Europe: Report poses challenges for low-carbon future

Thursday, November 12, 2009,

Tags: BMW Group, Daimler AG, Emissions, Engines, Fiat SpA, Ford Motor Company, Future Models, General Motors, Honda Motor Company, Hyundai Motor Company, Legislation, Marketing, Mazda Motor Corporation, Mitsubishi Motors Corporation, Nissan Motor Company, OEM Strategy, PSA Peugeot Citroen, Porsche, Recycling, Renault, Research & Development, Toyota Motor Corporation, Volkswagen.

AutomotiveWorld.com

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A new report published by AutomotiveWorld.com analyses the strategic implications of low-carbon cars in the European Union for vehicle manufacturers and concludes that the three biggest challenges are:

• Defining the right portfolio of technology packages to reach the low-carbon targets;
• Securing the supply chain to deliver those technologies, with a special emphasis on the issue of the supply of lithium for batteries;
• Developing a green branding strategy to present new technology packages to consumers.

The report, entitled Low-carbon cars: strategic implications for OEMs in Europe, also argues that meeting the EU targets of 130 g/km by 2015 and 95 g/km by 2020 may not be sufficient because of the growing social and political momentum behind the low-carbon concept amid increased concerns over the pace and impact of climate change. NGOs and governments are really starting to focus on the low-carbon agenda to an unprecedented degree, and as a result the message is permeating deeper into all aspects of society. This means that consumers will be looking for 'better than compliance' cars in the future.

The technology packages required for low-carbon cars offer differing levels of performance improvement against cost, but the analysis shows that by 2020 the achievement of the 95 g/km target will have necessitated a massive shift towards hybrid and full-electric vehicles. The Table below, taken from the report, illustrates the approximate scale of change required in a typical average portfolio mix.

This shift will in turn have huge reverberations throughout the automotive industry value chain, from material supply all the way to dealerships, and is likely to result in innovative business models and new relationships rather than just 'business as usual' while selling low-carbon cars. As the report makes clear, different OEMs are adopting quite different strategies to meet the low-carbon agenda: and not all of them will be right.

Please click here to find out more about: 'Low-carbon cars: strategic implications for OEMs in Europe'.

Published on Thursday, November 12, 2009

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