Annual Report 2010 - VDA Report... · 2015. 7. 24. · The VDA annual report for 2010 does much...

Annual Report 2010

THANK YOU.

Every year the automobile industry generates a turnover of 263,140 billion euros and is one of the biggest training providers in the country. It puts more than 20 billion euros annually into research and development, applies for ten patents a day, making Germany the “Land of Ideas”. Our automobiles are an expression of the inventive spirit, of striving for perfec-

tion, of a sense of responsibility, of capability, and of passion. German automobile innovations are at home all over the world, as is our greatest invention: The automobile itself.

This success has many faces. Around 710,000 people work in the German automobile sector, in research and development, in production, in manage-ment and administration, or in sales and marketing. Without them, we would not be what we are today, the most successful and most innovative automobile nation in the world. It is our pleasure to present some of these amazing, dedi-

cated, and successful people here. And to all of them, we say: Thank you.

www.vda.de www.unsere-autos.de

Annual Report 2010

7

Foreword

What an extraordinary year we have just experienced. The world has been throughthe most serious economic crisis in decades. The gross domestic product of a great many industrialized countries, including Germany, shrank to an extent never previously witnessed. The global demand for cars fell by four percent and, in the commercial vehicle sector, demand was even more seriously affected.

The German automotive industry – a major source of exports – was not immune to the effects of the global slump. Over the year as a whole, motor car export figures fell by 17 percent, while commercial vehicle exports fell by as much as 57 percent. Sales figures for the industry as a whole dropped by a total of 20 percent.

The VDA annual report for 2010 does much more than simply document the economic shockwaves of the year gone by. It also provides evidence that German automobile manufacturers, together with their suppliers and companies that produce trailers and superstructures for the commercial vehicle sector, rose valiantly to the challenges which they faced – and overcame them. Showing a high degree of flexibility, they quickly adjusted their production levels in line with the declining demand and made full use of the options available to them under flexible working hours arrangements and by extending short-time working. This allowed them to keep stocks at optimum levels and to retain their core workforce as much as they possibly could. The fact that they succeeded so well with these measures is testament to the effectiveness of the sector.

At the same time, manufacturers continued to build up their positions in important growth markets — especially in China and the US. We have seen a remarkable three-fold increase in our motor car sales figures in China within a four-year period. And we have added a further 80 percent in the first quarter of 2010 as compared to previous year. Growth in these external markets has helped to cushion the difficulties in our domestic market. Policies introduced by the German federal government have also played their part in stabilizing matters; one thinks, for example, of the introduction of a CO2 element in vehicle tax, of the extension of short-time working arrangements and of the scrappage incentive scheme. The new federal government has also pronounced itself in favor of measures to promote environmentally friendly mobility on the public highway and will refrain from introducing new burdens on drivers and the road haulage sector. This will include a push towards innovation in commercial vehicle design and liberalization in the long-distance bus market; the federal government has also rejected the introduction of a car toll and has decided against increasing truck tolls. These signals send out exactly the right message: that there is no point in exacerbating the situation in which the automotive industry – Germany’s key sector – finds itself, given that there are still significant after-effects of this major crisis to be overcome.

We have confidence in the ability of national governments, the International Monetary Fund and the European Central Bank to create a firm basis with regard to the stability of the euro and European public finances. Stable financial markets are an absolute prerequisite for a successful industrial sector.

This annual report also makes it strikingly clear that our manufacturers and suppliers have long since committed themselves to responding to the environmental imperative. This can be seen in the increasing levels of investment in research and development – up by more than 4 percent in 2009 to approximately 21 billion euros. A major part of this investment goes towards environmentally friendly technology. The fruits of these labors are easy to see. German brands now offer more than 140 models with fuel consumption better than 5 liters per 100 kilometer or 56.5 mpg; they lead the field

8F O R E WO R D

with their range of cars equipped with near-zero-emission Euro 6 engines; and, according to the German Federal Motor Transport Authority, the average CO2 consumption of our newly registered cars is now better than that of our competitors across all ten vehicle segments, from subcompact cars up to large-capacity vans. And Germany is the first country to produce premium production vehicles with high-performance lithium ion batteries.

As the home of the automobile, Germany will play a decisive role in the race to pro-vide the mobility solutions of the future – with super-efficient internal combustion engines, with up-to-date biofuels, with hybrid technology, and with battery-powered as well as fuel-cell-powered electrical drives. Further measures to reduce fuel consumption levels in both cars and commercial vehicles can be expected soon. The German automotive industry supports the declared intention of the federal government to make Germany the lead market in electromobility by 2020. Our manufacturers and suppliers are working actively inside committees of the “National Platform for Electromobility,” which began its work in May 2010.

It is pleasing to note that global automobile markets are now showing a gradual upward trend. Exports have been increasing since the fourth quarter of 2009, and growth prospects in the commercial vehicles sector are now also somewhat healthier. The industry will use the IAA Commercial Vehicles trade fair in September to highlight the important role played by lorries, transporters, buses and special-purpose vehicles within society, the economy and for consumers. One need only think of fire engines and rescue vehicles to illustrate this point. And it is also worth considering the impor-tance in macroeconomic terms of transport and logistics not just for Germany but also for Europe and the wider world. IAA Commercial Vehicles has expanded its position as the most important mobility trade fair in the world and will prove this once again in Hanover this September.

The German automotive industry sets the standards for fuel efficiency, safety, quality, comfort and design. And those who work within the industry have levels of expertise unparalleled anywhere else in the world. The levels of knowledge and awareness within the industry convince me that our manufacturers and suppliers will emerge stronger out of the global financial and economic crisis and will continue to lead the field at a global level in the decade ahead.

With best regards,

Matthias WissmannPresident, German Association of the Automotive Industry

9

Contents

Foreword 7

Facts, Figures and Data about the Automotive Industry 13The German Auto Industry Makes it Through an Endurance Test 14 Numbers and Data – an Overview 22The State of the Automotive Business 25Developments for Trailers and Bodies 43The State of the Auto Supplier Industry 50

General Conditions for the Automotive Industry 59The Coalition Treaty as the Basis for Transport Policy 60Tax Policy of the New German Government 62The Increasing Influence of the EU on Motor Manufacturing 68National and European Climate Protection and Environment Policy 70EU Air Purity and Noise-reduction Policy 82Emissions Trading Directive in the EU 85The EU Energy Taxation Directive 86European Transport Policy 88The EU Labeling Directive and Advertising 91General Conditions of International Automotive Markets 92The Development of Energy Prices 97

Climate and Environmental Protection in the Automotive Industry 99The German Automotive Industry as “Front-runner” in Climate Protection 100Spark-ignition Petrol Engines and Diesel Engines 103The Electric Car: Option for Sustainable Individual Mobility 111Fuels: The Role of Renewable Sources of Energy 120Hydrogen, Fuel Cells, Natural Gas and Biofuels: Important Components of the Fuel Strategy 122Environmental Protection in Engine Development and Vehicle Production 125Noise, CO2 and Exhaust Emissions: Status of the Technology, Preview of Future Developments 128

10C O NTE NTS

Safety and Technology 137A Road-safety Summary for Germany and Europe 138The EU General Safety Regulation 140Accident Statistics – Influencing Parameters and Successes of Vehicle Safety 146Innovative Driving Dynamics to Enhance Safety 150The New EU Type Approval 151Developments in Vehicle Safety 156Standardization to Ensure the Safe Functioning of Vehicles 158Quality Management 165

Logistics 177The Situation of Logistics in the Automotive Industry 178The VDA Logistics Congress 2010 179The VDA Logistics Award 180Events and Committees 181

Transport and Infrastructure Policy 189Cars and Trucks as a Means of Mobility and Economic Prosperity 190Mobility Must Remain Affordable 192The Transport Industry in Crisis 195The Demand-based Infrastructure 197

The Law and Sales 205New Competition Rules for Motor Sales 206The EU Consumer Protection Directive – New Hurdles for Motor Manufacturers and the Trade 208Potential Developments in the After-sales Service 209Positive Trend for Automotive Financial Firms 211The VDA Guideline on Cartel Law for Group Work 213The VDA Brochure on Commercial Legal Protection 214The Automotive Aftermarket 215

The International Motor Show 219IAA Cars 2009: A Successful Show in Difficult Circumstances 220

11

Historic Vehicles 223VDA Supports Establishment of Historic Vehicles 224

Communication 231Communication Offensive “Unsere Autos” (“Our Cars”) 232

Index 235List of Figures and Tables Index 238

Imprint 245

Cover: Hatice Yildirim – Production Sealing Systems, Metzeler Automotive Profile Systems GmbH, Lindau

Facts, Figures and Data about the Automotive Industry

Ernestine Krempels – Diplom-Betriebswirtin (FH), Sales OEM, ElringKlinger AG, Dettingen/Ems

14FACTS , F I G U R E S A N D DATA A B O UT TH E A UTO M OTI V E I N D U STRY

The German Auto Industry Makes it Through an Endurance Test

The world economy has passed the low pointIn 2009, global production declined for the first time in six decades. The crisis, which began with the real estate bubble in the U.S., spread like wildfire to the global econo-my. In this drama, no forecaster predicted these developments – there was absolutely no usable historic experience of the magnitude and time-frame of the economic collapse upon which a meaningful prediction could be based.

Now all the indicators point to the fact that the global economy has passed its low point in 2010 and shows clear traits of a recovery. Numerous institutes have adjust-ed their growth projections upward. The developing countries of Asia as well as Brazil and Russia are displaying a stronger dynamic of growth. The outlook has also improved in the U.S. On the other hand, the euro zone is the economic region with the weakest dynamics.

Due to its international integration, Germany has been particularly affected by the crisis. In 2009, its real gross domestic product declined more sharply than at any point in the Federal Republic’s existence. But the global recovery will likewise give Germany, a strong exporter, a powerful push.

Statistical base effects distort economic dataProduction index (2005 = 100) in the manufacturing sector, seasonally adjusted

Source: Federal Statistical Office

-24.8 % +33 % Remaining production differential

November 2009February 2008 April 2009 August 2009

116.8

High point

Low point

87.8 9496.4

StatusBDI economic report 04/09

StatusBDI economic report 01/10

Base level

116.8

15

Admittedly, the path back to pre-crisis levels is long and rocky. The German economy will make its way back to its old strength at the end of 2011 at the earliest. The risks are obvious: Governmental programs are running out and declines in profits weigh heavily on business activity. Moreover, there is a gap of nearly 25 percent between the high point of the production index in February 2008 and the low point in April 2009 (see figure). But from a purely statistical standpoint, it would take a growth rate of 33 percent to return to the old level. In that respect, the growth in 2010 must not be overrated, even if it turns out to be positive – the earlier steep decline puts the positive impression into perspective.

Due to stimulus programs measured in the billions, some portion of these growth rates is a borrowing against the future. Business expectations are, on balance, positive and permit the hope that the upward trend will continue. In this way, the figure below shows parallels between the course of the current situation and the crisis years of 1990–1992. The progression of the curve is similar, although the current economic crisis was accompanied by an even more drastic decline.

In addition, the economic trend will naturally be determined by the opportunities and risks in the economic cycle beyond 2010. On one hand, the dangers in rising unem-ployment, setbacks in the stabilization of the financial market and bottlenecks in company financing are virulent; furthermore, the drastic situation of public finances is weighing heavily on economic trends. At the same time, the boom in world trade, the vigor of developing countries and the stabilizing effects of expansive monetary and fiscal policies are clarifying the central opportunities for Germany as an exporting country.

Business climate manufacturing industries

Jan 1994

Jan 1993

Jan 1992

Jan 1991

Jan 1991

Source: ifo

-60 -45 45-30 30-15 15 600

0

-60

45

60

-30

-45

30

-15

15 Jan 2010

Jan 2009

Jan 2008

Jan 2007

Business climate 1990–94 und 2007–2010

Business situation

3 monthly average

Bus

ines

s ex

pect

atio

n


A key economic sector, the auto industry is coping with an area of tension consisting of short-term crisis management and the determination of long-term trends The German automotive industry has done remarkably well in extremely difficult circumstances. The industry’s economic trend over the course of the economic crisis can be seen graphically in a representation of the business cycle for the automotive sector. The figure below shows how the the automotive business climate coming out of the 2008 boom passed through the downswing and the recession, to establish itself in the upswing quadrant at this point.

Due to the auto industry’s great importance, its quick recovery is especially important for the overall national economy:

• The auto industry is the largest branch of Germany’s economy. With revenues of more than 263 billion euros in 2009, the sector generates about 20 percent of the total revenue of German industry.

• The auto industry is one of the largest employers in Germany. It employs about 723,000 people, up 64,000 in the last 15 years. The share of German automotive employees in all of industry has meanwhile increased to 14 percent. When you take into consideration all employees working in a field dependent on the automo-bile, the total comes to more than 5 million jobs.

• In all, German automakers produced more than 10.4 million vehicles last year, representing 17 percent of all vehicles built worldwide. With its strong market position abroad, the German auto industry maintains jobs domestically, as a result of rising deliveries of intermediate products and high export rates: for every three jobs created abroad, one is secured within Germany.

Business climate in the automotive sector

Source: ifo

-100 -80 60-60 40-40 -20 20 80 1000

8/091/10

2/10

3/10

4/10

11/09

7/0910/09

9/095/09

3/09

1/09

2/09

11/09

11/09

9/08 8/08

6/08

5/084/08

3/08

4/07

7/07

5/07

6/07

7/08

0

-100

60

80

100

-60

-80

40

20

-40

-20

Downturn

BoomUpturn

Recession

Business appraisal

Bus

ines

s ex

pect

atio

n

17

• Innovative, medium-sized suppliers contribute significantly to the stabilization of the job market. They employ – directly and indirectly – about 1 million people. The domestic market accounts for roughly two-thirds of their total revenue of about 50 billion euros.

• No industry invests as much in research and development, nearly 21 billion euros in 2009 alone. The auto industry provided more than one-third of all the R&D expendi-tures in German industry. Furthermore, German automakers and suppliers are among the world’s leading patent applicants. This behavior in innovation and investment guarantees the national and international success of German brands.

• The auto industry plays the most important role in exporting. About 70 percent of the cars built in this country go to customers abroad. In 2009, the German auto industry exported products valued at more than 130 billion euros and imported vehicles and parts worth about 64 billion euros. The sector thus made an important contribution to the German economy’s balance of trade surplus. And the growth of new key markets is offering still greater potential: while there are 500 cars for every 1,000 inhabitants of Germany, the figure is 21 cars for China and a mere eleven for India.

• Roads are by far the most important mode of transport in Germany. They handle more than 80 percent of the traffic flow in personal transport. Trucks are also indispensable for the transportation of goods, taking a share of more than 70 percent of total freight traffic.

Auto manufacturers and suppliers can only cope with the crisis if they undertake measures to secure long-term success as well as activities for short-term crisis manage-ment. The auto industry is in its most serious crisis while simultaneously in the midst of a technological paradigm shift: the debate over climate change, the need for reductions in greenhouse gases, the finiteness of resources and changing consumer behavior are virtually forcing it to re-invent the automobile. It is essential to press ahead with such a technological paradigm shift in an environment of the industry’s greatest crisis where the survival of individual companies is not always certain. As a result, a company has to assure its capacity to survive in the short-term, or, to put it another way, to “navigate by sight,” proceeding as market conditions allow. At the same time, the German auto sector must make sure it continues to be the pace-setter long-term in the global industry, with its innovative power and its capacity to set trends and break new ground as a pioneer in the technological paradigm shift.

Balance between short-term and long-term measures to secure sustained success

Source: VDA

Short-term measures:“Navigating by sight

in response to the outlook”

Long-term measures:“Remaining the pacesetters

of the sector”

Securing success


Navigate by sight short-term based on market conditions In 2009, it was primarily government incentive programs that were able to prevent an even more massive decline. In Germany, the triad of CO2-based vehicle tax reform, a vehicle tax suspension and the environmental bonus fulfilled the mission that policy-makers assigned to them and strengthened the domestic demand for cars, especially in the lower and mid-range segments. Government incentive programs were also set up in other countries. They are associated with side effects, however. These include an asymmetrical distribution of results, since the additional demand was mainly limited to the smaller vehicles of domestic and foreign manufacturers.

The dramatic global sales decline resulted in a direct income decline for car and commercial vehicle manufacturers and suppliers, as well as in the trailer and body industry. Medium-sized companies especially, and smaller companies above all, will have a tough time getting new loans until at least mid-2011. Correspondingly, there is the danger that it will prove impossible to cover financing needs in the upswing of the economic cycle.

The federal government responded to the crisis quickly and provided momentum with two stimulus packages as well as measures to accelerate growth. But the protec-tive shield that the federal government spread out for lending institutions did not completely fulfill its purpose, as the debates over the “credit crunch” show. It’s a good thing that the federal government, as part of its guarantee program, is providing a shield for the commercial loan insurers. In addition, the federal government took on a total of 22.4 billion euros in export credit guarantees, the so-called Hermes covers, for Germany’s export sector in 2009. That corresponds to an increase of 8.2 percent compared to the previous year and represents a record in the 60-year history of the instrument.

Changes in the funds for employees working reduced hours have been among the especially important components of the stimulus program: the extension of its avail-ability to 24 months, accompanied by the assumption of social security contributions for the unclaimed working hours after the sixth month, unfolded its full potential for the labor market. The measure supports the strategic goal of retaining core staff, which is essential for future success.

Guarantors of success in remaining the pacesetter of the industry

Source: VDA

EmployeeGuarantor of success Brand

Effic

ienc

yIn

nova

tion

0

50

100

150

200

250

300

ImporterGerman

Upper rangeMid-range classCompact classMinis

Selection of average CO2 values in Germany in g/km

Source: KBA

118.7 119

147.5 155 162.2 169.2

233

264.3

19

Long-term the German auto industry remains the pacesetter in a global industry The long-term guarantors of success for the German auto industry are above all a consistent strategy for innovation, strong brands, efficiency in the value chain and qualified, motivated employees (see figure on page 6).

Innovation

The German auto industry has always known that research and innovation are the keys to a successful future. The auto sector accounts for more than 36 percent of all R&D spending by German industry, spending more than 20.9 billion euros, and it has been able to expand its lead: in 2009, it spent 4.4 percent more on R&D than it did the previous year (see figures below). It was the only branch of the economy to increase R&D spending last year.

There is no foreseeable shift in the distribution of R&D activity by industry. So the automobile sector, with its impetus for innovation, is and remains the predominant sector for innovation and employment in Germany.

At the same time, high research and development expenditures have been a main driver for the sound CO2 balance sheet of German auto manufacturers. In 2009, they were able to reduce their emissions by 5.7 percent, to just an average of 157.1 CO2/km. In nine out of ten vehicle segments – from mini-cars, through compact and mid-range cars, all the way to the luxury class, SUVS and sports cars as well as mini and large-sized vans – the new registrations of German corporate brands had lower CO2

emissions on average than importers did.

The technologies that help to continually reduce CO2 emissions today are the result of ongoing development efforts by manufacturers and suppliers. Part of a so-called “compartmental” diversification strategy, this innovation policy draws on a triad consisting of

• Saving - Improvement of conventional gasoline engines and diesels

• Complementing - Increase the share of alternative fuels

• Replacement - With alternatives such as electric drive and hydrogen technology

0

5,000

10,000

15,000

20,000

25,000

2009200820072006

R&D expenditures by manufacturers of vehicles and partsin millions of euros

Source: Stifterverband, January 2010

16,79918,116

20,04220,934

Automotive R&D expenditures by manufacturers of vehicles vs. total expenditures in millions of euros

Source: Stifterverband, January 2010

Automotive20,934

Total R&D expenditures

57,404


Fuel-saving powertrains are being developed along a broad front – ranging from clean diesel, to direct injection gasoline engines and hybrids, all the way to purely electric vehicles as well as vehicles with hydrogen or fuel cell powertrains.

Brand

No product lives on emotion and passion to the degree that the automobile does. And in no other field do strong brands have the towering importance that they have in the auto industry. Automotive brands with a clearly perceived profile of expertise are not simply a guide to customers but rather create an emotional sense of belonging and contribute to the realization of their own lifestyles.

With their strong brands, German automakers are global leaders in technology and quality. Without compromising safety, they have managed to carry out substantial reductions in fuel consumption and emissions. At the same time, they cover the entire spectrum of international demand – from attractive small cars all the way to luxury vehicles. Worldwide, German manufacturers produce 80 percent of all premium automobiles.

Premium and sustainability haven’t been a contradiction for a long time – but rather they involve and complement one another. Furthermore, emotional appeal is especially brought to bear in the premium segment. Premium isn’t merely a concept for the luxu-ry class. It connotes innovation and progress, intrinsic value in all vehicle segments. Over the long term, German manufacturers will be able to assert themselves on quality and innovation in international competition.

In the process, the premium segment has a singular importance for Germany as a location for innovation and manufacturing. Premium vehicles have increased from 40 to about 50 percent as a share of domestic production in the last 10 years. The share of exports has also increased by 10 percentage points to 50 percent in the same time-frame. That means that one car in two produced in Germany or exported belongs to the premium segment.

Efficiency

Besides brands that are strong and major revenue producers, an optimal mix of costs is a pre-condition for the international competitiveness of the German automotive industry. This includes an ongoing increase in domestic productive efficiency, in-creased cooperation between individual manufacturers, for example, as a part of manufacturing and purchasing cooperation, as well as the use of favorable production costs in growth markets. With such a commitment, the auto industry maintains domestic jobs through rising deliveries of intermediate products and high export rates. Loyalty to German production and commitment abroad are therefore not a contradiction. In the future as well, “Made in Germany” and “Researched in Germany” will remain the quality seal for German automobiles.

Besides the above-mentioned potential for efficiencies in production and purchasing, changes can also be seen in development. Challenges such as the “low-cost car” or environmentally friendly technologies are increasing the pressure on manufacturers and suppliers. Furthermore, the alleged contradiction between efficiency and individu-alized diversity is being brought into harmony, in terms of an “efficient diversity,” with new production approaches and modular concepts.

Premium Made in Germany: the industry presses ahead with increases in its brands’ strengths

There is no contradiction between loyalty to German production and a commitment abroad

21

Employees

Whatever the innovations, the building of strong brands, or the increase in efficiency: Success can only be achieved long-term with qualified and motivated employees. The crisis has demanded a great deal of employees. But one thing has been different in this crisis. There were hardly any job losses in 2009. With the help of political leaders, the industry turned to every possible measure to maintain its core workforce and to keep valuable know-how from being lost. Abroad, people talk about the “German employment miracle” from time to time. By keeping employees, companies can imme-diately participate in the upswing. But securing employment has consumed enormous resources, and 2010 will be more difficult for many companies than 2009. In many cases, companies this year will face the challenge of managing the balancing act between the economic performance it needs and social-political responsibilities.

Innovation is tremendously important to the long-term success of Germany as a location for auto manufacturing. Demographic trends, however, are a risk factor, and a growing shortage of engineers is accompanying them. In the future, as well as right now, this key sector will need young, highly qualified specialized staff to secure and extend its core competency in the world market. In addition, the technological paradigm shift – away from the conventional internal combustion engine and toward alternative drives – will bring a shift in employment in the industry along with it. In this way, first-class training and education come into focus as success factors for the German auto industry.

With help from policy-makers, companies have largely held onto their employees

Engineer bottlenecks loom as a result of demographic shifts


Revenue down sharply in 2009 The global crisis weighed heavily on revenue in the German auto industry in 2009. Taken together, its companies (manufacturers, suppliers and companies in the trailer and body sector) achieved just 263 billion euros in revenue. That is a decline of 20 percent compared to the previous year. At the same time, domestic revenues fell less than the results from foreign activities in all categories. Domestic revenue declined 15 percent to 112 billion euros, while foreign revenue fell one-quarter to 151 billion euros.

Revenues down 19 percent for German auto manufacturers German manufacturers of cars and commercial vehicles had to absorb significant revenue declines in crisis year 2009, although the domestic market fell less than expected due to the effects of the environmental bonus. At nearly 208 billion euros, the results came in under the previous year by about 18 percent. Domestic revenue fell by 9 percent to just under 76 billion euros, while foreign revenue likewise lost nearly a quarter, with a 22 percent drop.

Trailers and bodies: steep fall in revenueRevenue for manufacturers of trailers and bodies plunged a total of 46 percent, reaching 5.5 billion, the lowest level since 1996. Domestic business, down 39 percent, declined less than foreign activities (-54 percent). Thus, a long boom with significant revenue increases came to an end with a severity that was difficult to anticipate.

Numbers and Data – an Overview

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Inland volume overseas Sales volume overseas

20092008200720062005200420032002200120001999

Revenue trend in the German auto industryin millions of euros


23

Losses in the supplier industry steep as well The German auto supplier industry lost more than a quarter of its revenue compared to 2008. The sector fell to 50 billion euros, the level in 2001. In this case as well, domestic revenue, with a drop of 24 percent, declined somewhat less rapidly than foreign revenue (-30 percent).

Auto industry vigorously expands investment in research and development The German auto industry once again boosted its spending on research and devel-opment. A total of 20.9 billion euros, 4.4 percent more than during the previous year, was spent on the development and improvement of technology. The companies thus are cementing their leading position worldwide and securing the pole position for the period after the crisis. A large share of the research projects deal with improvements in conventional powertrain technologies and the development of alternative drives. The German auto industry is by far the strongest sector in innovation: the auto sector accounts for 36.5 percent of R&D expenditures by all of German industry (57.4 billion euros), and it has been able to expand its lead. Its distance from the second-strongest sector – electrotechnology/data processing/office technology – increased to more than 10 billion euros, after that sector cut its R&D spending by 3.8 percent to 10.4 billion euros. R&D employment increased from 85,683 to 90,410 in the German auto industry.

0

5,000

10,000

15,000

20,000

200920082007200620052004200320022001200019991998

R&D expenditures in the German auto industryin millions of euros

Source: Stifteverband

R&D expenditures Share of total

30

31.75

33.50

35.25

37


Employment in the auto industry largely remains stable Companies in the auto industry did slightly reduce employment by 3.5 percent during the course of 2009, but this decline must definitely be considered a success compared to the drastic plunge in revenue. The federal government’s improved handling of reduced working hours especially contributed to the fact that companies were able to keep their core employees, so they would be able to expand their lead globally with the help of their highly special-ized, trained staff. In all, the auto industry directly employs nearly 723,000 people. Auto manufacturers account for more than 406,000 (-2.2 percent). The second-largest share is employed at supplier firms. In this case, the total number of employees likewise declined slightly, by 5 percent to just under 285,000 people. Companies in the trailer and body industry with 31,700 employees, down 9 percent, had to make the greatest adjustment. But here as well the reduction turned out to be very modest compared to the trend in revenue and production.

The employment trend in 2010 will be closely tied to the speed of the global market recovery. Should a far-reaching recovery fail to materialize or be only perceptible late in the year, further marginal reductions in employment must be expected. Companies, however, are fully aware of the situation that can result if they end up with a shortage of specialized staff. Against this background, they will continue to do all they can to keep employment stable as long as possible.

-15

-10

-5

0

5

10

15

Automotive industryParts industry Trailer and body industryMotor vehicle manufacturer

200920082007

Number of employees in the German automotive industryPercentage change


25

Global automotive demand falls 4 percentDespite the global financial and economic crisis, the international passenger car busi-ness has developed significantly better than initially expected. At the start of the past year, there were predictions of a 15 to 20 percent decline in new car registrations, but governmental incentives, mostly in the form of tax breaks and environmental bonuses, brought a revival in the new car business. As a result, car sales for the entire year were down just 4 percent. Above all, the dynamically growing countries of China, India and Brazil were the drivers of the growth.

Global auto production down more sharplyDue to a severe reduction in inventory, global auto production was scaled back substantially more vigorously than demand in 2009. Over the entire year, 60 million vehicles were manufactured worldwide (-13 percent). Global car production was curtailed by 14 percent in line with falling demand. The manufacture of commercial vehicles fell 9 percent to 10.6 million units. In the NAFTA region, the production volume fell nearly one-third, to 8.8 million vehicles.

The State of the Automotive Business

Global auto production 2009 Shares in percent

Source: VDA statistic

Nafta14.6

China23.0

Other countries

4.6South Korea

5.9

Mercosur6.2

New EU countries

5.0

East Europe2.8

India4.4

Japan13.2

EU-1520.4

Early fears of a drastic decline in the global car market have not been realized


Nearly 3.7 million vehicles (-3 percent) were produced in two Mercosur states, Brazil and Argentina. At 12.3 million vehicles, auto production in Western European factories was nearly one-fifth below the level of the previous year, and their share of global production came to 20.5 percent. In the new EU countries, production was scaled back 9 percent to 3 million units. In all, production in Eastern Europe declined almost by half in 2009. Only in Asia did the production volume slightly exceed the level of the previous year (+1 percent). In this way, Asia’s global share of auto production rose to 20.4 percent in 2009.

Falling auto production in the NAFTA regionAt 8.6 million vehicles, the production of light vehicles in North America fell below the volume of the previous year by nearly one-third. In the process, car production declined 35 percent, and the manufacture of light trucks 29 percent. The financial and economic crisis afflicted the American auto industry severely over the past year, leading to a significant decrease in new car purchases. In all of 2009, the U.S. market recorded a sales decline of 21 percent, to 10.4 million light vehicles. In Canada and Mexico, the production of light vehicles fell 28 percent in each case.

Last year, the “Big Three” sold 4.7 million light vehicles (-27 percent), and the market share of American manufacturers thus fell by more than 3 percentage points to 44.8 percent in 2009. The Asians acquitted themselves better – the share of Japanese and Korean brands in the U.S. market climbed to 47.9 percent in 2009. Sales of German brands also developed more positively than the market as a whole. As a result, German manufacturers have now been able to continuously increase their market share, now at 7.3 percent, over a five-year period and in particular expand their market position in the sale of light trucks.

Light vehicles production in the NAFTA in 1,000

Source: Ward's Communication

-32 %

0

3,000

6,000

9,000

12,000

15,000

Mexico Canada USA

20092008

2,085

2,047

8,447

1,502

1,479

5,580

The market share of the “Big Three” in the U.S. is lower than the Asian auto-makers’ share

Asia is now capturing 50 percent of global auto production

27

Truck sales in the U.S. market fell by a third in 2009, to just under 200,000 units. The demand for medium-duty trucks in the 4 to 7 weight class fell 36 percent for the entire year. The sales of heavy-duty trucks (class 8) were 29 percent below the previous year’s level.

Brazil shores up the demand for cars in MercosurIn the Mercosur states of Brazil and Argentina, automotive demand rose by nearly 6 percent in 2009. At the same time, however, the South American market developed highly variably. The Brazilian light vehicles market was able to benefit from positive demand effects from the temporary award of tax breaks for new car purchases (+13 percent). On the other hand, neighboring Argentina registered a sales decline of nearly one-fifth. In Brazil, sales of commercial vehicles were 11 percent below the previous year’s level, and demand fell nearly by half in the Argentine market. With a total of 172,500 commercial vehicles manufactured in the two countries in 2009, truck and bus production fell 31 percent. In contrast, the manufacture of light vehicles in Brazil slightly exceeded the previous year (+1 percent) with 3 million units, 451,900 of which were exported, which corresponds to an export rate of 15 percent. In Argentina, just under 499,000 light vehicles were manufactured, a decline of 10 percent. The total number of vehicles exported fell 3 percent, to 312,300 units.

Auto production in Japan one-third lower In 2009, Japan had new car sales of 3.9 million, 7 percent lower than the previous year. Tax incentives and the payment of an environmental bonus increasingly stabi-lized demand over the course of the year. Due to muted domestic demand as well as the weak sales trend in its most important export markets, car production declined almost one-third, to 6.9 million units, in Japan last year.


China’s engine hums alongIn China, automotive sales climbed to 13.6 million vehicles sold last year. After a short period of weakness at the start of the year, car sales evolved very dynamically (+47 percent). As part of a stimulus program, the Chinese government cut the sales tax for small cars with displacements of up to 1.6 liters in half, driving car demand skyward despite the subdued economic trend. The sales of commercial vehicles rose by more than 44 percent, to 5.3 million units. At the same time, the growth can largely be traced to an increase in demand in the area of light trucks (+38 percent). Further-more, the minibus segment registered a sales increase of 83 percent. In line with this dynamic market trend, car production registered a rise of 48 percent, to 8.4 million units. In 2009, with a total of 13.8 million vehicles manufactured, China surpassed the U.S. and Japan to become the country with the highest production.

Indian market on a growth courseThe Indian car market also reached a significantly higher volume of new registrations (+17 percent) in 2009, after economic weakness and constrained credit for auto purchases led to short-term slackness in demand at the start of the year. With 2.2 million cars manufactured, auto production in India surpassed the previous year’s level by 18 percent. Along with growing domestic demand, India’s increasing impor-tance as an exporting country spurred an increase in production.

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

2009200820072006200520042003200220012000

Sales of passenger cars in China

Source: CAAM, Fourin

29

Asia – market trends are splitIn 2009, 1.2 million cars were sold in South Korea, about a fifth more than a year earlier. An emerging economic recovery and a tax incentive program launched by the Korean government led to a clear revival of the demand for cars in the course of last year. The smaller southeast Asian countries did not escape the global economic downturn, car sales fell in the past year by 4 percent to 1.2 million vehicles. The trends turned out differently in individual countries: in Taiwan, car sales grew by about one-third in 2009. On the other hand, demand fell 5 percent in the Malaysian market. The decline in sales was significantly greater in Indonesia, where car sales fell below the previous year by 15 percent. In Thailand, car sales were about at the previous year’s level. The production of passenger cars in these countries came to a total of 1.2 mil-lion units (-12 percent).

Decline in demand in Eastern EuropeIn the new EU countries, passenger car demand declined more than one-quarter in 2009 (-27 percent). Only the Czech Republic (+13 percent) and Slovakia (+7 percent) recorded an increase in new registrations. In Poland, car sales were at the level of the previous year. Romania, with a drop of nearly 60 percent, and Bulgaria (-49 percent) had to absorb the greatest declines. Last year, the demand for commercial vehicles in the new EU countries was cut in half. At nearly 2.9 million vehicles, the manufacture of passenger cars was just 7 percent under the previous year’s figure in these countries. The fall in production was less pronounced in the new EU countries than the market trend there, since cars manufactured in this region were destined in most cases for Western European markets supported by incentives. Last year, car sales in Turkey rose 21 percent to 369,800 vehicles. Between March and the end of September, the Turkish government cut the consumption tax for the purchase of small cars and thus bol-stered car demand in the short term.

Bucking the trend, Turkey grows with the help of incentive programs

-20 -10 0 10 20 30 40 50

Indonesia

Thailand

Japan

Malaysia

Philippines

India

South Korea

Taiwan

China

-19.9

-10.8

-9.3

-2.1

Sales of motor vehicles in Asia2008/2009 percent change


6.4

14.2

18.9

28.3

46.1


Russian market suffers from economic downturnLast year, the Russian economy had to struggle with a severe economic downturn. At year’s end, however, the first signs of recovery were visible. Dynamic in previous years, the market faced rapidly rising raw material and energy prices as well as a shortage of bank credit, among other factors, which negatively affected purchasing power. The car business was almost cut in half in Russia in 2009 (-49 percent). Sales of foreign brands, which amounted to slightly more than one million vehicles, declined 51 percent. In the course of the economic slump, car production in Russia was down nearly 60 percent to 595,800 units.

Incentives revitalize car sales in Western Europe In 2009, the number of new car registrations in Western Europe (13.6 million) surpassed the previous year by nearly 1 percent. At the same time, Germany regis-tered the strongest gain with a sales increase of 23 percent. Sales grew 11 percent over the entire year in France, where an environmental bonus had been paid since the end of 2008. Last year, the Italian car market, with help from the government starting in February, reached the approximate level of the previous year (-0.2 percent). After the introduction of their scrapping programs in May, Britain and Spain gained momentum, but the volume of new registrations fell 6 and 18 percent, respectively, as a result of weak sales at the start of the year. In 2009, the market trend evolved considerably less favorably in the Western European countries that were not suppor-ted by government incentives. The decline in Ireland, where sales fell 62 percent, was especially severe.

-80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30

Ireland

Finland

Portugal

Netherlands

Greece

Spain

Sweden

Belgium

United Kingdom

Italy

Austria

France

Germany

New car registrations in Western Europe 2009/2008 percent change


Manufacturers whose emphasis was on a range of a small cars were the main beneficiaries of the bonuses

31

The incentive programs introduced last year especially provided an increase in demand in the small car segment. As a result, manufacturers with a wide array of low-cost models primarily benefited from the scrapping bonuses that were paid out. Nonetheless, German manufacturers were able to maintain their position as market leader in the Western European car market (47 percent of new registrations). The sales of French companies rose 4 percent, to more than 3 million cars, achieving more than a 22 percent share of the overall market. The Italians sold 7 percent more cars in Western Europe, reaching 1.2 million units. This corresponded to a market share of just under 9 percent. The Japanese brands registered a slight sales decline (-2 percent), achieving a share of 13 percent in the Western European market in 2009.

Diesel sales in decline in Western Europe Western Europe’s sales of passenger cars with diesel engines were forced to absorb a slight decline last year. The relatively high price of diesel fuel as well as the mostly higher purchase costs for diesel cars, in combination with environmental bonuses, promoted the demand for small, gasoline-fueled cars. While more than half of all newly registered cars were equipped with a diesel engine in 2008, the diesel share dropped to just under 46 percent in 2009. Sales of diesels were down 12 percent in Western Europe, falling to 6.3 million vehicles. Belgium, at 75 percent, had the greatest share of diesels, followed by Luxembourg and Norway (73 percent each). In Germany, diesel’s share was 31 percent last year, down more than 13 percentage points com-pared to the previous year.

Belgium

Luxembourg

Norway

France

Spain

Western Europa

Austria

Denmark

Italy

United Kingdom

Sweden

Germany

Switzerland

Diesel’s share of new car registrations in Western Europe in 2009 Percent change

Source: AAA

0 10 20 30 40 50 60 70 80

Bonus programs primarily provided a boost in demand for gasoline engines


Decline in commercial vehicle demand subsidesLast year, the international commercial vehicle business suffered severely from the effects of the global financial and economic crisis. At year’s end, however, the first signs of stabilization emerged in nearly all foreign markets. In Western Europe, nearly 1.6 million trucks and buses were sold, a decline of 30 percent. At the same time, new van registrations fell 27 percent, to 1.3 million units, and sales of heavy trucks of more than 6 metric tons were down nearly 42 percent compared to their level a year earlier. At 7 percent, the sales decline in the bus segment ended up somewhat less. German manufacturers did not escape the sales slump in the commercial vehicle business, but were able to continue to improve their position in Western Europe. In 2009, one out of every two newly registered heavy-duty trucks bore the brand of a German company.

0

300

600

900

1,200

1,500

1,800

2,100

200920082007200620052004200320022001

New truck registrations in Western EuropeTotal in thousands

Commercial vehicle up to 6 t.Commercial vehicle over 6 t.


33

One car in five worldwide is produced by a German manufacturer Global vehicle manufacturing by German auto companies declined 13 percent to 10.4 million units in 2009 as a result of the worldwide economic downturn. Their domestic and foreign facilities produced 9.8 million cars, just 9 percent fewer vehicles than in 2008. In this way, German manufacturers were able to consolidate their position and further expand their global car market share to 20 percent, up from 19 percent in 2008. The global orientation of German manufacturers was also evident in the fact that their share of foreign production rose slightly to nearly 50 percent. In addi-tion, 2009 was marked by two diverging semesters; while the global production by Germany’s corporate brands fell 24 percent to 4.5 million vehicles over the first six months of the year, it was able to be increased 9 percent compared to the previous year during the second half, reaching 5.3 million units. Besides the base effect and early recovery trends, government incentives in many countries contributed to this stabilizing development. Given these measures, which particularly boosted sales in the lower segments, it is all the more remarkable that German manufacturers were able to expand their global market share, since their strength especially lies in the premium area.

Global production of German manufacturers in 2009

Manufactures Units+/- %

09/08 Share in %

Volkswagen Group 6,067,208 -4.8 10.1

Daimler 1,447,953 -32.6 2.4

BMW Group 1,258,417 -12.6 2.1

Ford Germany 929,665 -13.8 1.5

Opel 607,739 -22.7 1.0

Porsche 75,637 -21.8 0.1

MAN 42,050 -61.1 0.1

Iveco-Magirus 5,775 -74.2 0.0

Multicar 1,084 -14.3 0.0

Total 10,435,528 -13.4 17.4



In China, production expansion cushions crisisIn 2009, the global economic crisis was unable to slow the dynamic growth in China. Last year, with 1.25 million units (+43 percent), China was German manufacturers’ most important location abroad. Added to that were another 200,000 CKD (“Comple-tely Knocked Down”) kits from German factories, which were assembled on site.

With 758,000 cars (+7 percent), Brazil is in second place in terms of German auto production abroad. Here, German automakers have seized the opportunities present-ed by globalization and are producing high volumes in the country, to serve its large, still relatively unsaturated markets locally. Ten years ago, foreign production in the emerging markets of China and Brazil came to a mere 670,000 cars in all. In contrast, German auto companies had to reduce their foreign production in Europe by a fifth, to 2.12 million cars. Their production was still able to be maintained at a substantial level in Britain (-11 percent to 218,000 units) and Spain (-15 percent to 566,000 units), two countries that were especially affected by the financial crisis. In the NAFTA region, foreign production had to be cut back 31 percent, to 534,000 units, due to the very weak demand for light vehicles in the U.S.

German manufacturers seize opportunities presented by globalization

German corporations’ world production

2005 2006 2008 2009+/- %

annually+/- %

2nd term

Domestic production

passenger cars 5,350 5,399 5,532 4,965 -10.3 6.0

commercial vehicle 408 421 514 245 -52.2 -43.5

in total 5,757 5,820 6,046 5,210 -13.8 1.8

German manufacturers’ foreign production

passenger cars 4,232 4,749 5,287 4,858 -8.1 11.2

commercial vehicle 709 720 725 368 -49.3 -43.0

in total 4,941 5,469 6,011 5,226 -13.1 4.3

Worldproduction

passenger cars 10,205 10,148 10,819 9,823 -9.2 8.5

commercial vehicle 1,116 1,141 1,238 613 -50.5 -43.2

in total 13,453 11,289 12,057 10,436 -13.4 3.0


35

Production increases for subcompacts and the compact class There was growth in just a few segments in German car production abroad last year. These included the most important segment by far, the compact class, which accounted for 37 percent of all vehicles built by German car companies outside their home market. The manufacture of compact-class models was able to grow to 1.803 million units. Subcompacts were another segment that was able to register growth in production to 1.803 million units in 2009. First and foremost, these two vehicle catego-ries were able to post growth because they benefited from the trend toward low-cost vehicles still being supported with various scrapping bonuses.

German diesel-fueled cars hold up well in a difficult environmentThe year 2009 was a year of major challenges for diesels because the various buying incentives mainly favored sales in the lower price classes and thus tended to bene-fit gasoline vehicles. In all, German manufacturers produced 3.33 million diesel cars domestically and abroad. The future promise of the fuel-efficient diesel engine remains unchanged, however, since it is clearly superior in fuel consumption not merely to the gasoline-fueled cars but also to hybrid and purely electric systems, especially over long distances.

German manufacturers are accommodating a rising trend in the demand for low-priced vehicles


Domestic production despite the crisisIn 2009, 4.965 million vehicles were manufactured in Germany, 10 percent less than a year ago. In comparison with European production, which fell 18 percent, this decline turned out to be quite restrained. Thus, Germany was clearly able to maintain its fourth-place position behind China, Japan and the U.S. The most important segment was again the compact class in 2009 (1.57 million units). The shift in demand to vehicles with less powerful engines is evident from the fact that more than one million vehicles with a displacement of 1.5 l or less were built for the first time. Domestic production of sport utility vehicles was expanded to 438,000 units (+47 percent). The midsize share of production in Germany declined further in 2009. At 1.31 million vehicles (-21 percent), the segment’s share of production was just 26 percent. With a decline of just four percent, the sports car segment held up surprisingly well and was able to add to its share of production.

Export share declines For the first time since 2001, the share of exports came in below the 70 percent mark. This development was especially due to the German environmental bonus, which led to a re-strengthening of the domestic automotive market. In 2009, 3.43 million units were exported, one-sixth fewer than the previous year. Given the economic crisis that led to significantly greater market declines, this is a respectable result and documents the strategically balanced global orientation of German manufacturers. A recovery in the markets was looming as the end of 2009 approached; in the last quarter, there was a significant rise of 17 percent over the same quarter a year earlier.

Germany can assert its position in global auto production

Britain, Italy and the U.S. are the most significant importing countries

Car exports by destination countryShare in percent


Rest of the world3Italy

11

Western Europe11

Spain6

GB17

Asia14

Eastern Europe7

Benelux7

France9

America14

37

One exported car in six from German manufacturing plants went to Britain in 2009. Italy was in second place at 383,000 cars, importing only 6 percent fewer cars from German production than it did in 2008. Car exports to the U.S. suffered more severely, declining 31 percent to 359,000 units. Last year, exports to France reached 317,000 units, falling 7 percent. China, whose car imports from Germany rose 38 percent to 300,000, ranked fifth. With this excellent result, German manufacturers demonstrated that they are especially competitive in the booming emerging markets. In 2009, they were also able to maintain a high share of diesels among their exports, 44 percent, nearly the figure for the previous year. In total, they exported 1.52 million units with diesels, 17 percent fewer than during 2008.

Personal transportation costs in Germany: relief in fuel pricesIn a sign of the deep crisis, the cost trend in 2009 was primarily marked by relief in fuel prices, which fell 11 percent over the entire year. The costs of buying a car evolved in different ways over the course of 2009. The costs for new cars rose 0.5 percent, and the costs for used cars fell 3.1 percent. Overall, the auto cost index of the Federal Statistical Office registered a decline of more than 2 percent over the entire year, while the general cost of living, rising 0.3 percent, was nearly at the previous year’s level.

80

95

110

125

140

FuelUsed Passenger cars New Passenger cars Total Index

Jan. 09Jan. 08Jan. 07Jan. 06Jan. 05

Trend in personal transportation costsBase year 2005 = 100



Balance sheet for 2009: environmental bonus and vehicle tax reform roil domestic market In 2009, the domestic car market took a very dynamic direction, which is primarily attributable to the environmental bonus and a reform of the vehicle tax – along with a vehicle tax exemption for new cars. The vehicle tax was converted from a tax purely based on engine displacement. It now takes CO2 emissions into account as well. Thus, buyers’ uncertainty about the future taxation of their vehicles was finally eliminated, as the VDA had long urged, and consumers were no longer reluctant to make purchases. The environmental bonus, which the grand coalition proposed at the end of 2008 and introduced in 2009, revitalized the domestic market to a great degree. The order backlog of German car manufacturers increased sharply over the course of 2009 as expected. It peaked at nearly 600,000 units and exceeded the level of the previous year by more than 50 percent before normalizing at the end of the year. At just under 3.81 million cars, the number of new registrations reached a level that was last achiev-ed in 1999. At the start of the year, the assumption was a market volume of about 2.8 million units. Based on that figure, the bonus provided extra sales of one million cars over the original expectation.

Temporary shifts in the car market The environmental bonus – irrespective of its intended role as a bridge into 2010 – also had an asymmetrical distribution of results as one consequence. For one thing, as expected, the manufacturers of high-volume cars benefited to a far greater degree than premium manufacturers did. For another, ratios that had long been stable were turned around. The market shares of German manufacturers were among them: the share of diesel vehicles declined, and the model mix turned toward subcompact and compact cars. But these changes are of a temporary nature, and the registra-tion results after the bonus expired show this very clearly. Nonetheless, the current preconception that German brands did not benefit to a great extent from the environ-mental bonus is not correct. Overall, German corporate brands had a share of more

0

20

40

60

80

100

120

Other

Minis

Mid-range class

Small cars Compact class

20082009

Segment development Percentages for new registrations

Source: Federal Motor Transport Authority

25

10

13

24

29

32

6

17

18

27

Expectations were exceeded by a million cars

39

than 54 percent of new registrations or sales of pre-registered vehicles related to the bonus. Admittedly, that is significantly below the average market share achieved in recent years (just under 70 percent). Still, more than one out of every two cars bought as a result of the environmental bonus can be assigned to a German company.

The incentive structure of the environmental bonus provided a temporary shift in the segment structure toward mini-cars and subcompacts. As a result, registrations in these segments did not merely rise in absolute terms but in relative terms as well. The mini-car and subcompact classes rose to a share of 34 percent from 24 percent in 2008. Compact cars were able to gain two percentage points – despite their already strong market position. To a great extent, this came at the expense of the midsize class. This extremely strong segment accounted for just 13 percent in 2009, after 17 percent in 2008. Along with the midsize segment, the upper mid-range, the luxury class, sports cars and large vans lost share in 2009.

The share of cars with diesels has grown substantially over the years, but it already had to endure a decline in 2008. Due to increased prices for diesel fuel compared to gasoline during that period, buyers, especially private owners, were less willing to make purchases. The environmental bonus, at least until the third quarter, strength-ened this trend. However, after the bonus expired, sharply rising market shares for this highly efficient powertrain technology were registered. In 2010, the diesel engine remains an important building block in the multi-discipline strategy of the German auto industry. The optimized internal combustion engine will be irreplaceable for reducing emissions and fuel consumption in coming years as well.

The ownership breakdown in 2009 shifted sharply toward the private buyer – after a wait-and-see stance that had lasted for years. As a result, private buyers represented 63 percent of new registrations – the figure was 40 percent the previous year.

The environmental bonus led to a surge in demand for mini-cars and subcompacts

Declining diesel share and more private buyers as a temporary result of the bonus


Commercial vehicle market: dramatic decline across a broad front The German commercial vehicle market had to endure a dramatic downswing in all classes during 2009. Overall, somewhat more than 242,000 commercial vehicles were registered in the German market, a decline of nearly 28 percent, the worst record since German reunification. Van sales headed downward to 175,300 units, a drop of 24 percent. Their more stable trend compared to heavy vehicles can likewise be attributed to the bonus. Nevertheless, the crisis has severely affected core customers in the commercial field and limited their opportunities for financing. This had a negative effect on the market. This market volume in the van segment was last achieved in 1996. In the heavy-duty class over 6 metric tons, the trend is disproportionately more dramatic. New registrations fell 38 percent to 61,200 units, the lowest since reunifica-tion. The trend in new orders was correspondingly dramatic in 2009. Overall, orders fell nearly 29 percent in the commercial vehicle field, whereas a stabilization emerged at year’s end.

This is due less to an overall economic recovery and more to a base effect: the third and fourth quarters of 2008 were down significantly in all subcategories of the commercial vehicle market. Thus the commercial vehicle business again unerringly announced an economic downturn in the overall economy, even if the decline in demand exceeded the downward movement in the economy as a whole. In the up-to-6-metric-ton class, order backlogs had already substantially melted away in 2008. In the course of 2009, there was a bonus-related increase around midyear, but it was already reduced at year’s end. The situation is disproportionately more problematic in the heavy-duty class. The order backlog has been spiraling downward since mid-2008, and in December 2009 was only at one-fifth the level of 2007.

0

20,000

40,000

60,000

80,000

100,000

200920082007

Q4Q3Q2Q1

Total new registrations for commercial vehiclesby quarter


The market for heavy commercial vehicles was hit especially hard

41

Manufacturers of trailers, bodies and containers found themselves in a very demand-ing market environment last year. The declines in new orders – at their worst, the rates of decline approached 70 percent – ended up at -33 percent. After a very dynamic stage in the upswing, in which annual revenues for this manufacturing category were able to rise from just under 6 billion euros in 1999 to more than 10 billion euros in 2008, these companies had to endure revenues that fell to a little more than 5 billion euros last year.

In the process, the companies made a major effort to hold onto their skilled staff. The employment decline of 9 percent, compared to a revenue decline of more than 46 percent, can be classified as a clear contribution to the stabilization.

A period of stabilization did begin at the end of the year, but customers’ high stocks of unused vehicles acted as a brake. The upturn in demand for transportation is initially being met with reactivated vehicles.

Production of commercial vehicles cut in halfThe global economic crisis is having an especially severe effect on the commer-cial vehicle area, since the end of the economic cycle was added to it: before 2009, production reached record levels five years in a row. Last year, production by German commercial vehicle manufacturers around the world fell by half to 613,000 units; that put it at the level of 1995. The trend in the domestic market and abroad was similar. In Germany, German companies produced 245,000 units, 52 percent fewer than in 2008. Abroad, the decline was only slightly less, 49 percent, to 368,000 units.

-80

-70

-60

-50

-40

-30

-20

-10

0

10

20

30

over 6 t.up to 6 t.

4th Q. 20093rd Q. 20092nd Q. 20091st Q. 20094th Q. 20083rd Q. 20082nd Q. 20081st Q. 2008

Domestic truck productionRate of change compared to the quarter a year earlier


The trailer and body sector has lost substantial ground

The manufacturing decline is roughly half what it was domestically and abroad


Van production more stable at year’s endIn the light commercial vehicle area, the global recession led to a decline of 45 percent, to 321,000 vehicles, in German van manufacturers’ total output. Here, domestic and foreign facilities were affected in equal measure. Production came to 168,000 units in the domestic market and 160,000 vehicles abroad. In 2009, Poland, with 54,000 vans (-42 percent), was the most important production location outside Germany for German manufacturers. Brazil, with 27,000 units (-33 percent), was next, followed by Japan with 25,000 units (-48 percent).

Production of trucks over 6 metric tons in reverse gear Last year, the domestic production of heavy trucks had to be scaled back by two-thirds to 69,900 units – its lowest level in more than thirty years. This put an abrupt end to a six-year production upturn. Several factors contributed to this severe reduc-tion. Investments declined due to the economic crisis and the resulting slowdown in the transport business. In addition, manufacturers and shippers drew down their inventories. German commercial vehicle companies had to noticeably reduce their production abroad as well. At 162,600 units, 55 percent fewer trucks over 6 metric tons came off assembly lines than during the previous year. German manufacturers were forced to register their greatest decline, 65 percent, in North America, where production fell to 22,000 units; in the rest of Europe, they built 58 percent fewer units than during the previous year, bringing production to 26,200 units. The declines were less in Asia, which fell to 54,600 vehicles in a 55 percent drop, and in Latin America, which fell to 59,600 heavy trucks in a 47 percent drop.

Commercial vehicle exports: stabilization at a low level The severe decrease in German manufacturers’ domestic production can, above all, be attributed to dwindling demand abroad. Commercial vehicle exports plunged 57 percent to 158,100 units. Commercial vehicle exports to Eastern Europe were partic-ularly weak, falling 78 percent to 16,400 units. In 2009, van exports fell by half to 109,600 units. This reduced the export share by 9 percentage points, to 65 percent. Britain was the most important export partner at 22,500 units (-43 percent), ahead of France with 14,400 units (-39 percent). The U.S. scaled back its van imports from Germany by 78 percent, to 3,600 vehicles. In the area of commercial vehicles over 6 metric tons, with 42,600 exported units, the decline even came to 69 percent. Exports to Eastern Europe nearly came to a complete standstill after booming in previous years. They fell 89 percent to 3,600 units. The decrease was 67 percent for exports to Western Europe, which accounted for 23,500 units. There was also a significant de-cline of 64 percent, to 5,800 vehicles, in the OPEC states, which suffered from falling oil prices. East Asia, which imported 3,000 trucks over 6 metric tons from Germany, down 31 percent from 2008, still turned out the best, albeit with a small share from the German point of view. China, with 1,700 units (-12 percent), was mainly responsible for this. In 2009, the export share for heavy commercial vehicles was just 61 percent, 8 percentage points below the previous year. Exports had not taken up such a small share of domestic production since 1999.

The foreign activities of trailer and body manufacturers lost a great deal of ground in 2009. Revenues from abroad fell nearly 55 percent to just 2.2 billion euros. At the same time, the established West European markets as well as the new EU regions that had been growing dynamically up to that point appeared very weak. In addition, the companies had to face a situation where their customers’ financing opportunities were limited and put additional pressure on new business.

The Eastern European market is especially weak

43

The year 2009 brought the German commercial vehicle industry face-to-face with its greatest challenge in decades: in the course of the global financial and economic crisis, every commercial vehicle market – after a number of years of growth – began a nose-dive, unmatched in its severity and its speed, right after the IAA for commer-cial vehicles in the fall of 2008. In the process, the crisis took hold in all key markets across Europe and around the globe. Export business was also down sharply – which was not the case in previous years – even coming completely to a standstill in the meantime. German trailer and body manufacturers were hit especially hard by the trend in the Central and Eastern European markets, which were still the growth drivers for the entire commercial vehicle industry in the years before 2009.

At the same time, the German shipping and transport industry was more seriously affected than its European competitors due to the toll increase on January 1, 2009. The rise in tolls came at a conceivably unfavorable time and – along with the already existing credit crunch – worsened lending terms for the industry, which limited financ-ing opportunities even more. The road transport industry had only limited success in passing the toll increase onto to its customers. An added difficulty was that orders plunged for many transport companies during the current financial crisis. Thus, the toll increase had negative effects on the renewal of fleets, was highly constraining for the overall economy, and, to some extent, entailed the drastic depreciation in the value of trucks purchased just three years earlier as a result. The German transport industry is thus the sole sector that was burdened with greater charges, in the form of tolls, in the middle of the crisis. It is still incomprehensible why the transport sector, of all industries, was burdened with extra costs of more than one billion euros at a time when the road transport business had shrunk drastically and the number of bankruptcies had risen sharply – by nearly 20 percent compared to the previous year in 2008 alone.

Developments for Trailers and Bodies

2009 was the most difficult crisis year in decades


In 2009, the German commercial vehicle market was forced to endure a dramatic nose-dive in all vehicle classes. In all, somewhat more than 242,000 new commercial vehicles were registered in the German market, a decline of nearly 28 percent, the worst record since German reunification. Domestic sales of heavy trailers with a gross vehicle weight of more than 6 metric tons fell to 36,400 units, more than 42 percent below the previous year’s level. At the same time, the manufacturers of standard heavy trailers over 6 metric tons are looking back at a volume of 19,600 registrations, a drop of nearly 12 percent. With a decrease of 59 percent, semi-trailers fell drastically below the previous year’s high sales level, the second-best ever achieved. At a total of 16,800 newly registered semi-trailers, sales did not even reach the level of the crisis years of 2002 (18,500) and 2003 (19,600). Rather, they could only barely exceed the level for 1997 (15,600). In the process, the semi-trailer trend observed in recent years did not persist in 2009. Last year, only 46 percent of all the newly registered heavy trailers over 6 metric tons on German roads were semis. At 41,200 vehicles, sales of heavy trucks (not including semi-tractors) were also well under the previous year’s levels, falling by one-third.

With the national implementation of the 2007/46/EC guideline (EU uniform approval of vehicles and trailers), the corresponding type approvals for new vehicle models have been issued on a selective basis since the end of April 2009. But a result of these type approvals is that codings based on new EU classifications have been introduced for vehicle as well as body classes in the truck, bus and trailer segments. In consequence, it is only possible to distinguish semis and draw-bar, center axle and travel trailers. There has been a substantial reduction in information from German registration statistics since April 2009, due to the sharply reduced range of the EU classifications compared to the familiar national system of the Federal Office for Motor Transport (KBA) and in view of the fact that significantly more vehicles than expected were registered under the new type approvals.

There is indeed a correct reflection of the totals for registered vehicles in the truck, van, semi truck or tractor truck segments as well as for semi, draw-bar, center axle and travel trailers. Statements about gross vehicle weight and manufacturers contin-ue to be possible as well, as far as the total number of vehicles is concerned. On the other hand, only subsets of actually registered vehicles are represented, based on body type, such as insulating tanker, closed-box and long-material bodies as well as dump trucks – and these vehicles have indeed been the ones coded under the older type approvals. Given the extreme relevance of detailed data for the determination of market volume and share in individual vehicle segments and body categories, the VDA is now in an intensive dialog with the Federal Office for Motor Transport and the EU Commission to bring about a solution as quickly as possible.

Last year, manufacturers in the German trailer and body industry had to endure a roughly 46 percent decrease in revenues in light of the dramatic decline in foreign and domestic markets. At a total of 5.47 billion euros, their level was the lowest since 1996. Industry revenues thereafter were able to continually rise from 2000 to 2008, achieving a record of 10.18 billion euros the final year. A long boom phase with substantial revenue increases then came to an end with a severity that could not be anticipated. In their home market, German trailer and body manufacturers registered a decline of 39 percent, achieving domestic revenues of 3.25 billion euros. Thus, for the first time in five consecutive years, the industry’s domestic revenue failed to grow. Still, domestic business declined less than foreign activities, which registered a drop of nearly 55 percent, to just 2.22 billion euros. The share of revenue earned abroad in terms of overall revenue thus fell substantially, going from 47.9 percent in 2008 to just 40.6 percent in 2009. Nonetheless, many German manufacturers managed to position themselves successfully in their generally declining export markets and gain market share.

Declining sales along a broad front

A detailed determination of market size and market share is still only possible on a limited basis

Significant drop in revenues for German trailer and body manufacturers

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The commercial vehicle market is a rather cyclical business with greater economic swings than those found in the auto industry, and thus has more in common with the capital goods industry than with the consumer market. German trailer and body manufacturers did not forget this during the long years of the upswing and thus placed great importance on a high degree of flexibility. In this way, they succeeded in adjusting production short-term and reducing their stocks, and they retained their core staff as much as possible. In recent years, these companies were able to absorb the peaks in demand with temporary employment contracts. Investments in research and development were also maintained at a high level, so the companies would be in the forefront with new products after the downturn. The German commercial vehicle industry has again demonstrated that its companies think strategically and at the same time are enormously flexible in the short term.

While numerous foreign trailer and body manufacturers have had to fight for their survival or already shut down production, German manufacturers adjusted their capacity to falling demand early. At the same time, the magnitude of the market slide last year required, first and foremost, systematic cost and cash flow management, an adjustment in capacity and careful production planning. German trailer and body manufacturers did everything they could to manage the crisis with the resources available to them – a reduction in working hours accounts, extended factory breaks, the release of contract and temporary workers, and reduced working hours. Nonethe-less, the companies were forced to steer their production “by sight” and reduce staff to a limited degree. As a result, they had to reduce total employment by 11 percent to 30,400 employees (-3,000 staff). This decrease, however, must definitely be seen as a success in comparison with the dramatic fall in revenue. The industry, which had continuously ramped up staffing levels since 2004, still employed 2,400 more workers, an increase of 8 percent, than it did five years earlier.

The improved control of short-time workers accounted for the fact that the companies were able to retain their core employees for the most part, so they could expand their leading global positions with the help of their specialized, skilled workforce after the downturn. In a joint display of strength, the industry and the political world succeeded in maintaining the employee base, as much as possible, at companies in the German trailer and body industry. Everyone involved behaved constructively in this regard: political leaders extended reduced working hours a number of times, workers were ready to make their contribution to lower costs with a reduction in their working hour accounts that earlier would have been barely conceivable, company leaders carried out a systematic cost-cutting drive, to at least partially escape the “fixed-cost trap” that inevitably looms in a sales decline. Should the German and European markets recover, this can have a positive, stabilizing effect on employees.

The trailer and body industry prepared for the decline in demand early

Employment remains relatively stable in crisis periods


Last year, the global commercial vehicle industry suffered severely from the effects of the downturn. The first signs of a bottoming out came at year’s end. A third of the German trailer and body manufacturers belonging to the VDA assume that the utilization of their capacity will increase this year. Expectations about employment are likewise not as pessimistic as they were a year ago: significantly more than half the companies assume that they can keep their workforce constant this year or even hire additional staff.

The year 2010 has huge endurance tests in store for the entire commercial vehicle industry. But at least a slight upturn is expected in the second half of the year. It is reassuring that economists are again looking ahead optimistically. Economic forecasts are indeed still cautious, but the outlook has clearly improved compared to the predic-tions six months ago. In the end, a significant revival of the overall economy will be crucial for the commercial vehicle industry as well as the transport industry, and thus for German trailer and body manufacturers. There is no doubt about the basic expec-tation of continually rising demand for transport in Europe and the rest of the world. But it will still take a few years to reach historic highs in production and sales. The transport industry still has some relatively new vehicles in its stocks that are currently idle, and they will be the first to be commissioned and roll onto the streets when the market picks up, which delays the revival of the new vehicle business. German trailer manufacturers are aware of the situation and are correspondingly planning for a gradual upturn.

Outlook for the current year: stabilization at a low level

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German trailer and body manufacturers have so far fared better than their competi-tors and are doing all they can to manage the effects of the economic and financial crisis in their field. To this end, banks are being called on to especially provide small and middle-sized companies with adequate liquidity. According to a VDA survey, credit has become more restrictive for two out of three companies this year. For the economy as a whole, it hardly makes sense to see firms that are essentially in good shape and have great future potential fall into difficulties with financing due to credit policies that are excessively tight. The blanket rating downgrade for an entire industry must yield to a factual examination of each individual case. As a result of the difficult course in 2009, the balance sheet of many companies is unquestionably problemat-ic. Thus it is vital for credit institutions to employ a “rating for the future” to a much greater degree, along with the conventional rating, and correctly gauge their custom-ers’ positive market opportunities and their great potential for innovation. Otherwise, companies already in a recovery mode would be incorrectly evaluated and encounter financing difficulties.

Some elements in the new federal government’s coalition contract ought to be supportive of the commercial vehicle situation:

• A moratorium on charges on the battered transport industry;

• the promise of a proportionate CO2 regulation for light commercial vehicles;

• field tests of new commercial vehicle concepts;

• and the liberalization of distance bus travel,

are examples that are specifically oriented to the commercial vehicle industry. In this regard, matters relating to tax policy and especially corrections to the corporate tax reform of 2008 are just as important. They must now be carried out quickly and without tolerating any delay resulting from federal-state conflicts.

Compared to the still-stable registration numbers for 2008, sales of recreational vehicles in Germany were down sharply last year. The decline in demand from the downturn, especially in the first half of 2009, led to a total of 17,600 new motor home registrations (-16 percent) and 16,700 new travel trailer registrations (-13 percent). After 11,900 new motor homes (-19 percent) and 10,700 travel trailers (-12 percent) were sold in the first half of the year, the decline in motor home demand softened somewhat: between July and December 2009, 5,600 motor homes were registered as new vehicles, a drop of just 9 percent.

Last year, the European recreational vehicle market was down roughly 18 percent, recording new registrations of about 68,000 motor homes and 87,300 travel trailers, and performing even worse than the German market. The Scandinavian market for recreational vehicles, in particular, lost ground with an average decline of 30 percent. Spain likewise saw substantial declines in the motor home as well as the travel trailer area. New motor home registrations in Italy, with a sales decline of 31 percent, were also caught in the grip of the downturn. The registration trend in Belgium and Switzer-land was more stable.

Credit institutions and political leaders must make a contribution

The markets for recreational vehicles are softening in line with the downturn – Germany is doing better than the rest of Europe


The decline in recreational vehicle sales seriously affected German manufacturers’ production and exports. The export of travel trailers from German production was down 31 percent in 2009, to 22,100 units. Motor home exports had to absorb a steep decline of 39 percent, to 11,200 units. In 2008, 32,000 travel trailers and 19,500 motor homes were exported. In all, 59.2 percent of the travel trailers and 50.3 percent of the motor homes produced in Germany were sold in other European countries.

Lower demand, high inventories and financing bottlenecks for consumers domesti-cally and abroad forced the predominantly middle-sized manufacturers of recreational vehicles to scale back production dramatically. About 22,900 motor homes, down 41 percent compared to the previous year, and 38,100 travel trailers, down 25 percent, were produced in 2009. The drop in production, however, went far beyond the decrease in registrations in Germany and Europe, although the reduction had the goal of sharply decreasing the high inventories of new vehicles built up during the boom years and thus giving the industry’s specialized dealers greater financial room to maneuver. According to the travel trailer industry association (CIVD), this was successful in cutting new vehicle stocks from 32,800 vehicles in 2008 to 21,000 units in 2010 in Germany alone.

The weak market trend in Germany and in neighboring European countries intensified the decline in the German motor home and travel trailer industry’s revenues. Overall revenues were 21.4 percent below the results for 2008 (5.22 billion euros), falling to 4.11 billion euros, whereas revenues declined from 2.9 billion to 1.82 billion euros for new vehicles (-37 percent) and from 513 million to 429 million euros (-16 percent) for the accessories business. In contrast, the market for used recreational vehicles climbed nearly 3 percent, from 1.81 billion to 1.86 billion euros.

The outlook for the current year is extremely mixed – just as it is for other indus-tries. While declining sales figures in single-digit percentages are expected in 2010, German manufacturers and suppliers are assuming slightly rising production based on sharply diminished inventory levels for new vehicles across Europe. In light of the current hesitancy to make purchases and the ongoing financial downturn, manufactu-rers expect a slightly declining market in Germany and Europe. More than 40 percent of travel trailer manufacturers expect a stable or slightly rising travel trailer market in Germany and the rest of Europe, while nearly 60 percent assume lower sales. Motor home companies are somewhat more optimistic: 78 percent assume stable or rising sales, while 22 percent calculate that there will be slight decreases. 40 percent of companies expect no change in travel trailer exports. Some 30 percent expect a slight increase, and another 30 percent a slight reduction. Nevertheless, 48 percent of motor home exporters see 2010 at last year’s level, and 38 percent expect higher exports than in 2009. Only 14 percent calculate that there will be slightly decli-ning exports. More than 80 percent of German and European recreational vehicles manufacturers assume that they will either maintain their employment levels (70 percent) or even hire more employees (13 percent). Only 17 percent calculate that they will have fewer staff. The situation appears to be similar for trainee positions: 68 percent will retain their training positions, and 10 percent even intend to hire more trainees.

Weak economic trends brake exports of German recreational vehicles

Weak market trend domestically and abroad causes industry revenues to shrink

Mixed outlook for 2010 in recreational vehicle market

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Bus tourism claims its market shareThe bus industry has coped with crisis year 2009 better than expected and only had to absorb slight losses, according to a survey by bdo, the national associa-tion for bus operators. Thanks to the most advanced vehicles, comfort, quality, service and the best possible organization, along with “experience trips,” bus trips are popular and will remain so. The current figures from a trip analysis for 2009 attest to this. It credits bus tourism with a market share of nearly 9 percent of all vacation travel with at least five overnight stays – despite the dumping price strategies of partly state-subsidized, low-cost airlines and likewise subsidized railway travel. The trend last year was increasingly toward tourism in Germany.

The number of trips was even able to be maintained in 2009: 49 million Germans of at least 14 years of age took at least one vacation trip (starting at five daysʼ duration). Still, the economic crisis did not leave the tourist industry unscathed. One section of the population traveled more than in 2008, but another limited its travels, against the background of an uncertain situation.

Buses have had a stable market share between 8 and 10 percent for two decades as a means of transportation for domestic vacation trips with at least five overnight stays. At the same time, bus travel increased its lead on railways, whose current share is about five percent. The millions of passengers who use overland buses for tourist travel are a reliable staple for the German tourism industry.

The bus remains an indispensable economic factor for the hotel sector, fine dining, the tourist economy and other tourism-related firms. About a half million people working in restaurants, hotels, theaters and other destinations can thank bus tourism indirectly for their jobs.

Germans are still glad to travel during the downturn. City trips are in fashion, along with educational and cultural trips. As a flexible, environmentally friendly means of transportation, overland buses are especially suited to city tourism.Environmental protection, health-related and recuperation needs, as well special requests from the rapidly growing older population, from singles and from women: all the surveys see outstanding opportunities for buses. The industry also sees a potential for growth in the increasing number of second and third trips. In addition, short vacation trips of 2 to 4 days are coming more clearly into focus.

New travel destinations and offers of theme trips make the bus an indispens-able partner for the tourism industry for the future as well. In a current trend analysis on vacation practices from Forschungsgemeinschaft Urlaub und Reisen (F.U.R.), a market share of 12 percent is predicted for 2015. The study even clas-sifies bus trips as the top candidate in the “special forms of vacation” category. The trend toward shorter, earthbound trips argues in favor of bus tourism.

The bus especially stands out for features like flexible, house-to-house trans-portation, without baggage worries, and the greatest possible claim to travel comfort and safety. Whether for vacations, city trips or studies, the buses used for these trips evince a comfort and service that holds up to the railway and the airplane. In addition, flexibility, high cost-effectiveness and environmental friendliness militate in favor of the bus as a means of transportation.


The State of the Auto Supplier Industry

Supplier sector under extreme strainThe prevailing economic situation has led to an extraordinary strain on the auto indus-try, including the supplier sector. Companies are facing extremely serious circum-stances due to the decline in financial markets, which triggered the global economic crisis, associated problems with the utilization of the auto industry’s capacity and issues relating to the availability of credit.

The environmental bonus last year represented a stabilizing instrument for auto manufacturers and suppliers, especially in the domestic market. The additional demand that it created, however, was unable to offset the demand decline that neces-sarily affected supplier companies as well. Already in 2008, the companies had to absorb a revenue decrease of 1 percent, to 67.4 billion euros. Domestic revenue came to 44.3 billion euros (approaching -2 percent) and foreign business came to 23.1 billi-on euros (-1 percent). In 2009, the decline went into double digits. For the whole year, revenue came in 26 percent below the volume of the previous year. The decline was especially clear for revenue from abroad (-29.6 percent).

The crisis did not leave the employment situation unscathed. To a great degree, many suppliers exploited opportunities for flexibility in their working hour arrange-ments, such as reduced hours. With these measures, many companies could avoid a reduction in core employment. But the number of employees has trended downward since the crisis began. The yearly average for supplier industry employment in 2009 was 285,089 staff, down 4.6 percent compared to the average for the previous year. Continuing sales problems will push down employment levels in 2010 as well, even if companies keep trying to hold onto their core staff.

Sales and employment in the automotive supply industry (by company)

Source: VDA

Employees Sales

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30

40

50

60

70

80

20092008200720062005200420032002200120001999199819971996199519941993180

200

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s in

bill

ions

of e

uros Em

ployees in 1,000

Environmental bonus provides temporary stability

Reductions in core employment were able to be prevented

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Companies in a credit crunch?Due to the drastic drop in their income, many suppliers lack adequate liquidity. The banking sector in turn is reacting to the industry’s economic situation with more restrictive lending. The state of financing in the supplier industry is critical, even if there is not a “credit crunch” in the literal sense of the phrase. As banks define it, this only occurs when 50 percent of companies view their banks’ lending in a critical light. Still, there is no denying that numerous companies complain about tougher loan terms as they obtain financing.

Credit practices create a problem

The assessment of the auto industry by the banking and insurance sectors is causing substantial concern, as confirmed by the VDA in a survey of its members as well as another survey. It can quickly result in a threat to the sur-vival of mid-sized companies in particular.

Precarious situation in trade credit insurance

The state of trade credit insurance is similarly precarious. With the support of the general association for the insurance industry, the VDA is trying to get insurance companies to base decisions exclusively on the examination of indi-vidual cases rather than a general rating downgrade for the sector. Violations are reported to the VDA staff, who pass them on to the GDV. This has brought about the reversal of some credit limit cutbacks. The additional “protective shield” for the credit insurance sector did not unburden the climate to any appreciable extent by early summer.

Even upstream sectors of the supplier industry such as chemicals and electronics are suffering in the auto industry downturn. Counting these sectors, the supplier industry provides jobs for about 1 million people.

Developments in foreign markets are crucial to the success of the auto industry and thus for the business performance of its suppliers. The German auto industry ultimate-ly produced roughly 9.8 billion cars worldwide, about one-fifth for customers outside of Germany. But in many foreign markets, the demand situation has not been satisfac-tory at all. To some extent, the situation turned out to be drastic last year, especially in the commercial vehicle field. The global recession has hit the international commercial vehicle market squarely – particularly in heavy commercial vehicles. This weakness in international markets has naturally hurt the strongly export-oriented supplier industry. Nonetheless, its direct export share comes to about 40 percent of its total volume, and the indirect share through OEMs can be added to that.


Manufacturer/supplier partnership on the test stand Both sides – manufacturer and supplier – know that common effort is the basic pre-condition for gaining the customer’s trust and assuring success in the market. The cooperation between manufacturers and suppliers has naturally been put to the test during the downturn. Competitive and cost pressures remain high – and this sometimes leads to tensions between the partners.

More than ever, intense negotiations have become a daily routine in the value chain. Suppliers, first and foremost, are in a very difficult situation. Like manufacturers, they must cope with rising costs that can hardly be passed on with price increases. And they are urged to contribute to the success of the manufacturer’s cost-cutting programs. Furthermore, to maintain their competitiveness, they must increasingly invest in new technologies – and all this at lower volumes.

Financial success must be achievable for all companies in the value chain. Ultimately, the sector’s lifeblood is the fact that it includes companies of all structures and sizes: large as well as midsized direct suppliers, to be sure, along with numerous small and medium-sized second- and third-tier suppliers. Taken together, these suppliers provide up to 70 percent of the value creation in the auto industry. Thus, they enjoy a prominent position and make their own contribution to the fact that the German auto industry is at the pinnacle of its competitive environment.

VDA as a common platform for solving problems The VDA represents the interests of the entire German auto industry, those of the vehicle manufacturers as well as their suppliers. The combination gives the VDA a unique feature internationally: a variety of difficult situations in the manufacturer/supplier relationship can be discussed and a solution provided under the VDA umbrella.

Manufacturing Group III in the VDA (vehicle parts and accessories) consists of about 500 members. Direct suppliers to vehicle manufacturers, especially suppliers of systems and modules, are nearly completely represented in the VDA. But second- and third-tier suppliers, to a large degree, take advantage of the benefits that their VDA membership offers: besides the flow of information on economic, structural and technological development, the possibility of close cooperation with manufacturers is appealing. This is reflected in a series of committees and working circles in which both manufacturing groups – auto manufacturers and suppliers – are represented.

For example, on a joint panel in 2009, vehicle manufacturers declared they would maintain their development projects and, at the same time, agree to a reduction in services from supplier development departments, to the extent that quality would not be affected. It was also possible to reach an agreement on reducing the expense of the bidding process. In a joint effort, a VDA steering committee is pressing ahead with defined standardization projects. Work is underway on other issues relating to standardization and the reduction of expenditures. The VDA raw materials committee, which includes the chief purchasing executives of the German vehicle manufacturers and the CEOs of supplier firms, has taken the lead in this area.

The manufacturing group assembly, which meets once a year, is the highest commit-tee for the supplier industry in the VDA. The manufacturing group elects 45 repre-sentatives from its membership to the advisory board for Manufacturing Group III; executive committee members automatically belong to it. Among other things, the advisory board defines the strategic issues for the work of the association.

Suppliers must make a contribution to cost-cutting programs

Suppliers represent the largest category of members in the VDA

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Out of the crisis through technological leadershipThe success of the German auto industry lies in its systematic pursuit of a premium strategy, across all segments, in all areas and on all issues. In the process, it has to develop the best vehicles with regard to comfort, workmanship, functionality and design, as well as the safest and most efficient technologies, and make them available to a broad consumer segment.

German supplier firms likewise bear the bulk of the work of innovation development for German vehicles. In this way, suppliers have a legitimate opportunity to perform better than their foreign competitors in the winnowing process that prevails across the globe. This is especially true if the companies maintain a constant level of develop-ment spending or even increase it in individual cases.

The development of fuel-efficient powertrain technologies, in addition driven by changing consumer behavior and legal requirements, without a doubt qualifies as the most pronounced technology trend. It still cannot be predicted which powertrain concept will prevail in the future. German companies are therefore well advised to open themselves up to all the technologies and thus be a leader or the pioneer in them.

Suppliers thus face a major responsibility. They are being asked to open their doors at an early stage, participate in exploring the paths of this diversified strategy and position themselves well, either with their own development work or with collaboration and strategic alliances. This is an appropriate way for them to do their part in keeping German automakers at the pinnacle of global technology.

The challenge of variety and complexity Advanced logistical and production processes make it possible to produce vehicle models with a variety of body styles, engines, transmissions, paint and equipment features. This results in shorter model life cycles and the rising individualization of vehicles. This trend is driven by globalization and rising market heterogeneity, in combination with market dynamics that are increasing to the same degree. This multi-plicity of variations demands increasingly short innovation cycles. Furthermore, the complexity within a company is increased. Correspondingly high costs of this com-plexity are emerging. The challenge is to master this complexity and to hold down costs.

The standard way to do this is to exploit synergies among the product variants of a product generation or between products of different generations that are based on commonly used product components, technologies or product concepts. Further opportunities for synergies emerge from similar technology and design platforms. While a product platform consists of a package of components or parts that collec-tively form a structure, technology platforms enable the common use of technological features in different products. In contrast, a design platform describes the totality of expertise that can serve several products or a product family as a design foundation. Know-how is collected, documented and stored, and can be used again in future designs.

For a supplier, product variability involves a high use of increased flexibility in struc-tures. But the positioning and form of the supplier’s own product group is a major factor in gaining a competitive edge.

Suppliers provide innovation

Changing consumer behavior drives development on

Synergies within the product generation must be exploited


VDA Rating ToolIn 2003, the VDA teamed up with Prof. Dr. Schneck Rating GmbH to develop the VDA Rating Tool to evaluate financial situations (creditworthiness). Building on this, manu-facturers and suppliers on VDA committees pursued the goal of focusing on a rating grade to communicate the financial stability of a customer-supplier relationship and make the disclosure of detailed year-end financial statements superfluous. Numerous companies in the auto industry meanwhile rely on results (balance sheet rating) determined by the suppliers themselves with the help of the VDA rating standards. Furthermore, it has been shown that the VDA Rating Tool, including its qualitative portion, represents a valuable complement to their internal evaluation instruments.

The results of the VDA rating are no longer seen as adequate evidence of credit-worthiness by some customers. But in times of rapid market changes and the challenges associated with them, the reliability of a tried-and-tested tool is a not inconsiderable advantage in the customer-supplier relationship. So in difficult times, the VDA recommends the use of of the rating results (balance sheet rating) as evidence of creditworthiness for customers in the auto industry. The goal must continue to be the maintenance of this role for VDA ratings. Each year, the VDA offers its member companies a new version of the VDA Rating Tool through its partner, PSR Rating GmbH.

VDA Plans ManagementPlans are indispensable. Reforms in social security systems, health provisions and demographic trends in society require increasingly robust individual arrangements for provisions. Against this background, the opportunities for company plans are gaining importance.

The VDA therefore offers its own services on matters relating to plans. A smart, finan-cially attractive package of services, VDA Plans Management, has been developed for VDA members based on the VDMA’s industry system, with The Pension Consul-tancy (TPC), a specialist in integrated company plans, as the partner for the services. It offers consulting, implementation and support on all issues relating to company provisions. It is especially tailored to the needs of companies in the automotive indus-try and their employees. Custom solutions are offered for all employee groups – from managing directors and executives all the way to the broad workforce.

It covers the key plan fields with building blocks for health plans (prevention models), disability, retirement provisions and survivor’s insurance, as well as models for flexible design of fair value and lifetime working time accounts. As an industry solution, VDA Plans Management also offers the best possible benefits and terms through a group contract. Furthermore, should the employee change employers, transferability (porta-bility) to another employer is simplified with this solution. These are the right argu-ments to make an employer even more attractive – and, for example, to score points in acquiring sought-after specialized staff or executives or cementing ties with them.

Detailed information on VDA Plans Management is available at www.vda-vorsorgemanagement.de.

Balance sheet rating serves as evidence of creditworthiness

Plans Management as an attractive service

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VDA databaseThe VDA has established a number of Internet platforms, www.vda-herstellernachweis.de, www.auto-world.org and www.vda-kooperationsportal.de,specifically to support the activities of supplier firms. These programs, largely usable without an access code, are also in English and thus available for international users.

The “Herstellernachweis (VDA Directory of the Auto Industry)” is a database in which VDA member companies can input company information and their range of products, classified according to a special product key. In detailed searches for companies, products or regions, users of the Directory of the Auto Industry receive precise answers and can establish a direct connection via e-mail with the relevant contact person at the company found in a search.

“auto-world,” a broadly based automotive database for Germany, was developed by networking the Directory of the Auto Industry with the databases of German auto-motive initiatives. Foreign organizations are also connected to it; one example is a database for the Netherlands and Belgium.

“VDA AutoCooperations” is an Internet platform with news, events, literature, service providers, links and checklists on cooperation in the auto industry. A distinctive feature, AutoCooperations contains an electronic marketplace (cooperation exchange) in German and English, in which the submitted requests for cooperation are matched and connected with the offers from other firms.

VDA Medium-sized Company GroupOf the roughly 500 member companies of the VDA’s Manufacturing Group III (vehicle parts and accessories), more than 80 percent can be classified as medium-sized: about half of all supplier firms in the VDA employ 250 or less staff; 80 percent are in the class employing 1,000 or less. In Manufacturing Group II (trailers, bodies and containers), nearly all the companies can be assigned to the medium-sized category. Membership in the medium-sized category especially applies to companies when they bear the stamp of a medium-sized firm qualitatively, and not merely because they meet the standard quantitatively. For example, there are companies that are owned by families or that have owner-led structures.

The VDA accommodates these companies by maintaining a special committee for them: the VDA Medium-sized Company Group. The panel deals exclusively with the interests of firms with medium-sized features as well as trailer, body and container manufacturers, and offers a variety of activities for the members.

The high point in the work of the medium-size committee is Medium-sized Company Day – the annual conference for medium-sized companies in the VDA. Every year up to 300 leading figures from the entire automotive industry come together and join with political leaders and scientists to create the ideal platform for the exchange of infor-mation and discussion. In May 2010, the theme of 10th VDA Medium-Sized Company Day, which took place as always at Gravenbruch near Frankfurt, was “Future – Strat-egy – Competitiveness.” Well-known speakers such as Nick Reilly, CEO of Opel/Vaux-hall, Wolfgang Leimgruber, board member in charge of production and logistics at Porsche AG, and Hans-Joachim Metternich, the federal government’s credit facilitator, were welcomed to the conference. Current VDA topics relating to the auto industry’s situation as well as a panel discussion rounded out the event.

The 11th VDA Medium-Sized Company Day will take place on May 4 and 5, 2011, in Gravenbruch.

Broadly based database with international participation

VDA Medium-sized Company Day 2010, with the slogan, “Cooperation – Innovation – Securing the Future”


At the suggestion of the medium-size group, the VDA Young Entrepreneur Group was formed about two years ago and meets twice a year to discuss common issues and to allow fresh ideas to flow into the work of the VDA. The young entrepreneurs were successfully represented at the last IAA for cars with a well-regarded joint stand.

VDA Young Entrepreneur Group has been established as a forum for discussion

General Conditions for the Automotive Industry

Harald Reiser – Motor mechanic, working area brakes - tachometer inspection, Daimler Buses/EvoBus GmbH, Neu-Ulm

60G E N E R A L C O N D IT I O N S F O R TH E A UTO M OTI V E I N D U STRY

The Coalition Treaty as the Basis for Transport Policy

In transport policy, the new coalition government in Germany appears to have moved away from the direction taken by previous governments. It focuses more closely on the importance of mobility for the wealth, employment and freedom of Germans, and has turned its back on the idea of eliminating transport by making it more expensive. The tone of this change is demonstrated by the fact that the new German government is no longer criticizing and distancing itself from the subject of transport, particularly transporting people and goods by road, and instead it is discussing it openly, prag-matically and optimistically. The core points of industry and transport policy in the coali-tion treaty concluded in October 2009 for the 17th period of legislature are as follows:

• Making “affordable” mobility possible while taking account of the needs to protect the climate and the environment as well as reducing noise

• Securing investment in national routes “at a high level”

• Nationwide field test for innovative commercial vehicle concepts by allowing moderate increases in truck sizes and weights

• Deregulation of national bus routes

• Compliance with the concept of proportionality in establishing environment zones and the national standardization of exemption regulations

• A moratorium on added burdens for the transport industry “by ruling out any increase in truck tolls during this legislature period”

• Requesting that the EU Commission produces a new concept for charging external costs (equal treatment of all transport users; no inclusion in accident and traffic jam costs)

• Harmonization of competition conditions in the transport industry within Europe

• Moderate CO2 regulation for light commercial vehicles taking the concerns of the commercial vehicle industry into account

• Support for alternative engine types focusing on support for battery technologies. Germany should become the “leading market for electrical mobility”

• Acknowledgment of the improvement made to fossil fuel engine technologies as a short-term measure; support for innovative biofuels by means of providing “stable fiscal conditions”

• Principle of technology neutrality

• Trial to establish a “road finance system” using the transport infrastructure finance company (VIFG) by allocating truck tolls direct to the VIFG

• Acceleration of planning law for transport infrastructure projects

• Rail reform: increase competition on the network by increasing the separation between the network and operations and by more stringent regulation

The new German government turns its back on making transport more expensive

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From the point of view of the motor industry, and in particular manufacturers of commercial vehicles and their suppliers, the moratorium on added burdens and the field test for innovative commercial vehicle concepts is extremely welcome. The same applies to the planned approval of national bus travel. Other items in the coalition treaty which are viewed as positive include the rejection of city tolls and the promise by the government to lobby in Brussels to ensure that the planned CO2 regulation for light commercial vehicles will be fair and objective, and above all that the solution planned for imposing external costs will not create unilateral burdens on road trans-port and the motor industry.

The new coalition remains extremely vague, however, about its plans for infrastruc-ture finance. There are no prospects for the development of the investment line. The continued development of the transport infrastructure finance company (VIFG) and the establishment of a finance system for roads, which is of paramount importance to the efficiency of this finance system, are apparently to be “looked into.” Unfortu-nately, after its initial consultations the new German government decided not to make any binding statements in the coalition treaty on this subject. Nevertheless, hope still abounds that transport policy will become decisive enough to implement these steps in the course of this legislature period.

Motor industry views the assurances of the German government positively


Tax Policy of the New German Government

During the last legislature period, three important reforms to tax law were introduced - corporation tax reform, reform of vehicle duty and inheritance tax reform. As far as the motor industry is concerned, the reform of vehicle duty is of particular signifi-cance. The introduction of CO2-based vehicle duty created an important incentive for the purchase of fuel-efficient vehicles and immediately increased demand for vehicles which have low fuel consumption and produce low emissions. In addition, it put an end to the long-term uncertainty in the minds of drivers.

The new vehicle duty

For cars registered after July 1, 2009, vehicle duty is made up of an engine size and a CO2 component. The previous taxation regulations will initially continue to apply to vehicles which were registered before this date.

New vehicles (registered on or after July 1, 2009)

• Completely linear CO2 tax rate with a rate of € 2.00 g/km

• Staged CO2 tax exemption of 120 g/km from 2009 to 2011; 110 g/km in 2012 and 2013 and 95 g/km from 2014

• Engine size-based flat rate of € 2.00 per 100 cc or part thereof for petrol engines and € 9.50 for diesels

• Time-limited one-off tax exemption worth € 150 for cars with a diesel engine which comply with the Euro 6 emissions regulation early (registered before December 31, 2013)

Existing vehicles

• Existing vehicles (vehicles registered before June 30, 2009) will be trans-ferred to CO2-based vehicle duty as from 2013. The type and scope of taxation for older vehicles will be decided at a later date.

• A more favorable rate review will be carried out for newer existing vehicles (vehicles purchased after November 5, 2008 which are liable to receive the time-limited tax exemption). In these cases the tax department will carry out an official review to decide whether the old or the new law is more favora-ble.

The introduction of the CO2-based vehicle duty also meant that the revenues entitlement and administration competence for vehicle duty was transferred to the federation on July 1, 2009.

Reform of vehicle duty has eliminated the uncertainty for drivers

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The reform of vehicle duty is to be widened to include existing vehicles. In this case it is important that the type and scope of this inclusion of existing vehicles are defined as soon as possible to prevent uncertainty.

The reform of corporation taxation and inheritance tax are also very significant for the motor industry. For example, the aim of corporation tax reform is to improve the fiscal conditions of Germany as an industrial location. The reform of inheritance tax makes succession in the ownership of companies easier, which is an extremely important matter for many of the family companies and partnerships which exist in the supply industry. As a result of major defects in both reforms, one of the core objectives of the new German government is to provide improvements to the tax system. With this in mind, the coalition treaties call for a whole series of important corrections to be implemented with immediate effect.

In the section headed “The way out of the crisis,” the coalition treaties between the CDU, CSU and FDP for the 17th legislature period in particular include a series of fiscal measures which are very important to German industry. The main items for the motor industry include the corrections to the regulations from the corporation tax reform of 2008, which served to make the crisis worse and the measures to simplify the taxation of year-old car discounts sold to employees and company car taxation rules.

One of the first measures to be implemented under the coalition treaty was to improve the taxation of vehicle sales to motor company employees (year-old car taxation). The German government quickly implemented its plan to move the taxation on year-old car discounts for employees to a realistic level in the interests of simplifying the taxsystem. The administrative order dating from 1996 was updated by agreement with the states. Backdated to January 1, 2009 when calculating the monetary benefit from car sales to employees, the average discount granted on the market is no longer taken into account at a rate of 50%, but now at 80%. Indirect discounts such as in-creased trade-in allowances on pre-owned cars have therefore now also been included. The requirement for this is that the indirect discounts are properly documented.

With this updated regulation the new German government has reacted to the changed market conditions which resulted in excessive taxation, and also to the consequences of a verdict passed by the Federal Finance Court (BFH). The new administrative order also takes account of a major concern of the motor manufacturers and their employ-ees. The sale of new vehicles to employees is an important sales segment for motor manufacturers. High taxation on the discount granted to employees, increased price reductions by dealers and an increasing marketing risk resulted in the purchase of a year-old car becoming more and more unattractive for employees. The new adminis-trative order means that taxation has been returned to a sensible level.

With the objective of simplifying the tax system, one of the agreements reached by the coalition is to review whether the taxation of the monetary benefit from the private use of company vehicles is also reasonable.

The current taxation of the private use of company cars has essentially proved itself over the years. Therefore, the objective in this case is not to overhaul the system completely but to make reasonable corrections which take account of the changed market conditions while retaining the time-tested 1 percent regulation and simplifying the tax system.

Improvements in the taxation of year-old cars implemented quickly

Company car taxation should be simplified


As Professors Jesse and Musil from the University of Potsdam showed in a legal review for the VDA, this can particularly be achieved by removing the 0.03 percent supplement on the list price for journeys between home and work. The fact is that this supplement, which is not charged in other similar countries, results in an unjustified burden and complication of the system. The tax on this supplement in the form of wages is countered by a tax deduction of traveling expenses which are income-relat-ed expenses (distance rates). The implementation of this proposal would result in the elimination of a wide range of complicated regulations which are repeatedly the cause of disputes. This will ease the burden on companies and their employees as well as the tax authorities. Furthermore, the required adjustments have been implemented to take account of recent legal precedents (for example, sales representatives who do not travel to their place of work every working day). It would therefore give a clear signal and relieve some of the bureaucratic burden if this special supplement were to be rescinded. In return, the concept of the distance rates for journeys in company cars between home and the workplace would be revoked. This is already law for journeys back to the family home when a family maintains two households. An assimilation measure would mean massive simplification. The 1 percent value must therefore be retained unchanged as an accepted signal value. The changes on the market could be taken into account in the view of Professors Jesse and Musil by making a general discount from the gross list price.

Structure of company cars

As far as the structure of company cars is concerned, it must be noted that they are not just restricted to upper range and luxury vehicles. The majority of company cars are in the compact and medium class. More than half of all registered company cars are within these groups. The proportion of upper range vehicles, by comparison, accounts for just 1.5 percent of all newly registered company cars.

The fact that the majority of company cars are not from the premium segment can also be seen at a glance by a look at the average price paid in 2008 which was around 28,000 euros.

New registrations company vehicles 2008Units in percent

Source: VDA

Upper mid-range8.5

Utilities7.7

Motor homes0.2

Sports cars1.6

Luxury class1.5

Other0.5

SUVs9.2

Large vans5.5

Compact class 26.5Subcompacts

7.0

Mid-range25.8Mini vans

2.5

Mini class3.2

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To eliminate the barriers to growth related to the corporation tax reform carried out in 2008, the coalition treaty includes the following corrective measures:

• Long-term introduction of the higher exemption limit of 3 million euros for the interest limitation

• Introduction of an EBITDA carry-forward facility for the interest limitation

• Improvement in the application of the so-called escape clause for interest limita-tion for German groups of companies

• Reduction in the trade tax addition rate of rental and leasing interest on property from 65 to 50 percent

• Simplification for company restructuring in terms of property purchase tax

• Reduction in the retention periods for the inheritance tax exemption regulation to ease company succession problems

• The time limit on the financial rescue clause will be rescinded for the loss deduc-tion restriction (purchase of goodwill), the deduction of losses equal to silent reserves will be permitted and a group clause will be introduced

• Extended acceptance of individual inter-company accounting prices using general principles instead of valuation as a transfer package in the event of function relocation

• Reintroduction of the immediate depreciation of minor-value items with a purchase cost of up to 410 euros

These measures can make a valuable contribution to reduce the investment-damping and company-endangering effect of the corporation tax reform from 2008 and to make the problems relating to company succession more resistant to the economic crisis.

However, there is still room for improvement. In addition to the interest limitation, this particularly relates to trade tax for which there has been no improvement whatsoever in the addition of interest and finance costs to leasing rates and licenses. In fact, we believe that trade tax is in fact obsolete since it places an added burden on German companies and should be reviewed as a matter of urgency. Pleasingly, the coalition treaty contains a proposal that the elimination and replacement of trade tax should be reviewed by a commission.

Another positive feature is the fact that the new German government has actually managed to implement the “immediate package of measures” immediately. This means that the Growth Acceleration Law which contains the majority of the correc-tive measures passed through the relevant parliamentary hurdles before the end of 2009, while the law to implement EU directives has to undergo the adjustment of the function relocation with greater attention being paid to the normal foreign comparison principles used in OECD countries.

It is also important that the extension of the support for retrofitting diesel vehicles with soot particulate filters in light commercial vehicles is implemented and the expired package of support measures is extended. This will give a major signal for investment and contribute to making further reductions in particulate emissions from diesel engines.

Support for retrofitting

There have been tax incentives in place for retrofitting modern particulate reduction systems for some considerable time. A vehicle duty exemption of 330 euros was made available for diesel cars which are retrofitted with filter systems. As from August 1, 2009, instead of the limited vehicle duty exemption of up to 330 euros it was also possible to apply for a direct state subsidy (cash payment). This increased the attraction of retrofitting diesel particulate filters. Fortunately, the support program, initially running only until December 31, 2009, was extended. The cash incentive for filter retrofitting in the amount of 330 euros for diesel vehicles is still being granted, with motor homes and light trucks likewise included in the promotion.

Coalition plans to ease the corporation tax burden

There is still a need for improvement in interest limitation and trade tax

Support for retrofitting in diesel vehicles: extension is important


German industry in general and the motor industry in particular in its capacity as an engine developer is at a disadvantage to its foreign competitors, in some cases a massive disadvantage, when it comes to taxation on fuels. The reason for this is that the German legislator does not use possible exemptions or exemption situations are canceled out by restricted administrative regulations. These mainly affect industrial engine test beds. In fact, possible tax reductions relating to the development of low emission and low consumption engines in the form of so-called pilot projects, as well as to the power generation related to these activities, are only granted on a restrictive basis, if at all. Since many foreign manufacturers are also granted additional reduc-tions, this is damaging Germany as a development location.

Corrections to fuel taxation

The following measures should be taken to address the taxation of fuels for power generation plants, pilot projects and in export vehicles:

• Inclusion of petrol fuels in the existing relief procedure for power generation plants (in this case engine test beds)

• Unrestricted tax exemption for pilot projects is required in order to strengthen and secure Germany as a development location in view of the fact that it has managed to be particularly successful compared to its inter-national rivals over the last few years in the development of low emission and low consumption engines. To this end, the definition of “new type” in the existing administrative regulation must be made less stringent

• To secure Germany as an export location and remove the competition disadvantages faced by the German motor industry, first fuel loads in vehicle exports to third-party countries should be exempt from tax

Another disadvantage faced by the motor industry results from the fact that, in con-trast to other EU countries, there is no tax exemption for fuels (first fuel load) placed in vehicles exported to third-party countries. To eliminate this disadvantage to compe-tition, it is necessary to grant the tax exemptions possible under EU law and is in fact even mandatory in some cases relating to the taxation of fuels for power generation systems, for pilot projects and in export vehicles. Particularly in the face of the current economic crisis, we must do everything in our power to eliminate any fiscal disadvan-tages faced by German companies.

The VDA has found a good deal of sympathy for its proposals for fiscal improvements relating to engine test beds. As part of a law to change the Energy Tax and Power Tax Law, there are plans to include both diesel and petrol fuels in the relief procedure for power generation. The tax exemption for first fuel loads in vehicle exports to third-party countries is not included in the current draft law, however. This measure should be included in the law during the legislation procedure.

Fiscal competitive disadvantages on fuel taxation must be removed

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The immediate deduction of development costs must be retained One subject which is placing a particular burden on motor industry suppliers is the balance sheet treatment of development costs. During company tax inspections, the tax authorities are increasingly questioning the immediate deduction of development costs used by suppliers. Contrary to balance sheet practice which has been in force for decades, development costs relating to a mass production item are set off against the manufacturing costs which must be included on the assets side even if a devel-opment contract has not been concluded. This is contrary to the ban on including internally produced intangibles in fixed assets set out in § 5 Para. 2 of the Income Tax Law, and also contrary to the improvement in R&D support which has been stated as a goal in Germany.

The tax authorities refuse to accept that a “letter of intent” (LOI) constitutes a binding order. It represents a declaration by the manufacturer to issue a production order if certain conditions are satisfied. The supplier bears the risk. This means that classing this as an asset is not justified. Since the main committee of the Institute of Auditors (IDW) has also found that the motor industry supplier bears the main risks for an LOI and that there is generally no adequately secure remuneration of the development costs and therefore no reason to class an LOI as a commercial asset, the tax authori-ties should abandon their fiscal attitude.

Finally, in view of the immense burdens placed on drivers, a warning should be given against adding to the tax on mobility. This applies to the introduction of car tolls and to EU plans to increase taxation on diesel vehicles or both direct and indirect calls for even higher mineral oil taxes. In the coalition treaty, the German government correctly states that one of its objectives is to improve the tax situation. This must not be coun-teracted by tax increases at either a national or EU level. Furthermore, the transfer of responsibility for vehicle duty to the federation and the resulting streamlining of mobility taxes at a national level must not be used to tighten the tax screw any further.

Warning about the increasing cost of mobility


The Increasing Influence of the EU on Motor Manufacturing

The Lisbon Treaty to amend the European Treaties came into force on January 1, 2010. This extensive treaty transfers additional responsibilities from national to European level, including energy policy, joint foreign and social policy and the coordination of economic and social policy. At the same time, a series of drastic changes has been made to the decision-making authority of various EU institutions. The political winner from this process is the European Parliament which will have a voice on many subjects in the future. The authors of this constitutional treaty hope that the establish-ment of a Permanent Council President will improve the transparency and consis-tency of the work of the council. The Foreign Officers are charged with formulating EU foreign policy and articulating it forcefully around the world. We must wait to see whether and to what extent this will actually happen.

Even before the new constitutional treaty came into force, European legislation had gained massively in importance for the motor industry. One of the main factors in this was the creation of the EU single market. This resulted in a harmonized homol-ogation law for the motor industry throughout Europe which represented a great step forwards since it meant that, instead of 27 national homologation procedures, each new model only had to complete a single procedure. The standard European Euro emissions standards for cars and commercial vehicles, the CO2 legislation and the standardization in the field of road safety are other examples of good measures leading to a standard European single market for the motor industry.

European trade policy, which is formulated by the EU Commission under the super-vision of the EU Council and Parliament has always been and continues to be in the interests of the European motor industry which is reliant on global and fair world trade. The political weight of individual EU member countries is in fact far too insignif-icant to gain an adequate hearing in the global concert of powers. The motor industry demanded this process time and again since everybody in Europe benefits from the EU single market - manufacturers, suppliers and certainly the customers.

However, EU policy has abandoned this successful path over the last few years. The so-called “Lisbon Strategy,” which was approved in the Portuguese capital in 2000 by the EU heads of state and government chiefs to strengthen Europe as an indus-trial location, must be regarded as a failure. This is primarily due to the fact that its objectives were too abstract and compliance with them was not made a responsibility at European level. The more recent “Strategy 2020” recently put forward by the EU Commission continues to move in the same less than promising direction.

Apparently the decision-making processes of an EU with 27 member countries are extremely complex and generally result in compromises because of the structure the three main EU institutions, the Commission, the Council and the Parliament. It is therefore even more important to ensure that these three bodies concentrate from the very outset on essential projects and political contents, on regulations which actually have a chance of implementation and on legislation which will improve the economic base of the EU. From the point of view of both the German and the European motor industry, less legislation would actually be better if less legislation were to be based on a clear strategy at achieving what is actually feasible.

The implementation of the Lisbon Treaty has resulted in further responsibilities being moved at EU level

The single market project was a massive step forwards for the motor industry

At the moment, EU policy is not helping to strengthen domestic industry

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• A strategic industrial policy is extremely important for securing jobs and retaining wealth in Europe. However, this requires such a policy being aimed at the needs of those involved – industry itself. The formulation of abstract objectives such as those in the Lisbon Strategy and in the recently published strategy for 2020 only makes sense if they are actually achievable. In addition, a strategy of this nature must also be taken into consideration in the implementation of concrete legisla-tion projects. Swearing to protect the future of European industry is all very well, but then to drown it in a sea of bureaucracy and unrealistic environmental legisla-tion is hardly a policy which is based on a strategy of this nature.

• In the form of Cars 21, the EU Commission successfully created the model of a high-level group for the future of the motor industry as a key industry for the future of Europe. The aim of this group is to bring together politicians, administra-tors and the industry to discuss the future of the sector and the legislative conse-quences of this. Good papers and programs have resulted from this, for example the principle that automotive engineering is an important factor in the reduction of CO2 emissions in the transport sector, but areas such as transport infrastructure, driver behavior and fuel composition (focusing on biofuels) and quality must also be included in any integrated approach. In the concrete CO2 legislation, however, the EU nevertheless concentrated almost exclusively on automotive engineering and simply forgot about the integrated approach.

• The strategy of the European motor industry to reduce CO2 emissions is mainly based on the spread of clean diesel technology. German manufacturers have shown great commitment in establishing this cleaner and more efficient diesel technology outside of Europe as well. If, however, the EU Commission imple-ments measures to raise the minimum taxation rates for diesel fuel in the planned amendment of the Energy Control Directive, this would not only go against the strategy of the motor industry but also the EU Commission’s own policy to reduce CO2 in the transport sector.

• A strategic trade policy for the EU must be based on establishing which nations and economic groups are primary partners for a free trade agreement and which are not. This type of prioritization has become even more important since the temporary failure of the WTO negotiations. The free trade treaty concluded last year with South Korea does not fall into this category. Because the EU Commis-sion wanted to record a political success, some of the major needs of the motor industry were ignored in favor of signing the treaty quickly.

These cases provide examples of the fact that the EU has a great deal of influence for achieving the needs of the motor industry in its role as regulator. The VDA reacted to this development five years ago by increasing its personnel numbers at its Brus-sels office and making it a fully integrated part of the VDA group. Together with the European manufacturers group, ACEA, and the suppliers’ grouping, CLEPA, the VDA is now a permanent part of the political scene in Brussels. Its range of tasks includes monitoring the decision-making processes in Brussels and Strasbourg and the preparation and provision of information relating to current developments in our industry for the political and administrative power brokers. The joint representation of the interests of manufacturers and suppliers also makes the VDA an important partner for EU institutions. They know that the VDA speaks on behalf of the entire German motor industry.

The VDA represents the interests of its members in Brussels


National and European Climate Protection and Environment Policy

The Kyoto Protocol that came into force in 2005 obliges industrial states to reduce their greenhouse gas emissions by at least 5 percent compared to 1990, within a period from 2008 to 2012. Some countries and communities of states are proposing reduction efforts for their countries that go far beyond this figure. For example, Japan has promised to drop its CO2 emissions by 6 percent and the European Union by 8 percent. In this case, Germany shoulders the major part of the entire EU with a target of 21 percent. As the latest surveys show, Germany exceeded its climate protection target with 22.2 percent in 2008. The German economy sees itself facing the special challenge of meeting ambitious climate protection targets that are attainable without the trade-off of slipping behind global competition – particularly as other industrial nations are either not participating in the Kyoto Protocol or are claiming a significant deviation from the originally agreed targets. This even applies to many EU member states. As a result, the EU so far reports only a reduction of a few percent compared to 1990.

At the UN climate conference that convenes at regular intervals, it is intended to negotiate an internationally binding agreement as a follow-up to the Kyoto Proto-col. However, the results so far have not always lived up to the high expectations. For instance, the conference of the parties to the framework climate convention in December 2009 failed to agree on a binding resolution. The plenary meeting merely took note of the “Copenhagen Accord.” In the “Accord,” the parties undertake to de-velop “activities” by 2015 to limit the long-term global temperature rise to 2 °C over the pre-industrial era. The industrial countries promised to supply “reasonable, foreseeable and sustainable financial resources, technologies and capacity improvements” and attain the emission targets reported to the Climate Secretariat by January 2, 2010. The obligations/targets also had to be measurable, reportable and verifiable. The other signatory states to the convention will implement their own emission reduction measures and report them to the Climate Secretariat every two years in national announcements.

The emission reduction measures will be performed cost efficiently by means of market mechanisms. This applies in particular to funds totaling 30 billion US dollars pledged by the industrial countries from 2010 to 2012 (the EU contribution here is 2.4 billion US dollars) and 100 billion US dollars in the period up to 2020 (of which the EU will contribute 30 billion dollars). This money will primarily be placed at the disposal of the poorest countries and small island states. To facilitate technology transfer to developing and emerging market countries, a “technology mechanism” will be developed. This path is not uncritical and requires precise observation.

In addition, what must be considered is that four states alone are responsible for 50 percent of the worldwide CO2 emission: the People’s Republic of China, the USA, Russia and India. This is evident by the latest figures of the International Energy Agen-cy (IEA). Accordingly, global emissions of CO2 from the use of energy have risen from about 21 to 29 billion metric tons, almost half of this growth was attributable to China.

The Kyoto Protocol to reduce greenhouse gas emissions expires in 2012

The “Copenhagen Accord” ended without any binding resolutions under international law

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Europe is pursuing more ambitious climate targets than other regions in the worldThe European Council already considered comprehensive climate protection measures in 2007. The EU also wants to continue to set the tone with climate protection. At the start of the year, it informed the UN Climate Secretariat that it was supporting the “Copenhagen Accord” and would keep to its emission reduction target of 20 percent (base 1990) by 2020. According to an EU Council resolution, the EU is offering the prospect of increasing the reduction target to 30 percent in case comparable coun-tries commit themselves to similar reductions. In addition, developing countries are called upon to make a reasonable contribution.

In Appendix I of the “Accord,” the USA announced their aim to reduce their green-house gas emissions by 17 percent by 2020 compared to 2005. China intends to reduce its CO2 emission per BIP unit by 40 to 45 percent by 2020 compared to 2005 and India has pledged 20 to 25 percent. Brazil intends to reduce its greenhouse gas emissions by 36.1 to 38.9 percent by 2020. The targets that the EU is setting itself are highly ambitious, but this harbors the risk that it can only be achieved as a trade-off with economic performance.

CO2 regulation of cars, light and heavy commercial vehicles

According to the will of the EU, the CO2 emissions of all new cars made by European manufacturers and registered in 2012 are planned to be reduced to an average of 130 g CO2/km by equipped engine or drive train measures alone. A further 10 g will come from the use of biofuels and so-called “supplementary measures” such as timing point indicators, efficient air conditioning systems, tire pressure control systems and low-friction tires. In all, this will achieve a target of 120 g. By 2020, cars will meet a figure of 95 g. This figure is highly ambitious and will probably only be achievable with extreme efforts.

Motor vehicles must meet a target figure that is dependent on the vehicle weight. From a purely mechanical aspect, every vehicle would have to reduce its consumption by about 19 percent from the present figure in order to achieve the target. In this way, all vehicle classes would correctly contribute to the reduction in CO2 emissions. The EU Commission has now calculated the weights, sales figures and CO2 emissions for all cars. The EU Commission has also found a solution to also cater for manufacturers of small vehicles.

New cars are planned to reach a CO2 emission of 120 g in 2012


Car manufacturers may achieve an average value for their fleet by offsetting models with lower CO2 figures against those in their product portfolio that have higher CO2

values. However, there is less of an incentive to reduce values for manufacturers whose portfolio contains a majority of small cars. Whereas these manufacturers must reduce consumption by a total of 12 to 16 percent, the manufacturers of larger vehi-cles must achieve over 25 percent.

Almost all EU laws stipulate that introduction may take place over a specific period of time. A transitional period has also been granted to the car industry. This is intended to take account of production cycles that are typical for the industry. For example, 65 percent of the new car fleet must meet the new figures by 2012. In the following year, the figure will be 75 percent and 80 percent in 2014. By the year 2015, 100 percent of the new car fleet must meet the targets. This takes stock of the fact that it is only possible to influence the development of new car models. Models that are manufac-tured now and brought onto the market will still be leaving the assembly lines in 2012.

Disproportionately high penalties for the car industry for failing to achieve targetsWhat is of considerable significance are the sanctions in the event of failing to achieve the 120 g target. Whereas one metric ton of CO2 only costs 20 euros for industrial companies, the EU Commission has imposed the car industry with up to 95 euros per g CO2 in the final stage in case targets are exceeded. In the opinion of the car industry, this is totally exaggerated and is 24 times the penalty for other industries – especially when it is totally irrelevant to the climate whether one metric ton of CO2

stems from traffic or from industry. In order to ensure proportionality, sanctions should be based on the emission trade system. One possibility would be to link the amount of penalty payment to the average stock market prices for CO2 emission rights in the year prior to introduction of the system. The staggered scale of sanction payments is a practical but insufficient solution. In addition, it should be ensured that funds earmarked for climate protection measures are directed to road traffic.

The “supplementary measures” proposed by the EU Commission fail to cover the potential of efficient reduction technologies by a long mark. Other effective measures that are implementable on motor vehicles, i.e., “eco-innovations,” are therefore credi-ted to the contributed reduction actually achieved by the manufacturer but only up to a maximum of 7 g CO2/km. The regulation is designed to make it worthwhile to invest in CO2 technologies. Measures may be implemented directly on the vehicle, the driver or in servicing.

As a result, the car industry is subjected to an extremely severe order to reduce fuel consumption and CO2 emissions. The previous requirement remains to achieve CO2

savings as part of the integrated approach wherever it is expedient from a macroeco-nomic aspect. CO2 savings in the car sector are the most expensive variant. However, we intend to and we will make our contribution.

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Eco-innovations – the industry‘s contribution to more climate protection

Eco-innovations are vehicle-specific technologies that are capable of converting the motor vehicle into an intelligent efficiency packet. CO2 savers include solar roofs, LED lamps, converting current directly into light, or storing and convert-ing engine heat into electric energy. Ultimately, what is typical of eco-innova-tions is that their CO2 savings potential cannot be calculated in the conventional CO2 measuring cycle (New European Driving Cycle – NEDC).

Now that the general calculation of eco-innovations is integrated in the CO2

regulation, this directive now needs to be worked out in detail. Since these explicitly consumption-reducing technologies cannot be, or at least are insuf-ficiently, mapped using current test methods, a transparent and simple approval process must be created at EU level for eco-innovations in parallel to current NEDC test methods.

The VDA has presented its own proposal for this. It describes a practical test and approval process that sensibly involves national and European institutions and also ensures the necessary independence for testing and approval. To secure long-term planning within the industry, it is of special importance that the approval method is designed with as little bureaucracy as possible, that harmonized conditions prevail throughout the EU and that they apply as the basis for the future quantification of eco-innovations. Only then can eco-innovations contribute to harnessing future-oriented technologies to sustain the leadership of the German car industry and to make an effective contribution towards climate protection.

Ultimately, not only do eco-innovations reduce the emission of carbon dioxide, they also create new innovation markets for environment technologies, they strengthen competitiveness, in particular in the automotive supply industry, and thus safeguard jobs in Germany and Europe. The approval of consump-tion-reducing technologies obliges manufacturers and suppliers to wage a stimulating and competitive competition struggle to the benefit of both the environment and consumers alike.

EU intends to transfer CO2 reduction mechanisms from cars to commercial vehiclesUsing CO2 minimization in cars as a paradigm, the EU Commission submitted a proposal for regulating CO2 emissions in light trucks (EU weight class N1, up to 3.5 metric tons) on 10.28.2009. Light trucks are normally used by tradesmen, couriers, express services and many retailers. The first proposal is not yet marked by the understanding that commercial vehicles are defined by their transportation benefits and fuel consumption is already a key factor when making a purchase decision today.


In addition, the commercial vehicle segment is experiencing its greatest decline in sales for decades since the beginning of the financial and economic crisis. Many companies are fighting for survival. Manufacturers are forced to extend development times and postpone vehicle ranges. For this reason, the car industry demands Euro-pean institutions to show good judgment in further consultations and to be guided by cost-efficiency objectives. This applies in particular to the review planned for 2013 of the directive currently still under discussion. Depending on the results of this review, vehicles of Categories N2 and M2 will also be included. N2 are commercial vehicles with a gross vehicle weight up to 12 metric tons. M2 refers to small buses with more than eight passenger seats and a gross vehicle weight of 5 metric tons.

The EU Commission proposes a limit of 175g CO2/km. This limit will be achieved in stages between 2014 and 2016. The car industry regards this limit as basically attain-able but demands a postponement of introduction to 2015 and phasing-in to be extended accordingly to 2018. Compared to cars, commercial vehicles have a much longer product cycle of more than 10 years in some cases. This alone precludes intro-duction by the year 2014.

Moreover, the EU Commission proposes a long-term target of 135g by the year 2020. This target is unrealistic. As a consequence, the reduction in fuel consumption should be about one-third within the period of a single model cycle. Since more than 90 percent of commercial vehicles are driven by highly efficient diesel engines, it is practically impossible to raise efficiency by increasing the number of diesel engines.

A vital difference between the commercial vehicle and car sectors is that almost all commercial vehicle manufacturers cover only part of the segment in the transpor-tation market for reasons of competitiveness. As a result, it is impossible to obtain a fleet average for small and large vehicles. The long-term aim must be based on this situation.

As opposed to cars, commercial vehicles are also manufactured in several stages, i.e., by several manufacturers. Such vehicles normally consist of a chassis made in large-volume production on which another manufacturer places his individual vehicle body. Consequently, neither the manufacturer of the chassis nor the body producer can impact on the CO2 emissions of the complete vehicle alone. This is why vehicles manufactured in several stages must be completely removed from the draft directive.

The EU Commission is even planning to introduce penalties that are considerably higher than the CO2 costs of other branches of industry in European emission trade. This would end in an extreme disadvantage for a key European industry. Ultimately, it is customers, normally small and medium-size firms, that will bear the brunt of the transferred costs. Such penalties harbor the risk that many companies will change over from one large lightweight truck to several small vans. The overall consequence would be higher CO2 emissions for the same volume of transported goods.

In addition, the EU Commission is considering the mandatory fitting of speed limiters in lightweight trucks. This is practically tantamount to a speed limit. However, such speed limits belong to the jurisdiction of the member states.

The draft directive must therefore be revised accordingly and modified to the condi-tions of this particular market. The EU Commission has succeeded in this in some areas, including the decision to select the curb weight of a vehicle as the regulation parameter. However, the text passage concerning speed limiters should be deleted since a speed limit of this kind has a minimum potential for reducing CO2.

Limit of 175 grams to be gradually introduced from 2014

Obtaining a fleet average in the commercial vehicle sector is difficult to well-nigh impossible

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Discussion of speed limit for vans The EU Commission is recommending the acceptance of speed restrictions in the explanatory statement of its draft regulation for emission limits on light commercial vehicles (Type N1/vans). This would amount to a speed limit. The recommendation dates back to testimony from the European Federation for Transport and Environment (T&E) on the occasion of a so-called stakeholder consultation on March 9, 2009, in Brussels. The justification is the frequent overloading of vehicles and the accident dangers associated with it.

Speed limit: no definite criteria for raising road safetyThe fact that the proportion of accidents has risen in absolute terms since 2001 is attributable to the increase in the number of vehicles that are used in particular by courier, express and packet services (CEP services). Since performance is ultimately a decisive factor, the German Federal Highway Research Institute (BASt) analyzed the accident involvement rates for 2002 based on the assessments in the “Mileage Survey 2002.” The results supply the confirmation: on freeways, light trucks have the lowest accident risk overall, and the mileage-related accident risk involving personal injury on freeways for light trucks is roughly the same as for passenger cars. The BASt explicitly points out that light trucks do not cause any more accidents than other vehicle groups in relation to the number of kilometers driven – even on freeways. Consequently, accident statistics provide no criteria for a speed limit for light trucks on freeways.


Safety first – reversal of trend reached for accident risks of lights trucks In view of the growing significance, it is of particular importance that light trucks meet the highest safety standards. For this reason, the equipment level continues to rise with power steering, anti-lock braking system (ABS), traction control (TCS), Electronic Stability Program (ESP) and brake assistance system. The fixtures for securing loads have also improved substantially. In addition, many manufacturers offer driving safety training courses. Finally, it is thanks to these measures that the accident figures (accident involvement per 1,000 vehicles ) for light trucks since 2001 have noticeably declined. Nonetheless, every effort continues to be made to reduce the accident risk further and to increase the safety of occupants and other road users. It is therefore vital to conduct a precise analysis of accident statistics involving light trucks in order to derive suitable improvement measures.

“Safety of light trucks” joint project startedAs a result, BASt, the Accident Research Department of the German Insurance Association (UDV), DEKRA Accident Research and the Association of the Automotive Industry (VDA) have started a joint research project. Significant data on light truck accidents were extracted from the GIDAS database (German In-Depth Accident Study, joint project of BASt and the German Association for Research in Automobile Technology of the VDA), the accident databases of German insurers, DEKRA and nati-onal statistics. The project reviewed areas such as active and passive safety, whereby special attention was paid to driver assistance systems, driver behavior, driver training, load securing and occupant and co-driver protection. The investigation showed that the number of accidents is largely identical to that of passenger cars. Greater devia-tions are observable only in collisions with pedestrians, reverse driving and accident causes.

Speed limit is counterproductive and masks the actual accident causesHowever seriously every indication should be taken that the burden of guilt for causing accidents is above average for drivers of light trucks, the results of all accident studies show that there is no link between introducing a speed limit and reducing the accident risk of light trucks. A speed limit may even incur negative consequences for road safety.

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Very limited action radius:the impacts of a speed limit would only affect a very small percentage of light truck accidents at all (about 4 percent of all freeway accidents with personal injury). Only 14 percent of all light truck accidents take place at all on freeways (58 percent in built-up areas, 28 percent on rural roads). However, accident research studies show that only very few light truck accidents on freeways occur at speeds above 120 or 130 km/h.

Fourth speed leads to greater accident risk:a speed limit for light trucks would introduce a fourth speed category to the existing three (unlimited for cars, 80 km/h for heavy trucks, 100 km/h for buses) with the consequence that there will be a distinct increase in lane changing and an increased risk to car traffic. The traffic flow would be severely hindered, the capacity of an already meager road infrastructure would be restricted even more and the accident risk would increase further.

Changing to smaller vehicles and incentive to reduce weight:the advantages of light trucks from 2.8 to 3.5 metric tons are their high maneuver-ability and flexibility coupled with a high payload, variability and short transportation times. If smaller vehicles are made more interesting through restrictions, a further rise in the frequency of vehicle movements must be expected. In turn, this would be detrimental to both road traffic in inner urban areas and to the environment. Neither should there be any incentive to avoid a speed limit by reducing the weight of vehicles and therefore decreasing the payload.

Accident causes were discovered:a speed limit has no effect on the main causes of accidents, such as inappropriate speed, inadequate safety distance, over-tiredness and excessive loading. At best, these causes may distract from the subject. In any case, the CEP services have been training their drivers for years with a focus on traffic safety, and they have been sensi-tizing their drivers to exercise good judgment when driving.

Development of further safety features is inhibited:the demand for a speed limit would not be an encouraging sign for car makers to make every effort to design light trucks with more safety in a questionable segment and to canvass customers to accept driver assistance systems. The dynamic nature of this process as well as the progress that has been made so far should not be jeopardized.

Monitoring problems in flowing traffic: a speed limit may only have an impact if it were to be monitored systematically and any impact is estimated as being extremely low anyway. The regulatory authorities, primarily the freeway police, have no actual possibility of monitoring light trucks in the 2.8–3.5 metric ton segment without deploying unreasonably high-cost resources.

The discussion concerning a speed limit for light trucks is frequently highly emotive. The actual facts – decreasing accident figures, no definite link between speed limit and accident figures – feature very little in the argumentation. Rather, the measures introduced by car manufacturers and tradesmen are sufficient to reduce the accident risk. The car industry has met the demands of politics to equip vehicles systematically with the latest safety systems. This is a continuous process. But the government also makes demands such as a rather low level of vehicle safety technology requirements in public tenders. Here is an area where the public authorities could play a model role in the subject of light truck safety.


Uniform regulation required for environment zonesThe current nationwide Registration Regulation which came into force two years ago regulates the registration of cars and commercial vehicles on the basis of emission groups using discs (red, yellow and green) and exemptions from such registra-tion. This satisfied the requirements for the introduction of environment zones with restrictions on entry for certain vehicles depending on their emissions. These zones are established by local authorities if air-quality limits are exceeded, traffic is a major contributor to this and the establishment of an environment zone is a measure set out in the relevant air-quality plan.

Around 50 local authorities in Germany have now introduced environment zones particularly with a view to reducing particulate pollution in towns. On a national level there are exemptions from the registration obligation which primarily relate to ambulances, doctors and disabled vehicles, as well as special vehicles, two-wheeled vehicles and vintage cars.

In addition, local authorities have different categories with other exemptions which are intended, above all, to take account of an entry restriction being economically reasonable for those it affects. In certain towns almost every business owner or resident is permitted to enter the environment zone, while the opposite is true in other towns. In addition there is the fact that the introduction of the next stage (in other words an entry ban for motor vehicles with red or yellow discs) is being handled very differently by local authorities. For example, while no vehicles with a yellow or red disc have been allowed to enter the Berlin environment zone since January 1, 2010, the ban in Cologne from the same date only applies to vehicles with red discs.

Local authorities have established environment zones with different entry restrictions

Exemptions also differ from town to town

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For the average person this mish-mash of regulations is extremely confusing. A national standardization process is therefore urgently required. The German government also believes that the time to act has come and has included a statute in the coalition treaty to the effect that the establishment of environment zones must be based on effectiveness and proportionality. The exemption rules will therefore be standardized to achieve this.

In particular, access restrictions or entry bans for coaches which comply with the Euro III emissions standard (yellow discs) and which are only a few years old, are completely disproportionate and also have no effect on reducing particulate pollution in towns. On the one hand, the number of coaches contributes less than 2 percent to the total particulate emissions, while on the other the fleet consumption of a coach if we assume a realistic occupation rate of 60 percent is just 1.4 liters of diesel per 100 kilometers per passenger – but if the coach is fully occupied this figure falls to just 0.9 liters. Entry bans for coaches which comply with Euro III also means that the local authorities are damaging their own business centers without actually reducing par-ticulate pollution. Therefore these coaches should be exempted from their current ban from environment zones which has only been lifted by temporary exemption orders. However, a national regulation must also be created. Furthermore, bus companies should be given longer periods of transition for purchasing new vehicles.

While every second car on Germany’s roads bears a green disc, this ratio is much lower for light and medium commercial vehicles. In particular vehicles run by crafts-men, traders and small forwarding contractors are heavily affected by the regulations. Most of these vehicles do very little mileage, however, which means that they make a very marginal contribution to emissions. Faced with the threat of the cost involved, however, small businesses are hardly in a position to purchase a replacement.

Environment zones also make route planning difficult for vehicles without green discs. In some cases a major detour is required to avoid individual environment zones. This not only means additional cost for companies, but also greater pollution. Therefore the exemption regulations of the Registration Regulation should be adjusted accordingly. This could result in the creation of a standard national regulation.

In addition environment zones will only have a minor effect on particulate volumes. The initial results in Stuttgart and Berlin indicate support for the thesis which has been put forward for years by experts to the effect that traffic restrictions in envi-ronment zones would lead to a reduction in the particulate levels of a maximum of 3 percent. However, these figures include measurement tolerances. Joint efforts by all sectors of industry are required to actually have a noticeable effect on air quality.

The motor industry has been helping to improve air quality for many years. For example it has sharply reduced soot emissions from diesel vehicles. Under the unique “Stuttgart declaration” all new vehicles sold in Germany which are manufactured in Germany must feature diesel particulate filters. The success of this measure has been so great that the Ministry of the Environment expects total German engine emissions from road traffic to be lower than the emissions from smoking cigarettes.

In addition the motor industry also supplies retrofit kits whose installation entitles the car owner to a reduction in vehicle duty. The duty on vehicles without a filter, on the other hand, will be increased accordingly. Retrofitting stopped because there were filters on the market which did not satisfy the demands for cleaning the emissions. The filters provided by the automotive industry, on the other hand, are effective.

Coaches at a disproportionate disadvantage

The regulation is also disproportionate for craftsmen and traders

The motor industry has sharply reduced diesel soot emissions


The main cause of particulates remains meteorology. Normally the cases in which the daily mean ceilings are exceeded are not just restricted to densely populated areas in conurbations but occur over whole areas. High pressure and inversion weather systems such as those in January 2009 and in January 2010 are responsible for this. Emissions from small heating systems, in other words domestic heating systems, are now generating more particulate matter in winter than all the emissions from diesel vehicles. The German Federal Environment Agency has also confirmed in a study that household wood-burning systems in urban residential areas also significantly increa-ses the number of days on which the ceilings are exceeded.

Ozone and summer smog – human and natural causesDuring periods of “summer smog” ozone is created in the atmosphere due to in-tense sunlight. It is produced by hydrocarbons and nitric oxides in a highly complex chemical process. Studies have shown that local and regional peak ozone concen-trations are massively dependent on the natural hydrocarbon content of the forests. This content is estimated at around half a million metric tones. The emissions produced by humans make up around two-times this level. Since the quantities of hydrocarbons emitted by vegetation remain the same and anthropogenous emissions are falling, the role of vegetation is becoming more and more central to the creation of ozone. The absolute share of anthropogenous emissions produced by road traffic has fallen sharply over the last few years due to the fact that modern vehicles now produce very low emissions. This means that the motor industry has just about achieved its objective of helping the environment by reducing emissions.

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Ozone concentration in excess of 180 µg/m³ 1990 to 2009Number of days with 1-hr-average values > 180 µg/m³

Source: German Federal Environment Agency

Wood burning systems are the main source of particulate development

High emission reductions in vehicles help reduce pollution

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Over the past year ozone pollution continued to fall. This shows that a long-term strategy to improve air quality is a great deal more effective than short-term actionism.

The annual mean values for ozone concentration have risen slightly over the past few years. The German Federal Environment Agency found that this is due to the low quantity of nitrogen monoxide emitted by road traffic. This reduces ozone during the night. The improvements in emissions mean that the nitrogen monoxide source of traffic has essentially been eliminated, while natural emissions have remained constant. This is the reason of the rise in the annual mean value. However, these values are well below being relevant to the health of people and the well-being of the environment.

The EU is pursuing a long-term strategy to improve air quality. The basis of this is an environmental action program in which air-quality targets are described. This is defined in such a way that “no massive negative effects will be felt by human health and the environment.” The targets are to be met by 2020. National upper limits for emissions are part of the strategy. These define maximum emissions for sulphur dioxide, nitric oxide, ammonia and volatile organic compounds excluding methane (NMVOC) for each member state. Drastic cuts in emissions are to be made in the EU in 2010 compared to the base year of 1990. Efforts are now being made to update this directive. The initial drafts are currently under discussion. The motor industry demands that the efforts to reduce emissions made to date must be taken into consideration in this respect. No other sector of industry has cut its emissions on a comparable scale. Any further steps must be kept within realistic limits.

Drive by the EU to define new air quality targets


EU Air Purity and Noise-reduction Policy

The core element of the EU air-purity strategy is the newly drafted Air Quality Direc-tive. This uses the experience gathered over the last few years and is more relevant to practice. For example, “effective measures” are demanded to improve air quality. In addition, the previously unjustified focus on road traffic in the past is replaced by a wide-ranging concept which covers all sources of emissions. This takes into account the latest scientific findings which show that road traffic is a low contributor to particulate pollution. At the same time, the directive introduces uniform criteria for measurement points throughout Europe. This is designed to eliminate what in some cases have been massive differences in neighboring measuring stations separated by national borders. In the past, the measuring stations in the territory of country A just a few meters away from measuring stations in the territory of country B have produced widely diverging values. These incomprehensible differences will be eliminated in the future.

Little has changed as far as the limit values are concerned. Values for the particulate fraction PM2.5 have been newly introduced. By 2015 a value of 25 µg/m³/a must not be exceeded and this value falls to 20 µg/m³/a in 2020. This value is extremely ambi-tious. Nevertheless, the German Federal Environment Agency has measured annual mean particulate values of 24 µg/m³/a at traffic stations.

At the beginning of 2010, the EU-wide standard immissions limit for nitrogen dioxide (NO2) of 200 µg/m³/h or 40 µg/m³/a came into force. This target can only be achieved if all sectors make their contribution. For the German motor industry, the question of air-quality targets is particularly relevant and it has entered close discussions with the German Federal Environment Agency for this purpose. The aim of this is to develop an action plan to cut NO2 emissions from motor vehicles and to analyze the causes of NO2 pollution. The contribution of the motor industry particularly includes the launch of vehicles which meet the Euro 6 emissions standard. This standard will play a massi-ve role in reducing NO2 emissions. Notwithstanding the non-clarified and massive importance of air chemistry and the qualified contribution of so-called background NO2 pollution, which has still not been explained in full, the motor industry will conti-nue to pursue its reduction path. Nevertheless, this case shows that the EU has failed to grasp the link between emissions and immissions regulations. Immissions regulati-ons must follow the emissions regulations. Reversing this sequence causes problems which have to be faced by local authorities and the public. The EU should complete an assessment of the consequences of its regulations as part of its “better regulation” system so as to avoid conflicts of this nature.

EU acknowledges that particulates have many causes

Difference between emissions and immissions has not yet been understood in Brussels

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Local authorities are hesitant to implement the EU Environmental Noise Directive In a similar situation to that created by environment zones, some local authorities could see themselves forced to establish a “noise zone” in a few years, on the basis of the EU directive relating to the “assessment and management of environmental noise.” The German states are obliged to record the noise situation separately on noise maps using categories of rail, flight, road, industrial and commercial noise. The two-stage process initially includes conurbations with populations of over 250,000 people, trunk roads, major rail routes and major airports. Although noise maps for these areas and the appropriate noise action plans should have been produced some considerable time ago, a large number of local authorities and councils believe that to date they have been unable to do so. It is therefore likely that the second stage, which relates to conurbations with populations of over 100,000 people and half the traffic volumes on trunk routes of the first stage, will also be delayed. No noise maps or noise action plans are likely to be produced in the foreseeable future.

The main focus of noise action plans is often road traffic although it is very difficult to produce any reductions to this in the short term. In view of the special physical properties of sound, traffic volumes would have to fall by around 50 percent in order to have an audible effect. That also means that the widespread 30 km speed zones and the implementation of a 30 km limit in other areas will not necessarily achieve the desired effect. The acoustically palpable effects remain uncertain as a result of the physical peculiarities involved, particularly in view of the fact that a general reduction in speed limit may simply transfer the traffic to purely residential areas.

The local authorities can nevertheless make drastic reductions to noise levels on roads. For example, smooth surfaces with no repaired areas generate much less noise than other surfaces. In addition, a study could be made to find the extent to which open-pore asphalt could be used on trunk roads. According to the TÜV, it is possible to reduce the noise of a passing car by 9 dB(A). This is almost equivalent to a per-ceived traffic reduction of around 50 percent. Keeping traffic moving, using so-called “green light waves,” can also have a positive effect.


Significance of the Copenhagen climate summit for the German motor industry

The expectations of industry on the climate conference in Copenhagen were not fulfilled. The industry wanted a binding agreement with ambitious targets to help global climate protection and sensible growth. However, the “Copenhagen Accord” only constitutes a minimal compromise which, while it contains agree-ment on the prospects of the 2 degree target and funding for financing climate protection as well as adjustments in developing and threshold countries, it does not contain any concrete or adequate undertakings for emissions reductions. This is not enough to create a level playing field for international competition, particularly in terms of CO2 emissions trading. With this in mind, it would be over hasty for the EU to increase its reduction target from 20 to 30 percent by 2020 compared to the base year of 1990 on a unilateral basis, and could adversely affect the competitiveness of European industry.

Rigid recycling quota in the EU End-of-Life Vehicles Directive is uneconomicalRecycling has always been an integral part of product development. In a voluntary agreement dating from 1998, the German automotive industry agreed to minimize the proportion of waste placed in landfill sites to 5 percent by 2015. We are well on the way to achieving this target. One of the helpful factors in this is that current vehicles now have to provide evidence that they are suitable for recycling during their homolo-gation procedure.

However, the rigid recycling quota set out in the EU End-of-Life Vehicles Directive may result in vehicles becoming heavier. Therefore, in the view of the motor industry, these quotas should be reviewed to establish whether they are sensible. In addition, scientifically accepted eco-balances have shown that, when viewed overall, material and thermal recycling methods produce a roughly equivalent effect. This is intended to ensure that the most economically viable method should always be used. Since there is a de facto landfill ban on residues which can be incinerated, there is no need for a recycling quota anyway.

The End-of-Life Vehicles Directive also defines other environmental policy objectives. These include a ban on the use of lead, chromium VI, cadmium and mercury in new vehicles. Exemptions are listed in Annex II which is revised at regular intervals by the EU Commission. The last time a new list was published was this year. Regardless of this, the EU Commission has already stated that it intended to make yet another revision. As the initial results showed, time limits have been introduced for many of the exemptions without any technical reason for them. The return periods set out in the proposals put forward by the motor industry should be extended for reasons of product safety.

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Emissions Trading Directive in the EU

The current CO2 trading system will expire in 2012. The electricity generators have calculated the prices for fictitious emissions trading costs for all CO2 emissions de-spite the fact that emissions licenses were issued free of charge. As a result of this, the trading system resulted in a sharp rise in electricity prices without actually achie-ving the desired effects of CO2 reductions. The EU Commission has drafted a new ambitious regulation to meet the climate protection targets of the EU. This goes hand in hand with a reduction in the total allocation volume to 1.720 million metric tons of CO2 for the whole of Europe, while also reducing the issue of free licenses. The electric-ity generators will no longer receive free certificates. A large number of regulations in this amended directive throw up questions which must be clarified by the end of 2010. These include the division between heat generation, electricity generation and energy-intensive industries. The classification of systems where doubt exists is also still unclear.

Generators of heat and industrial systems which do not belong to the list of energy-intensive industries will receive allocations which will be reduced year on year. Starting in 2013 with the free allocation of 80 percent of a total volume based on a benchmark, the allocation is due to fall to 30 percent by 2020. The extent to which this should be seen in conjunction with the reduction in the total volume of certificates issued throughout Europe by 1.74 percent per year is also unclear. The way in which the benchmark will be set has still not been decided. According to the EU Commission, the values will be based on a “front-runner approach” with the standard being set by the most efficient 10 percent of European systems. Which systems these actually are has still not been decided.

In view of all these points that are yet to be finalized, it is very difficult for the motor industry to plan its systems for the next few years with any degree of security. The new regulations issued by the EU Commission also mean that the distribution of the burden is being moved to achieve the EU climate targets. While responsibility for the emissions trading sector has been taken over by the EU Commission, and emissions must be reduced in this sector by 21 percent by 2020 compared to the levels of 2005, transport is part of the “non-emissions trading sector.” The “non-emissions trading sectors,” which in Germany account for around one-half of the total emissions, can be regulated nationally. On an EU average, the “non-emissions trading sectors” must achieve a 10 percent reduction in emissions compared to the base year of 2005 by 2020. Various reduction obligations have been imposed on the different member states based on their per capital gross domestic product. The range is between plus 20 and minus 20 percent. Germany will be among the leading group of member states with a reduction target of 14 percent and will also have to bear a comparatively high CO2 reduction burden.

EU CO2 reduction targets throw up a host of questions

Planning is difficult for the motor industry as a result of unclear definitions


The EU Energy Taxation Directive

The EU Commission intends to publish a proposal to revise the Energy Taxation Directive. The preliminary draft submitted foresees a split in the existing fuel mini-mum taxation rates into a carbon and an energy component. The draft also contains a significant increase in the minimum tax rates for diesel and an alignment of the tax rates for petrol and diesel fuels in separate stages up to the year 2018. The minimum tax rate for diesel would then be higher than for petrol from 2015.

Despite the fact that the minimum tax rates exceed these figure in many member states, an increase in the minimum tax rate for diesel above the rate for petrol harbors the risk that all member states will change over their national taxation systems to match the European model. What is particularly questionable is that, according to the preliminary draft of the directive, an equal taxation of diesel fuel and petrol will probably occur in the energy content. The consequence here would be that diesel fuel would be subject to higher taxation than petrol in relation to volume in all EU member states.

Threat of increase in diesel fuel price

EU minimum tax rate Petrol Diesel

today 0.36 €/l 0.33 €/l

from 2013 0.36 €/l 0.35 €/l

from 2015 0.36 €/l 0.38 €/l

from 2018 0.36 €/l 0.41 €/l

Source: Press conference of the EU Commission on July 15, 2009

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There are serious objections from the aspects of pollution, climate and employment policy against an increase in diesel tax rate and the associated pan-European conse-quences with regard to the diesel proportion in the passenger car segment:

• A diesel engine is more efficient than a petrol engine. Fuel consumption is about 20 to 25 percent lower for the same power output.

• All in all, the internal combustion engine has a significant optimization potential. Through the use of modern engine and emission technologies, the fuel consump-tion of diesel and petrol engines can be further reduced by a quarter to a third. However, the diesel engine will still retain its efficiency advantage over the petrol engine.

• The diesel fleet in the various segments has a much lower carbon figure than the petrol fleet.

• What is particularly critical is the fact that the carbon dioxide regulation for passenger cars, Directive (EU) No. 443/2009 agreed at the end of 2008, requires the automotive industry to achieve considerable cuts in carbon in the coming years. However, target achievement is highly dependent on increasing the market share of diesel vehicles. Against this background, the plans described appear to be a contradictory policy that violates the coherence principle.

• The preliminary draft would also burden the financial standing of the German automobile industry. It is a worldwide leader in the development of efficient diesel cars and has made considerable investments in recent years to develop advanced clean diesel technologies. As a result, an increase in the tax burden for diesel would place the technology leadership of German manufacturers at risk. There would also be disadvantages for other European manufacturers which focus heavily on modern diesel technology.

For this reason, we must reject any increase in the tax rate for diesel fuels. It puts at risk the achievement of community specifications to lower carbon emissions and weakens the market position of European car makers. This would be linked to dire political consequences for employment. In the coalition agreement, the German government agreed with good reason that it would counter the introduction of carbon taxes on carbon emissions at EU level. This must also apply to fuel taxation.

The technology lead of clean diesel must not be put in jeopardy


European Transport Policy

Since the validity of the present white paper on transport policy entitled “Communi-cation on the Future of Transport” will expire at the end of 2010, the EU Commission has started preparations on a new white paper with a communication on the future of transport in June 2009. It is scheduled for submission by the end of 2010.

The communication describes the strategic vision of the EU Commission for the trans-port sector. This is strongly based on thoughts regarding pricing measures with the intention of shifting the balance between modes of transport to so-called “environ-mentally friendly transport modes.”

In fact, this would be an evident departure from the previous approach of co-modality, which says that transport modes are predestined for various tasks based on vari-ous system characteristics and are therefore not totally interchangeable. A forced re-shifting of transport demand to other transport modes would not only be associa-ted with trade-offs in transport quality but would also have serious ecological impacts. For instance, shifting road freight traffic to rail at local and regional levels would lead to enormous additional environmental pollution, due to detours for pickup and delivery, and additional fuel consumption since it would require double the unloading and reloading work. According to the principle of co-modality, transport policy should rather strive to achieve a uniform and cooperative relationship between transport modes in order to optimize the overall transport system.

A centerpiece of the transport-policy agenda that the EU Commission has set itself for the current legislature period in the revision of the EU Directive on Road Charging is the internalization of so-called external costs of transport. In concrete terms, member states are permitted to offset costs for air pollution, traffic noise and congestion costs by levying tolls.

In June 2008, the EU Commission presented a corresponding proposal that was more or less accepted by the EU Parliament, but was received with misgivings by sever-al member states. The reason for this is that the present EU Commission proposal contains several methodological problems. For example, the congestion costs fore-seen for offsetting toll charges are already borne by the user in the form of lost time and increased fuel consumption. Charging through tolls would therefore represent a double burden. In addition, it would be unjustifiable if users are be penalized for the failure of public authorities to invest in the infrastructure using congestion charges.

Moreover, it is tantamount to a contradiction if the EU Commission, on the one hand, uses congestion charges to encourage trucks to drive in periods of light traffic, e.g. at night, but at the same time wants to reduce traffic at night by imposing noise charges. In addition, the problem is that the EU Commission only foresees an inter-nalization of external costs for road freight transport at first, and that other transport modes are disregarded. This would distort intermodal competition on the freight transport market. It is correct that the new federal government wants to request the EU Commission to submit a new proposal on external cost charges that involve all transport modes uniformly and that renounces to charge congestion costs in road transport.

Europe facing relapse to old modal shifting ideologies

Attempts at cost internalization in transport must be questioned

Commission pursues contradictory aims in road freight transport

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However, the underlying idea of internalization is also questionable. Charging exter-nal costs with the aim of achieving an optimized macroeconomic volume of traffic assumes that it is possible to calculate precisely how much external costs are. This is linked to enormous methodological problems – first, a clear assignment of costs to a causer, and second, calculating the impacts in monetary terms. An overestimation of external costs would have the consequence that the traffic volume would be shifted by more than the optimized amount. This would lead to losses in economic growth.

As a result, it is an open issue as to who is regarded as the causer of noise costs if a new development area is build subsequently next to an existing expressway. It is also unclear who the causer of air pollution and carbon emissions is – the car driver or the state that omits to adapt the infrastructure to growth in traffic volumes. It is no coin-cidence that estimates of external transport costs in Germany lie within an extreme bandwidth of 20 to way over 100 billion euros.

Road transport generates taxes and surcharges with a volume that can be calculated to cover a majority, if not the totality, of external costs. The road transport revenue amounts to 53 billion euros yearly. On the other hand, the costs only for the transport infrastructure amount to a mere 14 billion euros. These charges affect the costs for transport demand users and are included in their decision-making, which is the whole aim of internalization. Even the handbook on estimating external costs in the transport sector, published by the EU Commission in February 2008 realizes, for example, that the external costs of climate change are more than covered by existing taxation on petroleum and environmental taxes.

Alternatives to charging external costs through toll charges could cover environmental requirements better and lead to a drop in external costs. This includes structural noise protection, the use of low-noise road surfaces or a needs-related expansion of the infrastructure that helps to avoid congestion. Finally, Germany has had good expe-rience with the revenue-neutral differentiation of truck tolls according to emission classes. This has resulted in a push to modernize truck fleets and achieve a reduction in pollution emissions. On the contrary, the EU’s plans would lead to a rise in costs even of low-emission vehicles and would deprive transport company funds otherwise earmarked for investment in vehicles with lower emissions.

The present EU Directive on Road Charging basically intends to levy a truck toll only on trucks over 12 t. after 2011 and not include vehicles above 3.5 t. This option should be left untouched. Otherwise, light trucks will be faced with a disproportion between revenue and costs, as a result of lower deductible road costs, and therefore lower toll rates, whereas the costs for collecting them remain the same in principle. Moreover, there is a need for harmonization here due to the proportion of international traffic that is much smaller than for heavy trucks. Levying tolls and the toll rate should con-tinue to be decided at subsidiary level – in this case at member-state level. Therefore, the existing directive should not be changed in this point.

The principle of external costs is unclear and susceptible to manipulation

Taxes and surcharges already cover external costs

Cost minimization is better than raising costs

Extension of tolls to light trucks is ecologically ineffective


EU action plan for city trafficIn September 2009, the EU Commission presented its City Traffic Action Plan to support sustained urban mobility. In addition, it mainly intends to improve the information base of all participants by promoting the exchange of information between member states and communes, financing research projects, committing to an improvement in multi-modal traffic information and supporting information campaigns. However, the EU Commission basically intends to say that it ultimately wishes to raise the cost of mo- torized private transport and render it more difficult, with the aim of shifting it to public passenger transport. This would be totally inappropriate as a one-sided strategy.

In general, the question that should be asked is whether it is at all practical for the EU to involve itself in traffic issues within the individual cities of Europe in the first place. Urban mobility is precisely a central application field for subsidiarity in Europe; competence primarily remains with the cities themselves. The nature of urban mobility differs strongly throughout Europe, depending on the type of settlement structure and mobility culture.

ITS Directive adoptedThe EU Directive on Intelligent Transport Systems (ITS) creates a framework for specifying concrete ITS applications, for example car park information and traf-fic guidance systems. This is intended to give new impulses to the introduction of appropriate services throughout Europe and secure system compatibility. The task in implementing the ITS Directive and the ITS Action Plan is now to take stock of existing solutions, set the right priorities based on cost-benefit analyses, develop suitable busi-ness models, and consider user needs in selecting and designing systems. In this way, ITS can make road traffic even more efficient, sustainable and safer.

Raising costs is the idea behind sustained urban mobility

Intelligent Transport Systems can make road traffic more efficient

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The EU Labeling Directive and Advertising

Every customer must make an informed decision when buying a car. The German car industry is expressly committed to this. No car should be registered new if the buyer is unable to find out how safe and nonpolluting a new vehicle is in operation fast, at no cost, and with no restriction – besides all the other criteria and requirements he or she may have of the car – and how much the running costs are. Carbon emissions may be a specially decisive factor. As such, it may be considered in an individual overall carbon footprint. In this way, the consumer can make a contribution to reducing the impact on the environment and climate change through his or her purchase decision.

The DAT (Deutsche Automobil Treuhand, German automobile trust) list is offered centrally to support a purchase decision. It is a guideline to fuel consumption and carbon emissions of all new passenger car models sold in Germany. In addition, the vehicles exhibited in the showroom are labeled accordingly, and the carbon emis-sion value is listed separately for each model and each engine size in the product brochures. The same applies to the manufacturer’s websites. These are the sites and communication channels that are intended for orientation and precede the purchase decision.

The German automotive industry emphatically supports the efforts of the EU to affix a carbon label for each specific segment in the same way as the system for “white goods.” This system is generally known and has proven its effectiveness.

Detailed customer information and freedom of advertising are two sides of the same coin, that is, to assist buyers in their decision-making process. Each of the two communication paths is helpful in its own way. Therefore, labeling may not risk the freedom of advertising by using the label more and more in classic advertising, for example. This is because advertising is a universal way of forming a preference in favor of a particular brand and model, way before the purchase decision. It helps the consumer as a guide to questions concerning upcoming vehicle classes, and other expectations and wishes. Companies enter into competition with each other through advertising and their brands.

Advertising is constitutive for a functioning competition and, in turn, for the entire market economy. Strong brands not only represent a corporate worth, they are also the expression of customer expectations and a guarantee of their fulfillment. Including a label in classic advertising would come at the wrong time, namely way before the critical phase in the purchase decision-making process and it would intervene strongly in the corporate freedom of advertising.

Customers base their purchase decisions on many sources of information

Customer information and freedom of advertising are two sides of the same coin


General Conditions of International Automotive Markets

The German automotive industry is represented abroad like no other branch of industry: three out of four vehicles produced in Germany are exported. At the same time German manufacturers produce almost the same volume of vehicles abroad as in Germany itself.

The member companies within the VDA are represented outside of Germany by over 2,000 production and assembly sites. In many cases, German automotive suppliers settle in the vicinity of the production plants of German and international manufac-turers. A strong presence on the German domestic market remains the cornerstone of the German automotive industry. However, world automotive markets are playing an ever more important role:

These figures clearly show how important foreign markets are for production and jobs. The significance of automotive growth markets outside of Europe is rising. Today about 63 percent of exports, i.e. the majority, still go to EU countries. However, in many non-European growth markets, high customs duties and non-tariff trade barriers hamper market access. The consequence is that these markets are either not serviced, or companies are forced to produce locally. Admittedly, customer proximity is often a major reason for investments abroad. However, it is as a result of customs duties and other import barriers that investments are made in certain countries, whereas the economic criteria in fact speak in favor of a different production location.

Trade barriers abroad compromise the competitiveness of Germany as a production location. For this reason, the VDA is emphatically committed to free trade and the removal of trade barriers. Since the general foreign trade conditions are defined by politics, it is important for the German government and European institutions to commit to the removal of trade barriers on the main foreign markets. Otherwise, it will become increasingly necessary to relocate research and production abroad in order to secure a share of world automotive markets. This would have a grave impact on the international competitiveness of Germany.

Three out of four vehicles produced in Germany are exported

Obstacles to free trade in growth countries often forces “onsite” production

Foreign activities of German car producers 2009

Production in Germany 5.0 mill. cars

of which exports 3.4 mill. cars

Production abroad 4.8 mill. cars

Production worldwide 9.8 mill. cars

Source: VDA

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Impacts on trade barriers

• Trade barriers dampen export chances.

• Trade barriers reduce the consumption potential of protected markets.

• Customs duties prevent efficient international procurement policy.

• Customs duties and non-tariff barriers raise the product price.

• Barriers, e.g., customs formalities, can cause time delays that bring about a competitive disadvantage compared to domestic suppliers.

• Trade barriers, in particular high customs duties, cause a misallocation of resources: Production fails to take place at the location with the lowest production costs.

• Barriers in international trade blocks growth and reduces prosperity.

• Trade and investment barriers prevent the international exchange of knowledge.

Free trade with major growth markets is vitally important

India - a market with enormous potential

The VDA supports the activities of the EU Commission to conclude agreements with key trade partners as part of its “Global Europe” strategy. In the view of the European automotive industry, the most important agreements are with Asian growth markets, such as India, the ASEAN region and MERCOSUR in Latin America.

During the free trade agreement currently under negotiation with India, it is deci-sive that the European automotive industry is granted genuine access to the market, instead of making concessions by removing customs duties, e.g., in the form of exclusion lists. In order to meet the requirements of the India’s status as a developing country, asymmetrical transitionary periods may certainly be conceded in some areas. This means that the removal of customs duties in India is slower than the removal of EU customs duties. However, India has become exceedingly competitive, especially in the automotive sector, so that there is a distinct trade surplus in India’s favor in the German-Indian automotive trade balance.

2009 New vehicles

Imports to Germany from India 258.5 mill.

Exports from Germany to India 88.7 mill.

Balance -169.8 mill.

Source: VDA, Destatis

India has a significant surplus in vehicle trade


The VDA maintains a close working relationship with India through a number of dif-ferent activities. For instance, the “Indo-German Joint Working Group on the Auto-motive Sector has been represented in industry, politics and institutions associated with the automotive industry. The issues dealt with include corporate-related techno-logies, general political conditions, and education and training. In addition, the VDA organizes regular events to do with the Indian market and Indo-German cooperation together with its Indian associates. The VDA travels regularly to India to attend the Auto Expo with an official joint stand, and ACMA, the automotive supplier association, is present at the International Motor Show in Frankfurt with joint stands.

The Association of Southeast Asian Nations (ASEAN) – comprising the ten member states of Brunei, Indonesia, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – is one of the largest automotive growth regions in the world. Japan has already concluded agreements with ASEAN, as well as China and India. ASEAN member states levy customs duties on automotive products well above average, with the result that European exporters have great difficulty staying competitive on these markets. For this reason, it is all the more important that the EU also concludes an agreement with the region.

Unfortunately, the EU has been unable so far to negotiate an agreement with all the countries of ASEAN. The reasons for this lie, in particular, in problems surrounding human rights issues in some of the ASEAN member states.

The VDA welcomes that the EU Commission has now switched over to negotiating with individual ASEAN members. However, the aim should be to obtain an agreement that covers the entire region. At present the EU is conducting a free trade agreement with Singapore. The EU expects to include other countries with even greater market potential.

The Latin America markets have experienced highly positive development. The German automotive industry is clearly giving its unanimous support to a free trade agreement between the EU and MERCOSUR – unfortunately, discussions have repeatedly ended in deadlock. Meanwhile, the results of the DOHA round on world trade should be awaited. However, since no real progress was expected here either, the EU and MERCOSUR will hopefully return to the bilateral negotiating table.

VDA member companies are extremely active, in particular in the main MERCOSUR states of Brazil and Argentina. Together with associated organizations, such as the BDI (Federation of German Industry) or the Business Association for Latin Ameri-ca, the VDA is intensifying its relations with Latin America, for instance at the Latin America Day at the Frankfurt Motor Show 2009, or the Automotive Workshop at the Latin America Conference that takes place in Mexico City from June 16 to 18, 2010.

The VDA supports the EU’s negotiations with Central America and the ANDEAN countries, even if these countries fail to have the same growth potential as MERCO-SUR. Negotiations in the automotive sector with Columbia in particular are proving to be extremely complex. For example, the Andean state is planning to introduce E85 fuel which has an Ethanol proportion of 85 percent. Since this requirement would be unique in the world, it would be extremely costly. Consequently, the VDA has urged to offer Columbia a solution that will keep access to the market open to German manu-facturers. Negotiations concerning an agreement have now been concluded and there appears to be a solution in sight.

ASEAN: Association of automotive tiger markets

Latin America offers good opportunities since the crisis

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The VDA is pushing to intensify dialog concerning regulation issues with the major trade partners of Japan and the U.S. It will benefit all parties if they can agree, or at least recognize, harmonized technical standards and regulations on car registration. This is particularly vital when it comes to future technologies since different standards would otherwise result in high costs for all those involved, and this should be avoid-able at all costs.

In this case, the VDA is pushing for an intensification in the partnership between the U.S. and Europe within the Transatlantic Economic Council (TEC). Despite the crisis year and a shift of power on world markets, the two economic blocks still represent over 40 percent of world automotive production. Close agreement may also help to harmonize standards in the two economic regions. The ambitious long-term aim should be to create a fair transatlantic competitive field, a “level playing field,” for all the main legal standards. In this situation, electric mobility assumes a prominent posi-tion as a beacon project for unified standards between the U.S. and Europe.

General trade-policy conditions determine export success – further agreements in the pipelineThe continuous improvement in general trade-policy conditions are a vital success factor for the export-oriented automotive industry. For this reason, the VDA supports completion of the DOHA round with a balanced result, the consolidation of regulatory relations with the main partners, such as the U.S., Japan or China, and the conclusion of further free trade agreements.

Other countries, with which the EU is currently negotiating agreements, include Cana-da and the Ukraine. The VDA is also giving its support to negotiations here. Moreover, the hope remains that Russia will soon join the WTO. There are repeated objections that Russia continues to set up obstacles to block access to their market and it is hoped for a reduction in these barriers when Russia accedes to the WTO.

A striking example of the problems surrounding non-tariff trade barriers is the automotive market in South Korea, where the main cause of market access prob-lems is not customs duties but technical standards. In this case, the VDA expects a total lifting of these barriers as part of the planned free trade agreement between the EU and South Korea – in fact, this should be achieved prior to the final conclu-sion of negotiations. For instance, a new carbon regulation is slated for introduction in South Korea. According to the latest information, this would establish a massive barrier, blocking market access to European suppliers. This should not be the result of a free trade agreement, and this is where the VDA is pleading for cooperation with the negotiation partners. As a whole, the role of the European Parliament has been strengthened in trade policy, a good sign for free trade.

Transatlantic cooperation can assume a pioneering role regarding electric mobility standards


Foreign trade show participations

Opening up new markets, customer proximity to attain the maximum possi-ble efficiency of production processes, international sourcing to optimize cost structures: These are the reasons why automotive supply companies are taking an international stance. In addition, foreign markets are increasingly becoming the main growth motors of the German automotive supply industry. Above all, Eastern Europe and Asia, and here it is mainly Russia, China and India, are regarded as regions with an enormous growth potential.

Joint booths offer major opportunities

The VDA offers German automotive suppliers the opportunity of presenting themselves as part of a foreign trade show program organized by the German Ministry of Economics on a German joint booth at preferential conditions. This is of particular interest to small businesses that can then become acquainted with foreign markets at a reasonable price. They can exhibit their products and make contacts. The VDA supports this undertaking with events and harnesses the projects to intensify cooperation with sister associations abroad.

The VDA also attends international car shows: 2009 in South Korea (Seoul Motor Show), China (Auto-Shanghai), Russia (Interauto Moscow), and the AutoExpo in New Delhi, India in January 2010. The joint German booths at these shows are also a sign of continuity and the German automotive industry was highly respected for showing their colors on markets that are difficult to process at present. Due to the financial crisis, two of the joint presentations registered were not implemented – AUTOMEC in Brazil and Tokyo Motor Show.

A forthcoming event is Interauto/Moscow International Auto Show (MIAS) in Moscow (August 25–29, 2010). In addition, the VDA – besides the official foreign trade show program – supports the participation of German automotive suppliers in the newly established AUTOMEC Commercial Trucks Sao Paulo, Brazil.

Trade obstacles and customs: international VDA activities

Internationalization and globalization are central issues for the German automo-tive industry. The VDA Committee for International Trade and World Economy Issues (IHW Committee) deals with the challenge of globalization and the de-velopment of international markets. In addition, the committee members prepare forecasts for individual countries and regions, and then discuss them. Another important issue is the worldwide reduction of obstacles to free trade. Here, the committee is also politically active to improve the general conditions for the entire German automotive industry.

Due to the high significance of customs duties and excise duties that accom-pany international transactions, the traditional VDA working group on customs issue has been converted into a committee. The working area has been extended to include excise duties, one of which is also energy taxation that is rapidly gaining in importance. The topic of customs duties and excise duties has grown in economic significance in corporations over the past few years. At the same time there has been an increase in operative tasks. This requires additional political influence. In many companies, responsibility for taxes and customs duties has been merged. The VDA has also taken account of this trend and has joined these areas in the new department for “Taxes and Customs Duties” accordingly.

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The Development of Energy Prices

Electricity and gas are by far the most important fuels used in motor manufacturing. Many motor suppliers are also energy-intensive companies. Energy prices therefore have a major effect on the selection of the production location for these companies and motor manufacturers alike. German industry is exposed to global competition. Therefore electricity and gas must be available to it on similar conditions to those faced by its global competitors. However, the fact is that German industry is at a massive disadvantage. This is because electricity and gas prices in Germany are among the highest in Europe. Although energy consumption fell in Germany during 2009 as a result of the difficult economic situation, and the fall in global demand resulted in a drop in prices, the price situation for German industrial companies is still critical. Despite a drop in price by an average of 0.46 cents per kilowatt-hour (kWh), industrial gas prices in Germany are still the most expensive in Europe. The price range within the EU has become even more marked due to the fall in global market prices. This is demonstrated, for example, by a comparison with other industrialized countries such as Great Britain and France.

Industrial electricity prices within the EU feature an even more marked spread of energy purchase prices. Although electricity prices for industry (medium voltage) were slightly down on the annual averages for 2006 and 2007 for new contracts (using the average from the first ten months of 2009), electricity prices for industry have there-fore fallen by around 2 cents per kWh or around 2009 by comparison with the average for 2008. The Federal Association of the Energy, Water and Gas Industry (BDEW) estimates that at least some industrial customers have already benefited from the fall in prices. However, electricity prices in Germany are also among the most expensive in Europe.

The subject of state supplements on electricity prices is already causing a good deal of concern. Charges and energy-related taxes on electricity, the so-called state supplements, amounted to around 15 billion euros in 2009. According to an initial estimate by the BDEW, these state supplements will rise to the record level of around 17 billion euros in 2010. One of the main reasons for this is the costs of the Renewable Energy Law (EEG) which are expected to rise from 4.8 billion euros in 2009 to 8.2 bil-lion euros in 2010. For domestic and industrial customers (excluding energy-intensive industries which have privileged end user prices), the costs imposed by the EEG will rise by a good 70 percent compared to 2009.

The state supplements will therefore have increased by more than seven times compared to 1998 (2.28 billion euros). In addition, of course, there is also value-added tax. There are already signs that the German government is taking action to prevent further excessive rises in EEG supplements. In spring 2010, the government intro-duced an amendment to the law which will reduce the subsidy rates for electricity generation from solar energy (photovoltaics) on a one-off basis and will adjust them to current cost and market developments.

The German motor industry faces higher electricity and gas prices than its competitors

State supplements on the electricity price at record levels

Climate and Environmental Protection in the Automotive Industry

Christian Völler – Developent Engineer, Electrical Engineering, Bertrandt Group, Ingolstadt

100C LI M ATE A N D E N V I R O N M E NTA L P R OTECT I O N I N TH E A UTO M OTI V E I N D U STRY

The German Automotive Industry as “Front-runner” in Climate Protection

Global road traffic contributes somewhat less than 10 percent to the world’s green-house gas emissions. The share of national emissions accounted for by traffic differs, as do the growth rates from one country to the next. A steep increase in traffic emis-sions can be observed in the up-and-coming Asian states.

Following the opening of the border, Germany witnessed an increase in CO2 emissions over the entire decade. Between 1990 and 1999, road traffic CO2 emissions increased by approximately 15 percent, with passenger transport journey volumes increasing by approximately 50 percent to 866.7 billion person-kilometers during the same period. Road freight transport movements went so far as to double, from 169.9 to 341.7 billion metric ton kilometers. This marked a significant improvement in road traffic efficiency in urban centers.

The decoupling of fuel consumption and CO2 emissions, on the one hand, and passenger and freight transport movements, on the other hand, which had been looming in the 1990s began in 1999. This was the first year in which road traffic CO2 emissions declined despite transport movements continuing to increase. This trend has continued ever since and is expected to continue in future.

The total distance traveled by passenger vehicles in Germany will continue to in-crease. In a dynamic society, it will be 11 percent higher in 2030 than it is today, and even in a faltering society (“tradition”) 2 percent higher. Ever more economical engi-nes, superior fuels and new drive systems will continue to cut consumption, now and in the future.

The year 2006 was the first year in which road traffic CO2 emissions were below their 1990 level. An important reason can be seen in vehicle manufacturers’ efforts to cut consumption. We can expect to see a continuing decline in road traffic CO2 emissions. In this context the effect could be even more considerably pronounced than it already is if the average age of the German vehicle fleet, currently in excess of 8 years, were to fall significantly. If the age of the vehicle stock in Germany were to be reduced by only one year, 800 million liters of fuel could be saved each year. That equates to approximately two million metric tons of CO2 annually.

That is why an effective program to rejuvenate the vehicle stock such as the CO2-based vehicle tax was a pressing requirement. A policy that dispels consumer uncertainties and avoids new burdens in the form of taxes and social contributions, thereby helping to stimulate the market, also contributes to climate protection. The industry is pinning high hopes on the vehicle tax in its currently amended form.

Just a few figures suffice to demonstrate clearly the impact that new vehicles have. New vehicles are more than two liters more economical per hundred kilometers than at the beginning of the 1990s. This is accompanied by the greater than 60 percent improvement in journey volumes per liter of fuel during this period. These successes can be literally experienced at the wheel. In 1978 one liter of fuel would take you approximately nine kilometers; nowadays a German car will go for more than 15 km on the same amount.

Road traffic emissions have been falling ever since 1999

Vehicle manufacturers’ efforts have paid off

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The German automotive industry’s efforts on the climate protection front are paying off. Despite the continuous increase in traffic growth, boosted by the opening up of European borders, CO2 emissions attributable to road traffic in Germany fell by more than 31 million metric tons between 1999 and 2007, according to be national inventory report conducted by the German Federal Environment Agency. Indeed, in 2007 CO2

emissions from road traffic were more than 6 million metric tons below what they were in 1990. This trend will continue. This sets German road traffic apart from all the rest within the EU15, with no other Western European country having managed to reduce traffic emissions below the 1990 level.

Manufacturers and suppliers have even gone up a gear. As a leading innovator, the sector has set itself the ambitious goal of offering the most CO2 efficient solutions in all vehicle segments. This can be seen from the Federal Motor Vehicle Authority’s official figures. In nine out of ten segments, ranging from the subcompact car catego-ry to the large multi-purpose vehicle, German-branded newly registered models ex-hibit average CO2 values significantly lower than those of their imported counterparts.

The average CO2 value of newly registered passenger vehicles in Germany in 2007 has once again fallen by 1.7 percent. In the process, German manufacturers have been able to achieve a significantly stronger fall, -2.0 percent, than importers with -1.3 percent. In the largest vehicle segments by unit volume, the compact-size, midsize and upper medium-size segments that account for almost half of all new registrations, the German suppliers’ emissions value is lower even than the average values.

In the small and mini-car sector as well, German manufacturers managed to achieve an above-average economy of -6.7 percent. By the same token German manufactu-rers increased their domestic sales of particularly economical and thus low CO2 new cars – vehicles with a CO2 value of less than 130 g/km – by 57 percent, whereas sales of these vehicles by importers fell by 4 percent.

No other country in the “old” EU can point to such CO2 successes in the transport sphere


This development continued in 2008. CO2 emissions from newly registered, German-branded passenger vehicles in the domestic market declined in this period by a total of 3.0 percent. German manufacturers achieved an above-average reduction. Also in 2009 the climate protection effect of the environmental bonus made itself felt: the CO2 reduction achieved the record level of 6.5 percent compared with the year before. In the current year as well, the downward trend in CO2 has continued. Since the begin-ning of the year, the average CO2 value of all newly registered passenger vehicles in Germany had undershot the previous year’s performance by 2.2 percent. In this context, German Group brands outpaced importers by a factor of almost two, at -3.4 percent. The average CO2 value of all newly registered passenger vehicles in Germany in 2009 was only 154 g/km.

The most fuel efficient vehicles are offered by German automotive manufacturers. They consume only 3.3 liters per 100 kilometers, emitting in the process a mere 88 grams of CO2 per kilometer. Another approximately 400 German-branded models consume less than 6.0 liters per 100 kilometers. A good 140 models are below even the 5 liter mark. These are not just small cars but medium-sized vehicles as well. The upper class even achieved disproportionately high reductions in fuel consumption.

A comparison shows just how important a reduction in fuel consumption is in all vehicle categories: if the CO2 emissions of the 50 vehicle models with the highest fuel consumption were to be reduced by 20 percent, this would only achieve a saving of 0.4 percent in the fleet. If, however, there were to be a 20 percent cut in consump-tion for the 50 top-selling models, this would result in a 14 percent reduction in fleet consumption. This is why the goal is to increase efficiency in each vehicle segment, be it for the small car or people carrier. All vehicle groups therefore have to do their utmost to reduce CO2 pollution.

The savings achieved could have been even more impressive if countervailing effects had not got in the way of the engineers’ attempted savings. For example, numerous statutory and quasi-statutory directives have increased vehicles’ average weights, thus resulting in a physically dictated increased consumption. This was caused, among other reasons, by more stringent external noise regulations, more rigorous crash test requirements and the new, ambitious Euro 3 and Euro 4 air pollution control stan-dards. All of these examples – along with the introduction of the diesel particulate filter – came at the cost of higher fuel consumption. By the same token, the new Euro 5 and 6 emission standards will not be without consequence from a fuel consumption perspective. Solving this task is an enormous challenge, bearing in mind efficiency aspects as well.

Moreover, people’s expectations of a car have changed significantly since 1990. Nowadays there is an increasing demand for station wagon, combis for short, and vehicles featuring new space concepts. Today’s must-have convenience features, such as air conditioning, electrically operated seats and windows or automatic transmis-sion, all add extra weight. From this perspective the German automotive industry’s performance in reducing fuel consumption and emissions should be seen as all the more remarkable.

2009 set a new record for emission reductions

State guidelines can be counter-productive when it comes to consumption and emissions

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Spark-ignition Petrol Engines and Diesel Engines

Efficiency potential is far from being exhaustedImproving the efficiency of drive systems is at the top of the priority list for the German automobile industry, because every percent increase in efficiency reduces the reliance on oil, conserves resources and contributes to climate protection.

Despite the current trend in the direction of electric drive systems, the energy required for driving in the coming decades will come primarily from modern combustion engines. That’s because both the spark-ignition petrol engine and the diesel engine are still far from reaching the end of their over one hundred year career. This will be ensured by, among other things, efficiency optimizations in the engine and in exhaust treatment. In addition, there will also be innovative systems in the powertrain from the transmission through to the tires.

When it comes to the spark-ignition petrol engine, companies are focusing on downsizing using supercharging and also on direct fuel injection. The aim is to run the engine constantly at its optimal operating point — even when operating at partial loads — so as to bring the spark-ignition petrol engine’s consumption even closer into line with that of the economic clean diesel.

Thanks to the high quality of its emissions, the spark-ignition engine no longer pro-vides any grounds for an environmental debate. The future development of the spark- ignition petrol engine will now concentrate on improving fuel consumption.

The partial load operating range is inherently where the greatest potential for savings are to be found in the spark-ignition petrol engine. This form of operation is charac-terized, for example, by urban stop-and-go traffic. Here, the engine can seldom be operated in its lowest specific consumption range. The so-called downsizing – for example by turbocharging and reducing displacement – is a promising route for also achieving lower consumption in this type of operation.

Compared with conventional indirect injection, various measures such as direct injection, new combustion techniques, variable valve control, start-stop systems, thermo-management and downsizing can deliver improved consumption in the order of 25 percent. When this is combined with a hybrid drive, it offers the prospect for even further significant economies. The spark-ignition petrol engine’s development potential is therefore still considerable.

The spark-ignition petrol engine


Due to tremendous progress in the development of diesel engines and in exhaust purification technology, it has been possible, particularly in the last two decades, to comply with the drastically more stringent emission limits and, at the same time, to reduce fuel consumption despite substantial improvements in performance. Important technologies responsible for these advances include:

• Transition from the combustion chamber process to direct injection

• Significantly increased injection pressure

• Electronic engine management

• Exhaust gas turbocharging with charge-air cooling

• Exhaust gas return

• Oxidation catalytic converters

• Transition to four valve technology

• Common rail injection systems

• Diesel particulate filters

• SCR systems (selective catalytic reduction) with AdBlue® dosing

Taking into account the high demands of future emissions regulations, numerous developments will continue to be pushed forward that can contribute to a further reduction of fuel consumption and, therefore, also to a reduction in CO2 emissions. In every area of the vehicle, from the engine to aerodynamics or from the chassis to the trailer, opportunities to reduce CO2 emissions will be implemented.

The position held by the clean diesel engine is thanks mainly to its high level of efficiency. Particularly in commercial vehicles, the diesel can be operated at near to its optimal effectiveness. In this way, the diesel system also offers even further potential for development.

This applies firstly to the actual combustion process. Common rail injection systems with improved injection pressure levels, multiple injection, injection rate shaping and the precise regulation of even the smallest injection volumes, enable further advances in terms of efficiency as well as in the reduction of pollutant emissions and fuel consumption. Piezo injectors provide even faster and more precise control of the injection system. This saves fuel and improves the engine response characteristics.

In addition, the diesel process offers the ideal preconditions for the use of even the highest turbo supercharging rates. Controlled and where possible staged exhaust gas turbo charging, in combination with intensive cooling of the charge air and the returned exhaust gasses, will not take on the classical role of providing performance, torque or nominal speed improvements, but rather decisively contribute to reducing fuel consumption and pollutant emissions.

To also successfully implement new emissions standards, the trend towards exhaust gas recirculation will take on ever-greater importance. That’s why exhaust gas recir-culation is a core component of many concepts for reducing nitrogen oxide emissions without increasing fuel consumption in the process.

Through the realization of low-temperature diesel combustion with a partial homoge-nization of the fuel-air mix, it is possible to significantly lower the critical dependency between fuel consumption and NOX emissions. Similar approaches are being followed for the reduction of fuel consumption and NOX emissions in spark-ignition petrol en-gines under the heading of “controlled auto ignition.” The spark-ignition petrol engine works here, at least in the partial load range, at operating temperature, almost along the lines of the diesel principle. Spark-ignition petrol engine and diesel technology are in this way converging.

The diesel engine

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A particularly important role belongs to the development of improved algorithms for controlling the engine that allow for enhanced or completely new sensors to be opti-mally used. This includes oxygen sensors in the inlet system, cylinder pressure sensors and also NOX sensors in the exhaust system.

Further potential for the reduction of consumption, particularly in the partial load operating range, lies in the reduction of inner engine friction loss as well as the demand-controlled regulation of ancillary units. This includes:

• Reduction of piston friction

• Use of lubricating oils with reduced viscosity for engine and transmission

• Start-stop systems

• Thermo-management (quicker heating of the engine and transmission)

• Variable oil pumps

• Electric fans instead of visco fans

• Variable water pumps

• Generators with improved efficiency

• Electric or hydroelectric steering systems

Further possibilities for improvement are also opened up by new transmission technologies. In particular, automated manual transmissions offer the possibility to continuously run the engine at its optimal operating point without having to make sacrifices with the driving dynamics in the process. Automated manual transmission also reduces the stress on the driver — a safety aspect that should not be underesti-mated.

Automatic transmissions “know” the vehicle and the engine better than the driver and, therefore, switch gears automatically at precisely the right moment. In this way, the automatic transmission helps to conserve fuel: fuel savings of 5 to 10 percent can be achieved in comparison with a manual transmission.

Double-clutch transmissions with seamless shifting points have significant potential for development, alongside their great market opportunities, which have not been fully opened up in their initial launch. Therefore, this targeted development to further increase the benefit to the customer is a primary development goal of automobile manufacturers and suppliers. The new double-clutch technology offers the comfort of a conventional automatic transmission but saves more than 10 percent of the fuel consumed.

The calling off of energy as required, such as in auxiliary equipment, otherwise called energy management, is an essential component in efficient fuel consumption. Start-stop systems and the recovery of brake energy (recuperation) for charging the battery are supplementary measures representing one further building block in electrifying the powertrain.

Transmission and powertrain

Further measures in the powertrain


Diesel: Essential for climate protection — low CO² emissions and efficiencyModern diesel combustion engines of today only have very little in common with the engine invented by Rudolf Diesel 114 years ago. The power/weight ratio has been continually increased. The engines have developed into high-performance, fuel-effi-cient, clean and cultivated drive systems. In this way, the exhaust emissions of diesel engines have been reduced by 98 percent since the beginning of the 1990s. This path will be continuously pursued in the future.

The modern diesel engine is, therefore, a clean and fuel-efficient drive system tech-nology. Clean diesel is achieved:

• With the most advanced diesel technology and the most stringent emission stan-dards worldwide — and is, therefore, now at the same level as spark-ignition petrol engines.

• By having a 25 to 35 percent higher efficiency in comparison to spark-ignition petrol engines and, therefore, delivering a considerably greater range as well as significant ecological advantages.

The German automobile industry has reduced the average fuel consumption of cars manufactured by them and sold in the domestic market since 1978 by more than 40 percent. This development has been contributed to by the voluntary and always successfully concluded commitments to the reduction of fuel consumption. Despite an increase in the distances driven, the fuel consumption in Germany has continued to fall. This has been achieved not least because of the steadily increasing proportion of diesels in new vehicle registrations. The reduction of the proportion of diesel vehicles in 2009 is here less to do with the abandonment of a trend but is due much more to a one-time effect of the car scrapping bonus, which resulted in a temporary prevalence of petrol engine vehicles among new cars.

0

20

40

60

80

100

Petrol proportion Diesel proportion

200920082007200620052004200320022001200019991998

New car registrations in Germany – proportions of petrol and diesel

Source: VDA

in percent

A variety of measures are reducing tractor-trailer fuel consumption long-term.

Exhaust emissions have been reduced by up to 98 percent since the beginning of the 1990s

107

Clean diesel offensive in the U.S.The diesel’s success story in Europe can now continue in the U.S. While the diesel image frequently had negative associations in the past, customers currently interested in advanced clean diesels can appreciate their outstand-ing characteristics: maximum efficiency with the highest possible cleanliness, combined with tremendous performance. Strong torque development, even at low rpm, leads to a relaxed and comfortable driving experience with a long range. If a market penetration similar to Europe’s could be achieved in the U.S., it would be able to save more than 800 million barrels of oil a year.

For this reason, German manufacturers have introduced clean diesels in a total of 11 models in the U.S. market. From the very beginning, these new diesel models have achieved a respectable market share. For example, diesels make up 40 percent of all newly registered Jettas. The experience since then shows that the rational criteria of “cost of ownership” (CoO) and range are in the fore-ground when the decision to purchase a clean diesel is made. New-car buyers surveys (NVES) demonstrate this. Based on their findings, buyers of clean diesel drives have been interested in a vehicle with advantages that can be demonstrat-ed rationally (mileage, fuel economy, CoO).

Long-term, a steadily rising demand in the U.S. is possible, according to the German auto industry. This assumes neutral parameters in terms of exploiting excellent cost of ownership and CO2 emissions levels afforded by clean diesel engines. These may result in comparable taxes for the various fuels, and recog-nition of clean diesels in government subsidies. Clean diesel would then present a convincing alternative to existing powertrain technologies, in relation to the usage profile of many U.S. customers. Combined with the significant price advantage over hybrids, it would offer a better opportunity for market penetration.

The diesel will become an increasingly common sight on the American street scene. A diesel share of 13 percent in the overall U.S. market is realistic long-term. The German auto industry has collected more information and its core demands in its clean diesel brochure.


AdBlue® Cars – the standard for the cleanest commercial vehicles Heavy-duty commercial vehicles using AdBlue® have been on the road since 2005. The method of exhaust gas after-treatment that AdBlue® employs is called SCR (Selective Catalytic Reduction). With SCR, vehicles meet the European pollutant guideline Euro IV as well as the especially demanding Euro V standard that went into effect in 2008/2009. In the SCR process, nitrogen oxide (NOX) emissions, which result from combustion in the engine, are treated in a catalytic converter downstream from the engine. The reducing agent AdBlue® is needed for this. AdBlue® is an extremely pure, synthetically manufactured solution containing 32.5 percent urea. AdBlue® is not a toxic substance and is classified as water hazard class 1, the lowest level of risk. The high level of purity and quality is guaranteed by the DIN 70070 standard (or the ISO 22241 international standard). AdBlue® is injected into the exhaust gas flow, where it is first hydrolyzed and then the conversion of nitrogen oxide into water vapor and elementary nitrogen takes place in the catalytic converter.

With SCR technology, AdBlue® is carried in a separate tank. The fueling connector for commercial vehicles is specified in a special international standard (ISO 22241-4). The standard contains geometric and physical requirements for the nozzle at the filling station and the filler neck of the AdBlue® tank on the vehicle side. They make it impossible for AdBlue® to be inadvertently fed into the vehicle’s fuel tank or for diesel fuel to enter the AdBlue® reservoir.

In the future, vehicle manufacturers will increasingly offer this technology for cars, as an option to help meet strict BIN 5 limits in the U.S., currently the law in California and four other U.S. states, and the strict Euro VI standard in effect for diesels in Europe starting in 2014.

The fueling connector for cars must meet significantly higher requirements than the connector for commercial vehicles. For this reason, an international group of experts under German central coordination is preparing an independent standard (ISO 22241-5). In the process, the following requirements are being taken into consideration:

• To start with, 2-liter and 5-liter canisters are desired for refilling with small containers.

• For refueling with a bottle, the “Kruse bottle” with a screw cap is the state of the art.

• The “Kruse bottle” is also well-known in key foreign markets.

• AdBlue® refueling for cars is expected to take place as exterior refueling in the future, for example, with an arrangement in close proximity to the filler neck for the diesel tank.

• Relatively small tanks (less than 10 liters) will be introduced with the implementation of exterior filling.

• Fueling must be simple and clean for car customers to handle.

• Odor-free, no-drip filling must be achieved.

• Fueling must take place at at a rate allowing fueling with AdBlue® to take no longer than diesel fueling (around 10 liters/minute).

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The bus – a clear winner in terms of environmental protection and safetyBuses perform extremely well in terms of environmental performance: traveling by bus means saving fuel. In the last ten years alone, the fuel consumption of buses has fallen by almost 15 percent – although at the same time they have become heavier due to new safety features. And this success story is not only due to the latest diesel technology. In addition, an increasing number of regular service buses conform to the so-called EEV standard that goes well beyond the Euro V exhaust gas purifica-tion levels. The environmental advantages will continue to increase when very soon more hybrid and hydrogen vehicles come into service. The practical application of the completely emission-free hydrogen drive system is currently being demonstrated by German bus manufacturers in worldwide field tests running over several years.

From an ecological perspective, the travel coach is the number one choice when it comes to road transport. The German Federal Environmental Agency has calculated that buses with an average passenger load of 60 percent have fuel consumption of 1.4 liters of diesel per person over 100 kilometers or 32 g of CO2 per person and kilo-meter driven. The fuel consumption at full load is as low as 0.9 liters per person over 100 kilometers. Long-distance trains produce 52 g of CO2 per person and kilometer traveled and – to provide a better comparison – fuel consumption of 2.7 liters of diesel per person over 100 kilometers.

Even in local public transport – and here particularly in large cities and busy metro-politan areas – the bus is making a huge contribution to climate protection. Modern local transport buses, with an average load of 35 percent or 28 persons, use just 1.2 liters of diesel per person over 100 kilometers – at full load this figure drops to only 0.5 liters. Therefore, regular service buses contribute sustainably to the reduction of local and global emissions.

Buses have the lowest energy consumption and pollutant emissions

The bus is the most ecological mode of transport


A considerable proportion of the particulate matter in inner cities has natural causes like pollen, wind blown soil erosion or the remote drift of sea salt. Particulate matter created by people can be traced back mainly to industrial plants, power plants or agriculture. Measurements in Berlin have shown that local road traffic does not even contribute a half of all of the particulate matter. The largest proportion attributable to traffic is due to resuspension of particulate matter and tire wear. According to Germany’s Federal Environmental Agency, traffic contributes up to 27 percent of par-ticulate matter. Of this amount, buses are only responsible for a mere three percent. In total, this means that the proportion contributed by buses is less than one percent of all particulate matter. The bus is, therefore, neither a significant cause of the partic-ulate matter problem nor would any optimization in this area make any noticeable reduction to the particulate matter in the air.

The environmentally friendly travel coach is, however, severely disadvantaged by the new environmental zones. Only a few cities have up to now removed the travel coach from their regulations. In terms of the unbeatably low particulate and CO2 emission values achieved by travel coaches, any unspecific access limitations or driving bans on diesel-powered buses are disproportionate and unsuitable for reducing particulate matter. In fact, it’s also counterproductive: the driving bans for buses ultimately damage the municipality’s ability to function properly without making any decisive reduc-tion to particulate matter.

Travel coaches that comply with the emission standards Euro III (according to the labeling directive with a yellow sticker), which are only a few years old, should be exempt from any form of ban within urban environmental zones. The German federal government also believes that there is a need for some form of revision and has formulated a corresponding postulate in the government coalition agreement. The VDA supports this goal. At the very least, uniform federal regulations should be created and bus companies should be offered longer transitional periods to purchase new vehicles.

Statistically speaking, the number of passengers killed in bus accidents is 0.2 per billion kilometers driven. At the same time – in relation to the number of kilometers driven – the accident frequency of buses in Germany has almost halved since 1970. Since 2000 alone, the number of deaths from accidents involving buses has declined by over a third in Germany. Therefore, the bus remains unquestionably the safest mode of road transport.

Modern buses are equipped with a comprehensive safety package including tried-and-tested technology that is being continuously developed. Series-production travel coaches stand out with their electronic safety components, such as anti-lock brakes (ABS), anti skid control (ASR) and electronic dynamic handling control. German manufacturers represented within the VDA have been offering dynamic handling control (FDR, ESP) with all new bus types since as early as 2004. Currently their focus is increasingly on the prevention of accidents (active safety), with systems like lane guards and lane departure assistants, distance-regulating cruise control or night vision devices, which will gradually find their way into vehicles and also positively influence the safety of buses in the future. These systems improve handling, among other things, or support the driver by performing monitoring tasks so that they can devote their full attention to what’s happening on the road.

Bus safety also has a human aspect: the bus driver. The law already sets very high demands on the occupation of bus drivers. Anybody who wants to drive a bus requires a special license to carry passengers and his or her medical condition is checked. Bus drivers have to undergo a health check and an eye test every five years to renew their driving license. And from the age of 50, bus drivers are subjected to a detailed examination in terms of their orientation skills, concentration, resilience and reaction times. They are also subject to a complete alcohol ban. In addition, bus drivers participate regularly in training programs, safety training, driver training and further practical seminars. This excellent safety record is supplemented by intensive state control measures for buses, companies and drivers in order to guarantee that the bus remains the safest mode of road transport in the future.

Buses disperse hardly any dust

All clear for travel coaches in environmental zones …

Safety is the priority for buses

Bus drivers – responsibility for safety

111

The Electric Car: Option for Sustainable Individual Mobility

The E-car as a long-term option and a key to sustainable mobilityEven in future, road traffic will remain far and away the most important mode of trans-port. What is needed is to ensure these increasing mobility needs are environmentally friendly. The German automotive industry’s long-term goal remains the zero emis-sions vehicle, while at the same time replacing fossil fuels. In this context, the option of a battery electric vehicle (BEV) and of a fuel cell electric vehicle (FCEV), using hydrogen as an energy source, have gained in popularity. The use of hydrogen in the internal combustion engine is also being tested in parallel.

The battery electric vehicle was invented more than a hundred years ago now. How-ever, over the intervening decades the technical prospects for storing energy had not significantly changed, with the result that the widespread introduction of this vehicle concept had failed to materialize. But the question of electrotraction is raising its head again, especially as a result of progress being made with the lithium-ion battery. To some extent, the impression has taken root in the public mind that a switch to the electric car is imminent. And electromobility will come, but in the form of evolution, not revolution. That is why the internal combustion engine will retain its position for some time yet.

The emergence of the electric car is an evolution, not a revolution


A number of prerequisites are still required to implement electromobility:

• the availability of efficient energy storage systems

• development of a standardized vehicle charging infrastructure

• provision of renewable energy

• customer acceptance of electric vehicles

• a regime for stimulating the market for electric vehicles allied with a reliable political framework

Customer acceptance is critical for electromobility. The area of application is defined by the achievable range. Fundamentally that means that use for short-haul operations and in major conurbations make sense. The use of vehicles with a small combusti-on engine to extend their range (extended-range electric vehicle, E-REV) or plug-in hybrids make sense for other applications.

The battery electric vehicle has one particular advantage: when in operation it is a “zero emissions vehicle.” This effect is immediately noticeable, especially in towns and cities. There will also be a drastic reduction in road traffic noise. To that extent, the electrically powered vehicle enhances the quality of urban life.

The electricity generation that electromobility requires should be renewable. Given the comparatively small amount of electricity that is required for electric vehicles, this is eminently feasible, thus closing the cycle that leads, via the environmentally friendly generation of electricity, to it being consumed in the vehicle. Whereas power supply is a matter for the energy industry, optimizing consumption is the responsibility of the automotive industry. This retains the tried-and-tested division of labor between energy provision and vehicle manufacturing.

Customer acceptance and vehicle running costs are closely intertwined. From a technical driving perspective, motorists will be delighted by electric propulsion’s rapid acceleration. However, as things currently stand, a battery electric vehicle will be considerably more expensive than a conventional vehicle primarily because of the expensive battery technology. As the customer must be able to recover the additional cost over a reasonable period, the introduction of electrotraction should be accompa-nied by tax incentives, direct subsidies and user benefits. Last but not least, customer acceptance will be decided at the electricity charging station. This is to do with cost, but also the way in which battery charging is handled. The associated standardization activities have already begun; industry is playing an active role here. But there are still many unresolved issues, such as, for example, the financing of public charging stations which are vital, especially for those with no garage of their own who have to park on the street. The motorist must be guaranteed a free choice of energy provider and he should not have to pay any special surcharges or levies for battery electric vehicles compared with domestic electricity. Viable competition in the energy sector will support this requirement.

The electric car can improve the quality of urban life

The question of the financing of public charging stations must be resolved

113

Semi-hybrids, full hybrids, plug-in hybrids and electric cars: Current state of research and market readiness The hybrid drive can be characterized as a bridge to electromobility. As a rule, it combines electric drive elements with a spark-ignition petrol engine or a diesel engine. The goal is to use the high efficiency of the electric motor while at the same time operating the combustion engine as much as possible in its optimal range and, in this way, achieving very low fuel consumption.

The advantages of the hybrid drive systems are dependent on the vehicle use profile. Although the savings potential by cross-country journeys is relatively low, it is particu-larly in stop-and-go traffic that the hybrids are able to fully exploit their advantages. The preferred utilization area is, therefore, in urban traffic. Urban vehicles like taxis or regular-service buses, which very often only drive very short distances from one stop to the next, are ideal for the use of hybrid drive systems. Through this continued short-distance operation, the vehicles are able to achieve a high regeneration of braking energy (recuperation level). Because the proportion of time spent at lower speeds is high, it is possible for the acceleration phases, which are unfavorable for the combus-tion engine, to be taken over or supported by the electric motor.

In this way, a start-stop automatic already achieves substantial reductions in fuel consumption. The particularly attractive thing here is that the additional investment for simple start-stop systems is relatively low and therefore comparatively short pay-off periods are possible.

Hybrid vehicles can fully exploit their advantages particularly in urban traffic

Saving potential for hybrid motors

Source: VDA

City

Cars

Potential for reduction in fuel consumption/emissions

Long-haul truck Touring bus

--

--

City bus Delivery truck

Van

Country Freeway

Recuperation

Engine start-stop

Benefits of hybrid drive


The increasing establishment of environmental zones across Europe calls for, in particular, the use of extremely low-emission supply and delivery vehicles. Depending on the size and the version of the electrical drive system, it is even possible with the so-called plug-in hybrids to achieve completely emission-free driving. Recharging the battery at an electrical socket also enables additional cost and environmental advan-tages in electric driving operation when the electricity required has been produced by regenerative methods.

Ensuring that the electrical components are offered at competitive prices is a crucial factor in the implementation of hybrid technology. In this area, hybrid technology is competing with the extremely fuel-efficient and cost-effective diesel drive systems. Hybrid drive systems will, therefore, in future be mainly utilized for inner city traffic where their advantages can be fully exploited. On cross-country journeys the efficiency of the clean diesel engine remains unbeatable.

The development of hybrids has been well and truly up and running for several years now. Different hybrid vehicles are now available on the market. The German auto-mobile industry is also working intensely on competitive hybrid concepts and has managed to bring the world’s first hybrid that uses a highly modern lithium-ion battery to series production. This success is another example of the successful pooling of know-how between manufacturers and suppliers in this still very young technological field.

The hybrid drive system encroaches deep into the structure of the vehicle from the engine and the transmission, right through to the electric drive. The key element is the battery. Their design construction is differentiated between parallel, serial and spirit hybrids. Common to all is the basic principle of a combination of two energy store units — the battery and the fuel tank. Two different types of drive system are combined, the combustion engine – spark-ignition (petrol) or diesel — and one or more electric motors.

First vehicle with a highly modern lithium-ion battery has been produced in Germany

Various types and functions of hybrids

Source: DaimlerChrysler

Series hybridThe output of the internal combustion engine is completely transformed into electrical energy in a generator. There is no direct connection.

+ -

⚡⚡

Parallel hybridBoth the internal combustion engine and the electric motor are connected to the drive train. They can propel the car either jointly or singly.

+ -⚡

Split hybridThe output produced by the internal combustion engine can be transformed into electrical energy in the generator or transmitted directly to the drive shaft. This involves a combination of the parallel and series hybrid principles.

+ -

⚡⚡

Electrical motor/generator

⚡ Generator⚡+ - High-performance battery

115

Even with mild hybrids it is possible to increase efficiency by ten percent or more

In addition, there are classifications from mild hybrid to stronghybrid, as well as plug-in hybrid. These classifications refer to the level of electrification. However, even taking into account the additional construction expenditure, the hybrid drive systems are not significantly more expensive than conventional drive systems using a combus-tion engine. The electrical energy storage adds additional weight and therefore uses up some of the advantages offered by the hybrid systems. In this respect, it must always be assessed which drive system will be accepted by customers in relation to the use profile and the vehicle size or vehicle class.

The electrical components in mild hybrids are comparatively small and purely electric driving is not possible. The additional costs for mild hybrids are in this way limited and it is the start-stop function alone, as well as the — although limited — possibility for recuperation, that enables the efficiency of the powertrain to increase by more than 10 percent in comparison to vehicles using just combustion engines.

The strong hybrid allows for periods of purely electrical driving and a high level of freedom for optimizing the combustion engine strategy. However, this requires large electrical components including a high-performance battery. This does mean that the savings potential of the strong hybrids is once again clearly above those of the mild hybrids. However, there are also considerably higher additional costs that need to be accepted.

The last classification is the plug-in hybrid. It embodies most clearly the bridge to an electric vehicle. It provides a definable “electric range” and correspondingly adapted purely electric driving. The plug-in hybrid can be recharged by attaching the external power connection to an electrical socket. In this way, it can be operated as a hybrid and for limited distances also as an electric vehicle. The large battery with a high capacity required by plug-in hybrids means that projected costs need to be set corre-spondingly high.

Source: FEV/VDA

CO

2 em

issi

ons

(g/k

m)

Otto MPI

Belt-driven hybrid (start-stop, recuperation)

ISG hybrid (start-stop, recuperation)

Mild hybrid (+ power assist)

Full Hybrid (+ power split, AER** > 1 mi)In future*

Diesel

In future

Additional production costs (€)

Advantages only with low hybridization

* Assumption: use of particle filter, reducing consumption by downsizing, friction reduction ** AER: All electric range

Comparison of conventional drive and hybrid


Standardization as the key to market success Cutting greenhouse gas emissions is a prominent political goal topping many countries’ agendas. Electric propulsion is credited with considerable potential for achieving these goals. The federal government has passed an ambitious program for promoting and supporting electromobility. What it aims to achieve is for one million electrically powered vehicles to be on German roads by 2020.

That is why the automotive industry is working flat out on alternative propulsion systems in parallel with progress in reducing CO2 from internal combustion engines. Manufacturers have developed the concept of a fuel-cell-driven vehicle to the point that there can no longer be any doubt about its practical viability. The first manufac-turers have announced the sale of vehicle models of this type before this decade is out.

This form of propulsion is therefore one option in the vehicle manufacturers’ portfolio, even if the lithium-ion battery is currently attracting particular attention as the alterna-tive to the conventional drive system. In future, lithium-ion batteries will be used both in battery electric vehicles (BEV) as well as in hybrid electric vehicles (HEV). The latter will increasingly be fitted with a charging facility (plug-in hybrid electric vehicles, – P-HEV) to ensure purely electric propulsion, for example for the journey to and from one’s place of work.

Despite questions concerning the durability and potential risk posed by batteries of this type, manufacturers and suppliers are pushing ahead vigorously with develop-ment and testing. This is the only way of successfully cutting costs while at the same time improving the lithium-ion batteries’ durability and reliability. Comprehensive fleet tests by German manufacturers are already underway in many regions throughout Germany and the world.

The federal government’s ambitious program for Germany 2020

Comprehensive fleet tests involving electric cars are already on the way

117

Common, international standards are critical to the success of electric cars

Germany and France have set up a joint cross-border test project in the border region between the two countries. The idea is to demonstrate not only that BEVs are engaged in cross-border travel but that their batteries can be charged without problem in the respective neighboring country.

To this end, at the end of 2009, a working group comprising German and French experts, with VDA participation, agreed on the most important focus areas for stan-dardizing the interface between the vehicle and infrastructure, thereby assuming a pioneering role in Europe. The market success of electromobility depends on stan-dardization to a not inconsiderable degree. Standards are being developed first and foremost for:

• defining interfaces for parts and components (e.g., for charging electric vehicles)

• ensuring the safe operation of vehicles with an electric drive component and powerful batteries

• verifying that components and systems such as batteries and power electronics comply with quality standards and requirements

• for ensuring fitness for purpose (e.g., measuring consumption, emissions and power output)

• ensuring mutual comparability

Standards help to cut costs and guarantee safety and reliability when dealing with electric vehicles and their components. They are always drawn up with the participa-tion of all the parties involved.

Besides vehicle manufacturers and their suppliers, representatives of the energy sector must also be incorporated into the standardization process for electrically powered vehicles, especially for the charging interface at the power grid.

Source: VDA

Participants in the standardization of the charging interface

Policy-makers

Customer

Automotive industry

Network operators/charging stations

Electrical power sector

+ -


The issue with standardization is not just to reach pan-European or even global agree-ment on a uniform plug and cable system for charging electrical vehicles: the chosen solution must also work reliably as well as being safe and vandal-proof. Furthermore, the data exchange for figuring costs and safeguarding the charging process must be assured with this connection. Ultimately, there must be an economically justifiable solution in the end. And the end result when it’s all over has to be an economic solution.

In addition to defining the interfaces, the priority is to ensure safe operation of the vehicle: all of the components and systems used must work reliably in all conceivable circumstances and the consumer must be able to compare performance characteris-tics and parameters.

The automotive technology standards committeeSupported by the VDA, the automotive technology standards committee supervises numerous national and international working groups drawing up standards for the introduction of electromobility. Work on ISO 6469-3 “Electrical road vehicles – safety specification – protecting people from electric shock” will conclude shortly. This standard now includes all types of vehicle with an electric drive system compo-nent and therefore also includes fuel cell vehicles. The first two parts of this standard were published back in 2009.

ISO project 12405 “Test specification for lithium-ion battery systems” defines standard test procedures which can be used to help check the suitability of battery systems for use as a traction battery. Following publication in 2009 of the draft of part 1 for high-performance batteries, part 2 for high-energy batteries will follow in 2010.

A group of experts from the automotive industry, power supply companies and network operators is working on a communication solution between the charging station and the electric vehicle. The future ISO 15118 “Road vehicles – communication protocol between vehicle and mains supply” defines the use cases for the charging process and the associated communication protocols.

The automotive technology standards committee is also organizing the collaboration of vehicle manufacturer experts in standardizing the plug-in connection for charging electric vehicles.

Charging stations must be reliable and lend themselves to direct billing

VDA supports the drawing up of ISO standards on electrical vehicle safety

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New concepts for climate control in electric cars The current trend toward battery-based electric vehicles requires new solutions for interior heating and air-conditioning. The total waste heat available in elec-tric vehicles is incredibly small compared to an internal combustion engine. As a result, additional devices with substantial energy needs are necessary to maintain a comfortable temperature and assure road safety. This energy is, to a high degree, related to the range of the vehicle. Furthermore, the climate control unit in electric vehicles takes over the additional role of safeguarding the permissible operation temperature of the traction battery under all temperature conditions.

In FAT, the research association for automotive technology, German auto manu-facturers and their suppliers are developing new solutions in this area. The goal is the development of heating/air-conditioning concepts and an integrated thermal management system. It is based on the legal framework. Available heat sources in an electric vehicle are being analyzed and characterized with regard to temperature level and output. In the process, various load strategies are being considered for the batteries. Additionally, supporting measures such as thermal pre-conditioning or decentralized, person-related climate control concepts are being evaluated.

The results are simulation models with whose help statements can be made about the ramifications of various heating and climate control concepts for the range of the vehicle. Measures will be derived to boost efficiency and reduce power output for occupant comfort, windshield defrosting and anti-fogging, and will be subse-quently evaluated.

Furthermore, there will be an assessment of the effects of various glass surfaces, the body, and thermal masses in the vehicle interior as well as the development of concepts for minimal cooling and heating.

FAT’s approach, unique so far, foresees the creation of a standard for the German auto industry as a common starting point for product development. At the same time, the foundation for legal requirements on heating, cooling and de-icing is being established. A number of institutes of the Technical University of Brunswick are participating in the work as project partners.


Biofuels are an increasingly important element alongside the continuing efficiency improvements in further reducing CO2 emissions from road traffic. This has led the EU commission to include a few grams of CO2 for biofuels within the calculations for their ambitious undertaking to reduce the emissions from new vehicles in Europe to an average 120 g CO2/km. The goal is to reduce emissions in the most cost-effective way possible so that biofuels are incorporated as a supporting element in the strategy reducing CO2. The German federal government has included this goal in the biofuel quota law that envisages a gradual increase in the proportion of biofuels used.

Biofuels provide an effective opportunity to reduce CO2 emissions because they work immediately and directly from new vehicles right through to vintage vehicles. In con-trast, vehicle engineering measures only have an effect on new vehicles and require a certain period of time until they penetrate through into the general vehicle pool.

Up until the year 2000, oil was almost exclusively used for the provision of fuel. From less than 2 percent in 2004, the market share of biofuels had increased to 7.3 percent by 2007. In the following year, the provision of biofuels did, however, decrease because the cultivation area for rapeseed declined. The long-term achievable proportion of renewable biofuels in fuel consumption stands at 17 percent.

It is vital for the automobile industry that all biofuels are compatible with existing vehicle technology, comply with the recognized sustainability standards and also satisfy the standards of the International Labour Organization (ILO), a specialist agency of the United Nations.

Biofuels can not only replace the liquid fossil fuels diesel and petrol, but also gaseous fuels. Bio natural gas provides an ecologically sound substitute for fossil natural gas. Bio natural gas is a processed biogas of natural gas quality that conforms to the quali-ty standard DIN 51624. This means it can be fed into the supply network anywhere where existing natural gas is currently used.

The Agency for Renewable Raw Materials (FNR) confirms that bio natural gas has a CO2 savings potential of 80 percent. This makes bio natural gas one of the most ecological biofuels. These positive characteristics and the opportunities offered by natural gas have led the German federal government to amend the biofuel quota law to include bio natural gas in the calculations of the biofuel quotas.

The liquid biofuels of the first generation which are today extensively available on the market – biodiesel and bioethanol – saw sales volumes in 2009 reaching a total of 3.8 billion liters for biodiesel and 570 million liters of bioethanol. Overall, these sales have seen Germany achieve a biofuel quota of almost 7 percent.

To create admixtures that deliver a substantial contribution to the reduction of CO2 emissions, it requires biofuels that can be added to conventional fuels in large amounts. For biofuels of the first generation, or FAME (fatty acid methyl ester) it can, however, lead to technical problems when high doses are added to conventional fuels. Therefore, the use of hydrogenated oils (hydrotreated vegetable oil or HVO) is a promising potential solution.

Compared with earlier first-generation biodiesel admixtures, hydro-treated vegetable oils offer the crucial advantage that the existing vehicle stock can also be quickly converted to fuels with a significantly higher proportion of renewable fuel, thanks to its compatibility with all engine components. When a diesel fuel produced using hydro-treated vegetable oil is burnt it produces considerably less emissions than with a conventional diesel. This results in, for example, a reduction in nitrogen emissions of up to 15 percent. The fuel also contains significantly more energy than conventional biodiesel and possesses significantly higher CO2 avoidance potential – provided that sufficient certified vegetable oil from sustainable sources is available.

Fuels: The Role of Renewable Sources of Energy

Biofuels contribute to the reduction of CO2 emissions

Bio natural gas as an ecologically sound replacement for conventional natural gas

The discussion about food or fuel production can be brought to an end with the new biofuels

121

The second generation of biofuels reduce CO2 emissions by up to 90 percent com-pared to the 50 percent achieved by today’s biofuels. In particular, biofuels biomass-to-liquid (BTL) and lignocellulosic ethanol exhibit very good CO2 and fuel attributes and will play a key role in meeting long-term biofuel targets. The new biofuels can also be produced from biological residual materials, such as waste wood or straw, and in this way finally draw a line under the “fuels versus foodstuffs” debate.

This is why the German automotive industry is actively committed to developing and implementing these technologies. This becomes apparent, for example, in the joint venture Choren Biomass GmbH. The world’s first commercial plant for the produc-tion of a synthetic biofuel was inaugurated on the April 17, 2008, with the German Chancellor in attendance. This plant’s annual capacity is 15 million liters of BTL, the annual requirement of approximately 15,000 passenger cars. This is an important step towards the large-scale industrial production of BTL.

According to a BDI study, despite their higher price per liter, second-generation bio-fuels enjoy a very high and cost-effective potential, even when compared with present- day biofuels. It can be seen that biofuels are frequently the more advantageous CO2 avoidance technology and incur lower CO2 avoidance costs than, for example, expen-sive vehicle technology measures such as vehicle hybridization.

The critical lever, when it comes to propagating high-quality second-generation biofu-els and ensuring their rapid availability in large quantities, is collaboration between industry and politics. By creating the right framework, politics can provide the neces-sary impetus for fast-tracking the research, development and use of these promising fuels. In order to give this new technology the necessary planning reliability, the German automotive industry demands the extension of the tax exemption, for these biofuels until 2020.

To achieve the specified fuel quotas starting in 2009 requires an increase in the incorporation rate in conventional fuel, currently limited to 5 percent by volume. With the federal government leading the way and within the framework of the “biofuel roadmap,” the automotive industry, mineral oil industry and biofuel associations had devised a solution that was both sensible and conducive to the aim of increasing the use of biofuels that took account of the technical requirements, such as an upper limit of 7 percent by volume of biodiesel.

The German automotive industry supports a substantial increase in biofuel quantities in diesel and petrol fuel. For example, since January 2009, it has been possible to add up to 7 percent biodiesel under the EN14214 standard. Unfortunately, a further increase in the proportion of the biofuel in diesel to at least 10 percent using so-called hydrotreated vegetable oils has not so far been implemented. The German automotive industry expects these decisions to be put into effect quickly.

Politics can provide the impetus for research and development


Hydrogen, Fuel Cells, Natural Gas and Biofuels: Important Components of the Fuel Strategy

The current German automobile industry’s fuel strategy plans for the replacement of fossil fuels over the long term. This substitution is happening continuously. Alternative fuels and drive systems are being strengthened, developed and expanded step by step.

An integral part of the fuel strategy is the use of vehicles powered by natural gas. The supply of natural gas is secure, which is an important precondition because most of the natural gas used in Germany is provided from within Europe. According to current estimates the reserves will last well into the next century. Vehicles powered by natural gas are also economical and more environmentally friendly. They emit up to 25 percent less CO2 per kilometer than a standard petrol engine.

In the search for post fossil fuel energy sources, the automobile industry has now managed to develop hydrogen as a vehicle power source right up to series produc-tion. Hydrogen reacts with oxygen to form water, producing hardly any pollutants, and in this way offers clear advantages over today’s fuels. Hydrogen can also be transpor-ted over large distances, e.g., in pipelines, or be produced directly on-site at the filling station.

Pure hydrogen actually occurs very seldom in nature. However, there is already around 500 billion m³ of hydrogen produced currently in the world per year (in Germany 20 billion m³) for other purposes or that occurs as a by-product in the chemicals industry. But hydrogen can only be an alternative to standard energy sources in the automobile industry if it is produced from renewable energy sources.

The direct combustion of hydrogen has the advantage that tried-and-tested combus-tion engines can continue to be used, ensuring that the transition to hydrogen technology is made easier. Vehicles are incorporated with an additional pressure tank or an insulated tank for liquid hydrogen. In addition, this concept provides the opportunity to bring bi-fueled vehicles onto the streets that can be powered using both hydrogen and also other standard fuels. The greatest advantage of these types of vehicles lies in the fact that they are still able to operate during the transition period independent of a comprehensive network of hydrogen filling stations, and with both tanks they can achieve ranges similar to those managed by vehicles powered by existing fuel sources.

A promising alternative to the combustion engine is provided by the use of fuel cells. Fuel cells work using a process involving so-called “cold burning” to chemically convert hydrogen and oxygen into electrical energy at a very high rate of efficien-cy. This energy can then not only be used for the vehicle’s drive system via elec-tric motors but also to operate numerous ancillary units. This form of drive system produces no harmful emissions. In contrast to the thermal conversion of the hydrogen in a combustion engine, the fuel cell is able to achieve a significantly higher level of efficiency than standard combustion engines. In terms of electromobility, fuel cells also offer an interesting drive system option that can be used in combination with the electric vehicle.

Natural gas is provided from within Europe – also in the upcoming century

Hydrogen propulsion can be combined with conventional combustion engines

Electrical drive via fuel cells means zero emissions

123

The use of hydrogen as a fuel source is still in the test phase both in terms of vehicles and filling stations. At present there are first potential solutions being put forward for the creation of a universal infrastructure. These will be shaped significantly by future political and economic conditions.

Biofuels, such as ethanol, BtL (biomass to liquid), or bio natural gas, are, in the short rterm, the only current compatible option for using renewable energy in the trans-port sector on a significant scale for both the present day and for the anticipated prevaliing mobility solutions in 2020. To this end, we are particularly focusing on the use of biofuels in the form of a compatible admixture for current fossil fuels. This has resulted in an admixture of biodiesel with conventional diesel being possible today up to a level of 7 percent. In addition, a majority of existing vehicles, as well as all new vehicles, are suitable for using a petrol fuel mixture containing 10 percent ethanol (E10) according to DIN 51626-1. Other biofuels, such as hydrotreated vegetable oil, are already suitable today as an additive for diesel up to a level of over 20 percent. Germany is already the country with highest use of biodiesel in Europe.

An important factor in the discussion about the suitability of vehicles for using new fuel sources is the fact that vehicles are in general only developed for one firmly specified and uniformly standardized fuel. This ensures that the precise fuel charac-teristics can be taken account of in the vehicle’s development and guarantees its suitability for the fuel source. A retrospective suitability check of existing vehicles for these new fuel sources would mean that all of the existing vehicles currently in opera-tion need to be tested. Following on from the emerging debate about the renewed amendments to the E10 standard, it can not be guaranteed from today’s perspective that such a retrospective check is at all technically possible.

An admixture of more than 20 percent with Diesel is possible with biofuels


An admixture of biofuels with a level of substitution of approx. 20 percent, which is compatible with existing vehicles in operation, is the most efficient way to introduce biofuels into the vehicle stock. A special filling station infrastructure is not required and the necessary quality assurance is guaranteed. In addition, the question of neat alternative fuels is gaining in importance.

Alongside the further development and optimization of engines and vehicle tech-nology, it is also necessary for the biofuels themselves to be optimized. To achieve this, the emphasis is being placed on the fulfillment of EU sustainability standards together with the compatibility requirements of biofuels in relation to the prevailing fuel infrastructure and vehicle technology. The technology-neutral political promotion of biofuels, free of levels and quotas and based on the achievement of higher-level quality criteria, will open up the innovative potential of the market and would encour-age competition between the different types of biofuel. The following quality criteria of biofuels would define the goal:

• CO2 reduction: the promotion of biofuels should be orientated in line with CO2

reduction

• Fuel quality: compatibility with existing or anticipated prevailing fuel infrastructure, vehicle technology and emission requirements

• Base of raw materials: the promotion of biofuels should be orientated in line with the proportion of non-food raw materials

A particularly attractive biofuel technology can be seen in terms of the so-called “biofuels of the second generation.” These new biofuels enable a reduction in CO2 of 70 percent and more, are compatible with current and future prevailing vehicle technology as well as the fuel infrastructure and, at the same time, fulfill the strictest EU sustainability criteria. Additionally, they are made of non-food raw materials und do therefore not compete with the food production. Furthermore, the demand can be met with European resources.

Despite the clear advantages of these second-generation biofuels, it is not the inten-tion for them to oust conventional biofuels which will continue to carry the main burden of fuel substitution up to the year 2020. Instead, the conditions should be created to encourage further development of conventional biofuels in the direction of those from the second generation. New investment in biofuels requires long-term investment security of between 10 and 20 years.

Currently, the greatest attention, also from politics, is paid to the research and market-ting of the vehicle with battery drive, Electromobility is at the beginning of the market implementation phase. Thereby, energy has to be produced in a renewable way, in order to enable a sustainable and future directed mobility.

Biofuels of the second generation no longer compete with food

125

Environmental Protection in Engine Development and Vehicle Production

In recent decades the automotive industry has scored considerable successes in con-trolling air pollution. Despite the continuing increase in journey volumes, not only has it been possible to reduce CO2 emissions, but since the late 80s the so-called “limited emissions” as well, thanks to the rigorous use of technology and improved fuels. These successes are owed in particular to the introduction of the catalytic converter, the reduction of refueling emissions, the particle filter on the diesel passenger car, SCR systems on trucks and improvements in engine technology. Modern trucks pollu-te the environment only marginally, if at all. The TREMOD computer model developed by the Ifeu Institute for Energy and Environmental Research Heidelberg on behalf of both the German Federal Environment Agency and the VDA can be used to quantify the falling trend in pollution emissions.

The greatest successes in cutting emissions were achieved in the second half of the past decade. But road traffic emissions will fall yet further in the years ahead. The models calculate a reduction in road traffic emissions in 2020 compared with 1990

• of 94 percent for volatile hydrocarbons (HC)

• 86 percent for particles (PM)

• 90 percent for carbon monoxide (CO)

• 73 percent for nitrogen oxides (NOX).

By 2010 alone, a reduction of around 63 percent was achieved for NOX compared with 1990 and as much as 67 percent for particles. The automotive industry has thus successfully mastered the tasks it was set. The results could however be improved yet further if the vehicle stock were to be rejuvenated. Around 40 percent of the passen-ger vehicles in the stock comply only with Euro 2 emission values or worse. If, on the other hand, all vehicles in the fleet were to comply with at least emission standard 4 values, NOX emissions would be halved with particle emissions being cut by approxi-mately nine-tenths at a stroke. Because of this outstanding performance, road traffic today accounts for a significantly smaller proportion of total nitrogen deposition, which is now mainly driven by animal husbandry.

Strong emission reduction for more than two decades

Traffic is no longer the largest nitrogen emitter


Environmental protection in productionThe German automotive industry has set standards when it comes to production-re-lated environmental protection. The consumption of resources continues to fall signifi-cantly. Since the early 90s it has been possible to reduce potable water extraction and thereby also effluent quantities by approximately two-thirds by means of water circuits and the use of additional water-saving technologies. One location has even achieved the ideal of the “effluent-free factory.”

By the same token the German automotive industry leads in air pollution control. Nowhere else are smaller quantities of solvents emitted per square meter of painted area. The paint shops set the benchmark for competitors worldwide. This German expertise and experience was incorporated in the European “integrated avoidance and reduction of environmental pollution” (IVU) process.

The reduction of landfill waste is yet another success story. Although vehicle produc-tion has risen significantly between 1990 and today, and the vehicles produced have become more complex, the volume of waste for disposal generated by vehicle manu-facturers has fallen considerably. This is mainly attributable to the outstanding recy-cling rates. More than four-fifths of waste is now fed back into the raw materials cycle. These figures do not include valuable metal waste material. If this were inclu-ded in the calculation, the recycling ratio would be close to 100 percent.

Quantity of wastewater lowered by two-thirds

127

EU combines emission regulationsThe European Commission has submitted a proposal for an industrial emissions directive. The second reading is now due. This directive aims to combine the IVU directive in force since 1996 along with six other directives, including the solvent emissions directive and the large combustion plant directive. The idea is for the experience garnered from scrutiny of the existing IVU directive to be reflected in the new directive.

The German automotive industry supports the attempt to refine and harmonize exist-ing policy. Further action is required however. For example, when redrafting the direc-tive its scope of application also needs to be revised from top to bottom. From the automotive industry’s perspective the absence of alignment here between the scope of the EU directive on environmental sustainability and the planned new directive is singularly unfortunate.

The automotive industry supports the opportunity to eliminate the differences in the level of environmental protection that exist between the different member states and thereby help to dismantle competitive distortions within the common market. The amendments supported by the European Parliament also take appropriate account of industry’s role in determining the best available technology. Divergences from this technological level should only be permitted in specific substantiated cases. More-over, the European Parliament proposed at the first reading that there must be an upper limit for such divergences. This is referred to by the term “European safety net” (ESN) and would in our view have the effect of helping to harmonize the level of environmental protection within the EU.

When introducing the directive, care should be taken to avoid imposing bureaucratic burdens, in particular for the many medium-sized companies. That is why the planned requirements in terms of the reports to be generated by operators regarding compli-ance with approval requirements are to be drafted accordingly.

The automotive industry is also convinced that the extremely onerous requirements on continuous on-site monitoring of the soil and groundwater at the factory are excessive. It would make more sense to establish what possible clean-up operations of contamination that has occurred might be required based on a risk analysis. The automotive industry is also of the view that to avoid duplicating regulations within the IVU directive, the soil and water protection arena should be excluded and that only precautions relating to plant and operations should be defined in the corresponding BAT leaflets and approvals.

New thread of over-bureaucratization for small businesses


Noise, CO2 and Exhaust Emissions: Status of the Technology, Preview of Future Developments

Exhaust emissionsSince September 2009, the Euro 5 standards have been mandatory for all new car types. Euro V has also been mandatory for all new heavy commercial vehicles since last October. With the introduction of these new emissions standards, it has been possible to continue the reduction of emissions in passenger cars and HGVs. As a result, the emissions from HGVs have been reduced by an average of 85 percent in comparison to Euro 0. In passenger cars, the average reduction in emissions has even reached 97 percent!

Emissions level Euro 6 will mean yet another major reduction in nitrogen oxide emis-sions from diesel vehicles. Overall particulate emissions will fall by 80 percent and NOX emissions by 68 percent. This will make a new level of international combustion technology and at least in part the introduction of NOX treatment systems a necessity.

Reduction of emissions in heavy commercial vehicles

020406080

100

-98 %

CO

[%

]

100

40 3317 12 12 12

020406080

100

-97 %

PM [

%]

100

3825

5 5 3

020406080

100

-95 %

HC

[%

]

47 4225 18 18

5

100

020406080

100

Euro 6Euro 5Euro 4Euro 3Euro 2Euro 1Euro 0

-97 %

NO

X [

%]

83

4935

2414

3

100

Source: VDA

Further significant improvement regarding emissions after Euro 5 for vehicles and Euro V for trucks

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

Euro 6Euro 5Euro 4Euro 3Euro 2Euro 1Euro 0

Reduction of emissions in passenger cars and light commercial vehicles

Source: VDA

-98 %

-98 %

-97 %

CO

[%

]PM

[%

]H

C +

NO

x [%

]

100

135 3 2 2 2

2312 10 5 4 3

73

3019

92 2

100

100

129

Probably the greatest challenge of Euro 6 is the drastic reduction in NOX emissions from diesel vehicles to a maximum of 80 mg/km. A special NOX emissions treatment system is required to meet this emissions level, particularly in larger vehicles. The existing technologies are the NOX storage catalytic converter and SCR technology. The NOX storage catalytic converter can store nitrogen oxides when operated in a substoichiometric mode. After the storage phase, these nitrogen oxides are degraded into harmless N2 by means of brief rich combustion phases when the engine is running.

In SCR technology, AdBlue®, an aqueous urea solution, is injected into the so-called SCR catalytic converter. The urea forms ammonia which degrades the remaining NOX. SCR technology has already become firmly established in commercial vehicles. Since the introduction of Euro IV vehicles in 2004, this technology has become increasingly widespread.

Compared to the NOX storage catalytic converter, SCR technology offers the advantage that the engine can be optimized for SCR operation. This means that the economy of an engine using SCR technology can be improved by several percent in comparison with a NOX storage catalytic converter. On the other hand, SCR tech-nology results in an AdBlue® consumption rate of at least 1 liter per 1,000 km.

The establishment of an adequate AdBlue® infrastructure, which is tailored to the needs of car customers, is important if SCR technology is going to be used in cars. In a similar way to diesel refueling points, separate AdBlue® points will be required for commercial vehicles and cars because AdBlue® filling stations for commercial vehicles are not suitable for refueling cars. The important feature for cars is to provide a drip-free, simple top-up solution. For this reason, the VDA is currently working intensively on an AdBlue® interface suitable for cars.

SCR system with urea injectionSCR-system structure

Source: Volkswagen AG

Differential pressure sensors

Temperature sensors

AdBlue® metering valve

NOX sensor

Mixer

NH3 catalytic trap

SCR catalytic converter

Diesel oxidation catalytic converter

λ-sensor

Diesel particulate filter

Reduction of nitrogen emission by storage catalytic converter and SCR technology

Exhaust gas after-treatment with DPF close to engine and NOx storage catalytic converter

Source: Volkswagen AG

Differential pressure sensor

Temperature sensors

λ-sensor

NOx storage catalytic converter

H2S catalytic converter.

Exhaust gas flap

Diesel oxidation catalytic converter

Diesel particulate filter

λ-sensor


The cost of a nitrogen oxide treatment system, whether it is the NOX storage cata-lytic converter or the SCR system, is approx. 1,000 euros on average. To ensure that the system can be launched quickly on the market, the VDA has campaigned for tax incentives for the Euro 6 diesel emissions class.

As a pioneer in low-emission drive systems, the German automobile industry — in anticipation of the Euro 6 standards — has, since last year, already brought vehicles to the market that correspond to the future Euro 6 standards. And not only in spark- ignition petrol engines but also in diesel engines (see also the chapter clean diesel). These vehicles feature the latest emission handling systems. Therefore, they are not only fitted with a diesel particulate filter which has now become standard, but also come equipped with new technology for the subsequent reduction of nitrogen oxides.

With the introduction of CO2-based vehicle duty in 2009, a tax bonus of 150 euros is provided for early compliance with Euro 6. Whether the large difference between the technology costs and the tax incentive offers sufficient encouragement for the rapid introduction of the technology remains, however, questionable.

CO2 emissions from light commercial vehiclesAt the end of July 2009, the European Union’s DG Environment submitted a propos-al for interservice consultation outlining the framework regulation of CO2 in light commercial vehicles. The regulation proposal advocates a reduction in the average CO2 emissions from light commercial vehicles to 175 g/km in the year 2013 and 135 g/km in the year 2020.

The proposal is accompanied by an Impact Assessment Report about the regulation costs — also published by the commission. This identifies five additional technology options and evaluates their potential for reducing CO2 emissions and their relevant additional costs. In addition, it projects the technology learning curve and cost reduc-tion potential, which shows that to achieve the long-term goal of 135g in 2020, an average additional cost in the area of 4,000 euros to 6,900 euros is to be expected.

Additional costs will impact potential buyers of new cars from all user groups. In a period when the automobile industry across Europe is experiencing a massive slump in sales and facing the subsequent economic consequences, for example the intro-duction of short-time work in Germany, the commission now intends to further burden an already crisis-hit sector instead of relieving it. In addition, it should be noted that the development period for light commercial vehicles, as well as their product cycle (approx. 10 years), differs substantially to that of passenger vehicles and the costs involved in meeting these regulation proposals would be prohibitive.

Avoidable and negative economic consequences are to be expected, such as increased cost pressures on small and medium-sized companies — who would have to cope with the proportional additional costs of new CO2 regulations for light commercial vehicles. This applies equally to companies in the value chain, as well as for busi-nesses that use these vehicles – with the corresponding implications for the job market. In an already tense economic situation, this is critical and would unnecessarily burden medium-sized companies.

German manufacturers leading the way at the implementation of Euro 6 for vehicles

The EU is pursuing ambitious plans to reduce the exhaust emissions of light trucks

Planned pollution in a time with massive falls in sales

131

The key points of the regulation proposal are:

Area of application: Vehicle categories N1 up to a reference weight of 2,610 kg (empty weight + operative fluids + 100 kg)

Exceptions: < 22,000 units per annum and EU

Limits/deadlines: from 01.01.2014: 175 g/km from 01.01.2020: 135 g/km. This long-term target as well as the associated modalities should be confirmed in a review in 2013.

Phase-in: 2014: 75 %, 2015: 80 %, 2016: 100 %

Parameters: Vehicle weight (so called “weight in running order,” road-ready weight); (empty weight + operative fluids + 75 kg driver)

Eco-innovations: Credit of ≤ 7 g/km in fleet

Excess emission premiums: For the period Jan. 2014 to Dec. 2018:ʼ • 5 euros for the first gramʼ • 15 euros additionally for the second gramʼ • 25 euros additionally for the third gramʼ • 120 euros additionally for every further gram (in passenger cars this is 95 euros for every further gram). From 2019:ʼ • 120 euros per gram

Review of the excess emission premiums in 2013.

Pooling: As in the passenger car regulations

Super credits: For vehicles with CO2 emissions <50 g/km Weighting factor: 2.5x in 2014, 1.5x in 2015 and 1x from 2016

Averaging the emission values: As for fleet averaging in the passenger car regulations

Monitoring of the data: From Jan. 2011: monitoring of CO2 emission data for light commercial vehicles, as well as for vehicles from the classes N2 and M2

Public reports: The emission values will be published by the end of June 2013, then every subsequent year.

Review: The commission is to produce a review on the emission targets and the excess emission premiums by Jan. 2013. The basis for this review is to ensure that the long-term cost-efficiency targets remain achievable and that a fair distribution of the CO2 burden between society and industry is maintained. By the time of the review, it will have been evaluated whether N2 and M2 vehicles should be included in the regulations.


Evaluation of the key points of the regulation:

Area of application:The area of application is currently limited to N1 vehicles. N2 and M2 vehicles often no longer come under the reference weight of 2,610 kg and should in principle remain exempt. Monitoring these vehicles is for this reason no longer completely possible. N2 and M2 should therefore be excepted completely.

Empty vehicle weight parameter (road-ready weight): The use of vehicle weight as a calculating factor is supported in principle – although the permissible gross vehicle weight should be used as the parameter.

Limits and phase-in: The vehicles for intended production runs in 2014 are already defined today. Taking into account a product cycle of more than 10 years and a development period of approx. 7 years, it is not possible to comply with the limits in 2014. An adequate phase-in period for a limit of 175 g/km would be from 2015 to 2018 at the earliest. The long-term target of 135 g/km was never previously discussed and due to the size and weight required by commercial vehicles to fulfill their intended purpose, it is no basis for a purposeful discussion. In combustion engines and hybridization, these hypothe-tical targets for companies, who manufacture use-related heavy vehicles within the category in question, would not be achievable. The particularly efficient large vans, which transport higher volumes, would be pushed out of the market or be at a severe disadvantage — automatically resulting in more emissions and in more traffic.

Multi-stage production of commercial vehicles: These vehicles are included in the regulation proposal, although the manufacturer of the chassis is not capable of assuming responsibility for the CO2 emissions of the completed vehicle. Those vehicles from multi-stage production should, therefore, be exempt from the regulations.

For a large number of individual points, the EU has the technically feasible and ecologically sound still in mind

133

Inclusion of off-road vehicles: Off-road vehicles are manufactured for very specific uses and are, therefore, due to their special requirements (stability, off-road capability with an impact on aerodynam-ics, transmission type, etc.), considerably heavier than a pure road vehicle. A uniform limit would place an unreasonable burden on these vehicles.

Eco-innovations: The discount for eco-innovations in the amount of up to 7 g is welcomed. It is also important that a pragmatic method is created for discounts on passenger cars.

Super credits: When you consider new drive systems like fuel cells or the electric vehicle, then the super credits could help to encourage their introduction to the market. Electrically powered vehicles could be a particularly good option for the supply and delivery market segment. However, the time period under discussion for the provision of these super credits is totally unsatisfactory.

Discontinuing the super credits by the year 2016 — in view of the ongoing devel-opment process and considering the number of vehicles that would receive these deductions up to this point — provides no serious business case for future develop-ment. The VDA is, therefore, calling for the super credit phase to be extended up to 2020, so that companies are provided with a real incentive to bring these new tech-nologies in the transporter segment quickly to the market.

Penalties: Commercial vehicles are work equipment, not consumables. The efficiency of a commercial vehicle is therefore the decisive argument for the purchase. The planned penalties of up to 120 euros per gram and vehicle, starting from a certain limit, would definitely exceed the penalties from other business branches. The review must be carried out with consideration for the feasibility of the regulations for industry and society, taking into account competitive neutrality within the industry sectors.

Development of vehicle weight versus CO2 emissions (autonomous mass increase):It is planned for the development of the vehicle mass of medium-sized vehicles to be monitored, beginning in 2016. The aim of the commission is to avoid any increases in vehicle mass by the manufacturers, which is assumed will allow them to comply more easily with the fulfillment of the planned limits. At the same time, an increase in the vehicle mass is always accompanied by a reduction in the payload, which is an important attribute of commercial vehicles. In addition, supplementary equipment that increases the mass of the vehicle, for example comfort features, play a very minor role in commercial vehicles. Monitoring the autonomous mass increase is for these reasons superfluous.

Alternative fuels: The so-called “flex fuel vehicles” are not being taken into account – in contrast to the regulations for passenger cars. These vehicles should be included in the calculations.


Noise emissionsChange to more realistic noise measures on its way

Over the years, noise limits for both heavy goods vehicles and cars have continued to decrease. The authorized noise level for heavy goods vehicles has decreased by 11 dB(A) since 1980 and by 8 dB(A) for cars. This means that one goods vehicle in 1980 made the same amount of noise as 13 modern HGVs. Likewise, six of today’s newest cars reach the noise level of a single car manufactured in1980.

The European Union thus has the most stringent noise regulations in the world (cars: 74 dB(A), in comparison with Japan at 76 dB(A), South Africa at 82 dB(A) and the USA, where local legislation is enforced). The conventional noise measurement method used up until now was based on the so-called “pass-by-noise measurement” in accordance with ISO 362. This corresponds to full-load acceleration from 50 km/h in second and third gear.

There is no doubt that noise reduction at full-load acceleration is a considerable challenge for design engineers. However, it is not representative of real-life traffic. The level of acceleration in real-life traffic is moderate. That’s why as part of UNECE, a new test procedure for measuring noise levels has been developed which will be orientated nearer to the noise emissions of vehicles in real-life traffic. This proce-dure will adapt the composition of noise-relevant torsional vibrations more strongly to actual real-life conditions.

The changeover from the current measuring procedure to the new, more represen-tative, method will take place gradually. The major challenge lies in transposing the currently valid noise emission limits into the new measuring procedure. In essence, this means that the best-possible equivalent limit for the new measurement proce-dure will be determined because, in general, the new method will lead to different and maybe even nominally higher noise-emission limits.

The automobile industry has made available a comprehensive measurement database which could have been used to determine the equivalent measurement values required. The EU commission has instead specified that there will be obligatory measurements of new type-approved vehicles for a period of 2 years that will include both the old as well as the new testing procedure. A database has been created by the commission to store these parallel measurements which should now be used as the basis for the setting of future limits.The old measurement procedure should be obsolete at the latest by the time these new limit values have been defined.

Because the new measurement procedure, although more representative, never-theless involves testing at a different speed range, it has been decided to define additional requirements for vehicles in order to avoid any excessive noise emissions, even outside of the scope of the tests. These so-called “Additional Sound Emission Provisions” (ASEP requirements) are intended, in particular, to prevent the use of irregular exhaust muffler systems. The aim is that vehicles do not display higher noise emissions, even outside the scope of the test, than the vehicle technicians expect. The informal working group put together to look at these issues as part of the GRB has so far not come to any final conclusions.

Safety and Technology

Nagaratnam Soulbary – Extrusion line manager X-Liner, Veritas AG, Gelnhausen

138SA F ET Y A N D TEC H N O LO GY

A Road-safety Summary for Germany and Europe

The fact that the road safety figures in Germany are improving from year to year and the number of accident victims on the road continues to fall to new historical lows every year is thanks mainly to the continued innovation efforts on the part of the motor industry. In 2009 some 4,150 people lost their lives in road traffic accidents. This figure represents yet another fall by more than 7 percent.

The fall in the number of deaths on freeways during 2009 was once again above average, with a drop of 8 percent – with freeways already being the safest type of road anyway. On the road network, not including freeways, around nine people die for every billion kilometers traveled, while on the freeways the figure is less than three.

The German freeways can also stand up to robust comparison with other countries. In 2007, the most recent year for which the data from all Western European countries and the USA are available, on a statistical basis around 2.7 people died for every billi-on kilometers traveled on German freeways, which is fewer than the figure in coun-tries with a general speed limit, such as Austria and Belgium where the figure was 3.2 and 4.2 deaths per billion kilometers.

This means that there is no justified reason whatsoever for the occasional calls for a general speed limit. The fact is that temporary or permanent speed limits apply on around half of the entire freeway network anyway. However, the probability of acci-dents is no higher on the unlimited sections of the network. Therefore it is only right that the coalition government has agreed to rule out a general speed limit.

Innovations from the motor industry continue to help accident numbers

0 10 20 30 40 50

20071970

Germany-90 %

USA-83 %

Switzerland-80 %

Austria-81 %

Belgium-90 %

Great Britain-91 %

France-94 %

Development in the death rates on freeways in Western Europeper billion vehicle kilometers

Source: IRTAD

The rejection of a general speed limit is correct

139

A sensible transport safety strategy must be based on a much more comprehensive, integrated approach which includes all the parties concerned – the motor industry which is the developer of safety technologies, the people involved in the emergency rescue chain in the event of accidents, the public sector which provides the infra-structure and finally drivers themselves. This is one of the objectives of the action program for road safety which the EU Commission passed in 2001 to cover the period up to 2010. The main target of this program was to cut road deaths in Europe by half in the period between 2001 and 2010, and this has resulted in the EU Commission implementing a whole host of measures over the past few years, extending from the support of information campaigns for road users to the development of a safety audit for trunk roads.

Another action plan is to be passed for the period after 2010 and work on this is currently in progress. The list of measures in this new plan should take into account more than previously the fact that the proportion of older road users is rising in Europe. With this group the problem is not so much an aggressive driving style as the physical aspects which make driving more difficult. There would be no sense in proposing a strategy which is based entirely on monitoring the laws of the road and ignoring the significance of helpful and supporting components of road use such as “forgiving” road design. The same requirements made on vehicles themselves should also apply to the infrastructure.

eCall is a good example of why an integrated approach to road safety is required to ensure that everybody involved is pursuing the same ends. The target date set by the European Commission for the introduction of this emergency call system, which sends a message automatically when a vehicle is involved in an accident and directs the rescue services to the accident location, was actually 2009. The motor industry signed the memorandum of understanding (MoU) to develop an eCall system very early on and is also involved in the standardization work. However, the system is also depen-dent on all the other parties involved in the rescue chain making their own contri-bution. Some of the main parties concerned, for example some large member states, have still not signed the memorandum of understanding. Furthermore, many member states have not yet made the technical upgrades to their emergency call infrastructure required for this system. The EU Commission is now considering legislation.

EU action plan must impose the right measures

eCall – member states fail to act


The EU General Safety Regulation

The General Safety Regulation (EC) No. 661/2009 of the European Parliament and the Council was passed on July 13, 2009. This is designed to improve the safety of motor vehicles by making certain modern safety systems mandatory in them. It is also desig-ned to improve the environmental impact of vehicles by reducing the rolling noise and rolling resistance of tires.

By issuing this safety regulation the EU Commission demonstrated that it continues to pursue the objective of bundling the existing regulations of the EU which relate to vehicle safety in a single vehicle safety regulation. The EU Commission has decided in this respect that existing EC directives will be replaced by ECE regulations which will bring to an end the parallel existence of EU directives and ECE regulations. This means that the safety regulation will be an integral part of Framework Directive 2007/46/EC.

In addition to ESP for all vehicle categories, tire-pressure monitoring systems for cars and the guidelines for tires, the regulation also defines rules for advanced emergency brake systems (AEBS) and lane-departure warning systems (LDWS) for commercial vehicles with a maximum gross weight of 3.5 metric tons. The main results of the safety regulation are as follows:

1. Driver-assistance systems for commercial vehiclesAn AEBS (advanced emergency break system) and an LDWS (lane departure warning system) has been introduced as a mandatory component of light and heavy commer-cial vehicles in categories N2, N3, M3 and M3. The deadlines for the introduction of these systems have been defined as November 1, 2013 (new models) and November 1, 2015 (new vehicles). Exemptions will be defined by the EU Commission using a costs-benefit analysis. An informal working group of the GRRF (Groupe des Rappor-teur en Matiere des Roulements et des Freinages) has been established to define the technical regulations and is due to define the technical criteria for these systems by September 2011.

2. ESP for carsESP for vehicles in categories M1 and N1 will be introduced as mandatory for new models on November 1, 2011 and for new vehicles on November 1, 2014.

ESP for commercial vehiclesThe introduction of ESP has been set for November 1, 2011 (new models) and Novem-ber 1, 2014 for new vehicles for light and heavy commercial vehicles in categories N2, N3, M2 and M3 as long as the corresponding ECE regulation does not specify later introduction dates. The following transitional rules and areas of application have been fixed with a view to the introduction of ESP for heavy commercial vehicles:

EU Commission bundles existing regulations

141

New types

Vehicle classImplementation

date

M2 July 11, 2013

M3 (class III, all braking systems) November 1, 2011

M3 <16 metric tons (pneumatic transmission)) November 1, 2011

M3 (class II and B (hydraulic transmission)) July 11, 2013

M3 (class III (hydraulic transmission)) July 11, 2013

M3 (class III) (pneumatic signal and hydraulic energy transmission)) July 11, 2014

M3 (class II) (pneumatic signal and hydraulic energy transmission)) July 11, 2014

M3 (other) November 1, 2011

N2 (hydraulic transmission) July 11, 2013

N2 (pneumatic signal and hydraulic energy transmission) July 11, 2014

N2 (other) July 11, 2012

N3 (tractive units with 2 axles) November 1, 2011

N3 (tractive units with 2 axles and pneumatic signal transmission ABS)) November 1, 2011

N3 (3 axles with electric signal transmission (EBS)) November 1, 2011

N3 (2 and 3 axles with pneumatic signal transmission (ABS)) July 11, 2012

N3 (other) November 1, 2011

03 (combined axle load between 3.5–7.5 metric tons) July 11, 2012

O3 (other) November 1, 2011

O4 November 1, 2011

Source: VDA


New registrations

Vehicle classImplementation

date

M2 July 11, 2015

M3 (class III, all braking systems) November 1, 2014

M3 <16 metric tons (pneumatic transmission) November 1, 2014

M3 (class II and B (hydraulic transmission)) July 11, 2015

M3 (class III (hydraulic transmission)) July 11, 2015

M3 (class III) (pneumatic signal and hydraulic energy transmission) July 11, 2016

M3 (class II) (pneumatic signal and hydraulic energy transmission) July 11, 2016

M3 (other) November 1, 2014

N2 (hydraulic transmission) July 11, 2015

N2 (pneumatic signal and hydraulic energy transmission) July 11, 2016


N3 (tractive units with 2 axles) November 1, 2014

N3 (tractive units with 2 axles and pneumatic signal transmission (ABS)) November 1, 2014

N3 (3 axles with electric signal transmission (EBS)) November 1, 2014

N3 (2 and 3 axles with pneumatic signal transmission (ABS)) November 1, 2014


03 (combined axle load between 3.5–7.5 metric tons) November 1, 2014

O3 (other) November 1, 2014

O4 November 1, 2014

Source: VDA

143

The following vehicles are exempt from the introduction of ESP:

• Off-road vehicles pursuant to Section 4.2, Section 4.3 (2007/46/EC, Annex III, Section A)

• M2, M3 with less than three axles, articulated buses, buses in class I or class A

• N2, N3 (tractor units): 3.5 metric tons < m < 7.5 metric tons

• N2, N3 with more than three axles

• Special vehicles pursuant to Section 5.7, Section 5.8 (2007/46/EC, Annex III, Section A)

• O3, O4 with more than three axles, trailers for heavy transport and trailers for standing passengers.

4. Tire requirementsNew limit values for rolling noise and rolling resistance as well as requirement for grip in wet conditions are to be introduced. The safety regulation of the EU will bring guidelines for improving tire rolling resistance, grip in wet conditions requirements and tire noise on road surfaces into force on November 1, 2012 at the earliest. Figure 1 shows the transitional regulations for the various tire categories.

Dates for the introduction of future regulation 661/2009/EC

Source: German rubber manufacturers' organization (wdk), July 2009

Type-approval tires Nov. 2012

Type-approval vehicle now only with type-approved tires

Nov. 2013

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Type-approval tires Nov. 2016

Type-approval vehicle now only with type-approved tires

Nov. 2017

Nov. 20181)New vehicle equipment now only with type-approved tires and sales of tires on the replacement market

New vehicle equipment now only with type-approved tiresand sales of tires on the replacement market

Nov. 20141)

New vehicle equipment now only with type-approved tires and sales of tires on the replacement market Nov. 20201)

1) The sale of tires (trade) not yet complying with limit values is permitted up to 30 months from this date.2) Car tires only

Higher limit values for rolling noise and resistance being prepared


Tire pressure monitoring systems (TPMS) The introduction of a TPMS (tire pressure monitoring system) has been decided for vehicles in category M1 (cars). In this case the dates of introduction for new models will be November 1, 2012 and for new vehicles November 1, 2014. The regulation is aimed at regulating tire pressure monitoring systems with no regard to a specific technology. It should be possible to fit vehicles with both direct and indirect systems to meet the requirements of the safety regulation.

Indirect systems do not measure the tire pressure itself. In the event of a drop in pressure in a tire, its external diameter will be reduced which results in the speed of the wheel increasing by comparison with the others. This is recorded anyway in the vehicle by the ABS sensors or the traction control sensors, and interpreted as a pres-sure drop as a result of which a warning is then tripped. For direct systems a sensor is fitted in the tire or on the valve which transmits the internal pressure and temperature of the tire to an electronic control unit wirelessly at specific intervals.

Four electronic wheel sensors send the pressure and temperature values to a central antenna every 60 seconds. The pressure and temperature information is displayed in the MMI display; pressure warnings and the system status are displayed to the driver in the instrument cluster.

Source: Audi AG

Example of a direct tire pressure monitoring system

145

To implement General Safety Regulation (EC) No. 661/2009, the UNECE parties to the contract approved the “TPMS supplements” to UNECE R64 which describe the requirements for a tire pressure monitoring system (TPMS). According to this a TPMS warning must be triggered if the warning threshold of “Pwarm -20 percent” is reached (in other words while the tire is in a stable operating temperature the tire pressure falls by 20 percent below the service tire pressure). If, for example, the service tire pressure of a tire Pwarm is 2.0 bar, a TPMS warning would be triggered if the pressure reached 1.6 bar.

To continue to reduce the CO2 emissions of vehicles even further, the EU Commission wishes to introduce a more stringent proposal for the type testing of tire pressure monitoring systems (TPMS) and implement it in Safety Regulation EC 661/2009. The proposal includes the introduction of a second stage of tire pressure monitoring systems (TPMS). It therefore represents an upgrade to the amendment of Directive UNECE R64 which has already been passed. According to this, the warning threshold will be 5 percent lower from 2015 (for new models) and from 2017 (for new vehicles), or in other words from Pwarm -20 percent to Pwarm -15 percent. In addition, the scope of the regulation will be extended to category M1 vehicles (cars).

However, the VDA believes that it is simply too early to start considering making this regulation more stringent at the current time. Instead, a study should be carried out of the effects of the amended UNECE R64 (Pwarm -20 percent) as soon as a sufficient number of vehicles have been launched into the European fleet with TPMS systems of this nature. The VDA is prepared to monitor the introduction of the improved TPMS systems in the form of field studies to produce evidence of what improvements the systems achieve in terms of ecology and vehicle safety.

A further stage for tire pressure monitoring systems is planned after 2015


Accident Statistics – Influencing Parameters and Successes of Vehicle Safety

Number of people suffering road accidents has dropped dramaticallyThe positive trend in the development of accident figures on the roads in Germany continues. Based on the provisional results produced by the Federal Department of Statistics (Destatis), the number of road users who died during 2009 fell by around 7.1 percent to 4,160, which is well down on the figure for the previous year (4,477). The fall in urban areas was slightly lower than that out of towns. On the other hand, the total number of accidents recorded by the police in Germany during 2009 hardly changed compared to the previous year (2,293,663). The number of accidents resul-ting in personal injury or death, however, is around 3 percent below the value for 2008 at around 311,000. The number of all the people injured or killed in these accidents fell by over 10,000.

The positive trend relating to vehicle passengers is a particular highlight in the break-down of people killed by the type of activity. In fact 13 percent fewer deaths of car passengers were recorded compared to 2008. Similarly positive trends are apparent in the number of children victims and pedestrians and in the group of young people (18 to 24 year olds). The number of motorcycle riders killed stagnated, however.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

BicycleMotorbike/powered cycle/moped PedestriansPassenger vehicles & commercial vehicles

Number of accident fatalities by road user typeAccident fatalities per year

Source: OSD

147

There are several reasons for the steady reduction in the number of people killed on the roads. These include an improvement in the road infrastructure, the provision of efficient rescue and emergency services as well as measures to educate people in traffic behavior, information campaigns and the prosecution of misdemeanors. On the other hand, the motor manufacturers now direct a great deal of attention to the fulfill-ment of high safety standards during the early development phase of a vehicle. It is clear that the consistent improvements, above all in passive safety systems, are having a massive effect on minimizing the risk of injury despite the severity of accidents remaining the same.

The concept of integral safety represents an important step towards road use with minimized accident risk As far as the vehicle itself is concerned, this means linking passive and active safety systems which help to avoid critical situations and reduce the severity of accidents and injuries. Important driver assistance systems include anti-lock braking systems (ABS), electronic stability programs (ESP), brake assis-tance systems (BA), adaptive cruise control (ACC), lane change assistance and lane departure warning systems. ESP, in particular, an active assistance system which automatically prevents the vehicle from skidding, is a safety system which verifiably helps to avoid accidents and all consequential collisions. In Germany, at the current time, 81 percent of all newly registered cars are fitted with ESP, which is well over the EU average of 55 percent. The approval of the General Safety Regulation (EC) No. 661/2009 now means that all newly registered vehicles in Europe must be fitted with ESP as standard as from 2011 which is why the market penetration of this safety system will now jump massively.

The statistical evaluation of errors by car drivers shows that the cause of accidents particularly includes speed not being correct for the situation, errors at cross-roads (failure to give way and accidents when turning) as well as not leaving a sufficient gap between themselves and the vehicle in front.

Car driver error causing accidents involving personal injury (Germany 2009)

Source: Federal Statistical Office 2009

70,176Other vehicle driver errors

5,489Stationary traffic,

traffic safety

20,173Incorrect behavior

towards pedestrians

82,804Turning off, turning, reversing,

driving in and starting off

78,409Right-of-way, priority

6,507Driving side by side

17,425Overtaking and passing

60,470Infringements of distance

requirements

67,553Inappropriate speed

17,325Incorrect road use

13,251Unfitness to drive

(alcohol, drugs, other)

Passive and active safety are linked


This is important for the assessment of the effectiveness of modern driver assis-tance systems. Brake assistance systems and automatic distance control systems can provide the driver with extremely effective support, particularly in critical situations. They enable the driver to remain in control of his vehicle. It must be possible to use assistance systems intuitively and they must not distract the driver from concentrating on his driving. The systems are designed so that their automatic intervention can be felt and seen by the passengers.

If an accident results in personal injury, fast and effective rescue is vital for minimi-zing the consequences of injuries and increasing the victims’ chances of survival. In addition to medical assistance, the effective work of the rescue services plays a major role in this respect. As technical systems in modern cars become increasingly complex, demands on technical rescue services also grow. Only if the rescue parame-dic or emergency doctor can gain access to the injured passenger can they provide essential medical assistance. To help the work of the fire service in this respect, motor manufacturers have agreed on a standard to provide specific data for their vehicles. The position of systems which are relevant to the rescue (airbags, structural reinforce-ment components and batteries) are shown in graphic form for every different vehicle model in so-called rescue data sheets. This information can be used by the fire ser-vice both for training purposes and during actual deployments. The central provision of rescue data sheets for the rescue services on the Internet ensures that the informa-tion they contain is both correct and up to date (http://www.vda.de/de/arbeitsgebiete/rettungsleitfaeden_feuerwehr/index.html).

Rescue data sheets from manufactur-ers facilitate rescue service work

149

Testing electronic systemsThe German Federal Ministry of Transport (BMVBS) is planning to extend the general inspection required by Selection 29 of the Road Traffic Licensing Regulation with the aim of tailoring it to the progress being made in automo-tive engineering. For example, the plans extend to enhancing the inspection by using a vehicle diagnostics interface. This measure is designed to achieve greater objectivity, process safety and also to reduce the time required for the inspection. In this development work the BMVBS is receiving support from Fahrzeugsystemdatentechnik (FSD) based in Dresden. FSD has developed a process for this purpose which is designed to review the vehicle systems on the basis of the data supplied by the manufacturers as part of the general inspec-tion procedure. This is to be done by means of activating some of the functions of the vehicle systems.

The VDA supports the efforts of the BMVBS to improve the efficiency and information provided by the general inspection. For this purpose, the VDA has developed its own process which, in contrast to the FSD process, is based completely on on-board diagnostics (monitoring of the electronic vehicle systems). This VDA process also checks that all the required control modules are actually present in the vehicle. In contrast to the FSD process, howe-ver, none of the systems is actually activated. The functionality of the vehicle systems is simply verified by the use of the on-board diagnostics which is an integral part of the homologation procedure and ensures the vehicle system functionality.

At the current time the BMVBS is giving serious consideration to using the FSD process. The VDA rejects the use of the FSD process for the following reasons:

• The FSD process accesses various levels of the signal and function supply system within the on-board systems by its actuating of some of the func-tions. As it does so, it separates some of the linked actions during the test. This intervention in the vehicle integrity can result in a change to the instal-lation status which forms the basis for the homologation.

• The vehicle manufacturers cannot accept liability for possible changes and the consequences of them in the vehicle produced by the FSD process.

• The FSD process requires sophisticated “off-board intelligence” to identify the variant or version of a vehicle system and to assess its functionality. The consequence of this would be a great deal of organizational work in cus-tomer service, technical services and after-sales departments.

In its efforts to develop the VDA process, the VDA has received the full support of the Association of International Motor Manufacturers (VDIK).


Innovative Driving Dynamics to Enhance Safety

As part of the FAT “safety” cluster, research is being carried out into improving the attraction and active safety of modern vehicles. This involves a systematic study into the legitimacy of driver perception and reaction. The results of this will provide the basis for designing a driver-based vehicle which offers a high level of safety, comfort and pleasure. From the point of view of new engine technologies, the aim is to extend the results to enable vehicles to be made available in the future which also offer high standards of active safety and attraction.

The tests were carried out in a simulator and also on roads using specialist testers. In various driving situations and maneuvers, such as cornering or changing lanes, the testers reported their impressions and evaluated the intensity of their perceptions using a scale. At the same time, the dynamic driving values of the vehicle (lateral acceleration, rate of yaw, rolling and pitching angles) and the drivers’ reactions were recorded in the form of pedal movements on the accelerator and brake pedals and movements of the steering wheel. The steering moment which can be felt by the driver was one particular focal point and this criterion was investigated in more detail. To cover as wide a range as possible, the dynamic driving properties of the test vehic-les were varied massively using the special design and controls of an active chassis or active steering system. This technology enabled the test drivers to put a value on the driving behavior of the vehicles. The vehicle reactions were then used, which the drivers found to be positive.

The tests were accompanied by automotive engineering and traffic psychology insti-tutes at German universities. Cooperation with the motor industry proved to be a great benefit in this respect. Their ideas and their automotive engineering and psychological expertise enabled the universities to achieve their objectives.

Future research will include electric vehicles in full for the first time. Battery-powered vehicles have different centers of gravity, moments of inertia and drive dynamics which affect the interaction between the driver and the vehicle. The findings produced thus far for electric vehicles will be extended to include different parameter ranges so as to enable the efficient design and enhancement of driver safety and comfort.

Improving driving safety and comfort are the main focus of research

151

The New EU Type Approval

In 2007, the EU Commission promulgated directive 2007/46/EC – EC type approval for establishing a framework for the approval of vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (frame-work directive). This directive replaces national general operating licenses in the EU member states; the type approval is extended to all vehicle categories. The EC type approval thereby governs all approval matters both for large-scale and small-scale production and for individual approvals. It also governs electric and hybrid vehicles.

Individual approval

If one member state has granted individual approval for a vehicle, another member state will permit this vehicle to be sold, registered or put into operation.

The familiar national individual approval procedure in Germany has not changed with the introduction of Directive 2007/46/EC. Individual approval will continue to be granted by the federal states. To that end the national procedure in Germany for gran-ting individual approval was implemented on April 29, 2009 with regulation EC-FGV (vehicle approval regulation).

In the VDA’s view, this regulation achieves its purpose. But there are still different procedures between the federal states when it comes to implementation and even within each federal state. Both the VDA and external experts have always advocated consistent treatment within the federal republic.

A further problem is international recognition of such approvals. Automatic recogniti-on must be the goal of harmonizing the common market. The Federal Motor Transport Authority has therefore had 450 approval authorities in the federal states notified within the EU. These notified approval centers are then permitted to issue internatio-nally valid individual operating licenses.

As the international approval process by the federal states is still new, there is as yet no experience with European recognition outside Germany. In all its international deliberations, the VDA therefore also points to the need for a smooth process.

EU regulation replaces all national operating licenses


Type approval for electrically powered vehicles

The Federal Motor Transport Authority has issued guidelines for approving vehicles such as these as there is currently little experience with type approval. The aim is to ensure consistent treatment for all applicants. This also takes account of the require-ments on energy storage systems in the event of a collision between electric vehicles.

Where such regulations are not yet in place, it is the VDA’s view that appropriate safe-ty precautions should be taken under the Equipment and Product Safety Act (GPSG). Requirements are also defined for fuel containers (gas/liquid) for heating systems with a combustion heater in vehicles.

Distinguishing characteristics between types (Annex II)

In Annex II – Vehicle class and type definitions – vehicle class is defined along the following lines:Class M: vehicles with at least four wheels designed and built for passenger transportClass N: vehicles with at least four wheels designed and built for goods transportClass O: trailers (including semi-trailers)

In a proposed revision of Annex II, containing significantly tougher requirements, the EU Commission wants to restrict the previously tried-and-tested regime for distin-guishing characteristics between types, which would result in higher documentati-on costs for applicants.The VDA advocates retention of the original distinguishing characteristics between types; an amendment would have massive repercussions on the approval and documentation procedure.

Radio frequenciesTechnical requirements for the vehicle were harmonized with the vehicle type approval (Directive 2007/46/EC). But harmonization in the radio frequency arena has not yet been achieved. Disruption, overlaps and interference have ensued. The decision aims to establish a legal framework in order to ensure harmonize conditions for the availa-bility and efficient use of the frequency spectrum.

The EU member states, who are largely responsible for their own frequency resources, have already recognized just how important a common EU policy in this area is for the functioning of the internal market. The VDA also advocates the international harmo-nization of frequencies for vehicles. The working group set up for this purpose has already achieved initial results. The VDA’s national working party on radio approvals has appointed its experts to the international working group.

The technical harmonization of radio frequencies is still outstanding

153

Daytime running lights can make an additional contribution to traffic safety

Lighting technologyRoad traffic makes heavy demands on its participants. Fellow road users should be inconvenienced or dazzled as little as possible. On the one hand, the motorist would like to see as much as possible in the dark, and on the other hand, oncoming traffic must not be dazzled. Today’s laws and regulations ensure this road traffic safety. A further contribution to safety is driving with one’s lights on during daytime.

Driving with one’s lights on during daytime means that one is more visible in road traffic. The vehicle is noticed earlier by other road users. According to the relevant research results, this is associated with an up to 25 percent reduction in collisions with other road users.


Daytime running lights are now frequently based on LED technology, which in addi-tion to their lower power consumption are also characterized by an attractive design. Vehicle designers now also use daytime running lights to give their vehicle an unmis-takable design, even in the dark.

The following timetable applies to the fitting of daytime running lights:

• New vehicle types (vehicle categories M1 and N1): with effect from March 2011

• New vehicle types (vehicle categories M2, M3, N2, N3): with effect from September 2012

The daytime running lights must be automatically switched on when the engine is started; in the international deliberations currently underway, there is also a discus-sion as to the availability of a dusk light switch in conjunction with the daytime running lights; the experts’ decision on this matter is still awaited.

The dusk light switch automatically switches on the vehicle’s dipped headlights when night falls. It is also possible to conceive of solutions whereby the driver switches on the dipped headlights manually. But international deliberations have not yet been concluded. Once the decision has been made, the legislator must allow appropriate transitional periods ensuring sufficient time for a switchover.

No decision on the dusk light switch has yet been taken

155

LED technology is reducing energy requirements and promotes environ-mental protection

The use of LED technology significantly enhances vehicle safety and takes account of environmental protection as a result of the reduced energy requirement. Energy consumption is also significantly reduced compared with the usual halogen technolo-gy. LED technology is also being used increasingly for other lighting functions such as dipped headlights and full beam, brake lights, indicators and rear lights. Compact and efficient LED lighting sources will therefore be a further building block for low consumption and electric vehicles, thus contributing to achieving the auto-motive industry’s CO2 objectives. In future, a dipped headlamp will consume less than 16 watts, thus saving 40 watts on each side of the vehicle relative to a comparable halogen solution.

Following the European Commission’s proposal to fit retro-reflective markings to make heavy goods vehicles more visible, corresponding equipment has now been prescri-bed as mandatory. But with a number of vehicle designs, the markings are causing major problems or simply cannot be applied in a way that complies with the law.

The VDA therefore quickly proposed amendments to the statutory regulations thus contributing to their international implementation in the discussions with all the governments and vehicle and foil manufacturers. The new proposal for amending the relevant ECE regulations also allows special vehicle manufacturers sufficient latitude when it comes to contour markings. The timescales have also been calculated so that vehicles coming into circulation for the first time can also be included in the implementation.

The problem of evaluating the existing contour markings in the context of technical monitoring has to be resolved as quickly as possible; appropriate working groups have been set up at the VDA’s instigation.

Until a uniform assessment yardstick has been achieved as part of regular technical monitoring pursuant to Section 29 StVZO (European Road Traffic Registration Regula-tions), the only possible solution in the event of the contour markings being damaged is for contour markings to be deemed “present/not present” so as not to demand an involuntary workshop visit for operators.

Contour markings should make vehicles more visible in the dark


Developments in Vehicle Safety

The massive amount of development work being carried out by motor manufactur-ers into the production of electric vehicles means that adjustments are not required to the existing ECE regulations. This particularly relates to ECE-R 12, ECE-R 94 and ECE-R 95, which describe the requirements for vehicles in frontal and side impacts. The specific peculiarities of electric vehicles in terms of the test method to be used must now be included in these regulations. For example, the potential risk of inju-ries to the passengers in a vehicle caused by the batteries and other high-voltage electrical components must be prevented. The revision of these standards is taking place with close international cooperation within the Working Party on Passive Safety (GRSP) which is a sub-committee of the World Forum for Harmonization of Vehicle Regulations (WP.29).

ECE-R 12, ECE-R 94 and ECE-R 95

The regulations prevent a situation where the passengers may be at risk from the high-voltage electrical components (> 60 V and ≤ 1,500 V direct voltage or > 30 V and ≤ 1,000 V alternating voltage) after the impact has occurred. Requirements have been defined for this purpose which are designed to protect the passengers from an electric shock.

• Non-use of hazardous voltages (U ≤ 30 V AC or U ≤ 60 V DC)

• Low energy level in high-voltage components

• Contact protection

• Definition of a minimum insulation resistance

At least one of these criteria must be satisfied to ensure that a vehicle crash can be assessed as having been “passed.” In addition no battery fluid (electrolyte) must ingress into the passenger cabin within a time of 30 minutes from the impact. Similar requirements will be defined in regulation ECE-R12 before the end of the year. The revised editions are on the agenda of the GRSP this year and could be ready for agreement in WP 29 at the end of 2010, as long as they are approved by the GRSP.

ECE-R 100

The revised ECE-R 100 regulation (uniform provisions concerning the approval of vehicles with regard to specific requirements for the electric powertrain) was appro-ved by WP 29 on March 10, 2010. This makes it one of the first of a series of further regulations which describe the safety requirements for the type testing of electric vehicles and electrically powered hybrid vehicles. In contrast to regulations ECE-R 12, ECE-R 94 and ECE-R 95, this standard contains requirements to protect passengers from the potential risk posed by the electric powertrain components and energy accu-mulators during normal vehicle use.

The safety of electric vehicles is a new focus for development work

157

ECE-R 10

This regulation will be adjusted to the requirements of electric vehicles in terms of the criteria for electromagnetic compatibility. It particularly relates to the charging process using external power supply sources.

A new version of ECE-R 44 is being prepared by the informal “Child Restraint Systems” working party within the GRSP. This regulation will become standard for the use of universal child restraint systems using Isofix attachment points. The contents of the new versions are currently being discussed and will result in extensive changes in the test methods and the certification of these systems. In addition to the planned use of new dummy models (Q series), the safety function of the child restraint system will also have to be demonstrated in side impacts.

A fresh proposal for the revision of ECE-R 44 was submitted at the GRSP meeting in Geneva in May 2010. This proposal includes a definition of the support foot on Isofix child restraint systems within the regulation and also makes reference to the require-ments relating to footwell rigidity in the vehicle. The verification tests required for this purpose are to be described in regulations ECE-R14 and ECE-R16.

Within the Passive Safety Working Party (GRSP), the informal “Frontal Impact” working group looks at matters relating to the revision of the requirements for improving passenger protection. This should include recent research results relating to mea-sures to improve the compatibility of vehicles in the event of frontal impacts, as well as possible methods of improving the protection of smaller and older passengers. At present, the European Commission is funding two research projects into this subject (Thorax and FIMCAR). The requirements for a future frontal impact test will be devised by means of close coordination with these two research projects.

The results of the EU Thorax and FIMCAR projects will be used to support the work of the informal working party in assessing future test methods. A first model of a chest will have been developed by mid-2011 featuring vastly improved bio-authenticity compared to current models. At the same time, current test methods used for frontal impacts will be evaluated and proposals will be produced for revising the current test.

The final evaluation of the results from the two projects will help in reaching a decis-ion on possible further activities to improve passenger protection. The time frame for this may be the deadline for the submission of an amendment proposal to the GRSP in May 2013.

Test method for child restraint systems are brought right up to date

Chest cavity protection of children and older people in accidents is to be further enhanced


Standardization to Ensure the Safe Functioning of Vehicles

The safe functioning of vehicles is indispensable for trouble-free individual road traffic. This is why the German automotive industry is busy at work ensuring that vehicle electronics systems in particular pose no safety risk, but make an additional contribution to road traffic safety. To that end, it has developed uniform guidelines for the automotive industry in conjunction with its partners around the world.

The guidelines regarding the development of safety documentation for electrical, electronic and programmable electronic safety-related systems (E/E systems) are defined in international standard IEC 61508 “Functional safety of electrical/electronic/programmable electronic safety-related systems.” This generic safety standard is also available as a European standard DIN EN 61508.

At the initiative of the German vehicle manufacturers, the automotive industry made an early decision to abide by the recommendation contained in DIN EN 61508 and devise a functional safety standard of its own, specific to the car. Only a proprietary standard adapted to the specific requirements of the automotive industry ensures that adequate attention is given to the particular conditions arising from the use to which vehicles are put. To this end, four proprietary safety requirement categories were also introduced as car-specific criteria under the term “Automotive Safety Integrated Level” (ASIL). These four categories define with what quality faults are to be avoided or overcome during development and operation.

159

Standardization to Ensure the Safe Functioning of Vehicles

Work on the standardization project was begun in 2005, spearheaded by the auto-motive technology standards committee operating within the VDA. The first public draft of ISO DIS 26262 “Road vehicles – Functional safety” has been available since summer 2009. The future International Standard comprises the following ten parts, the sequence of which is aligned with this safety life cycle:

• Part 1: Terms

• Part 2: Managing functional safety

• Part 3: Concept phase

• Part 4: Product development – System level

• Part 5: Product development – Hardware level

• Part 6: Product development – Software level

• Part 7: Production and operation

• Part 8: Supporting processes

• Part 9: ASIL and safety-related analyses

• Part 10: Guide to ISO 26262

The objective of this standard is to ensure road vehicles’ current high safety level, even in the face of the ever-widening use of electronics in vehicles. The manufacturers’ and suppliers’ compliance with the standard is supposed to limit the risks arising from potential product liability cases. To achieve this, the standard has to perform a balan-cing act between delivering clear evaluation criteria as regards development quality and the development’s outcome, while at the same time allowing sufficient latitude for new and flexible product developments.

Functional safety is defined as the “absence of unacceptable risks arising from hazards that can be caused by the malfunctioning of E/E systems.” The standard encompasses the entire safety life cycle from the concept phase via series deve-lopment and series approval, to the final phase comprising production, operation, maintenance and decommissioning (see illustration).

Safety life cycle according to ISO CD 26262

Source: ISO DIS 26262

Operationplanning

Productionplanning

Item definition3–5

3–6

3–7

3–8

4

5 6

4–11

7–5

7–5

7–6

7–6

Initiation of thesafety life cycle

Hazard analysisand risk assessment

Functional safetyconcept

Product development:system level

Softwarelevel

Release forproduction

Production

Operation, serviceand

decommissioning

Back to appropriatelife cycle phase

Controllability

Con

cept

pha

sePr

oduc

t dev

elop

men

tA

fter

SOP

Externalmeasures

Othertechnologies

Hardwarelevel


Occupational health and safety and hazardous substances in car productionThe European Parliament and Council regulation on the Registration, Evaluation, Authorization and restriction of Chemical Substances (REACH), passed on 18 Decem-ber 2006 and came into force on 1 June 2007. Whereas the focus in the past 2 years has been on the preparatory phase of this extensive body of legislation, the matter now at hand is the registration by the end of 2010 of substances that are important to the car industry. To this can be added reporting obligations for “substances giving particular cause for concern” published by the European Chemicals Agency in Helsin-ki (ECHA). This is a new milestone on the implementation time frame of 2018 set for this regulation.

In order to minimize the many and varied obligations and negative repercussions on the automotive industry resulting from this, the EU’s largest legislative initiative, the VDA, in consensus with other automotive associations, set up its own implementation strategy and necessary assistance. Concrete tasks were discussed and agreed within the VDA at national level. This included implementation of the communication duties in the automotive aftermarket. The “International Material Data System” (IMDS) also plays an important role in the reporting duties required by REACH.

It is already becoming apparent that REACH requires a greater communication and information flow both within the vehicle production supply chain and in the aftermar-ket. Drawing up registration documents and complying with reporting obligations requires extensive data exchange. Here, too, the VDA is providing the platform for completing the necessary activities.

REACH – EU chemicals regulation results in considerable extra cost

161

Advanced training as a “vehicle technology electrical specialist”The automotive industry has continued along the path towards improving working processes and reducing industrial accidents. Once again last year, it proved possible to reduce the number of industrial accidents and the number of days lost as a result, although the potential already seemed largely exhausted.

The impending production of electric vehicles has repercussions for occupatio-nal health and safety strategies and measures. Here, too, the German automotive industry is making early preparations; for example, it linked up with the employer’s liability insurance association and the Chamber of Commerce and Industry to devise an advanced training course as a “vehicle technology electrical specialist.” The first graduates have already received their diplomas. By so doing, the industry is sending a clear signal that it is pursuing a holistic approach, from planning via production and use through to recycling.

New approach to industrial safety regulations The industrial safety regulations bring together eight separate sets of regulations governing occupational health and safety and plant safety. This also had the result of concentrating the enormous body of regulations on the essentials.

The occupational safety committee within the Federal Labor Ministry applied comple-tely new criteria in the process. The new rules are now related to risk and no longer to plant and equipment. This “risk-related approach” made it possible to exploit the potential for modernizing state regulations. What is now required is to exploit syner-gies, continuing resolutely along the path that has been embarked on. This applies, in particular, to the attention paid to ergonomic issues and to longer working lives and the associated age-related work equipment.

An important objective of these newly drafted regulations is to highlight for each company what tasks are to be performed by the occupational safety engineers and what tasks by the company doctor. The task of the accident insurer is to develop a pragmatic approach based on the accident-prevention regulations that is easy to use for all companies and which does not result in competitive distortions. The preventive approach must be at the forefront of all considerations. In the process, however, one should not lose sight of effectiveness or the financial cost.


The 12th Technical Congress 2010With more than 400 participants from Germany and the whole world as well as renow-ned speakers, the 12th Technical Congress of the VDA on March 24 and 25, 2010, in Ludwigsburg, asserted its reputation as the leading technology symposium of the automobile industry in Europe. Highlights were both the key issues “vehicle safety and electronics” and “environment and energy.” On the second day, special emphasis was given to the current developments and perspectives of electric mobility. The executive boards of our manufacturers discussed progress and perspectives in this cutting-edge field with representatives from the power industry and suppliers. A few highlights of the two-day event are outlined here.

“The worldwide race for electric mobility has started. Important countries who manufacture cars see the strategic chance here to catch up with the leading German automobile sector,” said VDA president Matthias Wissmann at the opening of the congress. It really depends on whether the industrial and research status of Germany does not suffer a competitive disadvantage. “The specifications catalog is extensive: we need batteries which are light, achieve significant cycle stability, with high energy and power density, good unloading and charging efficiency, high safety and a long life, in short “auto friendly”. And all of this at a reasonable cost,” emphasizes Wissmann.

Until now battery costs have clearly been too high for the mass market, states Wissmann. “With a mid-range electric vehicle which is coming onto the market in the near future and has a range of 150 km, the additional costs of 10,000 to 15,000 euros compared to a conventional car should be considered. Even with the accepted price reduction through scale effects, the customer will be paying an extra cost of 7,000 to 10,000 euros in 2020. In comparison with conventional drives, electric vehicles will still remain a substantial economic challenge,” emphasized the VDA president.

Politics cannot leave the market launch of electric cars to the market alone, Wiss-mann emphasized. “But it can not find an ideal solution on a national level on its own either.” Otherwise a subsidy race of different nations will follow which ultimately does not help industry and the customer. “When politics, business and science pull on one rope, we have the best conditions to make the production location of Germany the heartland for the car of the future,” said Wissmann.

In his introductory presentation “Innovations in transmission for sustainable mobili-ty,” Dr Bernd Bohr, member of the executive board at Robert Bosch GmbH, outlined an automobile technology roadmap. “In 2020 to 2030, a clear structural break will be apparent. The winners of today are not necessarily the winners of tomorrow.” The manufacturers still rely too much on in-house production. Here, new alliances and future-orientated structures should be created. The combustion engine still has an efficiency potential of around 30 percent and in the coming 20 years will still ensure half of the mobility.

Key topics: Vehicle safety/electronics, environment/energy and electric mobility

The high battery costs of electric automobiles are a challenge

Industry expects “structural change” in transmission technology after 2020

163

In the second keynote speech, Prof. Dr.-Ing. Raymond Freymann, Managing Director of the BMW Group Research and Technology addressed the networking of driver, vehicle and driving environment with the subject “Connected vehicle – SIM TD.” The aim of the research is to enable a warning to be given to the driver in sufficient time to avoid accidents in “critical” traffic situations. This can happen via wireless communi-cation between vehicles and collective control, between several vehicles (“Car2Car”), as well as between vehicles and the transport infrastructure (“Car2Infrastructure”). These technologies will be tested in the major project SIM TD (Safe and Intelligent Mobility Test Field Germany) with a total of 17 partners, including all German automo-bile manufacturers, and the support of all three ministries BMBF, BMWi and BMVBS. The project is set out over four years (2008–2012) under the lead management of Daimler AG. A traffic area in the city of Frankfurt/Main has been equipped as a test site.

Afterwards, Prof. Dr. Uwe Grebe of GM/Opel spoke about “efficient drive systems for 2020.” Peter Langen, area manager for drive development at BMW AG, looked at the next 10 years of automobile technology with “Efficient Dynamics 2020.” Both were agreed that in the future, different drive technologies would coexist and there would be a diversification of energy providers. They spoke at length, arguing in support of a collaboration of manufacturers in standardization and modular systems.

Important questions of electric mobility such as network management and the use of storing capacity are still open. In the Plenary Session “Innovation shapes the future of mobility,” Dr. Helmut Ludwig, President of Siemens PLM Software, highlighted the big automobile trends sustainability, safety, comfort and “connectivity.” The vision is the continual reduction of traffic accident figures (“zero accidents”), of emissions (“zero emission”) as well as “soft factors” such as comfortable mobility whereby road users could continually receive information online and communicate with each other. With electric cars there are still decisive questions: “How will the networks be managed – and by whom?” Who will take on the charging procedures?“ The storing capacity of electric cars can be employed to store and use the irregularly accruing electric energy from alternative energy sources, e.g., sun, wind.

Dr. Thomas Weber, responsible for company research and development at Mercedes Benz Cars and board member of Daimler AG, spoke in connection with the electrifi-cation of the car, pooling domestic know-how and striving onwards together so that Germany can maintain pole position in the worldwide contest. “Technological lead is the decisive competitive advantage”, said Weber in his keynote on the subject “indivi-dual mobility – how do we travel in the future?” For this, an area-wide infrastructure, an intensified promotion of new talent and the standardization of vehicle interfaces are essential.

Key issues of electric mobility, such as network management and storage capacity are still outstanding


No drive system will fully replace the other. Rather, electric drives will complement petrol and diesel motors, fuel cells and drives with biofuels, said Dr. Ulrich Hacken-berg, a member of the executive board at Volkswagen AG, on the subject “future-orientated vehicle technology.” The development of alternative drives is not a sudden system change but a continual evolutionary process. With VW, priority is primarily given to hybridconcepts. Alternative drive solutions such as gas tanks, fuel cells, combustion engines or electric drives will be built into conventional vehicle platforms.

Electric mobility will proceed according to the thesis of Dr. Rolf Martin Schmitz, member of the board at RWE AG. It is technically possible and politically desired. The demand consists of electric drives being made possible and affordable for everyone, said Dr. Schmitz in his presentation “Electromobility requires cross-industry cooperation.” Schmitz specified three central fields in which market participants should collaborate: Europe-wide standards for charging and communication inter-faces (incl. accounting) with area-wide infrastructure, joint business models for limi-ting the high development costs of electric vehicles, batteries and infrastructure, and thirdly the guarantee of frameworks and kick-start finance as a political task. Schmitz suggested a one-off bonus for the purchase of a vehicle as well as promotion of the network connections/infrastructure.

With electrically driven vehicles which are mainly driven in the town, tires are respon-sible for nearly a third of the entire energy consumption, states Didier Miraton, mana-ging partner of the Michelin-Group, in his presentation “Joint development of tires and chassis as an answer to the demands of future mobility.” By contrast, the share of tires in the fuel consumption of conventional vehicles amounts to 20 to 25 percent. Therefore in the development of vehicles with alternative drives, it is also important for progress to be made in the area of rolling friction, for example tailored tires for the city or overland traffic. Car and tire manufacturers should also work more closely together in optimizing the vehicle and tire dimensions.

Electric mobility will arrive – “when, however, is still open to question,” says Sam Burman of IVECO, Senior Vice President of IVECO SpA, in his contribution to the discussion “Electric mobility for commercial vehicles.” The increase of CO2-regulations also requires rethinking in the commercial vehicle sector. Every transport purpose needs its individual drive solution. Therefore with Iveco, clean diesel was used on long stretches, but so was gas power. For short stretches in town, there are already fully electric solutions. The mid to extended range was covered by hybrid models. Such hybrid solutions reveal a CO2 saving potential of nearly 35 percent.

The VDA thanks the sponsors of the 12th Technical Congress, DEKRA, Michelin and Siemens.

The energy industry and automobile industry must work closely together

Electric drive technology also moves into commercial vehicles

165

Brand image

Market strength

Customersatisfaction

Product strength

Environ-ment

Safety Totalresult

Rank

Audi 2.5 3.8 2.3 1.4 1.7 3.4 1.90 1

Mercedes-Benz 2.4 3.7 2.6 1.5 1.7 1.0 1.91 2

BMW 2.3 3.8 2.2 1.6 2.4 1.5 2.09 3

Volkswagen 2.7 1.7 2.9 1.8 2.2 1.9 2.12 4

Volvo 3.9 4.1 1.7 2.0 1.0 1.7 2.16 5

Toyota 3.0 3.3 1.6 2.0 1.8 2.3 2.20 6

Honda 3.6 4.0 1.3 2.2 1.1 2.2 2.22 7

Skoda 3.2 3.0 2.0 2.0 2.5 2.2 2.35 8

Porsche 2.4 4.2 1.7 1.9 2.3 2.7 2.36 9

Seat 3.9 3.4 2.6 2.1 2.2 2.0 2.48 10

Mazda 3.9 4.0 2.0 2.1 2.2 2.3 2.51 11

Mitsubishi 4.0 3.6 1.6 2.2 2.5 2.6 2.55 12

Subaru 3.9 4.2 1.0 2.3 2.2 2.9 2.56 13

Opel 3.7 2.8 2.7 2.4 2.2 2.3 2.57 14

Ford 4.1 3.0 2.9 2.3 2.4 2.3 2.65 15

Jaguar 4.2 4.5 1.2 2.6 2.6 2.3 2.69 16

Mini 2.8 4.9 3.3 2.2 2.6 2.5 2.70 17

Saab 4.6 5.0 2.5 2.5 1.6 2.3 2.80 18

Peugeot 3.9 3.2 3.6 2.5 2.0 2.6 2.83 19

Citroën 4.2 3.2 2.6 2.5 2.7 2.9 2.86 20

Nissan 4.0 3.6 2.5 2.7 3.3 2.9 3.02 21

Lancia 4.5 4.1 2.0 3.3 2.3 2.7 3.05 22

Suzuki 4.0 3.6 2.1 2.9 3.0 3.4 3.06 23

Hyundai 4.1 2.8 2.3 2.9 3.6 3.3 3.09 24

Alfa Romeo 4.1 3.3 2.7 3.8 3.6 2.2 3.26 25

Fiat 4.0 2.7 3.6 3.2 3.3 3.0 3.27 26

Daihatsu 3.9 4.6 2.0 2.8 3.5 4.0 3.32 27

KIA 5.0 3.2 3.0 3.2 3.8 2.7 3.34 28

Renault 4.0 3.6 5.0 2.9 3.5 2.6 3.43 29

Smart 4.2 4.2 3.3 2.9 3.6 3.8 3.51 30

Land Rover 3.4 4.6 2.8 3.4 5.0 3.0 3.57 31

Chrysler 4.8 5.0 2.6 4.1 4.7 2.7 3.86 32

Chevrolet 4.0 3.7 3.9 3.6 3.8 5.0 3.97 33

Source: ADAC Infogramm

1V E R K E H R

Quality Management

Quality as a strength of the German automotive industryAs in previous years, the products of the German automotive industry continue to lead the established quality indicators. In the breakdown statistics of ADAC, the outstanding performance of the German manufacturers last year was confirmed in the current breakdown statistics.


Even in the DEKRA fault report 2010, 15 out of the 21 models which came first in terms of service life were manufactured in Germany. This is again an increase in comparison with the previous DEKRA fault reports. The result in the automobile brand study Auto MarxX, published every six months by ADAC, is in line with this: as in previous years, the German manufacturers occupy the top position.

These indicators show that the German automotive industry continually stands for the highest quality and reliability, even in a difficult environment. The quality offensive of the German automotive manufacturers and their suppliers is sustainable.

The methods and tools developed by the manufacturers and the suppliers in the context of the VDA quality offensive have frequently become globally recognized standards with the character of guidelines. The basis for this joint work was primarily laid down in the VDA committee quality management (QMA). The QMA, whose head office is the VDA QMC in Berlin, controls the activities concerning quality manage-ment in the automotive industry and so promotes quality thinking over the entire value creation chain.

VDA QMC scope of activities The development sections of the VDA QMC are provided in the QMC working groups, which significantly shape quality management in the German automotive indus-try through the QMA. The results and knowledge from these working groups are documented in the VDA QMC publication series. In 2009 the following editions were republished:

• IATF – ISO/TS 16949:2009Technical specification - norm, 3rd edition 2009

• IATF Auditor–Handbook 2009 IATF ISO/TS16949:2009 – Auditor Handbook about norms / 1st edition 2009

• Defective parts analysis field Marketing and customer care – defective parts analysis field / 1st edition July 2009

• Standardized complaint process Quality assurance in the product life cycle – standardized complaint process

• Maturity assurance for new parts 2nd Edition Product development - maturity assurance for new parts > 2nd revised edition

Purchasers of VDA QMC publications

OEMs and suppliers organized in VDA 31 %

Suppliers who are not organized in the VDA (abroad) 18 %

Advisers, auditors, individual persons 16 %

Certification companies 12 %

Training organizations 11 %

Publishers who buy books on behalf of companies 7 %

Colleges, institutes, other institutes 5 %

Source: VDA QMC

167

Distribution of VDA QMC publications among VDA members:In 2009, 17,000 VDA QMC books were sold, 10 percent of which were in English. Some 12 percent of the VDA member companies possess a license to download VDA QMC books via the QMC portal, and then put these at the disposal of their employees, in addition to manufacturers and suppliers via the company intranet. A total of 60 percent of the VDA members among the suppliers purchased VDA QMC publications in 2009 or accessed the portal; 70 percent of the VDA QMC publications were partly sold to “non VDA members” abroad. In the following table, the customer groups from the “non VDA members” circle are listed.

Besides the developmental tasks in the individual working groups and the careful documentation and publication of series, the VDA QMC is also a contractual partner of certification bodies approved by the QMC. Among other things, the QMC has the obligation to monitor the certification scheme worldwide in the form of so-called Witness Audits and Office Assessments. In addition, the contents which were previ-ously developed in the working groups are put at the disposal of member companies in the form of training directly from the VDA QMC.


VDA QMC ChinaA prominent aim of the VDA QMC is to embed quality awareness even outside of Germany and support German companies in the globalization process. The VDA QMC is present as licensee at the production locations relevant to the German automo-tive industry. In particular, local subsidiaries of the QMC were founded in impor-tant markets such as China and Russia in order to support the German automotive industry there. The offices in Peking and Shanghai already look back on a 4 or 5-year history. The focal points of the activity in China are the publication of familiar VDA QMC editions in three languages (German-English-Chinese), offers of training in quality management methods as well as the direct supplier qualification in the form of advice regarding the supply chain of German manufacturers and suppliers.

VDA QMC RussiaThe situation of the automotive sector in Russia necessitates an increase in the level of localization analogous to the situation in China: to reach the usual level of quality in local production, the regional automotive suppliers must have access to the quality standards and guidelines in their own language. Therefore in 2009, the QMC in Russia has extensively informed more than 50 specialists about the German QM guidelines at events in Moscow and Jaroslawl. In the meantime, the most important VDA standards can be acquired in Russia in the Russian language and are available throughout 2010. Also the first quality management training sessions has started well.

• Certifi cation training

• Auditor training

• Methods training

• Soft-skills, change

Management Support

• Selected projects for

German industry

Business fi elds

Quality Management Center China

• VDA editions

• - German

• - English

• - Chinese

• Print or online

• VDA publications

• Quality promoting

publications from the

German car industry

• Advice and implemen-

tation of concepts for

the qualifi cation of local

suppliers

Source: VDA QMC

VDA-QMC Quality Management Consulting (Beijing) Co., Ltd.

Training and advanced training

Publications Supplier development

169

Granting the official seal

Source: VDA

Registered system type“Company Waschmasch”

Name, locationtype of system

Etc. System Operator“Company Glanzwasch”

Name, locationtype of system,

washer,Etc.

Registered cleaner

“Company Waschfix”

Name, locationtype of cleaners

Etc.

Latest from the working groupsSeal of approval procedure with washing systems conforming to the VDA

Initial situationWhile automobiles and washing systems were compatible with each other for a long time, the products of the respective branches have developed slowly and steadily apart over the years. Therefore with the increased level of equipment, vehicles are also increasingly equipped with sensitive anodized aluminum surfaces. At the same time, the temperature and washing time of the systems have been continually reduced. To ensure a constantly high cleaning result, the cost for cleaning chemicals and mecha-nics (e.g., water pressure of the appliances) must be increased accordingly.

Definition of VDA compliant washer systems First of all the criteria for the reduction of damage incidents on vehicles in public car wash systems was defined. The guidelines even contained the criteria for the washing chemicals and the construction of the washing systems as well as for actual operation. Minimum standards were established for portal washing systems and car wash systems. Special requirements through SUVs or sports vehicles were taken into account. Approval tests were established for the cleaning agents such as pre-cleaner, shampoo, rim cleaner or insect repellent.

ProcessManufacturers of washing systems and chemical cleaning products register them-selves on the Internet in a database set up by the VDA QMC and are allowed to label their products or facilities with a seal. These companies issue the washing system operator with the conformity certificate for their specialist area, insofar as the corres-ponding VDA criteria are fulfilled.

Operators of washing systems can apply for the VDA seal over the Internet (www.vda-qmc.de). Besides the company data (name, address, owner), the application to be filled in contains details about machine technology and the chemicals used. At the same time, the conformity certificate of the manufacturer of the washing system deployed and the chemical products used is to be submitted. After positive assess-ment of the application by the VDA QMC, the washing system operator is sent the seal. This seal is valid for two years.


Cross checksWithin the context of inspections, the VDA QMC assesses the adherence to criteria by the washing system operator on-site. Due to the expected number of applications for provision of the seal, it is currently predicted that at least 10 percent of the washing systems designated with a VDA seal will be tested per year. The manufacturers of the systems and chemical products will undergo an audit by auditors authorized by the VDA QMC.

However, the guidelines should, under no circumstances, be introduced in the market. Therefore with system specifications, there will be differences between existing systems and systems to be installed in future. With this, the continued operation of existing systems should be achieved, but at the same time current and future develop-ments in the automobile sector should be considered for new systems.

The AdBlue Audit program of the VDA QMC In the so called SCR systems (selective catalytic reduction), the chemical synthesis product Harnstoff AUS 32 (Aqueous Urea Solution, 32.5 percent) is used to reduce NOX exhaust in diesel vehicles. For global circulation of AUS 32 for diesel vehicles, the VDA protected the brand “AdBlue®” in all relevant motor vehicle markets.

The quality of AdBlue® is extremely important for problem-free application in diesel vehicles. Therefore the requirements were established in detail in the ISO-norms 22241-1 to -4. These standards are to be fully noted by licensees of the VDA. The licensees of the VDA have invested significant amounts to be able to manufacture AdBlue® to the required quality. Furthermore, they are obliged to monitor not only their supply chain but also the distribution chain, and ensure that AdBlue® is not contaminated in transportation by other substances – for instance through transfer in small containers.

However, AdBlue® is partly provided at a quality which does not correspond to the ISO standard and, in the worst case, can lead to the failure of the SCR system. Some-times substances will be provided by “black sheep” which are indeed called AdBlue® without a license contract having been concluded with the VDA. Therefore the end user cannot rely on the details of individual providers since, until now, no one controls the market.

AdBlue® licensees: Difference between quality providers and “black sheep”

Source: VDA QMC

AdBlue® licensees

AdBlue®

Distribution net

“Black Sheep”

AdBlue®

Called AdBlue®, without meeting ISO requirements

!AdBlue®

Illegally called AdBlue®, but meets

ISO requirements

!AdBlue®

Illegally called AdBlue®, and doesn’t meet ISO requirements

!

171

Therefore the VDA has published a set of rules for auditing and certification of the manufacturers and distributors of AdBlue®. The manufacturers of commercial vehicles, as well as AdBlue® licensees from the chemical and oil industry (operation of petrol stations), assisted in issuing these rules. The quality management center of the VDA coordinates all audit activities concerning AdBlue® worldwide on this basis. Manufacturers of Aqueous Urea 32, who currently or in future want to acquire an AdBlue® license from the VDA, are obliged to carry out a quality audit for their production plant and their distribution system through the correspondingly qualified auditors of the VDA QMC.

The audit activities have been initiated and are achieving the level of success hoped for. The first worldwide company which recognized the competitive advantage and set itself apart form the masses as certified provider in the AdBlue® supply chain is the business unit CHEMILOG of the HOYER-Group, with headquarters in Dormagen. The audit was completed with a high total fulfillment grade of 96.6 percent.

The audit criteria vary depending on the field of activity of the company audited. While manufacturers will be audited by AdBlue® in view of the production processes, as well as the materials used there, the continual assessment of the chemical requirements, the documentation and traceability, as well as storage and transportation appropriate for the material, the pure suppliers (e.g., forwarding companies) or dealers (petrol stations) only have to fulfill the audit criteria applicable to them.

One of the most important elements of the new audit program is the counter check of AdBlue® samples by an independent and accredited laboratory. The samples to be examined were taken during the audit and must come from different production batches. The number of the samples taken is dependent on production or distribution volumes of the audited company. The audited company must reach at least an 80 percent fulfillment level to be able to conclude the audit with a positive result.

The set of rules underlying the AdBlue® Audits can be downloaded free from the homepage of the VDA (www.vda.de). Here, you can find additional information about the subject in general and especially the Audit program.


Status of certification according to VDA 6.x and ISO/TS 16949In 2009, there was a moderate rise in the figure of the production locations certified, according to the quality management standard ISO/TS 16949. At December 31, 2009, 41,072 production locations were certified according to this QM standard. Compared to the previous year, this corresponds to an increase of 4.4 percent.

This certification is as popular as ever in Asia, while the number of certified produc-tion locations in Europe and north America stagnates throughout. The penetration of the automotive supply chain with the certification is, however, already strongly pronounced in these regions.

Of the five International Automotive Task Force (IATF) Oversight Offices, the VDA QMC is the largest IATF Oversight Office in terms of figures, with 17,793 certificates of the 17 certification bodies authorized under the VDA QMC. As in the previous year, this corresponds to a share of 43 percent of all worldwide applicable ISO/TS 16949 certificates.

For suppliers, certification according to ISO/TS 16949 represents the entry card into the automotive supply chain as before. However, increasingly the companies in the 3rd tier and the supplier chain recognize the benefit of certification according to the quality management standard ISO/TS 16949.

In the area of the VDA 6x regulations, the number of certificates has been constant since 2008. On December 31, 2009, 772 companies were certified according to the regulations VDA 6.1, VDA 6.2 or VDA 6.4.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

20092008200720062005200420032002

ISO/TS 16949 certificatesVersion: 31.12.2009

Source: VDA QMC

VDA-QMCIATF

173

Distribution of the 41,072 worldwide applicable ISO/TS 16949 certificates Date 31.12.2009

Source: VDA QMC

North America5,350 locations(13 % of all certificates)

USA 3,841Mexico 976Canada 530

Europe9,895 locations(24 % of all certificates)

Germany 3,197France 1,090Italy 1,069Spain 896UK 598Czech Republic 551

Africa440 locations(1 % of all certificates)

Middle East1,407 locations(3 % of all certificates)

Iran 766Turkey 598

Asia/Pacific22,516 locations(55 % of all certificates)

China 12,038South Korea 3,845India 2,658Japan 1,194Thailand 955Taiwan 802

Central and South America1,464 locations(4 % of all certifcates)

Brazil 1,071

TrainingIn 2009, new seminars about the “Automotive Core Tools” were in the foreground, along with seminars about the VDA editions of the 6th series and ISO/TS 16949. At these seminars, not only was the theoretical and methodically correct approach in dealing with “Core Tools” presented, but it was developed and discussed in the course of exercises to be be considered during practical implementation. The close of the seminars constitutes a successful assessment.

During in-house training in the companies, demand extended from seminars about the “Process Auditor VDA 6.3” to “Automotive Core Tools.” Despite the global econo-mic situation, the number of the participants remained constant compared to the previous year. However, registration for the seminars at the VDA QMC was reduced to approximately 1,100 participants (open training in Oberursel and in-house training) caused by the economic crisis and the associated cost-cutting measures relating to training and travel costs. Compared to 2008, a decrease of about 10 percent was observed.

Internationally our branches in Peking and Moscow were represented at a total of twelve locations through our licensees. Through this network, we have offered the quality of VDA QMC training in the corresponding language through the VDA QMC approved trainer and at the usual cost according to the motto: “We are there for you, wherever you need us.”


EventsAfter the successful start of the series in the last year, the new quality management symposium on April 29 and 30, 2009 in Bad Homburg, was very much influenced by the evidence of both the further developed VDA standards VDA 6.3 and the new customer-specific requirements established by the working group in the context of ISO/TS 16 949 (CSR). As in the previous year, the format chosen in the meantime offered the possibility of being informed about new and further developments of the quality management standard. About 150 participants were spread over seven workshop themes and worked on current work group topics to bring experiences into practice and to exchange information. The main points of the event were the infor-mation from the International Automotive Task Force (IATF) and the further develop-ment of the international QM system standards of the automotive industry ISO/ TS 16949:2002.

The VDA QMC expert forum of the IAA 2009 in Frankfurt/Main, could latch onto the success of both the previous years with the new participant record, and offer a platform for the presentation and discussion of current quality management themes to the 300 participants of the manufacturers and suppliers. The focal point of the presentations, which were fully booked, were the quality management methods deve-loped by the VDA QMC and the current regulation of the certification for automobile standards ISO/TS 16949 and VDA 6.x.

Auditors symposium

• 2003, Düsseldorf

• 2004, Magdeburg

• 2005, Darmstadt

• 2006, Bonn

• 2007, Dresden

• 2008, Frankfurt/Main

• 2009, Bad Homburg


Summit meetings

• 2003, Stuttgart

• 2004, Ingolstadt

• 2005, Stuttgart

• 2006, Wolfsburg

• 2007, Munich

• 2008, Schweinfurt

• 2010, Leipzig

Workshops

• 2005, Reifegrad- absicherung

Technical Congress

• 2008 Ludwigsburg

IAA


• 2008, Hanover


• 2010, Hanover

Approx. 400 quality managers and specialists in discussion per year

Logistics

Sabrina Walbinger – Shift supervisor moulded foam production, F.S. Fehrer Automotive GmbH, Kitzingen

178LO G I ST I C S

The Situation of Logistics in the Automotive Industry

At present, fluctuating demand figures and the related influence on the supply chain are one of the dominating factors for logistics in the automotive industry. The customer’s freedom of design when ordering, extending into the actual production process of an automobile, and changes in the choice of models, certainly as a result of the present economic situation, has created a need for logistics to react with even higher flexibility in procurement, external transport, demand-oriented supply of production and accompanying processes such as IT service and packaging.

Rising transport costs and the intensification of goods transport on the roads call for creative solutions in order to ensure the smooth-running supply of the customers concerned, whether they are automobile manufacturers, suppliers, dealers or end customers.

In view of this situation, in 2009 the VDA Strategic Working Group on Logistics and the VDA Logistics Steering Committee, as the decision-making and steering bodies of the VDA Logistics Department, oriented the work of the individual committees towards the current challenges. Thus the focus was on the following main aspects:

• Supply chain organization

• Management of capacity and flexibility in the process chain

• Inclusion of logistics service providers in process standardization

• Standardization of forms of delivery

Various informative events and an exchange of experience with those involved in the supply chain have already taken place and communication between the partners has been intensified by the VDA. Here, the various committees, such as the VDA Steering Committee on Logistics and the working groups on CoC Packaging, KIT (Communi-cation and Information Technology), PLM (Product Life Cycle Management) and E12 Automotive (the working group on portal applications and supplier databases), with their related work groups and project groups, play an important role as their members are representatives of the manufacturers and suppliers. In many instances, these members exchange information with various partners in the logistics chain, such as IT firms, forwarders and packaging manufacturers. Another activity by which the VDA makes information and new knowledge available to member firms is intensive contact with academic science. In 2009, various activities were started in this area too, and in the near future we expect the publication of several studies on logistics topics of current interest which have been carried out in cooperation with the VDA.

Logistics react to current challenges with high flexibility

179

At the 9th VDA Logistics Congress 2010, held on February 25 and 26, in the Congress Center Leipzig, more than 250 decision-makers and specialists from all areas of logistics in the automotive industry exchanged their experiences in lectures, discussion rounds and topic sequences. The congress was opened by VDA President, Matthias Wissmann, and Saxony’s Minister for Economic Affairs, Sven Morlok. VDA Managing Director, Dr. Thomas Schlick, introduced the individual events. The cooperation part-ners of the VDA Logistics Congress were Porsche AG, ITA Automotive Service Partner and Dekra.

Currently relevant logistics topics in the German automotive industry and possible approaches to solutions constituted the main content of the congress. Under the rubric “Right of Way for Logistics – Intelligent Control of the Automotive Supply Chains in Volatile Markets,” logistics managers reported on activities and planning in their various enterprises, which included Benteler Automotive GmbH, Robert Bosch GmbH, the BMW Group, the Continental Automotive Group, Ford of Europe, Mann + Hummel GmbH and Volkswagen AG. Representatives from policy and science described the situation and challenges in the logistics sector from their viewpoint. The lectures mainly centered on value-chain oriented logistics in new forms of organiza-tion, changed requirements from logistics as a result of volatile markets, global supply chain excellence, challenges and trends in supply chain management accompanying the strongly fluctuating demand in the automotive aftermarket, currently interesting packaging topics, and human capital management in logistics for the automotive industry. As well as the lectures on “Management of Supply Chains in the Automoti-ve Industry – Myth, Fashion or More?” by Prof. Dr. Wolfgang Stölzle, University of St. Gallen, and “Your Great Comeback: A Supply Chain Success Story” by James A. Tomp-kins, President and CEO of Tompkins Associates, further focuses of interest at the 9th VDA Logistics Conference were presentations of the ITA/VDA Study 2010+ and the joint study of the European Business School (EBS) with the VDA on “Supply Chain Analytics – the Undiscovered Knowledge of the Automotive Industry.”

The program was rounded off by a specialist exhibition including IT enterprises, logistics service providers and packaging firms, and visits to the DHL Hub at Leipzig-Halle Airport and the Leipzig locations of BMW and Faurecia.

Leipzig as focal point of the automotive logistics industry

The VDA Logistics Congress 2010

180LO G I ST I C S

The prize for outstanding performance in automotive logistics, the VDA Logistics Award 2010, went to ZF Friedrichshafen AG. The six members of the jury honored the automotive supplier’s project “High-performance logistics in the area of transmis-sions for heavy commercial vehicles.” The jury was won over by the fact that in ZF’s general project concept, equal weight was accorded to all aspects of the logistics and production process for heavy commercial vehicle transmissions between component supplier and customers – from procurement, through adherence to delivery dates and quantities, to product quality. As a result, lead times were systematically shortened and sequence precision increased to 100 percent, meaning that the error rate in the logistics process of this strategic business field was reduced to zero.

The jury comprised VDA President Matthias Wissmann, Dr. Karl Nowak, President, Corporate Sector Purchasing and Logistics at Robert Bosch GmbH, Tina Rumpelt, responsible for special projects at Automobil-Produktion, Dr. Karl Sommer, Divisional Manager of Logistics, Design and Operations, Supply Network of the BMW Group, Prof. Dr.-Ing. Thomas Wimmer, Managing Director of the German Logistics Associa-tion (BVL) and, as Chairman of the jury, Prof. Dr. Wolfgang Stölzle, Chair of Logistics Management, University of St. Gallen.

VDA Award for a logistics concept in the area of heavy commercial vehicles

The VDA Logistics Award

181

VDA practical logistics forums

Since 2006, the practical forums of the Logistics Department, which take place twice yearly, have been important informative events for VDA member firms, keeping them informed on committee work and currently relevant topics in the VDA and its part-ner organizations, ITA and Odette International. As well as reports on the results and status of current projects and progress reports on the implementation of the VDA recommendations, these events focus on reports about new processes and strategies in member enterprises.

In 2009, the VDA Practical Forums on Logistics took place on June 17 and November 19 at the offices of the VDA in Frankfurt. Logisticians from more than 50 member firms heard presentations by representatives from Adam Opel GmbH, Audi AG, Continental Automotive, Robert Bosch GmbH and Volkswagen AG, and were able to follow reports on current ITA projects and topics relating to the VDA office. The subjects of the talks included VDA Recommendation 4933 on standardized transport advice, develop-ments on secure e-mail communication, Volkswagen’s new logistics concept, VDA Recommendation 4525 on the standardization of disposable packaging for seaborne container applications, collaborative demand and capacity planning, measuring of planning quality in the aftermarket and reports on VDA Recommendations 4500 (VDA small load carrier system – KLT) and VDA 5010 (standard forms of delivery logistics in the automotive industry).

The following recommendations were developed and published by the Logistics Committees in 2009:

• VDA 4933 (November 2009)Standardized transport advice

• VDA 4937, Part 0 (March 2009)Automatic feedback on delivery notes;Process description and general information

• VDA 4937, Part 1 (March 2009) Automatic feedback on delivery notes; Syntax and service report (EDIFACT CONTRL)

• VDA 4937, Part 2 (March 2009) Automatic feedback on delivery notes; Notification of application errors and confirmation (EDIFACT APERAK)

• VDA 4937, Part 3 (March 2009) Automatic feedback on delivery notes; Notification of goods receipt (EDIFACT RECADV)

• Updated VDA 4500 (October 2009)Small load carrier (KLT) system

• VDA 4520 (February 2009)Large load carrier (GLT) system

• VDA 4525 (November 2009)Standardized disposable packaging for seaborne container applications

Regular exchanges of experience among member enterprises on topics of current interest in logistics

Events and Committees

182LO G I ST I C S

AK KIT – information and communication technology working group

The work of the KIT working group in the year under review concentrated on the following themes:

• Modification of the most important VDA EDI recommendations. Here, indications of information sources and codes (e.g., for packaging or countries) are being brought up to date. Also some of the recommendations are to be translated into English. However, this measure does not involve a general revision ( i.e., one dealing primarily with content).

• Work on the EDI Agreement concerning tax regulation. A document is being compiled together with Odette and is intended to lead to a new DIN standard.

• The committee also ascertained that the Web-EDI project group urgently needs to be reactivated, due to the need for solutions particularly in the area of electronic transmission of invoice and advice of credit data for small and medium-sized firms. Unfortunately a start could not be made in 2009 due to capacity bottlenecks.

• Further work on the project “CMI – Collaboratively Managed Inventory.” The project, again together with the Supply Chain group of the Aftermarket Committee, is based on the already-existing Odette recommendation which, however, deals only with the process. The project in the KIT working group (AK KIT) has the aim of standardizing the related information flow.

• The project “Information concept for automatic feedback from electronic delivery notes” was successfully completed. This has closed the gap which made it impos-sible to exchange feedback on delivery notes electronically. The implementation of project results in an IT solution means that repeated adjustments by telephone and intensive fax exchanges in the case of errors in notifications of delivery have become a thing of the past.

• Completion of the work of the project group “Standardized Transport Advice.” This project was carried out jointly with the Supply Chain group of the Aftermarket Committee. The aim was to harmonize the various different methods and documents used in this process up till now.

• The use of UNICODE in electronic data interchange with countries where the Latin alphabet is not in use cropped up on the agenda many times. Intensive discussions took place, but it has not yet been possible to arrive at a coordinated view regarding further activities.

• Finally, the topic “Missing data fields in delivery note data when using RFID tags” was on the program. The proposed solution for completing the data structures is still being developed.

Working group brings international logistics codes up to date

183

Payment Procedures Working Group

Much attention in the Payment Procedures Working Group was devoted to the impacts of the “De-bureaucratization Act” (“Entbürokratisierungsgesetz”) passed at the end of 2008. This legislation is a breakthrough for the payment process, because it offers the possibility of leaving out the summation sheets which were obligatory for many years, provided the integrity and authenticity of the data are ensured. Among other means, this is achieved by using the new transmission protocol of Odette, the OFTP2 (Odette File Transfer Protocol). The possibilities of this protocol were compre-hensively presented and discussed. In the same context, characteristics of the new EDI agreement were also discussed, in coordination with the KIT working group.

The attempt to accommodate the new legal requirements by modifying VDA Recom-mendations 4906 (for invoices) and 4908 (for credits) was rejected. Instead, the committee agreed to the use of Global INVOICE, which has the added advantage that discounts, advance payments and invoices for non-productive material or for ser-vices can also be taken into account and can be displayed. An intensive and fruitful discussion on this issue was conducted with the representative of the VeR (Verband elektronische Rechnung, a newly formed German non-profit association concerned with electronic payment). There was also intensive discussion of one manufacturer’s concept for introducing VDA Recommendation 4938 (without digital signature, however). Finally, the working group adopted the idea of a Miniguide on the assigning of mandatory invoice fields to segment/field in Global INVOICE.

E12 Automotive Working Group

The working group met twice in 2009. The topics it focused on were portal interfaces; the results of the Odette study “Portal and EDI Usage,” a detailed consideration of master data cleansing in firms and the possible benefits and disadvantages of a central supplier database.

Container standardization and packaging issues (CoC Packaging)

Within the permanent working groups on wheel pallets (EWPS – European Wheel Pallet System), original parts packaging and VDA small load carrier (KLT), the CoC (Center of Competence) for Packaging deals with the current problems and requi-rements of the automotive industry regarding these aspects of packaging. The constant updating of the EWPS and KLT – products developed and certified by the VDA – requires close collaboration between the automotive industry, logistics service providers and packaging manufacturers. As well as the working groups in the CoC for Packaging, special Project Groups have been continued on large load carriers made of plastic, and the standardization of disposable packaging in seaborne container applications.

Large load carrier (GLT) made of plastic

The development of a VDA recommended standard for large load carrier systems made of plastic for the automotive industry, with unified interfaces and structure enabling them to be used across manufacturers and suppliers in a standard pool of load carriers, was concluded with the dimensions 1,200x1,000 mm and was docu-mented in VDA Recommendation 4520 (February 2009). The GLT was presented for the first time at the VDA Logistics Congress 2009. Practical use has commenced and the use of other GLTs with other dimensions will follow according to demand.

German federal legislation opens up possibilities for the dismantling of bureaucracy in payment procedures

Close collaboration between the automotive industry, logistics service providers and packaging manufacturers in working groups

184LO G I ST I C S

Standardized disposable packaging for seaborne container applications

The objective of this VDA Project Group was standardization of disposable packaging (its dimensions, design and quality) relative to the dimensions of seaborne containers and their applications, for general use. In 2009, this project was able to be completed with the publication of VDA Recommendation 4525.

VDA Recommendation 4500 – the oldest recommendation on packaging, more relevant than ever

In 1989, the publication of the first version of VDA Recommendation 4500 on a “VDA small load carrier (KLT) System” marked the beginning of a success story for this standardized container system which would not have been thought possible at the time. Today, a total of over 72 million VDA KLTs have been produced and brought onto the market. The sixth version of VDA Recommendation 4500 which has now been developed is substantially leaner but no less forward-looking. It is more logically structured, and the system descriptions are more compact and thus more transpar-ent. Important additions are the approval procedure guidelines intended both for the testing institutes and for interested KLT manufacturers. Knowledge gained from goods transport with VDA KLTs over the past years has also led to adaptation of quality tests. One significant innovation is the introduction of an attachment in autonomous document form, meaning that important data and variables, such as dimensioned drawings, limit values, etc., can always be dynamically updated.

The PLM Working Group – setting standards for continuous processes

Sustainable mobility needs people who work together to prepare the way for ideas. For more than 25 years now, the VDA Working Group Product Life Cycle Manage-ment (AK PLM) has been setting standards, here. The working group sees itself as an effective cooperation network of manufacturers and suppliers in the automotive industry. Its effectiveness is ensured by the commitment of its participants and by its proven working method for the creation and implementation of recommendations on procedures, data formats and system concepts. The successful cooperation with the ProSTEP iViP Association on the bundling of competences has been intensified further. In order to present to the general public the solutions that had been arrived at, the working group published an Image Brochure in 2009.

The Remote Data Transmission (DFÜ) Project Group successfully completed its work on the recommendations on ENGDAT (electronic delivery note for engineering data) and ENGPART (format for online exchange of essential partner information) at the end of 2009. In future, the project group will deal with the maintenance of the results, which are documented in VDA Recommendations 4951. Currently, adaptation work is still on the agenda, e.g., the updating of references to ENGDAT and ENGPART in the OFTP2 Implementation Recommendations published by the VDA, and the adding of references to new specifications. OFTP2 is the Odette File Transfer Protocol 2, a trans-mission protocol for the exchange of electronic data used throughout Europe.

Digital factory planning

Attention focused on factory layout, buildings and materials handling. Machine and plant design were included as an adjacent CAD planning area, and material flow simulation and cell simulation were included as adjacent simulation areas. The results of the working group were published in the relevant report, which gives a brief over-view of planning systems and the basic mechanisms in data exchange processes.

Standard for small load carriers has become a success story for standardized containers

More than a quarter of a century of close cooperation between manufacturers and suppliers over the whole life cycle of the automobile

Remote Data Transmission

185

Change management

Cutting throughput times, while at the same time increasing quality, must be the aim of every enterprise. To achieve this, changes have to be communicated and imple-mented promptly according to a defined change process (ECM – Engineering Change Management). The VDA and IT service provider ProSTEP iViP jointly issued VDA Recommendation 4965 for this application. All further measures are aimed at ensuring widespread international acceptance. This is taking place under the umbrella of the Strategic Automotive Product Data Standards Industry Group (SASIG), an amalgam-ation of AIAG (USA), GALIA (France), JAMA (Japan), Odette Sweden and the VDA. The results of this work have recently become available as Version 3 of VDA/ProSTEP iViP Recommendation 4965. In 2009, the start of this recommendation in industrial pilots in Japan, France and Germany was also intensively prepared, so that they can be commenced in 2010.

Vehicle electrics

The objective of this working group is to improve vehicle circuit development process-es and their integration into the vehicle development process as a whole. Since 2009, the members have been working on the specification for the so-called Vehicle Electric Container (VEC), which is intended to cover all aspects of vehicle circuit development. The components of the VEC are based on VDA Recommendation 4964, Harness Description List (Kabelbaumliste, KBL) and on the ELOG, KOMP and GEO models, and are downwards compatible with these. At the end of 2009, together with the ECAD Implementor Forum (a project group of the ProSTEP iViP Association), the group presented the first partial specifications to users and software manufacturers, who confirmed the great demand for these solutions in industry.

Collaborative CAD/CAE Integration (C3I)

The VDA/ProSTEP iViP Project Group C3I, newly founded in 2009, has proved itself a worthy successor to the SimPDM Project, which provided solutions for the integration of simulation and evaluation in a PDM environment, contained in VDA Recommen-dation 4967. Building on these results, the project concerns itself with solutions for cross-company collaboration in the area of simulation and evaluation, and with data exchange processes between CAD (computer aided design) and CAE (computer aided engineering) systems. Another main focus of project work is the active support of pilot schemes in industry for the further validation of the SimPDM solutions.

Faster production plus higher quality as the objective in product life cycle management

186LO G I ST I C S

JT (“Jupiter Tesselation”)

No topic was discussed so intensively in 2009 as JT. Jupiter Tesselation is a “light-weight” data format. There has long been a demand in the automotive industry, as well as in the aviation industry, to establish JT as the mandatory process format in order to reduce IT costs and simplify processes.

An important prerequisite for proceeding concretely with JT was the publication of the JT specification as an ISO Publicly Available Specification (PAS) – a measure in which the VDA and the ProSTEP iViP Association provided active support. Together with the ProSTEP iViP Association, the JT Workflow Forum was initiated. Within just a few months, users specified and validated 15 use cases – from procurement processes, through DMUs (digital mock-ups) and supplier integration, to digital factory planning. In the second half of 2009, a JT translator benchmark was also carried out. In this, the data exchange quality of leading CAD systems and translators was neutrally exam-ined in extensive test scenarios. The results of these two projects, and the experience gained, now form the basis for continuing the JT Workflow Forum, establishing a JT Implementor Forum with the purpose of allowing software manufacturers to ensure the interoperability of their products, and performing another benchmark.

ITA – Automotive Service Partner

Increasingly, information technology has become established as a key success factor for creating value added in the development, production, logistics, sales and servicing of automobiles, and generates significant competitive advantages. Since 2000, the ITA (Information Technology for the Automotive Industry), an organization combining consultancy and IT enterprises, has cooperated with the VDA in a spirit of partnership to support the automotive industry in developing innovative business models and solu-tions, gaining advantages of efficiency and productivity, and improving and standardiz-ing existing processes. The ITA has developed into a major communication partner for the automotive industry and contributes to the forward alignment and competitiveness of the sector.

In 2009, the Automotive Service Partner ITA again supported the VDA Logistics Congress as sponsor and co-organizer, and was represented in a lecture sequence with its own exhibition stand and speakers. Participants in these activities had the opportunity for discussion with partners from the automotive industry, associations, ITA member firms and logistics service providers.

In 2009, a study on trends in logistics and IT in the automotive industry and the auto-motive supply industry was carried out. Results were published at the beginning of 2010 in collaboration with VDA. In future years, this trend observation will take place in a biennial cycle. This study can be obtained from the Logistics Department of the VDA, or online via http://de.ita-int.org.

With a view to adopting an innovative approach to themes of current relevance and defining future projects, the ITA organized a strategic Project Workshop with the par-ticipation of experts, the VDA and representatives from the VDA Steering Committee on Logistics. As a framework program for the workshop, participants were offered insights into container units and car transport, with the support of the BLG (Logistics Group Bremen). The following project topics were presented in detail:

• RFID Strategy

• Logistics Collaboration in Emerging Markets

• Innovative Processes in Demand and Capacity Management (CDCP)

• MES Standardization

Cooperation of consultants and IT firms helps strengthen competitiveness

187

These projects are being developed in close collaboration with the automotive indus-try. The ITA is also supporting the KIT working group by participating in discussions on topics and projects. More information on the ITA can be found at the new ITA Portal www.ita-int.org.

Odette

Last year Odette – the European Organization for Logistics and EDI (electronic data interchange) in the Automotive Industry initiated some important services:

• Odette Certification Authority

• OSCAR-Odette ID (OSCAR – Odette System for Coding and Registration), replaces the previous Odette-ID

• OSCAR Trust Service

• The Odette EDI Validation Portal.

Worldwide availability of the Internet as a transmission medium for electronic data interchange (EDI) creates new challenges in the identification of partners. Together with other members of Odette, the VDA has developed a system for the uniform allo-cation and storing of so-called Odette-IDs: the OSCAR System. In 2009 the Logistics Department of the VDA converted the allocation of Odette-IDs to this new system.

The Odette Trust Centre (Odette CA) continues to offer security certificates which are used for the encoding and signing of data transmission. The Logistics Department is the registration point for applications from German-speaking countries and takes on the testing of the transmitted company data. In this way, reliable partner identification is ensured and misuse is prevented. More information on this is published at https://oscar.odette.org and https://www.odetteca.com.

Safe, low-price data transmission

The new OFTP2 transmission protocol has opened up the possibility of changing data exchange in the automotive industry and using the Internet without forfeiting data security or confidentiality.

The following recommendations on RFID were adopted:

• “RFID for Supply Chain Container Management” – based on VDA Recommenda-tion 5501

• “RFID for Tracking of Parts and Assemblies in the Automotive Industry” – based on VDA Recommendation 5510

• “RFID in Vehicle Distribution Processes” – based on VDA Recommendation 5520

Another highlight in the activities of the Odette organization was the completion of Version 3 of the Global MMOG/LE (Global Materials Management Operation Guide-line/Logistics Evaluation). This is also available in German. Important elements of the tool, which is compliant with ISO/TS 16949:2002, were developed further. Automobile manufacturers and suppliers can use it for internal and external self-assessments, benchmarking of existing status of the enterprise and/or best-practice evaluations. It can also be used in the continuous improvement process, in the development of suppliers and their performance evaluations. The tool is now available in 13 languages and there are more than 15,000 users worldwide. More information can be obtained at https://forum.odette.org/service.

Transport and Infrastructure Policy

Frank KlingemannGraduate in mechanical engineering, Director of Body Systems production, FFT EDAG Produktionssysteme GmbH & Co. KG, Fulda

190TR A N S P O RT A N D I N F R A STR U CTU R E P O LI CY

Cars and Trucks as a Means of Mobility and Economic Prosperity

The car – no.1 means of transport The motor vehicle is by far the number one mode of transport. It provides approxi-mately 80 percent of passenger transport traffic. It multiplies the range of activities for citizens and therefore increases the freedom of choice for every individual in work and training places offered, in businesses, doctors, recreational and cultural estab-lishments, as well as personal encounters. In brief, it is also an instrument for social participation.

The significance of the car for individual mobility is also shown by the fact that 81 percent of households in Germany have at least one car at their disposal. More than every fourth household possesses two or more cars. This shows the need to be mobile at any time, as required.

In this respect, the increasing level of motorization does not also mean an equal increase in passenger traffic. The volumes for this have only increased slightly over the last years. In 2009, 871.3 billion passenger kilometers were processed. This was approximately just as much (+0.2 percent) as in the previous year. Until 2025, the yearly growth rate should amount to 0.7 percent per year according to the prognosis of the Federal Transportation Ministry.

A number of factors suggest that passenger traffic is decreasing in the long term due to demographic development - increasing average age, declining population. In addi-tion it is noticeable that older people tend to be less mobile solely for the reason that they no longer commute to work. However, recent developments show that this effect is relative since the “active pensioners” therefore go on more cultural and leisure trips. Therefore, the desire for individual mobility will remain pronounced in the future.

Parallel to this, re-urbanization presents itself as the second megatrend. It creates scope for the use of innovative mobility concepts in urban areas which are based on the networking of public transport, bicycle traffic and car sharing.

The car is an instrument for social participation

0

2,000

4,000

6,000

8,000

10,000

CarPublic road traffic

RailAir transport

203020252020201520102005200019951990

Passenger traffic in the EU-27 until 2030in billions of passenger kilometers

Source: EU Commission

Demographic development and urbanization influence traffic

0

300

600

900

1,200

1,500

CarPublic road traffic

RailAir transport

2025200920001995199019801970

Passenger traffic in Germany until 2025in billions of passenger kilometers

Source: DIW, BMVBS, BVU/DLR/ISL

191

In European countries the development is similar: the car is also by far the most important means of transport there. In the EU-27 it mounts to 76 percent of passenger traffic. Of course, only a slight increase in traffic to the order of around 1.2 percent every year is also calculated here until 2030.

The devil makes work for idle handsWhile the car is important for passenger traffic, the commercial vehicle is important for the daily supply of goods. Since it is the only means of transport which can be driven up directly to the plant and the business to load and deliver goods, it is at least essential for the “first and last miles” of transportation. And since over two-thirds of the growing goods volume is transported regionally, during which an interconnection with rail traffic is not worthwhile, in many cases there is no alternative to the commer-cial vehicle for the whole transportation route. Therefore, according to 2009 figures, it also supports 71.4 percent of the total service in freight traffic. It also reaches this high output in other European countries; in the EU-27 its market share amounts to over 70 percent.

With distances of more than 300 km it makes sense in many cases to combine road and rail during transportation. Therefore the German car industry is also one of the main clients of freight transport by rail. Every second vehicle is transported by rail for the main part of the journey from the production site. For this reason the car industry also has a fundamental interest in an efficient and strong rail freight network. They therefore welcome the plans of the federal government to improve the product on the railway network through strong independence from operations, more competition and stricter regulation.

In contrast to passenger traffic the dynamism of freight traffic is expected to continue in the long term. As a consequence of the economic situation, the performance of road freight transport collapsed by 11.1 percent to 420.1 billion metric ton-kilometers in 2009. However, for 2010 an increase by 4.5 percent to 438.9 billion metric ton-kilo-meters is calculated.

The commercial vehicle – essential for regional supply

0

500

1000

1500

2000

2500

3000

3500

Truck Rail Inland shipping

20252020201520102005200019951990

Freight traffic in the EU-27 until 2025in billions of metric ton-kilometers

Source: EU Commission

0

200

400

600

800

1,000

Truck Rail Inland shipping

202520092005200019951990

Freight traffic in Germany until 2025in billions of metric ton-kilometers

Source: Federal Ministry of Transport, Building and Urban Development


In the meantime, the proportion which is to be paid for mineral oil tax and VAT on the purchase of one liter of fuel alone has reached two-thirds. Of 1.28 euros, which is the average price for one liter of normal petrol, the car driver pays 0.86 euros in tax.

Overall this adds up to a yearly income in the region of 33 billion euros for mineral oil tax from car drivers. With an additional burden of 6.3 billion euros, the share of VAT revenue paid by the car drivers alone which results from the raising of mineral oil tax is significant. In addition there are liabilities in the region of 8 billion euros for motor vehicle tax as well as 3.7 billion euros from the truck toll revenue for traffic route finance. In total, the tolls related to traffic amount to a total of 51 billion euros per year. In comparison with this, expenses for the road infrastructure stand in the region of only 14 billion euros. This corresponds to a back flow rate of not even 28 percent. Indeed, this has slightly improved in comparison with previous years due to the economic package. However, when this ends in 2011, the quota threatens to decline significantly.

In addition, in terms of transport services, significantly less money flows into the road infrastructure than into the railways. In comparison, yearly investments of 1.83 percent were achieved per transport service unit – calculated in persons and metric ton-kilo-meters – and was therefore more than three times as much as the roads, which only represented 0.57 percent.

Mobility Must Remain Affordable

0

10,000

20,000

30,000

40,000

50,000

60,000

Surplus Expenditure on roads

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

Application of the revenues from specific motor traffic contributions

Source: VDA

Tolls from road traffic exceed the 50-billion-euros limit

193

Cost risks car tollIn addition, demands for a kilometer-based car toll are always raised. To make this project palatable for the car driver, the supporters promise that, on the one hand the total burden remains constant through a simultaneous abolition of the car tax and a reduction of the oil tax, and on the other hand, that the revenues from the car toll – unlike with the tax revenue – would be appropriate in its entirety for the road infrastructure.

However, the example of the truck toll shows that the adherence to such promises is less probable.

• Instead of liability neutrality, the truck transporters experience a net additional burden in the region of 2.4 billion euros since the toll burden at 3 billion euros per year was only adjusted with the discontinuation of the Eurovignette, which had been used until then, and brought in a revenue of approximately 600 million euros.

• Up until today, only half the toll income flows back into road building. The other half goes into rail and river transport – the opposite of closed financial loops linked to transport carriers.

• Also a genuine increase of the freeway investments is undone since, from the year of the toll collection, the budgetary funds provided for the construction of federal highways was reduced to the amount of the additional toll funds so that the investment facilities implemented by then were not enhanced.

To date, the credibility of the transport policy has suffered a lot from this. Therefore there is reason to assume that ultimately the car toll would become a “loss-making business” for the car driver and the revenue would only be misused to plug budget deficits. A view abroad confirms that similar fears are harbored there: in the Nether-lands, where the government wants to introduce a car toll from 2014, 62 percent of the population does not believe the promises of their government about not increa-sing the costs.

0

1

2

3

4

5

6

Toll funds Budget funds

2008200720062005200420032002200120001999

No investment boost through the truck toll

Source: Federal Ministry of Transport, Building and Urban Development, Pro Mobilität

The arguments for a car toll have feet of clay


Apart from that it is considered that the introduction of an automobile toll is linked with significant system costs. If the alternative of introducing a vignette is considered, then the system costs would indeed work out slightly lower. However, the environ-mental steering effect would be very problematic since a fixed price rewards the frequent driver and, at the same time, financially penalizes the infrequent driver. This cannot be in the interests of a federal government.

Also the favored argument that foreign car drivers would contribute more to the cost of local road use through a toll is unacceptable. According to investigations of the German Institute for Economic Research from 2009, at already 162 percent these cover the costs occasioned by them on our federal highways via revenue from oil tax and VAT. They even cover inland cars at 265 percent.

Finally, it should be feared that an automobile toll would lead to traffic shifting onto the subordinate road network and urban roads. There the risk of accident is certainly higher. Apart from that the environmental burden would increase. Therefore the aim should be to transfer as much long-distance traffic to the freeways as possible.

With good reason, the federal Chancellor has spoken out against the introduction of an automobile toll before the parliamentary election.

No to city toll correct A city toll is repeatedly discussed on its own as an additional source of income. However, in Germany the city toll idea only finds a few supporters in the area of transport policy – with good reason. The local politicians know only too well that foreign experiences can only be applied to Germany in a limited way due to its special settlement structure. While other countries often reveal a strong concentration of population in mega cities with an expansive surrounding region – classic examples are London and Paris – Germany is relatively evenly populated. The towns stand in comparatively close proximity and compete for retail customers who soon stay away and “defect” to the neighboring towns when faced with mobility restrictions.

Also in ecological terms a city toll is not sensible. It drives consumers away from the individual downtown commercial centers to greenfield sites, which often require longer access routes and produce more emissions than shopping in the town center.

Therefore it is only logical that both the German Association of Cities as well as the federal government reject the introduction of a city toll.

The special settlement structure in Germany makes the city toll economically and ecologically untenable

195

In 2009, the road freight transportation sector experienced the hardest economic crisis since the founding of the Federal Republic. Its transport services declined by 11.1 percent. Despite all appeals relating to the economy, the former federal govern-ment did not want to forsake drastically increasing the car toll during this phase. Minus the compensation measures, the toll burden of the transportation industry rose to over a billion euros on January 1, 2009 and thereby by about a third.

The high toll did not remain in the transportation industry without effects. At the start of 2009, the financial situation index of the Federal Association of Road Haulage, Logistics and Disposal plunged to an all-time low in the road freight transportation sector. In the first half of the year, 445 companies went into administration. Parallel to this development, German transport logistics companies have significantly reduced their vehicle fleet capacities. Since the start of the toll increase, nearly 70,000 lorries required to pay the toll were decommissioned. In terms of the total stock of all vehi-cles required to pay the toll, this means that every fifth vehicle was decommissioned. In addition, this stage was linked to short-term work and dismissals.

Therefore it is to be welcomed that the new federal government has ruled out every further toll increase for the current legislation period. In connection with this, the federal government should in no way prematurely address allocating Euro V vehicles into the next higher toll charge level.

The Transport Industry in Crisis

Ten-thousand automobiles were taken off the road due to the crisis


Innovative commercial vehicle concepts: A contribution to the reduction of emissions The former federal government has foregone incorporating the assessment of efficiency potential into the freight transport and logistics master plan, which finds use for longer vehicle combinations in the transportation system. For example, two 25.25 meter EuroCombis transport the same volume as three conventional commercial vehicles. Through this, road space requirements, fuel consumption and emissions are reduced with the same transport capacity. The road space requirements are reduced by over 20 percent, fuel consumption and emissions are reduced by around 15 percent.

Other countries in the EU already benefit from the advantages of such concepts, for example Sweden and Finland and also countries in which the road infrastructure is very similar to that in Germany, such as the Netherlands or Denmark. Previously, people in Germany shied away from sounding out the chances which lay in these concepts for the infrastructure, the loading econo-my and the environment – not least because market share losses were feared for rail transport. Lastly, it concerns the search for possibilities to optimize the transportation system and to connect roads and rail traffic with each other for the benefit of the whole system. Therefore the automobile industry has taken on a constructive dialog with the representatives of the rail system to jointly develop this vision of an integrated transport system, in the context of new commercial vehicle combinations.

Scientific research of the EU proves the use of longer vehicles

The European Commission has also scientifically investigated the use of longer vehicle combinations. The result speaks clearly: at best, traffic shifting to the roads was expected to a marginal degree. However, even in this case driving performance on the road was significantly economized since fewer commer-cial vehicles were required to transport the given freight volumes. Through the smaller number of commercial vehicles, the waste potential therefore diminishes, and the saving of fuel benefits the consumer just as the reduction of emissions benefits the environment. Therefore, a Europe-wide approval of such concepts is required. However, the commission is rather skeptical of such concepts.

It is therefore all the more pleasing that the new federal government wants to gauge the chances of innovative commercial vehicle concepts. It plans to evalu-ate these in a nationwide field study. The automobile industry offers its collabo-ration in setting this up – as provider of such concepts but also as consumer of these concepts with its own goods transportation.

197

Next to innovative commercial vehicle concepts, intelligent traffic management systems can make a significant contribution to increasing the capacity of the avail-able highway system. Collective systems which depend on the current traffic situation enable temporary hard shoulders, specify optimum speed limits or regulate the influx onto the freeway. Individual systems navigate in traffic jams and make the driver aware of danger points ahead.

However, on highly congested bottlenecks you cannot avoid a specific expansion of the road section concerned. For a long time, it has been noticeable that the expansion of the federal highway system has remained behind in terms of what is important. Through this, an increasing need for expansion has been overlooked, which the public sector has procrastinated.

On the German freeway network the average daily traffic volume amounts to more than 50,000 vehicles. Numerous road sections partly reveal traffic congestion of 100,000 vehicles (e.g., the Cologne freeway ring). Today over a quarter of the total length of the freeway network must be categorized as “highly congested.” According to figures of the federal government, it amounts to over 100,000 traffic jams within a year on German freeways with a total of 180,000 congestion hours. The congestion time requirement for all automobile drivers adds up to millions of hours which could be used for other activities.

The Demand-based Infrastructure

German freeway network 2020ADAC request

Source: ADAC

These new roads are necessary*

These existing freewaysmust be expanded*

Expansion of 27,500 kilometers of motorway1,600 kilometers of new freeways

* Partially alreadyunder construction(September 2007)

Detailed map

National expansion plans remain behind the expected growth


Indeed numerous expansion projects are already provided for in the current federal traffic route plan (BVWP) 2003–2015. Of course, even if all the plans are realized, the level of expansion will not keep in pace with the expected traffic increase. This was shown by ADAC in its “Study about the long-term prognosis for traffic quality on selected federal freeways”.

In this, the expansion measures earmarked by the BVWP until 2015 as well as the additionally accepted measures in the years leading up to 2020 are applied. The study contrasts this virtual network with the predicted traffic situation in 2020. Despite the expansion measures, 44 percent of this network would consist of stretches perma-nently threatened by traffic jams. The continual congestion even threatens a quarter of these stretches. On the basis of these calculations, the ADAC has designed a freeway network 2020 which shows how far you have to go beyond the plans of the federal government to guarantee a level of expansion which meets demand.

The decline in traffic in 2009 caused by the economy does not change the need for expansion either. Freight traffic declined temporarily to the level in 2006, but will return to its original growth momentum as from 2010.

The current expansion deficit becomes even clearer if you realize that the BVWP only documents the intentions of the federal government without supporting these with secure finance. The number of projects implemented depends on the budgetary situation. In the yearly average, the projects planned in the BVWP amount to 5.2 billion euros. However, full financing was only achieved in a few years since the coming into force of the current BVWP. That this is the case for 2009 and 2010 is thanks to both the economic packages that were still issued by the great coalition to counteract the economic crisis through a strengthening of domestic demand. In addition, traffic route investment corresponds to this according to the estimation of economic investors.

Funds from economic stimulus package II Investments

2013(planned)

2012(planned)

2011(planned)

2010(concept)

2009(target)

2008200720062005

Investments in the federal highways 2005–2013in billions of euros

Source: Federal government, VDA

0

1

2

3

4

5

6

7

725 mill. 975 mill.

The economic crisis only leads to a short-term decline of traffic

199

Since these not only work short-term in the sense of economic and employment policy – after all, a billion euros of federal highway investment generates around 18,500 person years of work – but also in terms of long-term growth in which the spatial division of labor improves and contributes to an increase of economic productivity.

Therefore the investment measures for the federal highways, which were applicable up to that point in time, in the mid-term financial planning of the federal government, were increased in 2009 and 2010 to around one billion euros. In total, the volumes amounted to approximately 6.0 billion euros (2009) or to 5.9 billion euros. In the following years, the investment measures threatened to fall significantly below the 5.2 billion euros limit.

The strong deflections in the investment measures, unpredictability and short- windedness of infrastructure financing are great problems for transport and growth, since companies need long-term, reliable planning foundations for their site decisions. In addition, a continual, planned infrastructure policy is indispensable.

Due to its network character, the efficiency of the whole transport system results from systematic further development. The traffic and economic effect of expanding individual route sections can completely fall flat if, at the same, time synergy effects are not achieved with other expanded route sections. This is already the intention which underlies the federal highway plan of the federal government. This makes no sense without financing, which is independent from the budgetary process and is not exposed to the daily political considerations which are changeable and opportunistic.

It is therefore recommended to earmark the revenue from the truck toll and a definite share of the oil tax for the financing of road building. Considered in fiscal terms, the oil tax is not a real tax but a regulatory tax for the demands of the road network, and therefore permits an appropriation for this. Therefore paragraph 1 of the Road Build-ing Finance Law of 1960, which is valid to the present day, also sets aside 50 percent of the oil tax income which should be used for road traffic. However, the legislator expressly overrides this basic regulation year after year in the course of its budgetary legislation.

Companies also need long-term plan-ning security in the infrastructure


Testing the performance and financial agreement for the roadsIn addition, development of a performance and financial agreement for the mainte-nance of the federal highways should be considered. The federal government would also undertake a budgetary commitment appropriation. With this instrument, the parliament empowers the federal government, within the context of a budgetary plan, to arrive at financial obligations for the budgetary year. As contractual parties of the LuFV, the federal government is considered the “financier” and the regions as “admi-nistrators” of the federal highways. However, the new coalition has deviated from its original plan and agreed to the binding conclusion of such an agreement in their coalition contract.

Already such an agreement has long-since existed for the railways. It was agreed between the federal government and Deutsche Bahn AG in January 2009. As a result the federal government is obliged to put 2.5 billion euros at the disposal of the rail infrastructure every year until 2013.

In addition, Deutsche Bahn AG can retain its entire route revenue and invest it in building railways. Up until now this closed financial loop was withheld from the roads. Almost half of the revenue generated through the truck toll flows into the rail and inland-going vessel infrastructure. Closed financial loops are, however, in regulatory and transport policy terms sensible for all modes of transport. They take into account the principle of equivalent performance according to which the revenue of a trans-port carrier improves the more it is demanded. Since the revenue flows back again into those transport carriers from which it was generated, demand can be satisfied through the alignment of the range for building additional routes. Therefore it is ensured that the transport system is equipped as much as possible to meet the needs of the user. Consequently, the entire truck toll revenue, which is in the region of 3.7 billion Euros (exclusive of system costs), should again flow back into the transport carriers’ roads.

Model design for sustainable infrastructure financing

Source: VDA

Truck toll4.3 billion euros

3.7 billion euros

Petroleum tax (incl. VAT)39.4 billion euros

3.3 billion euros (8 %)

Bundesfernstraßengesellschaft(German motorway association)

7.0 billion euros

36.1billioneuros(92 %)

Roadworks funding(construction, maintenance)

Federal budget(incl. railways, waterways)

The federal government should be the financiers, and the federal states should be the administrators of the highways

Closed financial loop only applies to the railways

201

Thereby the financing of the federal highways would be based on two pillars – the revenue from the truck toll and the appropriated share of the oil tax revenue. At the same time an appropriation of only 10 percent from the oil tax, which currently corresponds to around 3.3 billion euros, suffices to generate a reliable finance volume of 7 billion euros per year together with the truck toll. This is the level, which transport experts define as “need-based,” which is therefore suited to the transport growth expected in the long term.

A further development of the current Transport Infrastructure Financing Compa-ny (VIFG) serves as an organizational basis of this financing model. This has been conceived so that the truck toll revenue appropriated by the federal government is passed to the transport authorities for the federal highways, the federal railways and the federal waterways according to its legal guidelines. With the establishment of separate, closed financial loops in the financing of transport routes, it would be sensible and consequential if the loops were respectively organized from one individu-al company. This would mean that the VIFG would split and from then on an individual federal highways company would be responsible for the federal highways, which would receive the appropriated share of oil tax and the full toll income.

In addition, less regionally specific and political considerations will be considered in future with regard to investment and financing decisions. However, strict transport economic measures would be applied. Then the measures could be implemented where they bring about the greatest use to transport.

The plans of the new coalition point in this direction. In their contract, the coalition partners have agreed to further develop the VIFG and to strengthen the creation of a financial loop for roads, to test the VIFG with direct assignment of the truck toll in order to strengthen financial loops related to transport carriers.

Also it has been promised to break up the responsibilities of the federal government and regions in the federal highways sector to improve the regional accuracy of the infrastructure provision. This is not ideal today due to the influence of the federal states on the project selection for federal freeways and with route management. Transport experts therefore suggested appropriating the responsibility for the federal freeways to the federal government and the responsibility for the federal roads to the federal states. However, the federal government and the federal states could not agree on a corresponding division of federal highway measures within the context of the federal commission. However, both sides are still in discussion to at least find a small solution. This could consist of federal roads, which still only possess a region-al transport function, being gradated to federal state roads. The federal states are responsible for these alone. However, these would also require the federal states to be financially compensated by the federal government.

The creation of a closed financial loop for roads would be a great step to an improvement in efficiency and continuity of infrastructure financing. However, regardless of this, the public sector should also consider additional potential for the improvement of efficiency which, if applicable, results from the use of public-private partnerships (PPP).

The infrastructure company must be further developed

Federal breakup of the infrastructure policy discussed further

Public-private partnership can be used more effectively


In principle there are three PPP models:

• With the F model, private bodies finance the building and running of bridges, tunnels, mountain passes and multi-lane federal roads. They refinance directly through the charges of users. However, the economic experiences with previous projects (Warnow tunnel in Rostock, Herren tunnel in Lübeck) are disappointing, therefore this model is rarely used.

• With the A model, the expansion, maintenance and running of the motorway sections proceeds through the private investor. For financing, this includes the revenue from the truck toll on the route segment and a start-up financing of up to 50 percent of the building costs as a result of automobile use. Four projects are being realized here and additional ones are being prepared – in addition, this PPP model is interesting for potential investors due to the positive, economic experien-ces with previous projects.

In both PPP models, the investor also pays for the financing. Since it has a normal but higher capital failure risk than the public sector, higher costs accrue for this raising of capital. Whether this price increase is absorbed through the other efficiency advan-tages of private companies depends on the individual case. A general superiority of PPP against the classic infrastructure financing has so far not been proven.

An interesting variation of the PPP model are functional building contracts and main-tenance framework agreements, since they exclude the problem of financing costs. Within the context of a functional building contract, the investor will only be given the functional requirements of a road. The investor can use the most efficient building, maintenance and operation methods according to its own experience. The payment can be made depending on the availability of the route (number of open ruts, quality of the winter service, elimination of traffic jams), which the company can influence through optimization of the building activity or the provision of services. If the cost for pure road maintenance service is limited on this basis, then in such cases pure main-tenance frameworks or service contracts are considered. Several federal state and communal road projects have already been implemented according to this model.

Value added by different PPP models

Source: VDA

Technical service

Construction, preservation

FinancingFunction

constructioncontract/

availability model

Maintenanceframeworkcontracts/servicesprovisioncontractsA modelF model

203

The energy efficient truck train The future emissions legislation sets great challenges for commercial vehicle manufacturers and the supplier industry and requires significant technical efforts to adhere to established limits. Increasingly, the commercial vehicle industry will very probably be confronted with the legal regulation of CO2 emissions and the conservation of resources employed. Besides this development, there are increasing expectations on the part of the custom-er and the public towards vehicle manufacturers to provide ener-gy efficient and, at the same time, economic, products and thereby make a corresponding ecological contribution.

Against the background of ecological and social respon-sibility of commercial vehicle manufacturers, there is the importance of pooling the activities of individual manu-facturers as well as placing these on a broad basis. Only bringing together available competencies and existing individual approaches for an integrated assessment of the subject “energy efficiency” can lead to an optimized and coordinated solution.

To enable a goal-orientated, manufacturer-spanning and pre-competitive investigation of the possible fuel-saving potential of future commercial vehicles, the project “energy efficient trailer train” has been drawn up at the Forschungsvereinigung Automobiltechnik (FAT) (Associati-on for Research in Automotive Technology).

Measures to reduce fuel consumption

Source: VDA

A variety of measures are reducing the fuel consumption of tractor-trailers long-term

Measures to reduce fuel consumption

Fuel

con

sum

ptio

n re

duct

ion

Fuel

con

sum

ptio

n

Actual Goal

Various FAT working groups are involved in the project whose different competencies should contribute to the end result.

The aim of the project is to investigate a possible reduction of fuel consumption in truck trailers through a combination of different vehicle-specific, but also logis-tical and traffic flow, measures-taking into consideration vehicle and traffic safety as well as the efficiency of approaches (see diagram). An expansion of the current vehicle length measurement for implementing possible aerodynamic measures is considered in the project.

The focus of the investigation is initially on the segment of long-distance vehicles, this offers the largest leverage in view of possible fuel savings and also CO2-reduction possibilities due to the comparatively high number in connection with yearly mileages. The aim of the investigation is to make a significant contribution to the reduction of CO2 emissions in road freight transport and thereby contribute to efficient transportation as well as to increased acceptance among the population with regard to this type of transportation. The first results were presented to the public on the occasion of IAA Commercial Vehicles in September 2010.

The Law and Sales

Narcisse Benissan-Messan, LL.M.Human Resources Manager Valeo Top Column Modules, Valeo Schalter und Sensoren GmbH, Bietigheim-Bissingen

206TH E L AW A N D SA LE S

New Competition Rules for Motor Sales

Continuation of the Block Exemption Regulation until 2013The position of the VDA has basically been confirmed with regard to the new anti-trust framework on vehicle sales and distribution, resulting in the new vehicle block exemption of May 26, 2010, along with its explanatory report, as well as the new vertical block exemption of April 20, 2010 from the EU Commission. The currently valid 1400/2002 vehicle block exemption will indeed expire on May 31, 2013, along with its regulations for new vehicle sales and distribution, but will subsequently be replaced by the vertical block exemption.

The EU Commission declared in an evaluation report issued in May 2008 that its competition policy objectives in the motor industry would be better implemented by the Vertical Block Exemption Regulation, which does not just relate to a single industry. The VDA also declared in 2008 in response to the evaluation report that it approved of the competition policy objectives of the EU Commission relating to the aftermarket.

In 2008, the VDA made a statement that the Vertical Block Exemption Regulation could be regarded as a “realistic alternative” for the new vehicle sales. Although the details still have to be reviewed, the change to the Vertical Block Exemption Regulati-on will result in streamlining the statutory regulations and therefore less bureaucracy and less administrative expense for both manufacturers and dealers. The motor indus-try is not expecting the new regulation to produce any major structural changes which will create a further burden on the motor trade.

The Vertical Block Exemption Regulation for sales of new vehicles from 2013 Competition in the new vehicle market is so intense that there is absolutely no reason why it should shun a comparison with any other markets for consumer products in the EU. As the EU Commission found in its evaluation report in 2008, prices of new cars are falling, price differentials have dropped and the market concentration among motor vehicle manufacturers has been falling for some time. Furthermore, the new vehicle market in the EU can currently be described as volatile and fragmented, and it is also heavily dependent on demand from consumers. There are also expectations that new foreign competitors will shortly become active in the EU. As a result of all this, the motor industry including suppliers and motor traders are facing massive competition pressure.

The VDA therefore supports the view of the EU Commission that there is no longer any need for the application of a block exemption regulation specifically aimed at sales of motor vehicles. The Motor Vehicle Block Exemption Regulation should therefore be replaced by the more general Vertical Block Exemption Regulation. The Vertical Block Exemption Regulation will enable manufacturers and dealers to reduce their costs and improve the efficiency and profitability of their sales networks as a result of it imposing less detailed and more flexible regulations. In view of the critical conditions that are currently plaguing both industry and the motor trade, there is a great deal of pressure to reduce the costs of both production and sales. The Vertical Block Exemption Regulation will enable the players in the motor industry to adjust to changing conditions more easily.

207

The introduction of the Vertical Block Exemption Regulation will enable motor manufacturers once again to impose a limited time agreement with brand-exclusive businesses. The fact that even the EU Commission found that there was only a small number of multi-brand businesses in the market shows clearly that this is a business module which is not required by the market. Neither new players in the market nor consumers have any special interest in multi-brand dealers. Above all, the conside-rable increase in methods of sourcing information on the internet has meant that consumers are able to carry out inter-brand comparisons, and manufacturers and importers can provide single-brand websites for marketing purposes without several brands having to be present under one roof at a dealership. Multi-brand business will continue to make commercial sense in sparsely populated areas, however, where lower sales volumes cannot sustain an exclusive brand business model.

As far as the VDA is concerned, the practice of opening additional sales outlets and delegating responsibility for after-sales service to third-party garages without the consent of the manufacturer should no longer be possible. Both commercially unattractive options are given hardly any attention in the findings of the EU Commis-sion. The fact that the garage business is still profitable means that instead it should be part and parcel of every dealership business. At the same time, investments in outsourced sales outlets are difficult to justify for a dealership in view of the low margins possible from motor sales.

The Vertical Block Exemption Regulation also includes a market share threshold of 40 percent as a prerequisite for it to be applicable. Since the market shares of certain motor manufacturers exceed this threshold slightly in some national markets, but these manufacturers wish to continue to use a sales system of quantitative selection, an explanation of the monopoly law consequences of this practice in the guidelines would be very helpful. If the note by the EU Commission to the effect that exceeding the threshold by less than 5 percent will generally not result in any competition prob-lems is correct, the VDA believes that this should be set down in the regulations. As far as the VDA is concerned, it is also important to establish that there is no need to set out the details of dealership contracts under civil law in order to comply with the Vertical Block Exemption Regulation. Minimum periods of notice for termi-nating contracts and alternative arbitration methods shall be included, however as a result of the “Code of Good Practice” approved by ACEA in 2008.

Special provisions for the aftermarketThe aftermarket business is undergoing dynamic development and there is a clear trend towards further diversification. The number of authorized garages has contin-ued to rise. Some independent chains of garages have now formed large, competitive groups. In contrast to this, despite rising labor costs and high investments in garage equipment and training, the expenditure of consumers in the aftermarket has in fact fallen slightly in recent times since the reliability of motor vehicles and their service intervals have both increased. Prices in the parts market have remained stable, while competition between the branded and independent parts trade continues to be fierce.

The VDA has recognized the political objective of the EU Commission to formulate special provisions for the motor vehicle aftermarket in the Vertical Block Exemption Regulation to supplement the provisions in the current Block Exemption Regulation relating to the aftermarket.

Limited brand exclusivity for motor manufacturers in sales

Block Exemption Regulation includes a market share threshold of 40 percent


The EU Consumer Protection Directive – New Hurdles for Motor Manufacturers and the Trade

The VDA welcomes efforts to standardize EU consumer law, although this does not necessarily have to take the form of so-called “full harmonization.” A standard definition of the terminology used in the various directives, however, is both sensible and desirable. The proposed directive, which takes account of the current status of discussions within the EU Council of Ministers, is simply not sustainable for the motor industry, however.

The following proposals from the EU Commission and individual member states, in particular, are not acceptable to the motor industry (both motor manufacturers and the supply industry):

• Right to cancel on the part of the consumer within 15 days of taking delivery of the vehicle

• Extension of the burden of evidence that the vehicle is perfect from 6 to 12 months

• Extension of the warranty period from 2 years to 10 years (in fact an extension even to 4 years is not acceptable)

• Introduction of a general priority right to return the vehicle before the repair alternative

In particular, consideration must be given to the fact that the value addition and sales chain in Germany alone features a very large number of medium-sized and small enterprises. The unilateral extension of consumer rights would therefore mean a correspondingly increased burden on the supply industry which is dominated by medium-sized businesses.

If the above changes to EU consumer law were to be made law in Germany, the prices of new vehicles would have to be raised by more than 10 percent as a result of the massive increases they would represent to warranty costs. One of the main consider-ations in this respect is that the increased return of motor vehicles by purchasers would not only mean a considerable loss of value suffered by the manufacturers, but would also burden the manufacturer with the remarketing risk of a previously owned vehicle. Furthermore, simply doubling the current warranty period from 2 to 4 years would also burden manufacturers with considerable costs for repairs and spare parts. If, on the basis of price elasticity and demand for certain vehicle models, it becomes impossible to pass on these price increases, in the medium term this would result in economic damage, particularly in the form of job losses.

209

Potential Developments in the After-sales Service

One of the results of the technical progress which has been made in motor vehicles is that vehicles have become more reliable and durable. This is particularly noticeable in the ever-increasing life of a motor vehicle. In turn this often enables motor manu-facturers and the after-sales service outlets to extend service intervals. Furthermore, repair work is generally becoming more infrequent. Therefore, despite the increasing technical complexity of motor vehicles, it must be assumed that the number of visits to a garage that a vehicle has to make will continue to fall.

However, as they increase in age, motor vehicles require more and more repair work which means that additional repair work orders may be expected. The cost of repair to wear and tear continues to be considerably higher for older vehicles than for newer models. The market for self-help also tends to fall for cars which are more than 4 years old. Furthermore, particularly in the current difficult economic times, we have found that the average mileage of a vehicle falls and therefore the annual servicing costs per vehicle also fall as a result.

Service work by the motor manufacturers’ sales networks has always been the label attached by consumers to the relevant brand, and regarded in the same light and evaluated as the brand values in every respect. The trademarks of no other sector of industry are as valuable as the brands in the motor industry on both a national and global scale. The strong brands in the motor industry have been established as the combination of product and service. Both parts complement each other (a situation which has even been acknowledged in legal precedents) and form a whole. This leads us to the fact that the service sector is at least co-responsible, and in some cases primarily responsible, for the business success of a motor manufacturer.

The progress which has been made in automotive engineering is having an increasing effect on the service market. The motor manufacturers have continued to expand their model ranges and customers are increasingly having their cars fitted out to suit their individual requirements. As a result of the advances in technical development, the introduction of new or even established powertrains, the increasing use of lightweight materials with new body and chassis designs and the continuous increase in the level of electronics in a new vehicle, garage personnel and equipment are facing ever-greater challenges to their capabilities. Garages need to carry large stocks of spare parts or have a more sophisticated parts logistics system, versatile technical equipment and personnel who are trained in all aspects of automotive construction. The motor manufacturers are therefore offering ever-more distinctive systems which will continue to enable garages to meet the after-sales service challenges so as to maintain customer satisfaction. One of the main service challenges is to concentrate on the entire life cycle of the vehicle. The strategy is aimed at the whole period from sale to scrapping and in-volves a wide range of services (including leasing and fleet management). In addition to simple garage services whose growth potential is somewhat limited, the volume of high-value garage services, extending from servicing and repairs to the networked electronic systems of a motor vehicle, is likely to increase. This includes the braking and exhaust systems, for example.

After-sales service intervals becoming longer

Service is extremely important to the success of the manufacturers

Service comprises the whole period from sale to scrapping


The financial challenges include national and international legislation which can create great burdens for the service outlets. This includes statutory requirements on a national and European level such as end-of-life vehicle recycling and the emis-sions regulations which affect the various companies in the sales chain. Most garages which belong to a brand are small companies in their own right and are almost exclu-sively involved only in the last stage of the chain. The manufacturers help these small businesses in the form of management systems and support in practical business administration methods. These will have to undergo further development.

After-sales service is required “around the clock” for commercial vehicles with nation-wide coverage being essential. The strategies which have been adopted by manufac-turers of commercial vehicles therefore include an extension of their 24-hour service, extended warranties, full-service leasing, a range of service packages and also telematic services. The aim here is to create customer loyalty for the entire life cycle of the vehicle, which should remain functional at all times for forwarding contractors as it represents their main investment.

Every customer lost is an expensive customer. The customer is entitled to receive excellent service particularly because a motor vehicle is a complex technical product and the customer must be able to trust his garage. Unsatisfactory garage tests by the various brands are published and damage their brand image. This, in turn, means that potential new customers for a brand are also negatively influenced. Strong brand products and excellent service therefore form a unit which must be maintained and built on by the brand and garage businesses together to ensure that they all benefit from the added value.

24-hour service is becoming ever-more important for commercial vehicles

After-sales: a success factor for customer satisfaction

211

Positive Trend for Automotive Financial Firms

The high level of new car registrations in 2009 is reflected in the outstanding sales results of financial services providers affiliated with manufacturers. The auto industry’s financial institutions and leasing firms financed and leased more new vehicles than ever before. These record results, however, are exclusively due to an onslaught of purchases by private customers; in contrast, commercial customers acted rather hesi-tantly due to the overall economic situation.

With about 1.34 million new contracts for new cars (2008: 1.20 million), manufacturer-affiliated financial services providers were able to register an increase of 11 percent. Of that total, the private consumer segment accounted for 782,000 vehicles, an increase of 34 percent compared to the previous year (589,000). On the other hand, the commercial business was influenced by the economic insecurities of 2009. The decline of 10 percent for the automakers’ financial arms, to 555,000 units (2008: 613,000), however, ended up being relatively moderate, in comparison with the trend in the overall market (minus 19 percent). This once again underscored the importance of manufacturer-affiliated financial companies. They act as a crucial stabilizer during the market’s weak phases. In 2009, the contract volume rose 9 percent, to 13.4 billion euros (2008: 12.3 billion euros). A decline of 11 percent, to 12.8 billion euros (2008: 14.4 billion euros) was recorded for commercial customers. The overall level, 26.2 bil-lion euros, came in 2 percent under that of the previous year (2008: 26.7 billion euros).

Besides their primary task of promoting new car sales, these automaker-affiliated financial companies are assuming an increasingly important position in the used car market. Contrary to predictions in 2009, a dramatic decline in the used car market did not take place as a result of the environmental bonus. There was a decline of 3 percent, to 582,000 units (2008: 599,000); based on the value of the vehicles, the decline was 5 percent, to 7.5 billion euros (2008: 7.9 billion).

In 2009, 1.9 million new and used vehicles (2008: 1.8 million), valued at 33.6 billion euro (2008: 34.5 million euros), were financed or leased by manufacturer-affiliated institutions. We were able to boost the contract portfolio by 3 percent, to 6.1 million leasing and financing contracts. The portfolio volume rose slightly, by 0.4 percent, to 88.9 billion euros.

While the environmental bonus generated rather short-term influences in the market, one trend has endured, and it is as continuous as it was in past years: the service, warranty and insurance packages from manufacturer-affiliated financial institutions. Many customers concluding a financing contract today no longer merely want to acquire a car. They rather want to be able to oversee the total cost of their vehicle as one monthly rate – and this for the entire period of use. The comprehensive packages put together by the automaker-affiliated financial institutions, which include additional service and insurance items (e.g., 3/4 vehicle insurance, warranty extensions, main-tenance and gap insurance) relating to the automobile, have become an important component of the market. In all, more than 2.35 million service contracts were sold in 2009. This represents a significant 25 percent increase over the previous year. That means that there are about 1.6 additional services contracts from AKA institutions for every new-car leasing or financing contract. The trend is also continuing in vehicle insurance, with 703,000 contracts (+6 percent) concluded in 2009. Manufacturer-affiliated financial companies are looking at the year after the environmental bonus with cautious optimism. Assuming a weak overall market with about 2.8 million new registrations, 2010 will be marked by declines in the private-buyer segment. In cont-rast, a recovery is looming in the commercial area. Financial companies affiliated with automakers will benefit from this. Comprehensive service, warranty and insurance packages will be seen as a driver of growth, as only manufacturer-affiliated financial companies can offer them.

Automotive financial companies 2009: Sharp increase in new contracts

Increase in the contract portfolio to 6.1 million units

Trend toward service, warranty and insurance packages


With the associated additional income and – even more importantly – loyal finan-cial customers, automotive dealerships, which continue to live in difficult times, are being strengthened on a sustained basis. Automobile dealers satisfy the bulk of their financing needs at automaker-affiliated financial companies. As auto dealerships see it, these financial companies continue to be reliable partners and credit suppliers that do not limit their lending in difficult times: while many other banks are pulling out of certain fields, such as automotive retailing, construction and transportation, the manufacturer-affiliated financial firms are supporting this economic sector and are underscoring their importance to the automotive industry.

Legislators plan change in the regulatory concept for creditThe VDA is observing with concern legislators’ plans to change the regulatory concept for credit, going beyond EU legal guidelines, so that the residual book value of the leased asset will no longer be the deciding factor for the classification of a leasing contract, but rather the appropriate receivables from the leasing contract are to deter-mine the amount of the credit.

The Federal Finance Ministry has accordingly proposed the following expansion of the credit concept based on Section 19(1) of the German banking act (KWG):

“Assets are …4. … receivables from leasing and rental contracts and from purchase commitments of third parties for leasing assets…are to be considered…as other off-balance-sheet businesses … 15. … claims to minimum payments from leasing and rental contracts not yet activa-ted on the balance sheet (including purchase commitments as well as an inducement to the exercise of the lessee’s offered purchase option for leasing assets) as well as purchase commitments of third parties for leasing assets.”

The expansion of the credit concept to include “purchase commitments of third parties” targets buy-back agreements that automakers’ leasing companies routinely take from suppliers and manufacturers as additional security, to cushion the leasing contract’s market value risk, in the form of a special risk associated with the leased object, at the end of the term (the so-called residual value risk).

With the expansion, based on the legislative background, the definition of the assess-ment basis for leasing businesses in the 2009/83/EG directive is expected to be imple-mented, for the purpose of calculating the equity capital requirement. In addition, the assessment basis between equity capital and large exposure regulation is to be aligned. The intended change has substantial negative effects on manufacturer-affili-ated leasing companies, especially in fulfilling the large-exposure regulation based on Section 13b KWG. Moreover, the change will act negatively on suppliers and dealer-ships through the “millions credit declaration act,” based on Section 14 KWG. Such a change in the credit concept in the leasing area is not provided in laws governing lending and not required under EU law. In view of the basic economic importance of the leasing business for the sales of vehicles (passenger cars and commercial vehicles), the VDA is making the case for a change in the legislative proposal that would most appropriately dispense with the proposed expansion of the credit concept

213

The VDA Guideline on Cartel Law for Group Work

The VDA is ensuring that its group work adheres strictly to the regulations of German and European cartel law. To this end, the VDA published a guideline in 2009 which provides information for VDA personnel and members of VDA groups to ensure that any action by the VDA and its members which may contravene cartel law is prevent-ed before it is actually taken. The guideline is available to download from the VDA website (www.vda.de).

The guideline explains the basic rules of German and European cartel law to members for group work. For example, all agreements between companies, decisions by groups of companies and coordinated activities which are aimed at, or actually result in, the prevention, restriction or falsification of competition are prohibited (Section 1 of the Law against Competition Restrictions). In addition, agreements are subject to the European cartel ban if they are designed to adversely affect trade between member states (Article 81 Paragraph 1 of the EC Treaty). However, the guideline cannot reflect the whole complexity of cartel law. In some cases, therefore, it may be necessary to seek further legal clarification.

The VDA Legal Department is available to all personnel and members of VDA bodies to help with questions relating to this guideline. It should also be consulted in all cases of doubt about the legality of a certain action or subject which is due to be brought before a group meeting for discussion, and must also be notified of any iden-tified or suspected breaches.


The VDA Brochure on Commercial Legal Protection

The German motor industry (motor manufacturers and suppliers) is reliant on the efficient commercial legal protection of its innovations on both a national and inter-national level. The protection of intellectual property has always been an essential principle for an active and competitive industry. These intellectual property rights have proved time and again that they are an essential factor for new technical develop-ments and the marketing of new products. Without highly developed legal patent, brand and design protection, the motor industry would be unable to maintain its leading role in innovation and would also no longer be able to justify its claim to be an innovator.

The development and provision of an efficient system of commercial legal protection must therefore be one of the primary aims of German and European policy to help Germany as an industrial location. Intellectual property rights are at the intersec-tion between engineering, law and industry. The complexity of so-called intellectual property management (IPM) also places heavy demands on companies and their internal intellectual property policies. The aims of IPM in the motor industry are mainly looked after by patent departments. IPM not only covers the registration and management of intellectual property rights, but also the active monitoring of research and development before product launches by trained patent specialists (in particular patent engineers, patent assessors and patent attorneys). Patent departments therefore create considerable assets for their companies.

The aim of the first section of the brochure which has now been produced by the VDA is to highlight the importance of commercial legal protection to the motor industry. The second section describes the practical approaches and the potential that patent departments can deliver to the motor industry. This therefore provides interested readers with a comprehensive overview of the aims and services of commercial legal protection.

Protection of intellectual property is an essential principle for the industry

215

The Automotive Aftermarket

In addition to the complete service and spare parts business within the motor industry, the automotive aftermarket also includes the field of vehicle diagnostics and techni-cal information. It was not possible to continue the positive trend in the aftermarket business over the last few years during the global financial and economic crisis which struck in 2009. According to the Central Federation of the German Motor Trade (ZDK), however, turnover in the service business (motor vehicle garages, labor, spare parts and accessories) in 2009 amounted to around 28.1 billion euros, which in turn repre-sents a rise of 0.3 percent over the figure for 2008. The use of garage capacity also improved by 2.5 percent in 2009 compared to the previous year.

Throughout Germany the number of motor vehicle garage businesses fell to a total of 38,300, which was a fall of 800 businesses over the previous year. According to DAT, the number of tied brand dealerships fell by 650 garages which was a sharper fall than that experienced by independent garages whose number only fell by 150. Over-all, there were 18,250 tied and 20,050 independent garages in Germany in 2009.

Aftermarket and service turnover is affected, on the one hand, by the average vehicle age and the ever-increasing service intervals which have been achieved for motor vehicles over the past few years and, on the other, by the increasing number of elec-tronic components in motor vehicles. In 2009, according to DAT, the average vehicle age fell from 8.3 to 8.1 years during a single year. Generally, the frequency of servicing and repairs increase with the age of a vehicle and therefore the fall in the average vehicle age has a negative effect on the repair and service market. This is also sup-ported by the improved quality of motor vehicles and their components. On the other hand, drivers must visit a garage ever-more frequently to have their vehicles serviced as a result of their increasing complexity. A recent DAT study shows that these effects almost balance each other out and that the frequency of servicing has remained almost constant since 2006.

As a result of the continued increase in the complexity of automotive systems, garages are having to invest in new equipment, particularly for the purposes of diagnostics, software and services. This is confirmed by the Federal Association of Manufacturers and Importers of Automotive Service Equipment (ASA).

REACH, the EU Directive for the Registration, Evaluation, Authorization and Restriction of Chemicals, has been in force since June 1, 2007. Chemicals are an essential compo-nent of motor manufacturing and the effects of the complex changes introduced by REACH have not yet been fully assessed. The directive subjects so-called “very high concern substances” to an official licensing procedure. By 2018, the regulation that applies to all chemicals which are produced in quantities of more than one metric ton will have to be implemented.

From the very outset, the VDA has provided support to companies in the motor industry on this challenging topic. The aftermarket is also affected by REACH in a whole series of areas. In particular, the possibility of banning certain chemicals which actually form the basis for certain spare parts means that REACH represents an addi-tional massive challenge. In 2009, therefore, a working group was established to look specifically at compliance with the communication obligations in the automotive after-market. A communication tool for the aftermarket was also created for this purpose.

Effects of the EU REACH Chemicals Directive on the aftermarket


Management of the rising number and complexity of model versions in terms of economy and security of supplies presents another great challenge to both motor manufacturers and automotive suppliers. Both groups of manufacturers are therefore currently working hard on the creation of component requirements which take into account the specific requirements of the aftermarket during the part development phase for standard products. One example of this is downwards compatibility when components are modified. Against the backdrop of supply obligations, some of which extend for a very long time indeed, new components should be compatible with previous models to ensure that there is no need to stock a whole series of different versions.

The standardized transport noticeA very wide range of communication media are used to notify the readiness of goods – telephone, fax, e-mail or the Internet, and in some cases electronic data interchange (EDI). Notification to forwarders that goods are ready for shipment is generally provided by the supplier, with the recipient generally being the party who is responsible for paying for the freight. This method therefore results in some problems, in particular:

• High communication costs for the parties involved due to the lack of standardization

• Complicated clearing process due to information being incomplete

• Misinterpretation due to the use of different forms

• Goods provided or collected late and too little cargo space due to misinterpretations

• Prevention of a correct evaluation of the process due to the lack of transparency in the transport notification process

VDA Recommendation (No. 4933) which was published in November 2009 defines a standard procedure for transport notification between the supplier, forwarder and recipient from the time that the goods in the motor industry are reported to be ready for collection until they are collected. In addition to a definition of the process, the Recommendation also advises the use of elec-tronic data interchange or alternatively a document for the written exchange of information.

The aim of the interdisciplinary working group composed of motor manufactur-ers, automotive suppliers and external logistics service providers was to minimi-ze the manual work required for arranging and organizing transport services for both the supplier and the forwarder. The recommendation has now been established to act as a basis for measuring the forwarding service from the order being placed to the arrival of the goods at the customer. It is also designed to provide a basis for measuring the fulfillment of the supplier. The ultimate objec-tive is to improve the way in which goods are received by the customer. The benefits for the forwarder include a reduction in the work required for proces-sing transport notices. The procedure proposes to reduce the workload for the supplier in creating the transport notice and by eliminating customer queries resulting from late collection or extended transport times. From the customer’s point of view, the benefits include a reduction of the cost for so-called exception handling in the event of late collection or extended transport time. The recom-mendation can be viewed by clicking on No. 4933 on the VDA homepage, under the heading Publications.

The International Motor Show

Peter Humml – Master of eletronicplating, head of production, Assmus Metallveredelung GmbH, Dietzenbach

220TH E I NTE R N ATI O N A L M OTO R S H O W

IAA Cars 2009: A Successful Show in Difficult Circumstances

The 63rd IAA Cars motor show from September 17 to 27, 2009 in Frankfurt, once again proved a big success with the public in spite of the difficult financial conditions. The self-set target of 750,000 visitors was considerably exceeded – with around 100,000 more visitors than expected. This wide audience represented a decline in visitor numbers of just 5 percent in comparison with the record-breaking IAA in 2007. Given that other motor shows in 2009 had to put up with declines in visitor numbers in the high two-figures, or were canceled completely, this is a remarkable result.

The 63rd IAA Cars, presented under the slogan “Experience what moves”, took place at a time of upheaval. It was quite clear that vehicle electrification continues to make further progress. A total of 781 exhibitors from 30 countries presented their products, innovations and latest technologies at the most important mobility trade fair in the world. More than 200 global premieres were on display, including 100 from German manufacturers alone. The innovations in the field of electromobility ranged from the mild hybrid through the plug-in hybrid to the pure electric car. Numerous new and further developments in fuel cell technology, hydrogen powertrains and the optimiza-tion of the traditional combustion engine were also on display.

The motor show featured a good two-dozen IAA specialist events, which welcomed more than 4,000 guests in total and dealt with virtually every issue related to mobility and the automotive industry. All the challenges associated with electromobility were thus discussed intensively and in detail. The “sustainability stage” was once again a highlight for visitors at this IAA, providing a platform for debate between prominent politicians and top managers. Another high point was the symposium hosted jointly by the VDA and IG Metall workers union entitled “Shaping change together”, allowing politicians, trade unionists, works councils and entrepreneurs to give their answers to structural change. One quite special premiere involved the directors of development of all seven German car manufacturers working in association with the VDA to present an outlook for the mobility of tomorrow to the public for the first time, reporting on the impressive innovations of German automotive companies in the field of alternative powertrains.

Once again, IAA was an international forum for the global automotive industry: this year there was an IAA India day, a Slovakia industry day, an IAA Latin America day and the Russia event, which all attracted an extremely keen international specialist audience.

Once again, the numerous special activities in the open-air exhibition area were very successful. Eco-training, test drives and the off-road course were all operating at maximum capacity. As part of the school grade campaign, around 22,000 students visited the exhibition center with their teachers – approximately 50 percent more than at IAA Cars 2007. The “innovation path” pointed them in the right direction at IAA, displaying a floor plan of the trade fair and highlighting the important product innova-tions related to the environment and climate protection, as well as vehicle safety.

No other automotive trade fair caters for young engineers and the qualified industry employees of the future so well. The “GoIng” series of workshops at IAA, target-ing sixth form school students, explained the future prospects of those entering an engineering career in the automotive industry. At the VDA young entrepreneur stand, young company successors and founders took advantage of the VDA’s offer to present themselves on stage together. The exhibitors – both manufacturers and suppliers – were able to draw positive feed-back from IAA 2009. The audience proved to be very competent and well-informed. As VDA President Wissmann stated at the IAA closing press conference, it was proven that even in times of economic crisis enthusiasm for the car remains high. As soon as one IAA is over, the next is on its way: the 64th IAA Cars will take place from September 15 to 25, 2011 in Frankfurt/Main.

German manufacturers’ development directors together on stage for the first time

22,000 students and their teachers visited IAA

221

IAA Commercial Vehicles 2010: Bringing together new technologies for efficiency and environmental protectionThe 63rd IAA Commercial Vehicles is once again due to open its doors in Hanover from September 23 to 30, 2010. The entire world of road transport will be presented under the slogan “Commercial Vehicles: efficient, flexible, future-proof”. In spite of the current extremely difficult situation in the commercial vehicle industry, all the impor-tant manufacturers and suppliers will be represented. Given that most other commer-cial vehicle trade fairs in 2010 have had to be canceled due to a lack of demand, this is all the more remarkable.

As the counterpart to IAA Cars, IAA Commercial Vehicles – which takes place in “even” years – presents a comprehensive exhibition focused on the commercial vehicle. The exhibition introduces all the latest developments in the fields of light and heavy goods vehicles, buses, trailers and bodywork, transport logistics, vehicle equip-ment, parts and accessories, and even workshop and garage furnishings. In recent years, IAA has developed to become the largest transport trade show in the world. The unique feature of this event lies in the fact that the show integrates the supplier industry, along with services, financing and logistics.

The 63rd IAA Commercial Vehicles is taking place under even more difficult condi-tions than IAA Cars the previous year. Commercial vehicles are currently suffering a particularly difficult period of adjustment, with manufactures of trailers and bodywork parts particularly badly affected.

This year, the focus of IAA will be on innovations and the latest technologies in the field of electromobility and alternative powertrains. These issues will be the central focus, especially at specialist events and among the innovations presented.

At the record-breaking 2008 show, 2,084 exhibitors from 48 countries presented a total of 258 global premieres, along with numerous further developments of compo-nents and systems. A total of 298,200 visitors from 110 countries attended the 62nd IAA Commercial Vehicles, with a remarkably high proportion of professional visitors, at 90 percent. For these visitors, the show also represented an opportunity to partici-pate in a variety of international congresses and specialist events. As host of the 63rd IAA Commercial Vehicles in 2010, the VDA expects around 1,500 exhibitors from more than 40 countries.

After focusing on Eastern Europe at the last event, this year the focus will be on the Benelux countries. In addition, the program also foresees a variety of specialist events on current issues related to the commercial vehicle industry and the transport market, accompanied by a comprehensive framework program of special exhibitions and presentations. Participants will also once again be given the opportunity to take test drives, while the special classic vehicle exhibition will take a look back at transport vehicles throughout history.

Further information can be found on the Internet at www.iaa.de.

Efficiency is the focus of IAA Commercial Vehicles

Historic Vehicles

Stefan Berroth – Mechatronics Technician, Mechanic Test Department, ZF Lenksysteme GmbH, Schwäbisch Gmünd

224 H I STO R I C V E H I C LE S

VDA Supports Establishment of Historic Vehicles

Assumption of responsibility for political issues In early 2007, the VDA founded the Historic Vehicles Committee in order to support the interests of the growing number of classic vehicle enthusiasts and drivers. Increasingly strict legal initiatives with regard to the environment and traffic safe-ty have, in particular, created an atmosphere of uncertainty in the classic vehicle community, as for a large proportion of historical vehicles any modifications required in order to achieve new standards may not be possible for technical reasons. Working with the employees responsible for tradition at the German automotive manufacturers Audi, BMW, Daimler, Ford, Opel, Porsche and Volkswagen, and the supplier compa-nies Bosch and ZF Friedrichshafen, the ambitious goal has been set of establishing the appropriate basic conditions to allow and facilitate problem-free operation of historical vehicles on public roads now and in the future.

Until now it has been difficult to assert the special interests of classic vehicle owners because the multitude of parties involved from clubs, the media, industry and trade, as well as policy representatives, has operated in a very heterogeneous manner. With the ADAC, which has its own classic vehicle section, and the “Historical Vehicles” division of the German Association for Motor Trade and Repair (ZDK), two like-minded organi-zations have been found which, together with the VDA, comprehensively cover all the different interests. In 2009, these associations founded a working group which meets regularly to analyze the various recent developments and jointly agree a basic course of action. This has enabled effective promotion of traditional automotive themes to be initiated very quickly and in a way that is comprehensible and consistent for both the public and the legislators.

Jointly establishing the basic conditions for problem-free operation of older vehicles

Creation of the “Historical Vehicles” working group with ADAC and ZDK

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-40

-30

-20

-10

0

10

20

30

40

German oldtimer index (classic car index)Dax

2009200820072006200520042003200220012000

German oldtimer index (classic car index)Change in %

Source: Classic Data

225

The activities of the political institutions are worthy of particular attention, as they formulate and adopt the relevant laws. Since founding its “Historical Vehicles” depart-ment, the VDA has thus committed itself to establishing regular communications with parliamentarians with an interest in the relevant issues. This strategy was endorsed in May 2009, when the“Automotive Cultural Heritage”parliamentary group in the German Bundestag officially started work, providing a cross-party communications and coor-dination platform with the intention of allowing opinions to be shared and establishing a strong basis for discussion between politicians on the one hand, and the media, other associations and decision makers on the other.

As a first step, this alliance should ensure that in future no one will be taken by surprise by political initiatives and developments that could have a negative impact on the operation of historical vehicles. More than 50 representatives from a variety of interest groups accepted the invitation to the official launch event, which is an indication of the confidence shown in this parliamentary group by those on the classic vehicle scene. National legislation on environment and transport-related issues that also has an impact on the issue of historical vehicles is increasingly influenced by EU activities. For this reason, the VDA is also striving to establish an appropriate inter-face with the legislature in Brussels. In order to take a concerted and target-oriented approach to this, in addition to coordinating its activities with the International Feder-ation of Historical Vehicles (FIVA), it is also necessary for the VDA to begin talks with international associations and politicians on a European level. The VDA has already made preparations to establish initial contact at an invitation-only event in 2010.

Regular contact with the “Automotive Cultural Heritage”parliamentary group


Special license plate for vintage cars established Vehicles must be at least 30 years old to meet just one of the prerequisites for holding a so-called H-license plate. The plate is then only issued if the vehicle is also in an original and technically sound condition, as far as possible. The vehicle should also be making a significant contribution to “preserving technical cultural heritage”. In order to obtain the H-license plate, the vehicle in question must be examined by an officially accredited expert. On January 1, 2010, the number of H-license plates assigned to vehicles numbered 188,360 passenger vehicles and a total of 209,954 vehicles, meaning that the figure has continued to grow over the past 10 years.

The marginal decline in 2007 was due to a change in the assessment methods by the Federal Motor Transport Authority (Kraftfahrt-Bundesamt). Since then, the statistics do not take into account vehicles that are temporarily not in use. Although the allo-cation of a H-license plate in a sense represents an accolade for a particular vehicle, some drivers of classic cars do not make use of this privilege, as for vehicles with an engine capacity under 700 cc the vehicle tax rate may be lower than the reduced annual flat-rate tax of 191 euros applied to vehicles with H-license plates. The VDA is thus committed to finding a regulation that equally motivates all owners of classic vehicles to use the H-license plate, in order to make it possible to identify all true classic vehicles in this way.

Vintage cars as economic factorCompanies in the German automotive industry have recognized the economic poten-tial of classic vehicles for a long time. Almost all manufacturers have now established their own classic vehicle divisions, which along with supplying spare parts also increasingly deal with the repair and restoration of classic vehicles. According to a study carried out by the Institut für Demoskopie Allensbach research institute in 2009, the repair and maintenance of both younger and old classic cars costs 1.3 billion euros a year in Germany alone, while classic vehicle owners spend a further 263 milli-on euros on accessories.

Special license plate as “accolade” for vintage cars

0

50,000

100,000

150,000

200,000

250,000

Passenger car Total

200920082007200620052004200320022001

Car population – trend in H-license plates


227

The ZDK has also responded to this development and, in cooperation with the VDA, established a rating system for specialist classic vehicle workshops. After inspection by a specially trained assessor, these businesses can display a sign designating them as a “Specialist workshop for classic vehicles”, in order to demonstrate their profes-sional expertise to potential customers. After the launch of the initiative in spring 2009, 129 specialist workshops had been awarded this accolade by the end of the year.

In the automotive industry activities related to classic vehicles are also pursued for marketing purposes. Owners of classic vehicles can, for example, be considered excellent brand ambassadors, who are also likely to choose the same brand as their classic vehicle when selecting a new car. Such customers are, according to market analysis carried out by the Allensbacher Werbeträger-Analyse, well-educated, younger than the population average and relatively wealthy. A total of 29.9 percent of classic vehicle owners also belong to households with more than two cars (compared with 5.5 percent of the total population) and are thus an attractive target group for the automotive industry.

During the banking and market crisis, financial and investment advisers have in-creasingly been looking to alternative investment options. Attracted by the individual sales of particularly rare and valuable vehicles at auction, various media reports have documented the apparently large profit potential of these valuable commodities. As no reliable statistics were available for the price development of classic vehicles, the VDA decided to carry out a fact-based comprehensive analysis of the German market. With the help of Classic Data, the market leader in classic vehicle surveys, an index was developed to reflect price development over the past decades. The Deutsche Oldtimer Index includes 88 representative classic vehicle models in Germany, selected from around 200,000 data records of reports and vehicle ratings compiled by Classic Data. The index does not document the price development of individual vehicles, but rather displays a trend at regular intervals. The index showed that an increase in value of 73 percent has been recorded over the last 10 years, which is equivalent to an annual rate of 5.7 percent. It is apparent that, in contrast to the German DAX share index, the annual growth has remained constant.

0 10 20 30 40 50

Average total population Classic car drivers

more than2 cars

Net householdincome

> € 5,000

Abitur (A levels)/degree

Age Over 50

Sociodemographic data of classic car ownersin percent

Source: IfD Allensbach/VF-Verlag

The increase in value of classic vehicles is documented for the first time


The vehicles represented in the index originate from seven manufacturer countries. German vehicles showed the greatest increase in value, with an individual index of 2,116 points, followed by Japan (2,022) and Italy (1,740). In terms of pure investment value, however, it must be taken into account that ownership of a classic vehicle can be associated with significant maintenance costs. For this reason, the VDA only recommends the purchase of such a vehicle when the buyer also has an emotional interest. Due to the significant media response following the publication of the Deutsche Oldtimer Index, it will now be updated and republished every six months.

The collection, maintenance and also the operation of classic vehicles that were initially registered 30 or more years ago is attracting the attention of an ever-increasing group of enthusiasts. For many years, the number of classic vehicles has been steadily increasing, and by January 1, 2009 approximately 310,000 registrations were recorded by the Federal Motor Transport Authority. In order to provide the members of the VDA “Historical Vehicles” committee with background material for the neces-sary technical support – and in particular spare parts supply – the VDA initiated a precise analysis of these vehicles. A detailed overview by brand and model was thus compiled for the first time of all vehicles with a first-registration date up to and inclu-ding January 1, 1979. With a share of 24 percent, vehicles from Volkswagen are the most popular and the company’s most successful post-war car – the VW Beetle – tops the list. Vehicles from Mercedes-Benz are also held in high esteem with classic vehic-le drivers, with a share of 17 percent, followed by Opel with 10 percent. Almost three quarters (73.7 percent) of all vehicles registered 30 years ago or more are products from German manufacturers. Models from Italian and British manufacturers come next, both with 6.2 percent.

Ranking list of vehicles over 30 years old now available

0 10,000 20,000 30,000 40,000 50,000

VolkswagenGolf

Mercedes-BenzModel line 108/109

Mercedes-BenzModel line 110/111 "Tailfin"

OpelRekord

Mercedes-BenzSL BM 107

Mercedes-BenzModel line 123

SachsenringTrabant

OpelKadett

Mercedes-BenzModel line 114/115 "/8"

VolkswagenBeetle

Stock of long-term registered vehicles first registered in 1979 and earlier


229

Classic vehicle exhibition “Legendary German Automotive Brands” at IAA 2009Historical vehicles were presented in their own special exhibition at the IAA Cars motor show in 2009. The VDA, the German Automobile Club (AvD), the ZDK and the Association of German Automobile, Engine and Technology Museums (Verband der deutschen Museen für Auto, Motor und Technik) hosted a joint stand – known as the “German Museum Road” – where numerous visitors were able to admire a selection of the most beautiful vehicles from over 120 years of German automotive history. A total of 16 vehicles from the pool of 200 from the German automobile and technology museums represented the almost 500 different former brands to which the German automotive industry owes its global reputation. Almost 115,000 visitors to the stand admired the original technical solutions in the vehicles and also collected additional information on their favorite vehicle or brand from the central information desk.

Communication

Josefine Pristolic – Manufacturing Expert, Production Soft Cellular Parts Car Seats, BMW AG, München

232C O M M U N I CATI O N

The automobile was invented in Germany – and it is continually being reinvented here. With over 20 billion euros invested annually in research and development and 10 patent applications every day – half of them in the area of environmental and climate protection – the German automotive industry is at the forefront in the fight against climate change. Innovations, that is to say successfully realized ideas, are the raw material from which the sustainable mobility of tomorrow is emerging. German car manufacturers have already taken the lead today in reducing pollutants and emissions.

The initiative “Unsere Autos” emphasizes the close connection between the raw mate-rial’ of ideas and the future-oriented product – the cause and effect of sustainable mobility in all its facets. “Unsere Autos” is the place on the Internet where the German automotive industry traces its way right from its beginnings to the progressively safer, more environmentally friendly, climate-friendly mobility of today, highlighting its successes along the road, and presenting its strategy towards an emissions-free future.

Information and dialogue offered by the automotive industryWhereas in 2008 and 2009, communication measures were realized mainly before and during the IAA events of each year, continuous communication is now possible: www.unsere-autos.de offers comprehensive information and dialog options on all the aspects of the car and the German automotive industry. Here, educational material on electromobility is also explicitly offered for the first time. This ia a truly electrifying theme, and also interdisciplinary in that it touches on both physics teaching and the discipline of political sciences. Charts and graphics clarify the technical basics of electromobility, explaining the problems that need solving and the challenges that have to be met before introduction can take place on a broad front.

With this unique information platform, the German automotive industry is making an active contribution to the societal discussion on climate and mobility, and demon-strates that the sector’s innovative strength will enable solutions to be found to the present challenges in the area of individual mobility. A welcome side-effect of the joint information campaign “Unsere Autos” is the debunking of some favorite prejudices by hard facts. Thus we learn, for instance, that 90 percent of emission reductions since 1990 have only been possible thanks to German engineering. Some people will be equally surprised by the fact that since 1999, CO2 emissions caused by traffic have been going down in absolute terms – whereas the volume of traffic has been going up at the same time. “Unsere Autos” presents these developments vividly; thus, for example, the “Timeline of Innovations” invites us to take a journey through the German automotive industry’s history of groundbreaking ideas.

Communication Offensive “Unsere Autos” (“Our Cars”)

233

Campaign generates more positive attitudes among the general publicThe realization of “Unsere Autos” requires relatively little funding. Nevertheless, within a short time, 18 percent awareness has been attained among the general public – in view of the budget, this is a very high penetration rate. Similar campaigns only achieve comparable values with budgets which are considerably higher.

It is also very pleasing that the campaign is not only known, but is having an effect. Whereas in spring 2008, before the start of the campaign, 69 percent of respondents in a representative survey agreed with the statement: “German cars are an example of German engineering skill,” in autumn of the same year, after the campaign was launched, a level of 73 percent was reached. In 2009 the corresponding value was 82 percent.

This success shows that the communication and information offer of the automotive industry has found acceptance. Consequently it is all the more important in future, too, to render transparent the efforts of the German automotive industry in pursuing a broad-based strategy, oriented towards more sustainable mobility and increasingly efficient transport. Here, there is also a widespread lack of knowledge which can all too easily give rise to a distorted picture. However, if people derive promotions and measures from an insufficient factual basis or a lack of technical knowledge, they will always be dissatisfied with the results. Therefore, the VDA will aim to maintain these communication efforts with an interested public.

German cars are examples of the art of German engineeringAgreement in 2008 and 2009 in percent

Source: Gfk, infratest dimap

0 20 40 60 80 100

AutumnSpring

2009

2008

The “Unsere Autos” logo involves the automotive industry and the public in a dialog. In this communication, they are both senders and recipients. The design recalls the origin and solidarity of car manufacturers and automotive suppliers with Germany.

The website www.unsere-autos.de is the communication platform all about the car and the German automotive industry.

Index

Maxim SterkIndustrial skilled worker in paper production, machine operator in the CNC department, Schweizer Group Plattenhardt KG, Hattenhofen

236I N D E X

Facts, Figures and Data about the Automotive Industry

Statistical base effects distort economic data 14Business climate manufacturing industries plus 15Business climate in the automotive sector 16Balance between short-term and long-term measures to secure sustained success 17Guarantors of success in remaining the pace setter of the industry 18Selection of average CO2 values in Germany 18R&D expenditures by manufacturers of vehicles and parts 19Automotive R&D expenditures by manufacturers of vehicles vs. total espenditures 19Revenue trend in the German auto industry 22R&D expenditures in the German auto industry 23Number of employees in the German automotive Industry 24Global auto production 2009 25Light Vehicles production in the NAFTA 26Sales of passenger cars in China 28Sales of motor vehicles in Asia 29New car registrations in Western Europe 30Diesel’s share of new car registrations in Western Europe in 2009 31New truck registrations in Western Europe 32Global production of German manufacturers in 2009 33German corporations’ world production 34Car exports by destination country 36Trend in personal transportation costs 37Segment development 38Total new registrations for commercial vehicles 40Domestic truck production 41Sales and employment in the automotive supply industry 50

General Conditions for the Automotive Industry

New registrations company vehicles 2008 64Ozone concentration in excess of 180 µg/m³ 1990 to 2009 80EU Minimum Tax Rate 86Foreign Activities of German Car Producers 2009 92India has a significant surplus in vehicle trade 93

Climate and Environmental Protection in the Automotive Industry

New car registrations in Germany - proportions of petrol and diesel 106Saving potential for hybrid motors 113Various Types and Functions of Hybrids 114Comparison of conventional drive and hybrid 115Participants in the standardization of the charging interface 117Reduction of emissions in heavy commercial vehicles 128Reduction of emissions in passenger cars and light commercial vehicles 128SCR system with urea injection 129Exhaust gas after-treatment with DPF close to engine and NOX storage catalytic converter 129

List of Figures and Tables

237

Safety and Technology

Development in the death rates on freeways in Western Europe 138New types 141New registrations 142Dates for the introduction of future regulation 661/2009/EC 143Example of a direct tire pressure monitoring system 144Number of accident fatalities by road user type 146Car driver error causing accidents involving personal injury (Germany 2009) 147Safety life cycle according to ISO CD 26262 159ADAC qualitiy indicators 165Purchasers of VDA QMC publications 166Quality Management Center China 168Granting the official seal 169AdBlue® licensees: Difference between quality providers and “black sheep” 170ISO/TS 16949-certificates 172Distribution of the 41,072 worldwide applicable ISO/TS 16949-certificates 173

Transport and Infrastructure Policy

Passenger traffic in Germany until 2025 190Passenger traffic in the EU-27 until 2030 190Freight traffic in the EU-27 until 2025 191Freight traffic in Germany until 2025 191Application of the revenues from specific motor traffic contributions 192No investment boost through the truck toll 193German motorway network 2020 197Investments in the federal highways 2005–2013 198Model design for sustainable infrastructure financing 200Value added by different PPP models 202Measures to reduce fuel consumption 203

Historic Vehicles

German Oldtimer Index 224Car population – trend in H-license plates 226Sociodemographic data Oldtimer owners 227Stock of long-term registered vehicles first registered in 1979 and earlier 228

Communication

German cars are examples of the art of German engineering 233

238I N D E X

Index

AAccident figures 146Accident statistics 146Accord 70Accredited laboratory 171Active assistance system 147Active chassis 150Active safety 150Active steering system 150ADAC 224AdBlue® 108, 129AdBlue® Audit program 170AdBlue®Audits 171AdBlue® licensees 171AdBlue® supply chain 171Advertising 91AEBS 140Aftermarket 181, 182, 206, 207, 215, 216Aftermarket business 207After-sales 209After-sales service 209Agency for Renewable Raw Materials (FNR) 120AIAG 185Air pollution control 126Air Quality Directive 82Air quality targets 81, 82A model 202Annex II 84Anti-lock braking system (ABS), 76Argentina 27ASA 215ASEAN 93, 94ASEP 134Asia 26Assistance systems 148Audit program 171Autocooperations 55Auto manufacturers 50Automobile brand study 166Automobile toll 194Automotive 172Automotive Core Tools 173Automotive Financial Firms 211Automotive industry 178, 233Automotive sales 28Automotive suppliers 96, 216Automotive supply companies 96Automotive technology 118Automotive technology standards committee 118, 159Auto production 26AvD 229

BBan 67Battery Electric Vehicle (BEV) 111, 116Battery technologies 60BDEW 97Biodiesel 123

Biofuel quota law 120Biofuels 60, 120, 123Bio natural gas 120BLG 186Block Exemption Regulation 206, 207Booths 96Brake assistance system 76, 147, 148Brand ambassadors 227Brands 20Brazil 25, 27Britain 30Broad-based strategy 233Brussels office 69Bulgaria 29Buses 32Business expectations 15Bus tourism 49BVWP 198By industry 19

CCAD 185, 186CAE 185Campaign 233Canada 95Carbon dioxide regulation 87Carbon emissions 87Carbon monoxide 125Cars 21 69Car tax 193Car toll 193, 195Car tolls 67Cassic vehicle divisions 226Catalytic converter 125Cause of accidents 147Certification 171, 172Change Management 185Chemicals 215Child restraint systems 157China 25, 168China, India and Brazil 25City toll 194City tolls 61City Traffic Action Plan 90Classic Data 227Classic vehicles 226Clean diesel 114, 130Clean Diesel 87Clean Diesel technologie 87Cleaning agents 169Climate and environmental protection 99Climate conference in Copenhagen 84Climate protection 70, 71Climate protection measures 72Climate protection targets 85Climate targets 71CMI - Collaboratively Managed Inventory 182CO2 104

239

CO2 balance sheet 19CO2-based vehicle tax reform 18CO2 emission 70, 71, 73, 74CO2 emission rights 72CO2 emissions 100, 101, 102, 120, 203CO2 emissions trading 84CO2 minimization 73CO2 reduction mechanisms 73CO2 reductions 85CO2 reduction targets 85CO2 regulation 60, 61, 71, 73CO2 tax exemption 62CO2 tax rate 62CO2 technologies 72CO2 trading system 85Coalition contract 47CoC Packaging 178, 183Coding 187Collaborative CAD/CAE Integration 185Comfortable temperature 119Commercial loan insurers 18Commercial vehicle business 32Commercial vehicle exports 42Commercial vehicle field 51Commercial vehicle industry 43, 46Commercial vehicle market 51Commercial vehicles 51, 171Commercial vehicle sector 74Commercial vehicle segment 74Committees 52Communication 232Communication Offensive “Unsere Autos” 231, 232Communication platform 233Co-modality 88Company cars 63, 64Company car taxation 63Company financing 15Company plans 54Compartmental diversification strategy 19Component requirements 216Components 216Conformity certificate 169Congestion 88Consumer 91Containers 184Container standardization 183Contour markings 155Controlling air pollution 125Cooperation exchange 55Copenhagen Accord 70, 71, 84Copenhagen climate summit 84Core employment 50Corporation tax 65Corporation tax reform 63, 65Corporation tax reform of 2008 63Cost-cutting programs 52Creation of ozone 80Credit 28Credit crunch 18Crisis 14Customer information 91Customs duties 92, 93, 94, 95, 96Czech Republic 29

DDA recommendations 181DAT 215Data transmission 187Daytime running lights 154De-bureaucratization Act 183Delivery notes 181, 182Demand and capacity planning 181Demand-oriented supply of production 178Demographic trends 21Development costs 67Development spending 53Dialogue 232Diesel engines 31Diesel particulate filters 104Diesel sales 31Diesel soot emissions 79Diesel tax rate 87Diesel technology 87Diesel vehicles 65Digital Factory Planning 184Digital signature 183Directory of the Auto Industry 55Direct systems 144Discussion 232Disposable packaging 181, 183, 184Distance rates 64Distinguishing characteristics between types 152DMU 186Domestic production 36Driver assistance systems 147, 148Driving safety 150Dr. Karl Sommer 180Duty 79

EE12 Automotive 178, 183Eastern Europe 29ECAD 185eCall 139ECM - Engineering Change Management 185Eco-balances 84Eco-innovations 72, 73, 133EDI agreement 182, 183Educational material 232EEG 97EEV standard 109Efficiency 114Electrically powered 116Electrical mobility 60Electric car 111Electric mobility 162, 164Electric propulsion 116Electric vehicle 115Electric vehicles 150, 156Electromobility 112, 124, 232Electronic data interchange 216Electronic Stability Program (ESP) 76ELOG 185E-mail communication 181Emergency doctor 148Emission reduction 80, 102Emission reduction measures 70

240I N D E X

Emissions 79, 80, 81, 85Emissions limit 82Emissions Trading Directive 85Emission trade system 72Employees 21Employers 16Employment 24Employment miracle 21Employment situation 50Energy component 86Energy content 86Energy Control Directive 69Energy prices 97Energy Tax and Power Tax Law 66Energy Taxation Directive. 86ENGDAT 184Engine developer 66Engineers 21Engine test beds 66ENGPART 184Environmental bonus 25, 30, 38, 50, 102Environmental Noise 83Environmental protection 109Environmental zones 110Environment Policy 70Environment zone 60, 78, 79ESP 140Ethanol 123EU air purity and noise reduction policy 82EU consumer law 208EU Directive on Road Charging 88, 89EU End-of-Life Vehicles Directive 84EU Energy Taxation Directive 86Euro 5 and 6 emission standards 102Euro 6 62Euro 6 emissions standard 82EURO III emissions standard 79European Chemicals Agency in Helsinki (ECHA) 160European Commission 127Euro VI 108EU Single Market 68Evidence of creditworthiness 54Exception handling 216Exhaust emissions 128Existing vehicles 62Expert 226Export credit guarantees 18Exporting 17Export share 36Export vehicles 66Extended Range Electric Vehicle, E-REV 112External costs 60, 61, 88, 89

FFactors for logistics 178Factory layout 184Fat-rate tax 226Federal Association of the Energy, Water and Gas Industry (BDEW) 97Federal commission 201Federal highway investment 199Federal Motor Transport Authority 228Federal Office for Motor Transport 44

Federal traffic route plan (BVWP) 198Figure 87Finance system 61Financial loop 200Financial rescue clause 65Financing needs 18First fuel load 66FIVA 225Fleet average 74F model 202Foreign markets 51Foreign trade show 96Foreign Trade Show Participations 96Foreign trade show program 96Framework regulation of CO2 in light commercial vehicles 130Free trade 92, 93, 94Free trade agreement 95Freeway investments 193Freight traffic 191, 198Freight transport and logistics master plan 196Front runner approach 85Fuel cell 116, 122Fuel Cell Electric Vehicle (FCEV) 111Fuel cell vehicles 118Fuel consumption 109Fuel consumption and CO2 emissions 72Fuel prices 37Fuels 66Fuel taxation 66, 87Fulfillment 216Functional safety 158, 159Function relocation 65Funds for employees working reduced hours 18Future 232

GGALIA 185Garage capacity 215Garages 215General inspection 149General Safety Regulation (EC) 140GEO 185German Federal Environment Agency 125Germany 14Global INVOICE 183Globalization 34, 96Global MMOG/LE 187GLT 183Government coalition agreement 110Greenhouse gas emissions 70, 71, 100Grip in wet conditions 143Gross list price 64Growth Acceleration Law 65Guideline cartel law 213

HHarmonization of frequencies 152Heating and air-conditioning 119Heating and climate control concepts 119Heavy commercial vehicles 40High costs of this complexity 53Historical Vehicles 223, 224

241

H-license plates 226Hybrid 113, 114Hybrid electric vehicles (HEV) 116Hybrid vehicles 113, 156Hydrocarbons 125Hydrogen 122

IIAA 220, 221IAA Cars 220Ifeu Institute 125IHW 96Incentive program 31Income-related 64Increase in value of classic vehicle 227India 25, 28, 93, 94Indirect systems 144Individual approval 151Information 232Information platform 232Information technology 186Infrastructure policy 199Inheritance tax 63In-house training 173Initiative “Unsere Autos” 232Innovation 53innovation cycles 53Innovation policy 19Innovative commercial vehicle concepts 60, 61, 196, 197Innovative strength 232Institut für Demoskopie Allensbach 226Integral safety 147Interest limitation 65Internal combustion engine 87International Automotive Task Force (IATF) 172Internationalization 96International markets 51International Material Data System” (IMDS) 160International Motor Show 219International standards 117Internet 232Invoice and advice of credit data 182Ireland 30Isofix 157ISO-norms 22241-1 to -4. 170ISO/TS 16 949 (CSR) 174ITA 181, 186, 187Italians 31ITS 90ITS Action Plan 90ITS Directive 90IT service 178IVU directive 127

JJAMA 185Japan 27, 95Job losses 21Jobs 16Joint booths 96Journeys back to the family home 64JT 186

JT (“Jupiter Tesselation”) 186JT specification 186

KKIT (Communication and Information Technology) 178, 182KIT Working Group (AK KIT) 182, 183KLT 183, 184KOMP 185Kyoto Protocol 70

LLabeling Directive 91Large load carriers (GLT) 181, 183LDWS 140LED technology 154, 155Letter of intent (LOI) 67Levying toll 88Lighting technology 153Light truck 75, 76Lisbon Strategy 68Lisbon Treaty 68Lithium-ion battery 111, 114, 116l Labour Organization (ILO) 120Loan terms 51Local public transport 109Location 20Logistics 177, 178, 181, 186, 187Logistics service providers 178Long-term success 17Loss deduction restriction 65Low-cost car 20

MMade in Germany 20Malaysia 29Management of capacity and flexibility 178Management Standard ISO/TS 16949 172Manufacturing 20Manufacturing and purchasing cooperation 20Manufacturing group assembly 52Matthias Wissmann 179Measures to accelerate growth 18Measuring of planning quality 181Medical assistance 148Medium-size committee 55Medium-sized Company Day 55Medium-sized firm 55Medium-size group 56Mercosur 27MERCOSUR 93, 94MES 186Meteorology 80Mineral oil tax 192Minibus 28Mix of costs 20Mobility taxes 67Model life cycles 53Modular concepts 20Moratorium on added burdens 60, 61Motor home 48Motor manufacturers 216

242I N D E X

Motor Vehicle Block Exemption Regulation 206Motor vehicle garage businesses 215

NNAFTA 25National bus routes 60National bus travel 61National economy 16National upper limits 81Natural gas 122Networking 190New car registrations 25New EU countries 29New European Driving Cycle 73New registrations 38New solutions for interior 119New vehicle sales 206Nitrogen 125Nitrogen oxide (NOx) 108NO2 emissions 82No. 4933 216Noise emissions 134Noise zone 83Non-tariff barriers 93North America 26NOX 128

OObstacles to free trade 92, 96Odette 187Odette CA 187Odette Certification Authority 187Odette EDI 187Odette-ID 187Odette International 181Odette Sweden 185OECD countries 65OFTP2 184, 187OFTP2 (Odette File Transfer Protocol) 183Oil tax 193, 199, 201On-board diagnostics 149Operating licenses 151Order backlog 38Original Parts Packaging 183OSCAR 187Ozone 80, 81Ozone concentration 81Ozone pollution 81

PPackaging 178Parliamentary group 225Particle filter 125Particles 125Particulate 110Particulate development 80Particulate emissions 79Particulate pollution 78, 79, 82Particulates 80, 82Particulate volumes 79Partner identification 187Passenger kilometers 190

Passenger protection 157Passenger traffic 191Passive safety systems 147Payment process 183Peak ozone concentrations 80Penalties 133People and goods 60Percent supplement (0.03) 64Performance and financial agreement 200Personal transportation costs 37Photovoltaics 97Pilot projects 66Plans 54Plans Management as an attractive service 54PLM (Product Life Cycle Management) 178, 184Plug-in 114Plug-in hybrid 115Poland 29Portal 167, 183Portal applications 178Potential for reducing CO2 74Power generation plants 66Power generation systems 66Powertrain concept 53Powertrain technologies 53Practical forums 181Pre-crisis levels 15Premium automobiles 20Premium manufacturers 38Pre-registered vehicles 39Private use 63Process Auditor VDA 6.3 173Process chain 178Processes 181Procurement 178Product family 53Product generation 53Production 24Production costs 20Production locations 172Production of BTL 121Productive efficiency 20Product life cycle management 184, 185Product platform 53Product variants 53Prof. Dr.-Ing. Thomas Wimmer 180Prof. Dr. Wolfgang Stölzle 180Property purchase tax 65ProSTEP 184, 185, 186Protection of intellectual property 214Public 233Publications 167, 216Public-private partnerships 201Purchase decision 91

QQMC expert forum 174QM standard 172QM system standards of the automotive industry ISO/ TS 16949:2002 174Quality awareness 168Quality Management 165, 166Quality Management Methods 168, 174Quality management standard 172, 174

243

Quality management symposium 174Quality offensive 166Quality standard DIN 51624 120

RRadio frequencies 152Rail reform 60Range of a small cars 30Rating 54Rating grade 54Rating standards 54R&D support 67REACH 215REACH (EU chemicals regulation) 160Recommendations 182Recreational vehicles 47Recuperation 113Recycling 84, 126Recycling quota 84Reduced hours 50Reduced working hours 24Reducing emissions 80, 81Reduction in CO2 emissions 71Reduction of expenditures 52Reform of corporation taxation 63Reform of inheritance tax 63Registration obligation 78Registration Regulation 78, 79Remote Data transmission 184Remote Data Transmission (DFÜ) 184Renewable Energy Law (EEG) 97Repair 226Representation of the business cycle 16Rescue data sheets 148Rescue paramedic 148Rescue services 148Research and development 17, 23Research and innovation 19Research association for automotive technology 119Research in Germany 20Restoration 226Result of customs duties 92Retrofitting 65Retrofitting diesel vehicles 65Revenue 16, 22RFID 187RFID Strategy 186RFID-Tags 182Road safety 138Rolling noise 143Rolling resistance 143Romania 29Russia 30, 95, 168

SSafe functioning 158Safety 109Safety level 159Safety of electric vehicles 156Safety standard 76SASIG 185SCR 108Scrapping bonuses 31

SCR process 108SCR systems 125, 170SCR technology 129Seaborne container applications 181, 183, 184Seaborne containers 184Seal of approval 169Securing employment 21Security certificates 187Semi-trailers 44Service and spare parts business 215Shift in employment 21Shifts 19, 38SIM TD 163Slovakia 29Small load carriers 181, 184Social-political responsibilities 21Social security contributions 18Soot emissions from diesel vehicles 79South Korea 29, 95Spain 30Spare parts 215, 226Spare parts supply 228Specialist classic vehicle workshops 227Specialist workshops 227Specialized staff 21Speed limit 138Speed limiters 74Stabilization of the financial market 15Standard 118Standardization of forms of delivery 178Standardized Transport Advice 181, 182Standardizing 117Standards 117, 166Stimulus packages 18Stimulus program 15, 28Strategic industrial policy 69Strategies 181Strategy 232Stuttgart declaration 79Summation sheets 183Summer smog 80Super Credits 131, 133Supplier database 178, 183Supplier firms 52, 53, 55Supplier industry 23, 50, 51, 52Suppliers 17, 50, 51, 52, 53, 54Supply chain 172, 178Supply chain organization 178Synergies 53

TTaiwan 29Taxation of year-old cars 63Taxation on petroleum and environmental taxes 89Tax exemption 62TEC 95Technical rescue services 148Technological paradigm shift 17Technology and quality 20Technology mechanism 70Test for innovative commercial vehicle concepts 61Thailand 29The “Copenhagen Accord“ 70Thermal management system 119

244I N D E X

The trailer and body sector 41Timeline of Innovations 232Tina Rumpelt 180Toll 43, 88, 89, 192, 193, 194Toll increase 43TPMS 144Traction control (TCS), 76Trade barriers 92, 93, 95Trade policy 69Trade tax 65Traditional automotive themes 224Traffic jams 197Traffic management systems 197Trailer 44, 45, 47Trailer and body industry 44Trailers 44Transmission protocol 184Transport advice 181Transport costs 178Transport infrastructure finance company 60, 61Transport Infrastructure Financing Company (VIFG) 201Transport notice 216Transport notification 216Travel coach 109Traveling expenses 64Travel trailers 47, 48Trend 24Trucks 32, 75, 76Truck toll 60, 89, 199, 200, 201Turkey 29Type approval 151, 152

UUkraine 95Unemployment 15UNICODE 182U.S. 95U.S. market 26

VValue chain 52Value-chain oriented logistics 179Value creation 52VDA 185VDA 6x regulations 172VDA 5010 (standard forms of delivery 181VDA Directory of the Auto Industry 55VDA EDI recommendations 182VDA KLT 184VDA Logistics Award 2010 180VDA Logistics Conference 179VDA Logistics Congress 183, 186VDA Logistics Congress 2010 179VDA Logistics Steering Committee 178VDA Medium-sized Company Group 55VDA Plans Management 54VDA Practical Forums 181VDA Practical Logistics Forums 181VDA President Matthias Wissmann 179, 180VDA Rating Tool 54VDA raw materials committee 52VDA Recommendation 184VDA Recommendation 4500 184

VDA Recommendation 4525 181, 184VDA Recommendation 4933 181VDA Recommendation 4951 184VDA Recommendation 4964 185VDA Recommendation 4965 185VDA Recommendation 4967 185VDA Recommendation 4933 216VDA Recommendations 4500 VDA small load carrier system 181VDA Recommondation 4500 181VDA Recommondation 4520 181, 183VDA Recommondation 4525 181VDA Recommondation 4906 183VDA Recommondation 4908 183VDA Recommondation 4933 181VDA Recommondation 4937 181VDA Recommondation 4938 183VDA Recommondation 4965 185VDA Recommondation 5501 187VDA Recommondation 5520 187VDA Small Load Carrier (KLT) 183VDA-Steering Committee on Logistics 178, 186VDA Strategic Working Group on Logistics 178VDA Working Group 184VDA Young Entrepreneur Group 56VEC 185Vehicle age 215Vehicle circuit development processes 185Vehicle diagnostics 215Vehicle duty 62, 63, 67, 130Vehicle electrics 185Vehicle exports 66Vehicle safety 146, 156Vehicle surveys 227Vehicle tax 100, 192, 226Vehicle tax rate 226Vehicle tax reform 38Vehicle tax suspension 18Vertical Block Exemption Regulation 206, 207VW Beetle 228

WWasher systems 169Washing system operator 169Washing systems 169Web-EDI 182Wheel Pallets 183White paper 88White paper on transport policy entitled 88WTO 95www.unsere-autos.de 232

YYear-old car discounts 63Young entrepreneurs 56

ZZDK 215, 224, 227, 229

245

ImprintPublisher VDA Verband der Automobilindustrie e.V. (German Association of the Automotive Industry) Behrenstr. 35 10117 Berlin Phone +49 30 897842 - 0 Fax +49 30 897842 -600 [email protected] www.vda.de

Editor VDA Press Department VDA Communications Department

Design DANGEROUS. Berlin

Printing DCM Druck Center Meckenheim GmbH, Meckenheim

ISSN 1869-2915

Copyright Verband der Automobilindustrie e.V. (VDA) 2010

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