Optimism, because demand for vehicles and components is picking up more rapidly than expected and the appetite for new, innovative technologies is accelerating. Caution, because the scars from 2020 are deep and the level of uncertainty remains high.
Thorsten Muschal (above), member of the management of Faurecia and CLEPA President gave his view on the supply industry’s outlook on the new year.
“COVID-19 has hit the automotive supply industry particularly hard and the impact of the crisis will remain a major factor in the new year. Many in the supply industry, in the last months of 2020, have managed to recover a good portion of the earlier revenue losses, allowing for optimism as regards further recovery in 2021. However, uncertainty remains high given the volatility associated with the containment of the COVID-19 pandemic.”
He said that until large parts of the population have been vaccinated, the threat keeps looming of supply chain disruptions, factory lockdowns and border closures which caused much damage during the first wave of the pandemic. As a consequence, the planning of production remains much more challenging than it usually already is in the just-in-time operations of the sector.
An illustration of this is provided by the current shortage of semi-conductorsin the automotive sector. A combination of different factors – the COVID pandemic, the trade war between China and the US, a spike in demand from the consumer electronics side and the acceleration of vehicle electrification – has added weeks of delay to already long supply chains.
This means localisation of supply which must be carefully assessed in the context of global playing fields and competitiveness.
In 2021, the risk of further employment loss remains high. Last year, over 50 thousand job cuts were announced by Tier1 suppliers alone, according to Eurofound data, matching a similar number with vehicle manufacturers.
A further major concern is presented by the cuts that many suppliers had to make in their R&D budgets in order to cope with the crisis. R&I is the main factor in ensuring that automotive products are continually improved in terms of environmental impact and social sustainability.
“We expect regulatory proposals on crucial topics such as CO2 emissions, Euro 7, data use and access, artificial intelligence, and the organisation of the aftermarket. Sustainability criteria and circular economy requirements will continue to fuel policy debate as well.”
He concluded, “The year 2020 has been one like no other. Working together has been instrumental to cope with the many challenges and this will be no different in 2021.
“The COVID crisis has shown the value of standing strong, together. In this spirit, we look forward to working with our customers, stakeholders and policy makers again also in 2021, advancing sustainable mobility and a competitive industry in Europe.”