Market Developments
European Commission Delays Car CO2 Legislation Announcement
The European Commission has reportedly delayed legislative proposals which were expected today on reducing average CO2 emissions from cars to 120 g/km by 2012; the delay reportedly follows disagreement between the Environment and Industry Commissioners over whether targets should be binding.
Meanwhile, Germany's environment and transport ministers have said that they support mandatory EU CO2 emissions limits, but the latter has proposed different limits for different classes of vehicle, which would penalise German manufacturers of performance and luxury cars, and the economy minister told an energy conference in Berlin, "We must ensure that the Commission does not deliver targets on reducing car emissions that would be tough for Germany to fulfil."
- SupplierBusiness.com said in its 23 January newsletter that the impending reduction of emissions limits in Europe will create huge opportunities for suppliers. Research carried out for the European Commission, according to the Wall Street Journal, suggests that the average price of new cars in Europe would rise by €3,300. But SupplierBusiness believes mandating targets is likely to be less efficient, and less likely to reduce fuel consumption, than raising fuel prices.
Tackling global warming through mandated fleet fuel efficiency of cars, says SupplierBusiness’ Edmund Chew, is “lousy economics for European consumers and global warming, but good news for the automotive supplier industry. There will be an effect on effect on new cars sales as new cars become more expensive, and the fleet of cars is likely to age, but the volume losses for parts makers of light parts or advance engine parts will be massively exceeded by the extra business that car makers are forced to push their way. To the extent that extra design and development work is required, that will also benefit first-tier system suppliers. There will be losers among suppliers, but the overall effect for European focused suppliers is likely to be positive.
“The major negative is that it will further increase the growing divide between the technology required for European vehicles and those required for emerging markets. This will impose some short-term additional costs on European suppliers looking to secure a global market position.
“But in the long term, if other regions follow Europe’s lead, supplier companies deploying technologies to meet the new targets will find themselves in a stronger competitive position.
And if the efforts by the EU to harmonise standards with the U.S. make progress in the next few years, that could apply to the North American market as well as other world markets in Asia and elsewhere that have more traditionally followed the European lead on technical norms.”
*Source: (www.planet-ark.com/Reuters, SupplierBusiness.com newsletter, 23 & 24.
Reported by Danny Chow.