the globe.
Harmonisation also benefits the environment and improves
vehicle safety. Technologies that cut emissions and
bring safer vehicles to roads can be introduced more
rapidly and more cost-effectively, if regulations
are applied globally and test criteria agreed internationally.
There is an urgent need to adopt fully harmonized
Global Technical Regulations on emission certification
testing, on-board diagnostics and off-cycle emissions.
Deviation from UNECE rules without justification from
facts and data is unacceptable.
International standards for fuel quality are also
important. Parts of the Commission's Fuel Quality
Directive on high-blend bio-fuels are unhelpful, threatening
to fragment the market even within Europe. Highlighting
a limit for metallic additives could also damage sensitive
vehicle components, leading to higher emissions and
premature component failure. |
Every
year, automotive exports worth €77.5 billion are delivered
to markets outside the EU. 40% are destined for the US.
Yet to reach these different markets, car and commercial
vehicle makers are often forced to adjust production programmes,
to comply with varying national regulations and standards
in areas like emissions and safety. This barrier to market
adds unnecessary costs, damaging competitiveness.
CARS 21 highlighted the importance of harmonisation. Global
standards and regulations bring certainty to manufacturers,
allowing them to plan and develop products for international
markets in the long term, enhancing competitiveness of the
European industry.
Europe has been at the forefront of international harmonisation
efforts, since the establishment of the 1958 Agreement of
the United Nations Economic Commission for Europe (UNECE)
on technical standards. In 1998, so-called Global Agreement
extended this.
Currently, 126 Regulations have been developed under the
1958 Agreement, covering most of the safety, emission and
power train aspects. These regulations are applied partly
mandatory, partly optional by the EU, Japan, Korea and a
number of other countries all over the world, including
some developing markets. ACEA welcomes the decision by the
EU to delete a large number of EU standards on vehicle safety
(passenger cars as well as trucks) and replace them by direct
reference to the UNECE regulations. This will be implemented
through the general safety regulation, recently approved
by the EU institutions.
At the same time, it is important to motivate as many countries
as possible to adhere to the 1958 Agreement. Therefore,
ACEA and the EU suggested including many of the new technologies
in the UNECE regulations on an optional basis, whilst they
will be mandated in the EU.
Under the 1998 Agreement, currently 9 "Global Technical
Regulations" have been adopted. These GTRs are the basis
for the harmonisation of national vehicle standards allover
the world.
The European industry will also continue to work with counterparts
in North America and Asia to pursue commonality in rules
relating to road safety, emissions, fuel quality and intellectual
property rights.
Vehicle standards
In 2008, truck makers set out the case for adopting international
standards on UNECE Global Technical Regulations. They argued
that harmonisation would help deliver the cleanest trucks
and passenger vehicles to market more quickly, benefiting
the environment while enhancing industry competitiveness.
Governments across the globe are applying policy instruments
to control road transport emissions by regulating tailpipe
limits. However, the approach can vary significantly from
market to market. In the US, Europe and Japan, this has
led to different technical solutions for standards, test
criteria and permitted emission levels. For CV manufacturers,
this has led to higher operating costs and longer lead-times
in bringing the cleanest new models to market.
Harmonising technical regulations on areas - tests, emission
limits and on-board diagnostics would reduce development
costs and help manufacturers roll-out new technologies more
quickly. This would deliver a more competitive auto sector,
but also newer vehicles with lower emissions and better
safety technologies in markets across the globe.
The CV industry is moving quickly towards achieving technical
harmonisation, which still have to be accepted at a political
level. Similarly, for passenger cars worldwide harmonisation
of emission requirement using the same arguments and claiming
the same advantages are needed. This would take some time,
and huge investments for testing will be needed.
Fuel Quality
Modern vehicles are fitted with sophisticated engines with
components and assemblies designed to operate at fine tolerances.
They are managed by computer to optimise performance, and
complemented by exhaust treatment technologies that remove
pollutants directly from the tailpipe. Together, these technology
solutions help reduce emissions and deliver the performance
demanded by commercial customers and private motorists.
The industry is concerned that regulators continue to priorities
vehicle technology in the drive to cut emission, while giving
less importance to fuel quality and to the need to develop
global fuel regulations that complement modern vehicles.
Without quality and standardised fuels, vehicles cannot
perform to their potential, generating higher emissions,
with the risk of premature component failure through contamination
and corrosion.
Automakers acknowledge European targets to increase the
use of renewable fuels in road transport to 10% by 2020.
However, the Commission's Fuel Quality Directive concerns
them. This sends conflicting messages about fuel quality,
by permitting the use of metallic additives in fuels and
by allowing member states to market diesel with a FAME content
above the 7% recommended by the industry. At a time when
the industry has been working to develop global standards
for biofuels through membership of the Worldwide Fuel Charter,
this is a retrograde step. It sends out entirely the wrong
message and must be reviewed.
Safety
Like climate change, road safety is an international issue,
which should be tackled through a collaborative effort from
all stakeholders. Manufacturers have a responsibility to
bring safety technologies to market, and innovation has
delivered huge advances in occupant protection, pedestrian-friendly
design and active technologies that help avoid a crash.
Road users, planners, governments and enforcement authorities
must also accept their role in cutting the unacceptable
death toll on roads.
Here too, an integrated approach must be applied. Safety
regulations that vary from market to market have the same
effect as those applied to emissions and fuel standards.
They create barriers that can delay the introduction of
new technologies.
Manufacturers are actively involved in the Global Road Safety
Partnership (GRSP), which brings together regulators, industry
and civil society in the poorest countries, to deliver an
integrated approach on a global level.
Voluntary measures have also been taken, such as the introduction
of seat belts as standard in all vehicles sold anywhere
in the world. All European cars are now fitted with ABS
as standard, while more recently, the industry has become
an active participant in the "Choose ESC" campaign to increase
consumer awareness of the benefits of Electronic Stability
Control.
Intellectual Property
Counterfeiting is a multi-billion euro problem that affects
all sectors of the motor industry, from parts and accessories
suppliers to packaging and even entire vehicles. It harms
the industry by delivering an unfair advantage to the supplier,
devaluing legitimate investment in R&D and threatening jobs
and prosperity in Europe.
In
Brief
Robust Intellectual Property (IP) laws encourage companies
to innovate and support investment in R&D. The automotive
sector, therefore, welcomes measures to protect legitimate
manufacturing interests and moves to drive out the counterfeiters.
It is, therefore, hard to understand why the Commission
would push ahead with plans to abolish design protection
for visible spare parts. They expect no price benefit for
consumers; there are also genuine safety concerns as well
as serious implications for investment and jobs in Europe.
Abolish design protection would also send entirely
the wrong message to countries, like China, which
are being urged to do more to prevent vehicle and
parts counterfeiting and fight Intellectual Property
Rights (IPR) infringements. |
In
the auto sector, counterfeiting presents particular risks
to consumers. It opens the door to poorer quality products
and poses unnecessary safety risks for motorists and other
road users.
Intellectual Property Rights
The European auto sector has fought hard to establish consistent
intellectual property rules in international markets. Counterfeiting
is a growing problem and emerging markets, like China, need
to do more to ensure the interests of those investing in
legitimate development programmes are protected through
robust rules and enforcement regimes.
ACEA and counterparts in North America and Japan are working
together to share information and encourage the development
of consistent anti-counterfeiting measures and robust intellectual
property laws.
An International Problem
Trademark and design infringements are particularly prevalent
in regions outside the EU, mainly in Asia (particularly
China), the Middle East and South America. However, some
counterfeiting also takes place in Southern and Eastern
Europe.
The European automotive industry is committed to safeguarding
its interests. Together with counterparts in the US and
Japan, automakers continue to urge the World Trade Organisation
to fulfill its obligations to uphold intellectual property
rights.
Active steps have already been taken by the sector and the
EU to limit the supply of counterfeit automotive goods.
In China, the government has finally issued regulations
on better enforcement of I P protection for automotive products;
the industry will continue to urge for their proper implementation,
and European manufacturers have set up a group of experts
to exchange information and promote a collaborative approach
to tackle the issue.
Design Protection
The EU recognises the importance of intellectual property
rights for competitiveness, encouraging better protection
in countries where it is weak. In Europe, harmonised trademarks
and patents, and strong enforcement have helped deliver
on this objective.
In this climate of robust protection, it is hard to understand
the rationale behind the proposal to abolish European design
protection rules for visible spare parts. These include
bumpers, fenders, bonnets, radiator grills and headlights.
If implemented, the move risks up to 50,000 European jobs
as well as investment in R&D, which depends on strong IPR
rules.
Design
Protection is Essential
Safety Aspect
In 2007, the UK's independent testing house MIRA carried
out comparative tests on an original Ford Fiesta bonnet
and various copies. MIRA concluded, "Unless the copy
bonnet has been developed and tested for pedestrian
protection it is unlikely to offer the same levels
of protection, as the original bonnet."
Job Losses in Europe
Scrapping design protection for visible spare parts
could cost the European automotive industry up to
50,000 jobs and €2 billion a year. The two largest
companies copying visible spare parts in Taiwan already
have a turnover higher than the combined turnover
of all independent body parts producers in Europe,
and have taken steps to increase their presence in
Europe. The United States, which have no design protection
rules, show what could lie ahead; Asian body parts
makers hold an 80% market share. |
Contradictory Messages
The proposal does not sit well with either the Lisbon Agenda
which aims to promote growth and high-skills investment
in Europe, or the Directive on Pedestrian Protection, a
set of design rules which have helped drive down casualties
on European roads.
Both could be compromised. The move would also present mixed
messages to overseas governments and industry stakeholders.
The result could be a serious loss of credibility, at a
time when the European automotive industry and regulators
alike are trying to take a lead in tackling a growing international
problem.
No Consumer Benefit
Scrapping design protection would not necessarily lower
prices paid by the consumer. That was the conclusion of
the Commission's own consultants, Technopolis. Their report
assumed that, even when copied parts could be produced more
cheaply than originals, the savings would not necessarily
be passed on to consumers. Instead, they expected them to
benefit parts' traders, repairers and insurance companies.
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