Erik Jonnaert was named Secretary General of the European Automobile Manufacturers Association (ACEA) in June 2013. He officially started the job in October, taking over from Ivan Hodac who was retiring. Automotive World spoke to Jonnaert on developments at ACEA since he took the helm, and where its priorities lay going forward.
Initial focus areas
“It was an exciting 12 months and I’m still here,” Jonnaert told Automotive World. “It takes time to understand a new sector,” he explained. Jonnaert came to ACEA from Procter & Gamble, where he served as Vice President for External Relations in Europe and Asia.
Jonnaert described the past 12 months as a “transition year, not only for me but also for Europe”, with changes in leadership in Parliament. In the midst of this transition, ACEA’s focus is to “engage in dialogue with new policy makers to create an environment that is conducive to growth.” The focus has centred on four key pillars.
Innovation: “We felt it was important that policy makers create an environment that is enabling innovation,” said Jonnaert. “One of the things that impressed me in coming into this industry was the efforts undertaken in innovation. Annual R&D investment made by automotive amounts to €32bn (US$43bn) – the biggest of all sectors active in Europe. Innovation is the backbone of this industry. We need to make sure, given the leadership role that European automotive industry has been playing, that we keep ahead of the game. We also called the new Parliament to further focus on this.”
International trade: The second pillar addressed efforts to foster growth for international trade. “Our industry produces more in Europe than they sell in Europe. A lot of that is being exported. It’s good for jobs and growth that we can keep exporting, especially to emerging markets,” said Jonnaert. “International trade becomes increasingly important. Our member companies are increasingly global players. The market place has become a global one.”
Regulatory framework: The third focus is building a supportive regulatory framework. “Automotive is one of the most regulated sectors,” observed Jonnaert, referring to the numerous directives and regulations with which the industry must comply. “It’s updated regularly and it’s quite a complex regulatory environment. We want to focus on the certification of that framework and make sure where we have regulations that they are supportive of what we want to achieve.”
Change: Anticipating and managing change was another important focus with the outgoing Commission. In June, ACEA published a new manifesto for the new Parliament. “In our new manifesto we focus on the first three pillars. I’m not going to say we’re out of the woods but we see some amelioration of market improvements for our sector,” said Jonnaert. New passenger car sales in the EU were up 6.5% in the first half this year. “It’s started moving and it’s moving upwards,” he added.
I’m not going to say we’re out of the woods but we see some amelioration of market improvements for our sector
Market-shaping trends
Moving forward, developments within the European automotive market will be impacted by a number of different forces, including connectivity, emissions reduction and growing international trade. Commenting on the ubiquity of connected devices, Jonnaert noted: “The consumer of today is a connected consumer. He is always online somewhere, using an iPhone or iPad.” This desire for constant connectivity offers “a growth opportunity for manufacturers,” he added.
In terms of cleaning up car emissions, Jonnaert believes considerable strides have already been made. “There’s a lot that has already been done by the industry to come up with cars that have less of an environmental footprint,” he said. So far, however, the uptake of most alternative powertrain options has fallen short. “We need to be honest: the interest in alternative powertrains, especially electric vehicles, is lower than was anticipated. We need to further stimulate demand for some of these alternative powertrains,” Jonnaert said.
He noted that Europe’s vehicle manufacturers have made hefty investments in new powertrain technology, and these need to pay off. “We want to make sure these vehicles reach the markets. This requires support from policy makers. Recharging infrastructure is a key demand we’ve been formulating for years. The Commission has agreed on a directive with member states to start investing in some infrastructure but we need to see it happen now. That creates the consumer confidence in that new technology, which is still not fully there.”
The market’s development will also be heavily influenced by growth in international trade and a key focus for ACEA is making sure that free trade agreements (FTAs) yield successful results. “Success will depend on the degree of regulatory convergence we can achieve,” said Jonnaert. The EU is holding negotiations on free trade with both the US and Japan.
Tied in with these factors is the regulatory environment, which at times gets ahead of itself, said Jonnaert: “We first focus on proper implementation of what’s on the books. There is a tendency to come up with new ideas all the time. They may be good ideas but we need to focus first on what’s already there. For example: the new targets set last year for reducing CO2 emissions by 2021. Let’s make sure we get there first before we talk something new. Implementation first.” Overall, he wants to make the regulatory environment “smarter and simpler.”
Overcapacity
For years, the European automotive industry has been struggling with overcapacity, but Jonnaert is keen that the situation not be generalised, noting: “It’s different for different companies. Some have a problem of overcapacity, some are fully utilizing capacity. As the industry picks up on sales this will be a positive development when it comes to capacity. It means we can produce more for the European market.”
Free trade will also help the situation and ACEA describes itself as a champion of FTAs. “If we can export more easily, it will also allow us to produce even more and further utilize capacity we have in our plants,” said Jonnaert. The overcapacity situation will also depend on the general economic improvement. “If we see further progress in the economy revival in Europe, it will be good for capacity,” he added.
Protect and enable growth
Overall, ACEA’s aims and Jonnaert’s own targets centre on protecting and enabling industry growth, competitiveness and jobs. “We’ve come through difficult times in the industry. We are not out of the woods yet,” he said. “We are fortunate to have some really strong global players and it’s a question of an outstanding record in terms of innovation. It’s a question of ensuring the sector continues to be recognised for the value it adds to the economy in Europe so we can keep growing globally.”
This will require continued discussions with key policy makers and other stake holders across the sector, covering everything from suppliers to dealers. “At the end of the day we are not alone in this,” Jonnaert stated. “We try to engage in more dialogue with other key players around automotive in Europe to see how can we move the needle forward.”
Erik Jonnaert will be speaking at Automotive Megatrends Europe 2014, taking place on September 10-11, 2014. Organised by Automotive World, Automotive Megatrends Europe 2014 is a two-day, six-stream conference focusing on Commercial Vehicles and Passenger Cars. Jonnaert will join other stakeholder panellists in the Big Picture Panel Discussion, which will focus on the key megatrends that are set to shape Europe’s light vehicle industry over the next ten years and beyond.
Megan Lampinen
