Download pptx - THE EUROPEAN AUTOMOTIVE AFTERMARKET FACTS & STRATEGIES Josef Frank Senior Advisor Aftermarket CLEPA

CLEPA Aftermarket Department

THE EUROPEAN AUTOMOTIVE AFTERMARKET FACTS & STRATEGIES

Josef Frank Senior Advisor Aftermarket CLEPA

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• The European Automotive Industry

• CLEPA at a glance

• The European Automotive Aftermarket

• European Legal Framework• Competition• Safety• Environment

• Conclusion

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12 million jobs in total

5 million in component manufacturing / 1 million in OEMs

15 Billion € RDI component manufacturing

18 million vehicles manufactured per year

270 million vehicles on the road all with combustion engines

The European automotive industry 2011

CLEPA Aftermarket Department 3

Trends and Challenges

Demographic change

Urbanization

Car Sharing/ Car pooling

Integrated Mobility solutions

Decarbonisation of road transport


Two Automotive WorldsBRIC Markets’ Growth Will Continue

Light Vehicle Sales

Note: Triad comprises USA, Japan & W. Europe

0

5

10

15

20

25

30

35

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45

50

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020M

illio

ns

Triad LV Sales BRICs LV Sales

Source: IHS Data Insights


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• Conclusion

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Founded in 1959 Represents 92 corporate members

of the world’s most prominent suppliers for car parts, systems and modules

25 National trade and European sector associations

representing more than 3000 member companies in total 2500 SMEs

more than 5 Million employeeswith 600 Billion € salesPartner of the EU and the UN

Facts about CLEPA


Automotive Suppliers in Europe

~ 40% of all automotive industry employees

~ 75 %of the vehicle is made

by automotive suppliers

“Automotive Suppliers have proven their leadership in developing products that are

innovative, environmentally sound and safe, providing sustainable mobility for

Europe’s citizens”

Peter Tyroller CLEPA President, Bosch

~ 50% of the RDI budget

for the automotive industry


CLEPA - What we do

• Influencing legislative decision process

• Ensuring harmonious development of international trade

• Participation in EU consultation process CARS21

• Actively endorsing the development of the necessary competitiveness

• Framework conditions

• Expertise on European project and fund raising

• Industry networking and trade eventsCLEPA Aftermarket Department 11






• Conclusion

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Introduction to the Aftermarket

• The automotive aftermarket consists of:

• Spare parts sales for the existing European car park

• Repair and maintenance of the existing European car park

• The European car park represents 270 million vehicles with anaverage age of 8.2 years.



The structure of the Aftermarket

• The annual volume of the automotive aftermarket is around EUR 100 billion for spare parts (consumer level without VAT).

• It consists of 2 distribution channels, Original Equipment Sales (OES) and Independent Aftermarket (IAM), each having around 50% of the market at consumer level.

• There are 3 main players: The Original Equipment Manufacturers (OEM) as multinationals, Independent Operators (IO), which are mainly SMEs and Parts Manufacturers (PM) (which are both multinationals or SMEs).

IAM OES

100 BillionEuro

IO PM OEM

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Parts Distribution

OEM Distribution Network

Independent DistributionNetwork

Service DeliveryOEM affiliated

garages

Owned and franchised

dealers

Multi-branddealers

Service DeliveryIndependent

garages

IndependentAftersales

ServiceProviders

Small garages/gasstations

Intermediaries

OEMs

Insurance Companies

AutomobileClubs

Leasing Firms

Political Decisions

e.g. Scrapping Schemes

Consumers

Business

Fleet

Private

Parts Manufacturing

OEMs

OEPart Manufacturer

(PM)

Generic PartsManufacturers

OEM brand

Generic

Dual branding(OEM / PM)

Mainly OEM and PM branded

Monobranding (PM)

The Landscape of the Aftermarket

Monobranding (PM)

Internet

CLEPA Aftermarket DepartmentSource: McKinsey, CLEPA 17

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• The market can be divided by age of the vehicles in segment I (0-4 years), segment II (>4-8 years) and segment III (> 8 years).

• Segment I vehicles used to be served mainly by OES, segments II and III mainly by IAM

~25%

~75%

Segment I (0- 4 years)

~50%

~50%

Segment II (>4

- 8 years)

~85%

~15%

Segment III ( > 8 years)

OEM pressure

OES channel IAM channelSource: A.T. Kearney, SupplierBusiness

On the one hand, due to technical reasons such as better quality of components and increase of electronic parts, valuable repair and spare part sales shifted in Segment II and the OEM want increase theirshare.

On the other hand, due to intermediaries like leasing companies, insurances and new business models there is an increasing demand for maintenance from the IAM in Segment I.

IAM pressure

Drivers for change inthe Aftermarket



3 players - 2 Distribution channels - 1 Market

OES(Original Equipment Sales)

IAM(Independent Aftermarket)

OES

OES

IAM

IAM

The consequence for the Aftermarket

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Technological Trends

Steer-By-Wire

Passenger Safety Systems (Airbags etc.)

Brake-By-Wire

Cockpit modules and instrument clusters

Dynamic Navigation, Telematic systems

ABS/ASR ESP

Car managementSystem Cartronic

Modern lighting technology

Gasoline Direct Injection (DI Motronic)Alternative energy supplies (H2, Fuel Cell)

Adaptive Cruise Control

High-pressure Diesel Injection Systems

Increasing share of electronics of production costs: 22% in 2000; 35% in 2012

The car has become

a computer on wheels

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Decisive factors to be part of the Aftermarket

Knowledge is power

• To stay in this market all participants need access to Repair and Maintenance Information (RMI) to maintain and repair the vehicles and

• Access to the Vehicle Identification Number (VIN) for unequivocal parts identification







• Conclusion

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CLEPA Aftermarket Department25

Vehicle retailing Automotive aftermarket

Transitional period until 31 May 2013:

Former MVBER 1400/2002

As from 1 June 2013:General Vertical BER 330/2010 & sector specific + general guidelines

Since 1 June 2010:New sector-specific BER 461/2010("new MVBER" or "Aftermarket-BER") & sector-specific guidelinesWhere sector-specific instruments are silent: General Vertical BER 330/2010& general guidelines

The new Automotive Framework for Competition

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The content of the Competition Framework

The EU Commission makes it very clear with the new MVBER and guidelines that, in order to preserve competition between authorised and independent repair and sales channels, particular attention will be paid to:

Access of independent repairers to all spare parts Ability of parts manufacturers to sell directly to the aftermarket Ability of parts manufacturers (PM) to apply their own logo to parts

supplied to the vehicle manufacturer (OEM) Ability of authorised repairers to source quality spare parts from the

supplier of their choice Access of independent operators to technical information, tools and

training Misuse of legal and extended warranties

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Access to RMI and parts identification for Euro 5/6 PC and LCV and Euro VI HDV


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Legislation: Both legislations 715/2007 and 692/2008 incl. amendment 566/2011 for PC&LCV and 595/2009 and 582/2011 incl. amendment for HDV are in place.

Situation: The text for the amendments with the purpose to get processable data, which enables the parts suppliers to create their technical information and catalogues on the same quality level as the OEMs, doesn’t emphasize this clearly.

Consequence: The OEMs interpret it differently and refer to their websites. The parts suppliers insist to get the data processable and will take all necessary measures to get them. This includes talks with the OEMs but also if necessary legal measures.

Aspects of remanufacturing


The European automotive remanufacturing business is worth approximately 8 to 10 billion Euros (retail sales)*

The benefits of remanufacturing at a glance

1. Environment

• CLEPA members offer 27 automotive product groups which can be remanufactured

• Reman has the potential to reduce emissions in the EU 27 by 400 kt CO2. This is comparable:

- to the saving of 170 millions litres of gasoline per year or

- to the emissions of 200,000 cars per year or

- to the absorption of 30,000 hectares forest per year

2. Employment

• Reman offers around 32,000 jobs in EU 27, increasing in number

3. Safety

• Reman products fulfil a similar function and are warranted as the “original product” (see definition)

4. Economy

• Reman products, due to savings of raw-materials and manufacturing, are significantly cheaper

30CLEPA Aftermarket Department

Technology evolution calls for remanufacturing

• Remanufacturing requires more and more R&D and also sophisticated manufacturing and testing processes.

Remanufacturing knowledge

Mechanical Electric

Electronic


DEFINITION for Reman *

“A remanufactured part fulfils a similar function as the original part [1] It is restored from an existing part (core [2]), using standardized industrial processes [3] in line with specific technical specifications [4]. A remanufactured part is given the same warranty as a new part [5] and it clearly identifies [6] the part as a remanufactured part and the remanufacturer ”

* This is a common definition of APRA, CLEPA, FIRM, supported by MERA and RIC.

A remanufactured part is different from a reused, repaired, rebuilt, refurbished, reworked or reconditioned part. These categories are not subject to this definition and the process of remanufactured parts.


DEFINITION for Reman *

Footnotes:[1] “Original part”, “matching quality part”•BER 461/2010/EC Article 1, Para h) in connection with supplementary guidelines 2010/C 138/05, Para 19•BER 461/2010/EC Article 1, Para h) in connection with supplementary guidelines 2010/C 138/05, Para 20

[2] Core•A core is a used “original” or “matching quality” part which will be remanufactured

[3] Industrial processes•An industrial process is an established process, which is fully documented•The size of the industrialized production batch is not limited; only one part could be remanufactured•In the case of remanufacturing, the minimum procedures used in the industrial process are: core management, core sorting, dismantling, cleaning of all internal and external components, replacement of all missing parts, restoration of all impaired, defective or substantially worn parts to a sound condition or replacement thereof, reworking, machining or performing such other operations as are necessary to put the part in original working condition or better, components assembly and final testing of each remanufactured part

[4]Specific technical specifications•Specific technical specifications, established by the remanufacturer and consistently applied

[5] Warranty as new part•The remanufacturer must give a warranty for the remanufactured part which is the same as the warranty required by law for a “new part”, if one is required by law

[6] Clearly Identifies•A non-removable, sustainable and uncoded marking is put on each remanufactured part


Manufacturers Against Product Piracy

• WTO (World Trade Organization) estimates the share of counterfeits at the total global trade volume of 5% to 7%

• 80% of the profits of counterfeit exports from China is created outside China (Hong Kong police investigator)

• Global loss of 750,000 labour in the automotive industry due to counterfeiting (MEMA). 56% of passenger cars in China are running on counterfeit parts

• In China, 190,000 people died in 2001 due to counterfeited medicine


Counterfeiting is a safety issue

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Manufacturers Against Product Piracy

A CLEPA Initiative:• Serve CLEPA members more effective in Brand Protection Issues• Take over leadership for brand protection in the automotive aftermarket• Create possible cooperation & synergies with associations, partners and official bodies active in Brand Protection• Better results with increasing numbers of seizures and discouraging counterfeiters• Promotion of two digit MAPP Code (Manufactures Against Product Piracy)


In the market we are competitors, in Brand Protection we are partners

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Similar is not the same

CLEPA activities to ensure

• Competition• MVBER (assure compliance)• Acces to RMI and VIN in a processable form• Reman and Antifake measures

• Safety • Acces to RMI and VIN• Remanufacturing• Manufacturers Against Product Piracy

• Environmental awareness• Remanufacturing


4th Aftermarket Conference 28-29 November, Brussels

The global Automotive World in 2020 Challenges - Opportunities and the Framework

www.get-connected.com Internet and Aftermarket – Opportunities or Threats?

How to service automotive electronics in 2020 Means and Needs from where we stand today


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Conclusion

CLEPA, as the voice of the suppliers,

defends the interests of the suppliers for a fair competition

and favourable conditions for the consumers… the rest is business…

THANK YOU

Josef FrankSenior Advisor CLEPA Aftermarket

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