THE EUROPEAN AUTOMOTIVE AFTERMARKET FACTS & STRATEGIES
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THE EUROPEAN AUTOMOTIVE AFTERMARKET FACTS & STRATEGIES Josef Frank Senior Advisor Aftermarket CLEPA. The European Automotive Industry CLEPA at a glance The European Automotive Aftermarket European Legal Framework Competition Safety Environment Conclusion.

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

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The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

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

  • The EuropeanAutomotiveIndustry

    • CLEPA at a glance

    • The European Automotive Aftermarket

    • EuropeanLegalFramework

      • Competition

      • Safety

      • Environment

  • Conclusion

CLEPA Aftermarket Department


The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

The European automotive industry 2011

  • 12million jobs in total

    • 5million in component manufacturing / 1million in OEMs

  • 15 Billion € RDI component manufacturing

  • 18million vehicles manufactured per year

  • 270 million vehicles on the road all with combustion engines

  • CLEPA Aftermarket Department


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    Trends and Challenges

    Demographic change

    Urbanization

    Car Sharing/ Car pooling

    Integrated Mobility solutions

    Decarbonisation of road transport

    CLEPA Aftermarket Department


    Two automotive worlds bric markets growth will continue

    Two Automotive WorldsBRIC Markets’ Growth Will Continue

    Light Vehicle Sales

    Note: Triad comprises USA, Japan & W. Europe

    Source: IHS Data Insights

    CLEPA Aftermarket Department

    7

    7


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    • The EuropeanAutomotiveIndustry

  • CLEPA at a glance

    • The European Automotive Aftermarket

    • EuropeanLegal Framework

      • Competition

      • Safety

      • Environment

  • Conclusion

  • CLEPA Aftermarket Department


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    Facts about CLEPA

    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 2500SMEs

    more than 5 Million employees

    with 600 Billion € sales

    Partner of the EU and the UN

    CLEPA Aftermarket Department


    Automotive suppliers in europe

    Automotive Suppliers in Europe

    “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

    ~ 40%

    of all automotive industry employees

    ~ 50%

    of the RDI budget

    for the automotive industry

    ~ 75 %

    of the vehicle is madeby automotive suppliers

    CLEPA Aftermarket Department


    Clepa what we do

    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 events

    CLEPA Aftermarket Department


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    • The European Automotive Industry

    • CLEPA at a glance

  • The European Automotive Aftermarket

    • European Legal Framework

      • Competition

      • Safety

      • Environment

  • Conclusion

  • CLEPA Aftermarket Department


    Introduction to the aftermarket

    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 an

    average age of 8.2 years.

    CLEPA Aftermarket Department


    The structure of the aftermarket

    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).

    PM

    IO

    OEM

    100 Billion

    Euro

    IAM

    OES

    CLEPA Aftermarket Department


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    The Landscape of the

    Aftermarket

    Parts Manufacturing

    Service Delivery

    OEM affiliated

    garages

    Intermediaries

    Consumers

    Parts Distribution

    OEM brand

    Mainly OEM and PM branded

    OEMs

    Business

    OEMs

    OEM Distribution Network

    Owned and

    franchised

    dealers

    Insurance

    Companies

    Automobile

    Clubs

    Multi-brand

    dealers

    Dual branding

    (OEM / PM)

    Leasing

    Firms

    OE

    Part Manufacturer

    (PM)

    Monobranding (PM)

    Internet

    Service Delivery

    Independent

    garages

    Monobranding (PM)

    Political

    Decisions

    e.g. Scrapping Schemes

    Fleet

    Generic

    Independent

    Aftersales

    Service

    Providers

    Generic Parts

    Manufacturers

    Independent Distribution

    Network

    Small garages/

    gasstations

    Private

    CLEPA Aftermarket Department

    Source: McKinsey, CLEPA


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    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%

    ~50%

    ~85%

    OEM

    pressure

    ~75%

    ~50%

    ~15%

    Segment I

    Segment II

    Segment III

    (>4

    (0

    -

    4 years)

    -

    8 years)

    ( >

    8 years)

    OES channel

    IAM channel

    Source: A.T. Kearney,

    SupplierBusiness

    Drivers for change inthe Aftermarket

    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 their

    share.

    IAM pressure

    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.

    CLEPA Aftermarket Department


    3 players 2 distribution channels 1 market

    The consequence for the

    Aftermarket

    3 players - 2 Distribution channels - 1 Market

    IAM

    (Independent Aftermarket)

    OES

    (Original Equipment Sales)

    OES

    IAM

    OES

    IAM

    CLEPA Aftermarket Department


    Technological trends

    Passenger Safety Systems (Airbags etc.)

    Dynamic Navigation, Telematic systems

    Modern lighting technology

    Adaptive Cruise Control

    Technological Trends

    The car has become

    a computer on wheels

    Steer-By-Wire

    Car managementSystem Cartronic

    Brake-By-Wire

    Cockpit modules and instrument clusters

    High-pressure Diesel Injection Systems

    ABS/ASR ESP

    Gasoline Direct Injection (DI Motronic)

    Alternative energy supplies (H2, Fuel Cell)

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

    CLEPA Aftermarket Department


    Decisive factors to be part of the aftermarket

    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

    CLEPA Aftermarket Department


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    • The EuropeanAutomotiveIndustry

    • CLEPA at a glance

    • The European Automotive Aftermarket

  • EuropeanLegal Framework

    • Competition

    • Safety

    • Environment

  • Conclusion

  • CLEPA Aftermarket Department


    The new automotive framework for competition

    Vehicle retailing

    The new Automotive Framework for Competition

    Automotive aftermarket

    Transitional period until 31 May 2013:

    Former MVBER 1400/2002

    • Since 1 June 2010:

    • New sector-specific BER 461/2010("new MVBER" or "Aftermarket-BER") & sector-specific guidelines

    • Where sector-specific instruments are silent: General Vertical BER 330/2010& general guidelines

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

    CLEPA Aftermarket Department

    25


    The content of the competition framework

    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

    CLEPA Aftermarket Department


    Access to rmi and parts identification for euro 5 6 pc and lcv and euro vi hdv

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

    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 processableand will take all necessary measures to get them. This includes talks with the OEMs but also if necessary legal measures.

    CLEPA Aftermarket Department


    Aspects of remanufacturing

    Aspects of remanufacturing

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

    CLEPA Aftermarket Department


    The benefits of remanufacturing at a glance

    The benefits of remanufacturing at a glance

    • 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 ktCO2. This is comparable:

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

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

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

      2. Employment

    • Remanoffers 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

    CLEPA Aftermarket Department


    Technology evolution calls for remanufacturing

    Technology evolution calls for remanufacturing

    Electronic

    Remanufacturing knowledge

    Mechanical

    Electric

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

    CLEPA Aftermarket Department


    Definition for reman

    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.

    CLEPA Aftermarket Department


    Definition for reman1

    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

    CLEPA Aftermarket Department


    Manufacturers against product piracy

    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

    CLEPA Aftermarket Department


    Manufacturers against product pirac y

    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)

    Similar is not the same

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

    CLEPA Aftermarket Department


    Clepa activities to ensure

    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

    CLEPA Aftermarket Department


    4 th aftermarket conference 28 29 november brussels

    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

    CLEPA Aftermarket Department


    The european automotive aftermarket facts strategies josef frank senior advisor aftermarket clepa

    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 Frank

    Senior Advisor CLEPA Aftermarket

    38


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