Automotive News Europe - January 2013 - 4

AUTOMOTIVE NEWS EUROPE

COVER STORY

10 things to watch in 2013
Bye-bye block exemption, hello stricter CO2 rules; CEOs on the hot seat
LUCA CIFERRI
lciferri@crain.com

CEO contracts
PSA/Peugeot-Citroen CEO Philippe Varin’s contract expires in June and Daimler CEO Dieter Zetsche’s ends in December. The renewal of both contracts is far from being guaranteed. PSA is performing well below its domestic rival Renault and Daimler-owned Mercedes-Benz continues to lose ground to BMW and Audi.

Europe enters 2013 with an “inventory hangover” after car sales decreased for a fifth consecutive year. Analysts predict European vehicle production will decline 13 percent in the first quarter to cope with the excess. This year we can expect to hear more about the “slope of the curve,” which will determine how the reduction is distributed amongst the brands. The “slope of the curve” was a subject of debate five years ago. Back then, it took summit talks between German Chancellor Angela Merkel and then French President Nicolas Sarkozy to forge a deal. In 2008, Germany won and France lost. If the leaders of the countries have to close the deal again, Merkel might not be as successful as in the past because new French President Francois Hollande is more closely aligned with PSA and Renault than Sarkozy was. networks in countries where vehicle sales are falling sharply. Automakers are also gaining power from the new rules, experts say. Steve Young, managing director of UK-based dealer analysts ICDP, said the change in the rules “eliminates the right for the dealer to sell on his franchise; gives the manufacturer more right to terminate; and also gives them the opportunity to ban multi-branding.” Ironically, encouraging the creation of multibrand dealers was at the heart of the block exemption. Former EU Competition Commissioner Mario Monti pushed to allow dealers to offer more than one brand “to put the consumer in the driving seat.” Time will tell whether consumers – and dealers – will feel they’re now in the backseat.

CO2 reduction
In July, the EU approved a proposal to lower automotive carbon dioxide emissions by 2020 to an average of 95 grams per kilometer (equivalent to fuel consumption of 3.6 liters per 100km or 65 U.S. mpg). That is a significant decline from the industry goal of 130g/km by 2015. Since the 2020 goal was set, German automakers have been clashing with their French and Italian rivals on how the proposed standard should be enforced across the European fleet as each brand will have to hit a pre-determined target. German manufacturers have been lobbying to revise the current calculation mechanism, which is based on a car’s weight, so that they can make a smaller contribution. Makers of lighter cars, notably in France and Italy, have been strenuously defending the current mechanism and reject any change that would force them to have to do more.

Dealers’ dilemma
Starting June 1, 2013, car retailing will be governed by the EU’s general competition rules instead of the block exemption regime that was introduced in 2002 and offered the motor industry a “safe harbor” from normal competition rules. Automakers are using the expiry of the EU’s block exemption regulations for new-car sales to eliminate underperforming dealers and shrink dealer

Electric vehicles
This year, we’ll see whether there is any real appetite for electric vehicles in Europe. Renault will begin deliveries of the Zoe, the region’s first volume EV. The Zoe is not a re-work of a fuel-powered car because Renault wanted the model to stand on its own, much like Toyota

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JANUARY 2013

Photo: Reuters

o one expects the European car market to be a source of good news this year, especially for volume brands. Optimists predict flat sales while pessimists foresee a decline of up to 5 percent. How the European automotive industry responds to a potential sixth-straight year of decreasing sales will be a major story this year, but it won’t be the only headline grabber. Automotive News Europe editors identified 10 stories to watch in 2013. The stories are listed in alphabetical order.

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Automotive News Europe - January 2013

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