Research and innovation are core pillars under Europe’s economy and vital for a sustainable and successful society.

The European Commission stresses these points during the Research & Innovation days organised in Brussels this week, in which CLEPA takes part as well.

Automotive suppliers are at the forefront of adapting the automotive industry to meet the global societal challenges and regulatory requirements that come with decarbonization and digitalisation. This is becoming ever more challenging, with new areas such as software, artificial intelligence, connectivity, and new powertrains under development, all of which require new expertise and higher investment in R&D.

The European automotive sector is the biggest private investor in R&D, contributing with more than 30% of total expenditure in the EU. Research & Innovation are crucial to keep Europe in the lead of the global innovation race. CLEPA and its members are key partners in the debate on how to best shape the future research and innovation landscape in Europe, in order to ensure that the transition of our economy and society secures a sustainable future for citizens, while maintaining Europe’s leadership world wide.

To underline the importance, CLEPA has recently signed a joint statement to urge the EU Institutions to make research, development and innovation (RD&I) a priority within the next Multiannual Financial Framework 2021-2027, together with 92 other stakeholders. Public support and funding in the framework of the Horizon Europe programme has an important role to play in the competition with other world regions, such as the USA, China, Japan and Korea.

In the CLEPA vision paper “Future as we Move”, R&D is identified as a key component of European competitiveness. European suppliers are committed to maintaining and raising the competitiveness of the automotive industry through quality and excellence. Suppliers call on policy makers to Ensure funding for research and innovation which supports the strategic objectives of sustainability, safety, connectivity and automation.

Please provide your vision of mobility in the next decades.
One of the most important megatrends is the move towards mega-cities. We have to expect further strong growth in cities and this will have an impact on traffic. Second, people’s relationship to the car is changing and the ownership model will move more toward car sharing, ride hailing and other forms of new mobility. The auto industry will have to find its way here. A third megatrend is that many new players are coming into the mobility space because they see it as a growth market. These new and agile players are entering fields where the traditional auto industry is maybe moving a bit too cautiously.

The list of transformative developments in the auto industry is long
What’s also important to realize is that growth will come mostly in Asia, because the big markets of Europe, the US and Japan are saturated. And over the next 15 years, fuel consumption and emissions reduction will remain a key issue.

Which brings us to the topic of electric vehicles.
With electrification, we need to take care to have a technology-neutral approach. Take plug-in hybrids: they bring electrification to the mass market. They can be driven emission-free in cities, while the internal combustion engine comes into play on longer drives. Electrification also requires an honest discussion where complete transparency is required about the pros and cons of various powertrain options. For battery-electric vehicles (BEVs) you have to take into account the whole chain from the production of the battery to the use of the vehicle. And depending on how electricity is generated, BEVs are not always necessarily the best option. As for market development, nobody really knows what the split between EVs and traditionally powered vehicles will look like in five years, which is why we have to spread investments across different technologies. With regard to electrification, more progress needs to be made to deliver a viable charging infrastructure.

Any other challenges faced by the industry today?
One more megatrend is that we want to reduce road fatalities, which is why, at ZF, we have a zero-accident goal. Avoiding traffic accidents is a real megatrend.

What about autonomous driving?
Because of the many sensors that will be deployed in autonomous vehicles, they will contribute markedly to safety on the road. But autonomous driving isn’t quite there yet and a lot more investment is needed. We see autonomous driving coming first in geofenced areas for commercial vehicles. Then autonomous people movers and cars will follow.

Are the massive changes in mobility a threat or an opportunity for the European auto industry?
Both elements are there, but bigger companies may be better able to take a balanced approach. For smaller companies, it’s dangerous to bet on one trend. But, all in all, there are more opportunities than threats.

How is today’s consumer sentiment affecting the outlook? For example, will gains by European Green parties in the most recent elections have an impact on mobility trends?
Climate protection is a key driver in people’s mobility choices and Europe is leading in this area. The big question is whether the global car market will continue to grow 2% or 3% a year. Or will new mobility concepts and waning private demand for cars limit growth in global car production? Until recently, we still expected global car production volume to rise from around 94 million units today to around 115 million units by 2030. But in the past couple of years we’ve been revising our forecast downwards, with sustainability considerations being a major factor. The numbers will come under even more pressure if the trend toward ride-hailing, robo-taxis and people and cargo movers picks up.

You mentioned new players in the mobility space. How do you interact with them?
At ZF, we are in close contact with some of the new players, in particular the ones that want to move fast into electric vehicles and autonomous cars and trucks. For established automotive suppliers, that is beneficial, because these players often have a less in-depth understanding of automotive technology, which is where we can help them and generate revenue.

Are industry outsiders going to encroach upon the traditional market of automotive suppliers?
Technology companies like Amazon, Google, Microsoft and Nvidia approach the automotive industry from a tech and software perspective. They have different development and production cycles and we can learn a lot from them. But in the auto industry you cannot suddenly shorten development time from three years to six months. We can work very closely together because they don’t have the automotive know-how and we don’t yet have agility as a core competence.

Are you saying the automotive industry still isn’t fast enough to meet rapidly changing customer demand?
The industry is getting there, but we cannot completely upset the development process from one day to the next. The auto industry deals with certification and homologation and those take a bit of time. We’re trying to divide our business into areas where we adopt agile processes and areas where a more traditional approach is required. ZF and Nvidia jointly developed our ProAI supercomputer in six months. That would have been unthinkable in the past. We have people join agile process teams and, step by step, then introduce the methods in traditional areas.

How would you like European Union policy makers and regulators to support the European auto industry and suppliers in general?
We would like the European Union to speak with one voice. Europe needs to be united in the pursuit of open world trade, no protectionism and no trade barriers. If we don’t do that, we’re in trouble. In the area of regulation, we need a solid framework of rules in areas such as safety, security and connectivity. For emission reductions, a simple ban on certain kinds of powertrains is not helpful. We need a proactive policy, an overall concept to reduce emissions instead of simplistic ideas.

And what about regulation in new-mobility growth areas?
In Europe, we still face too much bureaucracy when it comes to field-testing new driverless technologies. The US is more generous here. We will also need fair and non-discriminatory access to vehicle data, as the volume of data from connected cars increases. And I believe Europe is not doing enough to boost innovation. Silicon Valley continues to drive innovation and every week you see new applications coming out of Silicon Valley in the area of transportation and mobility. I would like to see more of that coming out of Europe.

Please characterise the mobility revolution from your vantage point
Cars will be more connected and more electrified, and we will see different modes of personal mobility. Mobility will become much more diverse. I wouldn’t call it a revolution, but rather an accelerated evolution. The relationship between owner and car has already been changing for a while, especially in cities, where people are using cars differently. The push toward lower emissions is also something that started already 20 years ago. But the trend has accelerated in recent years.

Where are the opportunities for European automotive suppliers in this transformation?
It remains a regional strength that Europe has so many strong global automotive brands that originated here. Europe has been a catalyst for innovation in the auto industry, but this is not as evident today as it was 10 years ago. Look at China, Japan and Korea, where huge progress is being made in new technologies at a very fast pace. China isn’t just a maker of battery-electric vehicles. When you talk about infotainment and connected-car technologies, Chinese carmakers are not burdened by a legacy of established practices.

What should the European automotive industry do to remain competitive in this environment?
What’s needed is for both carmakers and automotive suppliers to adopt a pragmatic strategy that will work in the long term. We should invest in the next technology wave, where we can make a difference. We should invest in technologies that haven’t yet reached the level of maturities of, for example, batteries. Hydrogen and fuel cell technology is an example. Cyber security is another area where Europe could gain an advantage. We have some strong advantages in Europe as well because we operate globally, so growth in the Chinese market is good for us as well. And we benefit greatly from the multicultural organizational model European companies have, with development centers across different countries.

Customers want new technologies ever faster, but is the auto industry fast enough to keep everyone happy?
The European auto industry is not moving at the same pace as the Chinese, but we all still have to deal with the issue of reliability. You cannot bring a product to market that isn’t extremely reliable, dependable and safe. Customers pay for that. But it is frustrating that, by nature, the road to market in the auto industry is long. Chinese companies can develop much faster than we can, but we also have to look at the demand side. Not all drivers are interested in all new technologies.

Do you see the role of suppliers change as the auto industry increasingly turns into a provider of all kinds of mobility?
Most of the innovation that goes into a car comes from automotive suppliers. Carmakers cannot invent everything and do everything themselves. But they do play a strong role in deciding what brings value for the customer.

Is regulation helping or hurting the European auto sector?
If you look at recent emission regulations, the European Commission and the European Parliament have been a catalyst for innovation. The same is the case for safety. What European tier 1 suppliers bring to the industry is a neutral view on what kind of technology should be deployed. And, in the area of emissions, we need to not just look at tailpipe emissions, but take a so-called ‘well-to-wheel’ approach. We also need to look at the entire lifecycle of the automotive products from manufacturing all the way to recycling.

Despite today’s challenging global environment, are you optimistic about the prospects of the European auto industry?
I am optimistic because this is a fantastic time for the industry where innovation has become even more important than before. But in Europe we need to be very pragmatic when we look at the regulatory framework that will impact the future of the industry. If we don’t adopt the right approach, I’m afraid that Europe could shed its role as innovation catalyst to Asia.

Mr. Degenhart, please describe in a few sentences what is going on in the automotive industry.
In the automotive industry, we are currently experiencing a transformation that is the most fundamental change since its inception. We are replacing traditional powertrain technology for the sake of the environment. This a trend determined mostly by lawmakers and less so by consumers. It’s not yet clear just how fast the process will take its course. A second megatrend is assisted and automated driving. The bottom line here is safety. This trend is driven by consumers, who are willing to pay more for enhanced safety. And a third megatrend is more connectivity, with consumers eager to have the same connectivity experience in the car that they have at home or at work.

And what does that mean for auto manufacturers and automotive suppliers such as Continental?
First and foremost a big opportunity! All these changes are massive and are happening at the same time. They require enormous investments. Without a doubt, the top priority is the introduction of clean alternative powertrains. But “clean” here doesn’t just refer to the car; I’m also talking about well-to-wheel. In addition, there is a high degree of urgency to achieve the connectivity consumers want; consumers are very impatient. And we need to move decisively to reach our goal of zero road fatalities. Achieving autonomous driving, on the other hand, is somewhat less of a priority. Getting to that point will be very expensive and will take a long time.

There is a lot of talk about the growing role of software in personal mobility. Is the auto industry embracing the need to move into this relatively new area of automotive technology?
The separation of electronic hardware and software is a radical change in the engineering of the car and, with it, we are seeing completely new business opportunities and models. The auto industry has to learn to deal with software as a product, which is something the IT industry has been doing for 20 years. We have to become better at developing software and monetising it.

And how difficult is that proving to be?
The biggest challenge for the auto industry is to develop software in a highly efficient and effective manner. We need to introduce a range of technologies, including over-the-air (OTA) updates, without touching the hardware of the car. We have to learn how to do this in a secure and safe way to ensure data and system security. If a smartphone is under attack and there is a hiccup in its operation, that’s not a big problem. For a car traveling at 120 kilometers an hour on the freeway, it’s a different story. Software is probably our biggest challenge, but it is also our biggest opportunity. It’s a huge potential market and it is a very attractive business area as well, which is why it’s also attracting the attention of IT, electronics and internet companies.

Can you put a figure on that potential?
Today, according to external consultants, worldwide automotive hardware sales are around $2.5 trillion, while sales of software and software-as-a-service (SaaS) in and around cars amount to about $300 billion. By 2030, hardware sales likely won’t have changed much, but software and SaaS sales are expected to increase tenfold to around $2.7 trillion. That will be the biggest growth opportunity in the next 10 years.

Who are going to be the winners and the losers as the auto industry focusses more closely on software?
There will be winners and losers across all industries, but what’s more important are the criteria for success. No one can do everything by themselves. You can only be successful if you cooperate with partners such as IT companies, internet companies and electronics firms. In order to have long-lasting cooperation, you also need to have a culture that is open, flexible and agile. And you need to have a mindset and culture based on trust.

Are European automotive suppliers well positioned to make this transition?
From an innovation point of view, the big suppliers are in a very good position. But there are a lot of smaller and medium-sized companies that are highly dependent on mechanical components and systems. These companies are likely to have more difficulties, because it is much tougher for them to transform their product portfolios to software and electronics and to digitalise their products on the whole. Furthermore, big suppliers can quickly open tech centers in India, Mexico and South-East Asia and attract 1,000s of software experts in just a few years. Small and mid-sized companies are less likely to be able to establish similar capabilities. Such companies – especially hardware-centric ones – are at a higher risk as they struggle to get up to speed in the era of functionality, software and services.

What do you think about Europe’s industrial competitiveness in the automotive space compared with other regions of the world?
We are pretty well positioned against competitors from Japan, the US and Korea. US firms have one slight advantage in that most of the IT, internet and electronics companies are located there, which means that, culturally, US automotive companies are closer to the high-tech community than Asian and European suppliers are. But I am confident that, thanks to our technology know-how, high-tech partners in Silicon Valley find us attractive.

What do European automotive suppliers need to maintain their pole position in the mobility transformation?
First and foremost, we need top-level innovations. If we have these, we can offer attractive technologies to automakers, and we are interesting to potential IT partners. Second, we need a competitive environment in Europe with regards to IT and telecommunications, energy costs, taxes and social expenditures. The EU could have a very strong footprint, even with a population of just 510 million compared with 1.3 billion in China and 330 million in the US. But global discussions are taking place mainly between China and the US. In global economic and trade discussions, we – as Europe – are not making full use of our potential because we are not speaking with one voice. This is a risk that needs to be addressed by the EU nations internally.

What do you think about the regulatory framework put in place by EU authorities in Brussels?
Brussels is at risk of not just defining the targets for an industry but defining the solutions at the same time. That is not very helpful. Regulations should set targets but leave it to the industry to come up with the solutions. We need a general openness to the technologies that might possibly be adopted. This is directly relevant for the industrial competitiveness discussion. As soon as politicians start defining solutions, the industry is at risk of losing competitiveness compared to China and North America.

European elections this year showed that people are increasingly concerned about the environment. How will that impact the transition to alternative powertrains and new mobility models?
The pressure here will increase. Young people in particular are very interested in and concerned about the environment, and that is a good thing. But there is a risk that we will lose sight of the fact that a balanced approach is needed. In the discussion about the energy transition and nuclear power, which can have a big impact in reducing CO2 emissions, we need to avoid becoming emotional. Economic and technological factors have to be balanced. The world cannot be changed overnight. For example, forcing the industry to replace existing powertrains faster potentially would have a negative impact on employment and the industry on the whole. Things have to stay in balance in order not to endanger acceptance.

Are traditional carmakers more at risk than suppliers in the mobility transformation?
Smaller automotive manufacturers and smaller automotive suppliers are at a greater risk than the big players in the industry. That’s because the hardware in a car is going to lose value in the next 10-to-15 years, while functionality, software and services are going to gain significantly in value and importance. We will still need the hardware, obviously, but it will become a carrier of functionality to an ever-greater extent. Also, IT companies are much more focused on the software and services business, which means auto manufacturers tend to face an even bigger challenge. One of the consequences is that you are likely to see more merger discussions in the industry.

With software so important today, wouldn’t it also make sense to see mergers between IT companies and big automotive companies?
There’s a high probability that we will be seeing such developments in the next 10 years. The question here is: who will acquire whom? Will IT companies acquire automotive companies, or vice versa? We would have already seen more mergers initiated by automotive companies if the high-tech players weren’t so expensive. Today it’s already extremely difficult to justify the acquisition of even a mid-sized company specialized for example in cybersecurity or internet services.

During the UN Climate Action Summit last week in New York, world leaders were asked to come to the UN with concrete plans to cut emissions to net zero. The 1.5C goal of the Paris Agreement, backed by the UN and the majority of the world’s nations, requires achieving net zero global emissions by 2050. This will be back on the table during the next COP25, in Chile next December, but despite of the efforts, not all the world regions are on track or aligned on the next steps.

Europe has voiced strong commitment, reflected in the proposed “European Green Deal” topping the agenda of the next European Commission President Ms. von der Leyen. The next five years Europe aims to lead the transition to a carbon-free and digital world. All this will need to happen while securing Europe’s industrial powerhouse and maintaining the Union’s competitive edge.

How can we ensure that society continues to function without massively damaging the environment? The European automotive suppliers have developed technology solutions for different mobility segments and needs, as multiple solutions are needed in parallel to achieve net zero carbon emissions. They work and drive development with other sectors and stakeholders as well, as the fight against climate change needs a holistic approach involving all the relevant actors. This is true along the whole value chain, covering the use of raw materials from renewable sources, remanufacturing parts that contribute to the circular economy and collaborating with energy and utility providers to create the wider use of alternative energy sources.

It’s ‘European Week of the Regions’ time - the annual gathering of local policy makers to discuss latest trends and share best practices. The UN estimates that 55% of the global population lives in urban areas – a figure that is projected to rise to 68% by 2050. With few exceptions, cities are expected to become bigger and more numerous. As the majority of future humans will live in cities, automotive suppliers are bringing solutions to market that help the city environment to realise to its full potential.

Cities are a focal point for new mobility as electrification, connectivity and automation, as well as sharing vehicles, the use of different modes of transport and seamless-mobility services are great solutions to cope with dense populations, environmental challenges and congestion. Automotive suppliers work closely with regional and city authorities to make possible the new mobility demands, supporting the development of different ways of transport that are as seamlessly integrated as possible to offer citizens the accessibility to smart, clean and safer transport means. Additionally, urban and rural areas should be well connected, no matter their size. Solid mobility networks and the resultant infrastructure will ensure an equally efficient service for all.

The city of the future will count with digital systems, to make fleet management more efficient and interoperable software platforms able to combine, analyse and process urban mobility services.

Automated and self-driving transport systems will provide benefits not only to regular users but will open up a better accessibility to all citizens, meeting the needs of an ageing population.

Energy-efficient-multimodal transport systems will also integrate different energy sources and powertrains for the use of clean energy, that will combine with the city energy infrastructure thanks to the use of the smart grids and renewable energy infrastructure.

All these innovations will help to realise the cities and regions of tomorrow, that above all, need to improve citizens' quality of life and strengthen the economy by promoting sustainable urban mobility and increased use of clean and energy efficient vehicles.

An organisation is only as strong as its people. European leadership depends on the people driving it, that is why education, training and lifelong learning are among the most important instruments to sustain and strengthen the competitiveness of our economies and industries.

The automotive supply sector produces everything from vehicle chassis to powertrains, from interiors to roof tops, from advanced safety technologies to on-board computers, from braking systems to lighting equipment, and so on. Products and processes are varied and complex and require an equivalent educational programme able to train its human capital.

Automotive suppliers have realised long ago that industry needs the right tools in place to educate, train and reskill the workforce. Several programmes, involving different stakeholders such as education and training institutions, public authorities and related industries are in place. CLEPA is involved in the European Project DRIVES, that evaluates the needed skills for the sector, detecting, analysing and evaluating best practices for automotive

skills training and education in different EU member states, developing and implementing strategies to address skills gaps in the sector. The first results of the project already show the clear demand for technical skills in the future, and the pronounced gap between the skills available in our sector and those that are required as a result of the introduction of new technologies and automation.

The DRIVES project is supported by the European Commission, that this week also celebrates the “European Vocational Skills Week” with the aim of empowering people to seize employment opportunities. Quality and relevant vocational education and training, or VET, can provide people, and especially the young, with the knowledge, skills and competencies required for the jobs of today and tomorrow.

The automotive sector is an exciting place to work: advanced, modern, diverse, dynamic, focused on smart, safe and sustainable mobility for people wherever they live. Apart from mechanical engineers, electronics and computer sciences are increasingly important. Just as an example: there are four times more software lines in a car than in an airplane! We strive to ensure that the new generations see the attractiveness of the sector, to win new talents and minds for the industry able to help drive the changes society needs.

Connectivity is no longer a term that only points to the future, many of today's vehicles are already connected devices and interact with their surroundings; other vehicles, infrastructure, pedestrians... generating data that improve traffic conditions and expand the offering of mobility services and business models. Connectivity is important to advance road safety, traffic efficiency and driving comfort, by helping the driver to take the right decisions, adapt to traffic situations, plan next legs of a journey, or next activities in the day.

There are two main ways to enable interaction between vehicles and infrastructure; short and long range. ITS-G5 is a shortrange system, ideal for car-to-car communication and car-to-infrastructure and well suited, for example, to safety applications that can prevent an imminent collision between two vehicles. 5G, in turn, adds long-range capabilities and ability to handle larger data volumes, which are necessary for applications such as traffic management, in-vehicle access to remote services, or automated driving. Both technologies are complementary and are envisaged playing their role in Cooperative Intelligent Transport Systems (C-ITS).

The large-scale deployment of C-ITS should be accompanied with a legislative framework that supports connectivity and enhances the cooperation between all parties involved, to allow road transport to become safer, cleaner and more efficient. This is being discussed this week at the ITS Congress, where regulators and automotive representatives are debating how to set up the framework system for connected cars. Experiences and best practices are being shared.

CLEPA will present on the Project ENSEMBLE, an EU-funded initiative that explores the development of the platooning technology, that will allow trucks to communicate directly with each other by using connectivity technology and automated driving support systems. This technology will support emissions reduction, help optimise road capacity and improve traffic safety by reducing the error factor.

This is just one of the many examples automotive suppliers are working on, providing technology solutions for future mobility. High investments in software components, artificial intelligence and machine learning as well as dedicated hardware are already in place, and need to be accompanied with internationally harmonised standards and a long-term R&I planning and support from EU authorities, to guarantee European technology leadership.

Connected and automated vehicles will transform mobility as we know it. There is a big challenge in delivering on all the necessary elements in a highly efficient and effective manner, but also a great opportunity for industry in developing new services and products.

Small and medium-sized enterprises are vital for the EU economy, accounting for more than 99% of European businesses and two thirds of jobs in the private sector. They are the foundation for a sustainable economy and their needs and priorities should be included in any industrial strategy.

The need of having a comprehensive industrial strategy to support European competitiveness has long been a recurrent call from industry towards policy makers. A table, predictable and reliable regulatory framework is a key lever in creating the entrepreneurial environment that fosters innovation, creativity and developing new markets. The new Commission President Ursula von der Leyen stated that she will be working towards a “comprehensive long-term strategy for Europe’s industrial future” as one of the priorities of her mandate. As recognised during the last term, the “Think Small First” principle should prevail to guarantee that SME interests are considered at a very early stage of policy making.

The European automotive industry involves a complex network of tens of thousands of companies: from materials suppliers to component and parts manufacturers, OEMs, parts distributors and local service providers including repairs shops. SMEs are key building blocks in this complex ecosystem and deserve special attention. They operate is a lean and flexible set-up focusing on immediate business and market needs, with typically low overhead. Policy can support with targeted framework conditions, especially also in the research and development area, since SMEs may face difficulties to finance larger projects. SMEs have an innovation role to play, complementing the needs that mayor players may have in developing a number of technological fields and registering patents, contributing with technical solutions to the priorities of today and becoming part of global value chains.

The sector transformation, specially towards decarbonisation and digitalisation goals, is an area where SMEs are facing particular challenges. The threat of disruption is even bigger for smaller companies than for big corporations, and therefore a global and European competitive level playing field should be guaranteed, to support the new mobility ecosystem and EU manufacturing by providing legal certainty to the smaller players.

European automotive suppliers have a long history of developing technologies supporting a better, and safer, driving experience, and a raft of different applications in vehicles are already helping to save lives and prevent injuries. But the advent of connectivity and automation has led to a tremendous leap forward in recent years. With more than 90% of road accidents caused by human error, the benefits that these technologies can bring promise a paradigm shift.

Some of the already available technologies fall into the category of driver assistance and include adaptative cruise control (ACC) — a system that automatically adjusts the vehicle speed to maintain a safe distance from vehicles ahead. Lane departure warning is another example, with technology informing the driver when deviating from the marked lane. And autonomous emergency braking is another, where the system acts independently of the driver to avoid or mitigate an accident. These and other safety technologies use a combination of hardware (sensors, cameras, radar) and software to help vehicles identify certain safety risks so they can either warn the driver to act to avoid an accident, or take action automatically to prevent a possible human error. These are examples of specific technology applications paving the way for autonomous driving while already preventing accidents and reducing the overall number of casualties on the road today.

European excellence in safety solutions delivered by suppliers needs to be complemented with the implementation of these systems in new vehicles, ensuring that new vehicles are equipped with state-of-the-art safety technology, as well as infrastructure and user training modules. Realising the potential of automated driving also requires a standardised approach to safety requirements and test methods, as well as adopting type approval standards that can make cars as safe as possible and integrate the vehicles with the traffic infrastructure.

We will need enhanced cooperation between all actors in the mobility eco-system, ensuring that all road users — pedestrians, cyclists, drivers, passengers, commuters, goods transport, and others using any type of ‘wheeled’ vehicle— can be part safely of the future mobility ecosystem. Join us in the mission to bring about the benefits of autonomous driving!

The amount of connected vehicles will significantly increase in the next years, fueled by e-call and other communications-based applications, generating large amounts of data that will open new and innovative mobility services. It is estimated that, by 2025, 70% of all vehicles will be connected. This is an opportunity for many in the mobility sphere and indeed automotive suppliers are actively developing new services and applications, driving innovation in this field.

Connectivity will profoundly change the face of mobility as we know it. Connectivity is an enabler for services such as shared mobility, seamless transportation, personalised purchase offers such as repair and maintenance or on-board entertainment, but also for pay-as-you drive insurance, remote vehicle diagnostics, and information on infrastructure and traffic conditions. These are just some examples of how data can bring benefits to the daily lives of many.

To reap the benefits for consumers and businesses, a competitive marketplace is essential, opening the door for new business models to emerge and allowing also independent service providers including automotive suppliers to come up with innovative solutions. This needs a level playing field for all the involved actors while always guaranteeing safety, security and compliance with personal data protection legislation. Under the right conditions, the availability of automotive data will allow the development of new business models and services, supporting continued European leadership in the global mobility market as well.

In a nutshell, these were the messages delivered by CLEPA this week in an event by the Forum for Mobility & Society, where the main aspects of the CLEPA Position Paper on Access to In-Vehicle Data and Resources were highlighted as part of a broader discussion on connected and automated driving.

Automotive suppliers want to fully develop the potential of the data economy and provide solutions and services to their customers, in a joint effort to improve safety, environmental impact, consumer choice and driving experience for all.

Automotive suppliers are a substantial part of the European economy and growth. This is accompanied by key values that sustain not only today´s profitability but create conditions for long-term and sustainable growth. Our industry strives for economic growth that creates jobs and prosperity while assuming responsibility for the environment and society for current and future generations.

One of the main ambitions is to support the United Nations Sustainable Development Goals by promoting inclusive and sustainable growth, creating jobs with equal opportunities for both genders and supporting young generations to access the job market, as well as continuously training, reskilling and developing the companies’ workforce.

Initiatives to promote the people in the sector include talent programmes, technical lectures, workshops and camps organised at schools and universities. The industry encourages diversity, by promoting an open and inclusive working environment where individuals can contribute with their own abilities.

This goes hand in hand with the overarching sustainability programmes that many in the sector operate. Automotive suppliers are continuously developing and improving sustainability in the supply chain, by initiating and following industry specific standards and evaluating the requirements that ensure the lowest impact, reducing the industry’s environmental and resource footprint.

Industry supports the goal of becoming carbon-neutral by 2050 and has extended this sustainability goal to their manufacturing operations. This is reflected in the increased use of renewable electricity as well as improving energy efficiency, which in some cases includes own electricity generation as well as programmes to offset CO₂ emissions from industrial processes. Compliance with requirements for the use of raw materials, the continuous innovation to improve processes, or the better use of resources using local providers to shorten the transportation routes: these are just some of the several measures implemented as part of and active commitment.

Also, the continuous innovation of industrial processes, such as additive manufacturing – also called 3D printing, in parallel with an ambitious procurement policy that tracks the use and origin of the used materials play their part in achieving this goal.

Industry is continuously seeking ways to improve the supply chain and resource efficiency, with better methods to reuse an recycle materials. Currently, on average, over 85% of the weight of the vehicle that reaches the end of their lifecycle is reused or recycled in EU. This is complemented with an increased use of recycled plastics into new products.

Suppliers steadily increase the number of sustainable materials in their parts and, as an illustration of this commitment, CLEPA signed the Declaration of the Circular Plastics Alliance, together with more than 150 public and private partners covering the whole plastics value chain. The work of the Alliance’s automotive working group kicked-off last week with a meeting at the CLEPA offices.

Automotive suppliers strive for a sustainable future, supporting the transition towards a low-carbon and circular economy, providing citizens with a cleaner and safer environment for our and future generations.

What are the opportunities for European automotive suppliers in today’s rapidly changing industry?
The opportunities lie in the changes in mobility that will transform the car itself. These changes are transforming auto manufacturers and they are changing the role of suppliers. As car manufacturers shift focus and investments to other parts of the business, there will likely be an even more active role for suppliers in the value chain. There will be additional opportunities in areas such as new technologies, new platforms and new powertrains.

What is the biggest threat European automotive suppliers face today?
There is a big threat that we could lose business in key new areas such as artificial intelligence and electrification. The strong players in these fields are in the US and Asia. Mckinsey says that 85% of new investment in artificial intelligence takes place in Asia and the US.

Against this backdrop, what should European suppliers do?
I believe we need to face this threat with strong joint actions. Regulators, politicians and industry need to work closely together. Europe’s economy is about the size of the US, but in terms of innovation, we face stagnation and are investing less in innovation than the US and China. We need a European industrial policy focusing on the big industries and their supply and value chains. Automotive is clearly one of those industries. All EU member states need to pull together and adopt a coordinated, united approach to the future of the auto industry. Bilateral deals are not the solution. I’m talking about an industrial policy at the European level. Europe’s weakness is that national states are defending their own markets. But the coming challenges we face will play out globally and to be competitive in a global market, you need a strong European industry. The need for a unified European approach doesn’t just apply to the automotive industry. It’s also key in other areas such as energy and digitalisation.

Do you have any concrete policy recommendations?
Take innovation, which is crucial. We cannot continue as we did in the past with programs to boost innovation. In the future, we need to have a clearer and more focused approach. That means that incentive programs and research should reinforce the industrial competitiveness of key areas of the manufacturing industry. They should be aimed at helping with the technology transformation and the industrial application of new technologies. If you don’t want to waste resources, the money should be allocated as part of a European industrial policy.

You’re calling for more Europe at a time when, in many countries, governments are more openly espousing national interests.
I believe that, regardless of countries’ dominant political orientation, governments will take into account how their manufacturing industries can remain competitive. I’m positive that we can master the transition now underway. But we need policies to manage the transition.

You head a mid-sized specialist automotive supplier. How do small and medium-sized companies (SMEs) capitalize on the transformation?
The major players tend to have multiple strategies, but most don’t have a strong and clearly articulated view. For smaller companies that means the details of the transformation are received and reacted to, rather than being anticipated. The exception is the niche players in important new technologies. Overall, the threat from the disruption is even bigger for smaller companies than for the big tier 1 suppliers. But the reality is that small and medium-sized companies employ huge numbers of workers. I believe SMEs have an opportunity to grow and participate in the mobility transformation. If you develop some big European champions in key new technologies, they can bring their supply base along.

Is Europe doing enough to support startups?
Access to capital is an issue in Europe. We need more M&A and more available risk capital. We are still financing too many activities with bank debt and that, too, has to change at the European level. I don’t want Europe to more strictly regulate its internal market, but we need more cohesion to make our industries globally competitive. So, we need a stronger Europe to better protect the interests of European business and more aggressively help European companies compete globally.

You said at CES in January that the mobility environment has gone from being a complicated world to a complex world. Please explain.
Several megatrends are profoundly transforming our industry, for example electrification, connectivity, autonomous driving and shared mobility. These trends are increasing the complexity and diversity of automotive technologies although the rate of change is difficult to anticipate. We are also facing an increased number of stakeholders involved in decision- making. That is why I believe we are moving from a "complicated" to a "complex" world. What’s the difference? A complicated world is a world where the decisions and actions of independent parties have a predictable outcome. A complex world is more like weather forecasting. We can predict tomorrow’s conditions, but we have no idea of what the weather will be a month from now. The only way to deal with this complexity is to operate in an ecosystem, getting the different actors who can influence outcomes to work together.

What does that mean for auto manufacturers and suppliers?
One consequence is that things are no longer predictable and you have to move towards your vision in small steps. Five or ten years ago, there was much more visibility looking ahead. This trend toward complexity is not exclusive to the automotive industry.

Can you provide an example of what you mean?
Consider autonomous driving. Nobody is arguing about the vision. It will be beneficial for society because there will be fewer accidents, there will be less pollution, it will be good for global warming and traffic will flow better. So there are many advantages. But the closer you get to implementation, the more you have to face the reality that there are lots of hurdles that need to be overcome. I think the optimism is justified, but it will take a lot of energy and collaboration to get there.

Who coordinates or makes the key decisions on the mobility transformation?
A decision-making ecosystem doesn’t exist today. It’s a fairly conflict-dominated system, where industry, policy makers and consumers often have different views.

Does that mean that the transformation of the automotive industry may take longer than many have forecast in recent years?
We are at that point on the curve today where we are facing reality and are starting to understand that things won’t happen at the speed we forecast earlier. Look at electrification and some of the practical obstacles we face. Individuals want to have chargers at home and politicians say that, in shared buildings, the common garage needs to have chargers. But the building owners don’t want to pay, there are security issues and the electricity grid may not be able to handle the load. Another issue with electrification is that nobody knows if car manufacturers will be able to sell electric vehicles profitably at an affordable price for consumers. It’s normal that such problems arise at a time of disruption. But all stakeholders have to be aligned because if you’re not organized, these problems will be hard to resolve. We’ll have a certain period of uncertainty in our industry.

How can European authorities and regulators help and how do you see the ideal interaction between Brussels and countries and cities?
The subsidiarity principle should apply and Brussels should do what EU member countries cannot do. One example is traffic signs: it would be much easier for autonomous driving if all the signs were the same everywhere. Big cities should take the lead on what happens inside metropolitan areas, but Brussels should take the lead when it comes to pan-European regulations.

Is there still such a thing as a world market or are regional requirements diverging ever more?
Markets are not converging and regional requirements are getting more specific. Ten years ago, most global automakers had similar strategies, but that has changed. For example, US automakers are focusing on trucks and SUVs and divesting of their European operations. Europe is a very complex market with many technology alternatives and different price segments. On the other hand, China is a state-driven market where zero emissions is being driven as a strategic priority for the country.

How is the European supplier community positioned as auto manufacturers transform into mobility providers?
Transformation always entails risks and opportunities. European automotive manufacturers are among the most demanding customers globally, so European suppliers provide high levels of quality and more technology. Tier 1 suppliers have traditionally been solution providers to automakers; now we are becoming solution providers to the mobility industry and so we are seeing an extension of our customer portfolio and our offer.

Technology has always underpinned the automotive industry, but innovation requirements are increasing and you need to deliver faster. Technology is an enabler. Innovation will continue and it will accelerate. Automotive suppliers need to use their core technology expertise to develop consumer experiences. We have to get closer to the consumers, so we can solve their problems and anticipate their wishes. The trend is moving towards individual, tailor-made solutions. For this we will need more software and artificial intelligence. As consumers want to have digital continuity between the home and the car, our business will become more B-to-C in nature.

Is the auto industry rolling out new products, functions and services fast enough to meet rapidly changing consumer demand?
It’s very dangerous to have a vision of the future without an ability to break down that vision into individual technology bricks that have a short time to market. With our development, we have to roll out products and services in intermediate steps.

Please characterize the mobility revolution from your vantage point
We believe that three revolutions are changing mobility: electrification, automation & connectivity and digitalisation. The electrification revolution is certainly the most advanced of the three. That’s because of the maturity of technologies, convergent regulations for fewer vehicle CO2 emissions and restrictions on the use of diesel vehicles. Cities will continue to act as the enablers of electrification in the years to come, as they now have legal frameworks that will enable them to regulate for clean air. This is a worldwide trend we need to understand. If we don’t, we miss out on a big transformation. Within Valeo, reducing CO2 emissions has been one of the two pillars of our strategy; the other is automation and connectivity.

Are more highly automated and connected vehicles the main drivers of increased safety on the road?
Regarding automation & connectivity, many factors will contribute to the transition towards reducing road accidents, also called Vision Zero. There are two ways to realise this vision. One is to set high road safety standards for vehicles. Solutions such as automatic braking, lane-keeping assist and other technologies that are regulated by the EU or assessed by organisations like EURO-NCAP will deliver enhanced safety to drivers and other road users. A second way to contribute to road safety is to leverage the potential offered by digitalisation and new mobility services. Mobility as a service (MaaS) will unlock mobility, but will also contribute to reducing dangerous behavior on the road, including human mistakes. From this perspective, MaaS will contribute to safer, cleaner and inclusive mobility.

Where do automotive suppliers fit into this new mobility world?
As suppliers, we are contributing to those changes by developing and offering advanced technologies and new solutions. Beyond the realm of technology innovation, the main change from our vantage point is that we are now using business models in which we deal with a wide spectrum of players in the mobility ecosystem, from our traditional customers – the car manufacturers - to new mobility players or cities.

What do you expect from the European Union as a regulator?
The European Union has set a clear path for the carbon transition of our sector. Part of the new solutions and the transformation is already coming from outside Europe, and we need to continue to preserve the leadership position of our automotive industry. The targets that have been set for 2025 and 2030 give the right push to our sector to fight for the leadership of our industry in this global competition.

But you would like to see more from Brussels than just the setting of those targets?
In a competitive sector like ours and given the major strategic shift that our industry has already made and will continue to make, the first expectation is that a regulator provide stability and planning certainty. With regard to electrification, the target has been set; our sector needs to capitalize on the ambition and the certainty in regulations as it continues to engage in the transformation of its supplier base. Because transforming the supply chain takes time, we expect technology neutrality, certainty and security in regulations. Also, I expect the regulator to support the EU industry in international competition. With the ramp-up of electrification, automation and connectivity, there is a need to secure key materials, resources and technologies. European initiatives on securing electronic components, battery technologies and other essential parts and systems make sense. We need, however, to agree on the strategic areas to invest in, as the investments required are high.

If you were a super EU commissioner tasked with managing transportation, mobility, industrial competitiveness, digitalization and consumer protection, where would your priorities lie?
That would be a tough job! First, I would like to underpin how mobility and economic growth and wealth are working together. Mobility is changing and our sector has been able to adapt and deliver innovations to the market and understand these new mobility needs and opportunities. But other sectors are not moving at the same pace; there is a need to modernise and adapt infrastructure to enable those innovations to deliver their mobility benefits. I’m talking about benefits such as safety, comfort, energy transition, inclusiveness. Aligning all players is certainly a first step towards delivering shared economic growth in the EU, and there is a need to break open even more silos between the sectors that contribute to mobility.

That’s one priority, but undoubtedly there are more.
There is a need as well to design a framework for investment that will align all mobility stakeholders. These include automotive, energy and telecomunications companies, road operators, member states, cities, and others. They all need to agree on priorities and enable a better co-financing between private and public players. Another priority is the creation of an innovation-friendly environment. Innovation is not only a question of inventing new technologies. Our continent has great R&D capabilities that we need to preserve. This is why, as R&D costs continue to rise, we need to broaden and focus the existing financial programs to maintain the competitiveness of the industry. That applies to areas such as salaries, fiscal benefits, public funding, talent education and retention policies.

If all this is properly addressed, will that be enough to assure the competitiveness of the European industry?
As I mentioned, innovation also is crucial. If we want to keep the innovation path in Europe, we should continue to promote a framework for testing and experimentation. Together with its partners, Valeo is playing its part by co-chairing the EU Technology platform on road mobility (ERTRAC) and the public-private partnership on electrification (European Green Vehicle Initiative). Furthermore, we should leverage our specific European strengths and turn them into real competitive advantages. The EU is at the forefront of data protection and this is crucial in making automated, connected and shared mobility acceptable to the general public. A proper regulatory framework will build trust in the new technical solutions provided. And this will not only benefit European individual consumers; it will also make European solutions easily adoptable by consumers in Asia or in the United States. People there are also becoming more and more careful with their data.

Do you have one more priority?
All players need to establish a more in-depth cooperation with cities; City administrators need to better understand the growing mobility needs of their citizens. The answer cannot simply be to remove vehicles from cities. At Valeo, we are working hard to play our part in the triple mobility revolution: electrification, automation & connectivity, and digitalization. As we prepare for a future of electric, shared, autonomous and connected urban mobility in cities, I see the car as a key enabler of the smart and sustainable city of tomorrow.

Mr Zink, please describe in your own words what is happening in the automotive industry today. Or should we now refer to the sector as ‘the mobility industry?’
I would still call it the auto industry. I don’t think we’re witnessing a revolution, but rather an evolution. The auto industry is suffering from a combination of declining diesel sales, the uncertainty caused by worries over higher tariffs and a downturn in the market in general. But, in the midterm, electrification and, longer term, autonomous driving are an evolution and not disruptive. For sure, giving up the combustion engine is a big change and a tough challenge for the industry, but it will likely take 20 years. And if you have 20 years to transform yourself – and the industry, that’s an evolution.

How is the European automotive industry positioned for this transformation?
I think that, for electric mobility, the European supplier industry is well positioned, at least to some degree. We have a lot of strong electric motor and transmission makers. And European suppliers are prepared for the current increase in hybrid-electric powertrains. It’s true that the part of the business that revolves around combustion engines will decline, but the good news is that we are still technology leaders. The opportunities are there. When it comes to autonomous vehicles, we have to compete with a new array of high-tech players, including companies such as Google or Huawei. Europe is not in the lead here and, in the next 20-to-30 years, we have to pick up the pace.

Is Europe’s auto industry, with its tried-and-tested business processes, capable of moving at a higher speed when it comes to the development and rolling out of new technologies and products?
In Europe, we have a lot of capabilities that we will need in the future as well. Don’t forget that, in the internet of things, we will need things. Schaeffler, for example, is a deeply invested, highly vertically integrated manufacturer of mechanical parts and systems. Those will be needed in tomorrow’s auto industry, too. We are capable of speeding up, to a certain degree, but we will have to change some of our capabilities. At Schaeffler, we produce a lot of products for combustion engines, but we are now transferring the knowhow we have built up in this area into electric motors. That includes tooling, production, process insights; we are putting all those capabilities to use as we prepare for the future. Some of our capabilities are precious, but others we may no longer need. But most of the hightech players are lacking the capabilities we have, which is why there is a lot of talk about partnerships, collaborations and joint ventures.

There is a considerable amount of risk inherent in this transition
The risk for the industry is that the legacy of 100 years of success may stand in the way of the agility and speed necessary to face the new challenges. What you need is a clear willingness to change. And you need a transparent and rational transition scenario. At Schaeffler, we projected, for example, that, to fulfill the requirements of the Paris climate accord, 30% of all cars on the road need to be electric by 2030. With that in mind, we have developed real scenarios to change the mindset.

Are the changes coming to mobility more of an opportunity or more of a threat for automotive suppliers?
E-mobility is both an opportunity and a challenge for us. Essentially, in all-electric vehicles many of the engine components and the conventional transmission system are eliminated. That is a risk, but thanks to our strong systems know-how in drivetrains, we are well positioned to play a leading role in the development of innovative solutions for e-mobility.

Who will be better able to capitalise on those new opportunities: traditional automakers and suppliers, or new players from the high-tech and IT world?
There will be room for new players in the mobility space in certain areas. And companies with data and infrastructure expertise that aren’t producing millions of cars a year can look at the industry in a different way and come up with new ideas, which is positive. But these companies will have a tough time catching up with traditional automotive companies that can build on 100 years of experience. I don’t think new players will replace the old ones.

How does all this change affect the relationship between vehicle manufacturers and their suppliers?
Automakers are much more open than in the past and the ones that will open themselves up the most will be in pole position. As an automotive company you need to interact with cities and communities, need to address data and infrastructure. You need to apply the capabilities you have the right way. For my part, we are having many more strategic discussions with auto manufacturers on where the market is going. That wasn’t the case in the past, when demands from vehicle manufacturers were very solid and defined.

And what’s behind this change?
There’s a lot of uncertainty and nobody knows whether e-drives, hybrids or other powertrains will become dominant and when. Against this backdrop of volume uncertainty and, at the same time, a need to make huge investments in new technologies, there is much more interaction between automakers and suppliers. Automakers also are more willing to delegate investment or the development of systems to suppliers. We don’t know how long that will last, but it’s positive because it can provide critical mass for some of the systems we build. But it also means that more risk is delegated to suppliers.

What will a company such as Schaeffler look like in 20 or 25 years?
By 2040, we will definitely be a high-volume manufacturer of electric motors. And 30-40% of our business, and maybe even 50%, will be in mechatronics. We will have broad, in-depth knowhow of electronics and we will probably have one or more business areas that involve data services. We will also have strong potential on the data side, especially with our aftermarket products.

A lot of the new automotive business will be software-based, right?
Yes, the importance of software is growing steeply, and hybridisation and electrification are contributing to that trend. We are converting electric power into driving intelligence. At Schaeffler, we already employ about 200 software experts for our transmission technologies and in the years to come that will rise to a four-digit number. We are hiring a lot of people on the software side. With regard to data, that will be a very important area for us as well.

Shouldn’t automotive suppliers have a software specialist in their top management board?
It’s interesting to see how the Volkswagen brand, with Christian Senger, has created a board-level position for ‘digital car & services.’ A software architect in that position could be a kind of role model, but, on the other hand, there has been, in recent years, a very high turnover of chief digital officers in the automotive industry.

What kind of support for the industry would you like to see from the new European Commission and European Parliament?
In a key area such as electrification, with its high degree of complexity, we need a high level of collaboration across Europe. We’re talking about different national energy markets, the charging infrastructure, renewable energy policies, the procurement and production of EV batteries, the prospects for hydrogen. To pull all this together we need European collaboration and framework setting, otherwise we will have no chance against big competitors from China and the US. It’s essential that the EU Commission and the European Parliament provide the right framework, priorities and incentives to achieve a rational transition to electric mobility.

And what about autonomous driving?
The same holds true for autonomous driving, where we face issues such as access to data, ethical considerations and practical issues such as legal responsibility in the case of accidents. We need Europe-wide rules and regulations for all of this and that’s a big challenge that requires collaboration between all stakeholders. It’s a particular European strength that we have different cultures, but given the magnitude of the transition, you need an EU-wide framework. That’s of the essence.

What are the most striking aspects of today’s mobility revolution?
I would name four: the increased need for mobility globally, which is set to continue in line with GDP growth in most countries; the changes on the demand side, where people want seamless multimodal mobility; the evolution of the means of mobility, specifically the vehicles to carry people and goods around; and the more aggressive regulatory approaches we are seeing, which are having a major impact on the competitiveness of some regions.

Are you surprised by the speed of change in, for example, electrification and automation? Or is this mostly media hype?
I am not surprised by the speed of innovation. On the contrary, I think innovation should, in many respects, proceed at a faster pace, take battery cells: they are today inadequate to cope with the expected mass adoption of electric vehicles. The same holds true for brake-by-wire in my specific area of expertise. It isn’t implemented yet. Automation is more evident in manufacturing processes. But do not get me wrong: sooner or later we will witness a hockey-stick curve for automotive technologies and that will be because of regulation.

How is the European automotive supplier industry positioned competitively in the rapidly changing global automotive and mobility world?
Europe today is still one of the world’s biggest consumer markets. In many respects, the region also continues to be the main source of innovation in the automotive industry. But in new growth areas such as artificial intelligence and other high-tech innovations, we are at risk in the global competitive battle with the US and China. Also, volume-wise it is clear that Asia will be the biggest vehicle market this century. The message is, therefore, that we have to accelerate the growth of technologies that will keep our region competitive.

Aren’t high-tech companies better positioned than traditional automotive firms to provide the essential technologies for new mobility?
There are two sides of the coin to this question: on the one hand high-tech companies certainly could provide new devices and software meant to better use mobility at large; on the other hand, we will still need hardware-based vehicles to move around, although they will certainly be more intelligent than the ones we have today. Players from different industries will co-exist in the mobility world for the foreseeable future.

With speed and agility now essential in being a competitive 21st century manufacturer, has the automotive industry become faster and is it fast enough to compete with nimble new players and technology companies?
What I see is that there are new technologies popping up from small companies, and that often these companies are then acquired by bigger ones to transform good ideas into volume products at a reasonable cost.

How do you see the cooperation between the auto industry, national and Europe-wide governing bodies and regulators?
It is simply essential that there is transparency and honesty in the way the various stakeholders deal with each other. We cannot have holistic solutions to today’s problems with the currently prevailing tribalism. We need to go back to the true spirit of Europe’s founding Treaty of Rome. My vision is that Europe should lead the world in sustainability, skilled employment and innovation for the good of our citizens and the entire world.

Where do you see Brembo, the company you co-founded, in 25 years?
I expect that Brembo will continue to be the preferred choice of customers for its sustainable values, its performance and innovation and for the brand itself. The brand will always have a hint of passion. A world without genuine passion is boring.

If you were a super EU Commissioner tasked with managing transportation, mobility, industrial competitiveness, digitalisation and consumer protection, where would you set your priorities?
I would love to have such superpowers for a short while! I would probably address four areas simultaneously. First, I would design and implement a well-thought-out education and training program to prepare Europe’s citizens for the work they will be doing in tomorrow’s economy. Then I would draw up a program to renew Europe’s aging car fleet, with particular focus on so-called high-emitting vehicles. I would also adopt a research plan for advanced technology designed to assure that European countries will maintain the leadership positions they have built up in past decades. And, finally, I would work toward a competitive holistic regulatory environment that takes into account the global nature of the markets in which we operate.

You co-founded Brembo with your family in the early 1960’s. If you were starting out as an entrepreneur today, how would the situation be different?
I sometimes ask myself this question when I am playing with my 10-year-old nephew. Back in the sixties, it was easier to have a clear focus and a lot of mechanical skills were required in the auto industry. Today, there are many different opportunities, which makes it harder to decide on a course of action. And the skills required are more digital than manual. But I would still found Brembo today.

Are you generally optimistic that the automotive industry can prosper in coming decades and play a key role in solving the world’s increasing congestion and climate problems?
Personal mobility is a fundamental right of every human being. The automotive industry – and suppliers in particular – can deliver the solutions needed to provide mobility in today’s and tomorrow’s ever more complex world. And yes, I am optimistic that, even if teleportation one day becomes reality, suppliers will continue to contribute a lot to the wellbeing of our planet.

How would you summarise what is happening in the automotive industry today?
The two big things are electrification and what I would describe as “the road toward autonomous driving.” Everybody recognises that the latter will take longer than what was expected just a few years ago. Nevertheless, as we make this journey, cars will have more features and more advanced driver assistance systems (ADAS). This will make driving safer and more enjoyable. One example on the technology front: automated braking clearly makes driver distraction less dangerous. However, we must also focus attention on markets that are still developing and where, for example, automated features will be launched much later.

Following the global ministerial meeting on road safety in Stockholm, what kind of progress do you expect to see in further reducing traffic-related fatalities and injuries in coming years?
If all stakeholders in mobility come together and join efforts, we have a chance to reduce the number of global road deaths each year. We need to anticipate the trends that will play a role. For example, the use of cell phones in the car may have affected road death rates. Right now, we are studying how the proliferation of e-scooters impacts road safety. It’s important that we are proactive in addressing these issues. If governments, policymakers, industry and academia work together, we can develop the new ideas and technologies needed to further improve traffic safety.

Given how safe today’s cars already are, what do you focus on to make further improvements?
It’s true that the development of automotive safety has been spectacular in the past decades. But, worldwide, 1.3 million people still die in vehicle-related crashes each year. Industry and policymakers have focused on protecting people inside the car, but we haven’t paid enough attention to other road users, such as pedestrians and cyclists, who are often more vulnerable. We must improve in that area.

Can you give an example?
We can make improvements to the road infrastructure. For example, roundabouts have proven to be safer than regular intersections. You will still have crashes, but the severity of the crashes is reduced on a roundabout. In the area of technology, the introduction of autonomous emergency braking makes pedestrians and bicyclists safer as well. There is still a lot to be done, but industry and regulators are taking steps to improve road safety. All stakeholders should recognise that motorized vehicles do hit pedestrians, cyclists and even motorcyclists in current road traffic. There are no shortcuts, the vehicles must brake more efficiently and provide for improved impact mitigation. Advanced automated braking systems will reduce the number of fatal crashes significantly, but many will remain and protective technology will also be needed. I’m thinking of pedestrian protective airbags, for example, which are on the market already.

How does the transformation of personal mobility affect European suppliers in your view?
The impending change from internal combustion engines to electric powertrains obviously requires a lot of investment from suppliers and will also create opportunities for new types of vehicles. Regarding safety technologies, where Autoliv has its focus, European suppliers are leading and will continue to do so for a long time. One reason is that the EU has been proactive, including all stakeholders not least the Euro NCAP. Attention is focused on safety as a core value of society. The automotive industry is truly global, and this can help to expand the opportunities to save more lives in other regions of the world.

When we look at the bigger picture for the global auto industry, are you, in general, optimistic about the prospects of the European supplier community?
Yes, but there’s no doubt that we are in challenging times for the auto industry and I think one of our biggest challenges lies on the sales side. Buyers of cars face a lot of uncertainty. They are seeing local regulations curbing diesel-powered cars and they are not sure whether the time is ripe to buy an electric vehicle. Hence, in the absence of a clear picture, a lot of potential car buyers decide to wait.

How are Autoliv’s products changing as the industry moves toward electrification and highly automated vehicles?
With the technologies now available, there are new opportunities in the area of safety. In seatbelts, for example, the next generation of products will replace many mechanical parts with electric ones. Connected systems and more sensors also mean that you can anticipate a crash and know in advance whether there will be a crash, and we can now monitor not only drivers but all occupants in vehicles. That means you can reduce the severity of a crash and tailor protection to any specific situation. We are equipping our steering wheels with more sensors to understand what drivers are doing and we are studying other interior compartment sensors to be able to offer real protection in future vehicles. As I already mentioned, we will continue to develop protective safety for vulnerable road users, which will also be important for a highly automated vehicle.

Seats are a major focus for Autoliv. How are they evolving as a new generation of vehicles enters the market?
Safety will be more and more integrated in a car’s seating systems. And with higher automation, more seats will be in a reclining, comfortable position that has to some extent different safety requirements. This is technology that is being developed right now, because our customers need it already today. Safety solutions around the seat is one of the biggest changes we face in our business.

Which kind of role will artificial intelligence play as cars become more highly automated?
I believe that you cannot think about autonomous driving without artificial intelligence. You cannot have systems based on copy-paste situations that you have seen before. In real life, situations are very difficult to anticipate. You need to have a learning discipline in the car to achieve that. AI can also play a role in tailoring protection to specific situations.

And that will, in turn, make traffic safer.
Yes, when the car is connected as well as intelligent, it can anticipate potential crashes and avoid or mitigate them. Nevertheless, our research indicates that not all crashes will be avoidable and safety protection will still be necessary. With the sensor technology becoming available, Autoliv is creating the next generation of safety products around the seat that can adapt to specific situations and to specific persons who may be sleeping, reclining or doing something else. Most systems today are built for a mid-size male sitting in a standard position. If a system can be adapted to meet the characteristics of specific car occupants, that offers a tremendous opportunity.

How would you characterise what is happening in today’s automotive industry?
What we’re currently experiencing is a real seismic shift in the automotive industry. It’s comparable to the change in paradigm we experienced when we moved from horse-drawn carriages to the first automobiles – and it will have a major impact on our society. This technology revolution will introduce new ways of thinking and new business models that are wholly inconceivable to us today.

Are we experiencing a revolution or are we in the middle of an evolution?
The change in thinking is certainly revolutionary, however, the technology has to evolve in smaller steps, because of the inherent challenges. For example, two years ago every automaker was convinced that level 4 autonomous driving was just around the corner. But they quickly found that the technology is still too expensive and safety is and will remain the biggest challenge. Our strong safety culture at Aptiv means we take these issues seriously, so we are following a more considered approach.

Is that what’s happening with driverless cars now?
The industry is adopting a top-down as well as a bottom-up approach. When we’re talking about privately owned cars for the mass market, we’re building on the trusted technology that has already been developed for advanced driver assistance systems (ADAS). Those technologies will gradually evolve into more advanced levels of autonomous driving. At the same time, automakers are rapidly moving into robotaxis in geofenced areas. Vehicle manufacturers have realised that they have to embrace this trend so as not to miss a major business opportunity. Robotaxis work on the basis of a sound business model, which yields a quick return and amortizes investment faster.

Are people ready for robotaxis and driverless vehicles?
When people talk about autonomous driving, they assume they will have a level 4 car on their driveway tomorrow. It’s true that the technology is already there, as you can see from the large fleet of autonomous taxis we are already running in cooperation with the Lyft ride-hailing service in Las Vegas. However, most people have yet to come into contact with this new technology, so it remains an abstract concept to many. I’m sure that once robotaxi technology is rolled out on a larger scale, public acceptance will quickly follow. People are quick to change their behaviour. Look at what happened with automated, driverless trains at major airports and in metro systems. Not so long ago, people were hesitant to enter those trains, but that has completely changed. I am confident the same thing will happen with autonomous vehicles.

How is the European supplier industry positioned for the transformational changes we are witnessing in the automotive industry?
Companies that haven’t made major changes in the way they work are struggling, but for those who have been quicker off the mark, there are major opportunities. Aptiv is in a very strong position, because it transformed from being a traditional tier 1 to a technology company that works in an equal partnership with car manufacturers.

How has a company such as Aptiv changed to accommodate the transformation?
Aptiv recognised more than five years ago that the megatrends of advanced safety, green technology and ubiquitous connectivity were going to change the auto industry. To address these trends and ensure the company had a sustainable future, Aptiv had to make big, fundamental changes to the products and services we offer and how we operate as a company. For example we, exited more traditional low-growth commodity product lines, such as thermal and mechatronics, and spun-off the powertrain division. We invested in further strengthening our capabilities in high growth advanced technologies such as active safety, high voltage electrification, and vehicle connectivity. We completed a number of accretive bolt-on transactions and increased our scale and leverage in vehicle architecture, while also expanding into logical adjacent markets. These proactive moves – as well as its expertise in software and systems integration - have led to Aptiv being a leading technology provider with revenues of around $14.4 billion. Today Aptiv’s more than 20,000 engineers are solving mobility’s toughest challenges by delivering the software solutions automakers need to make vehicles safer, greener, and more connected.

But should traditional automotive suppliers such as Aptiv be worried about new high-tech competitors eating into their business?
I’m not overly concerned. I think our biggest strengths lie in the higher speed of development we have embraced, our strong safety culture, and our automotive production experience. If you look at startups, you realize that many companies can build an autonomous vehicle, put it on the road and drive it around the block. But making such a vehicle safe and affordable is the real challenge. Some new automakers without mass production experience are struggling with this.

But a relative newcomer such as Tesla is doing pretty well.
Tesla’s advantage is that it is extremely fast and fully owns their car. That’s a major advantage over traditional automakers. Look at how long it takes a conventional vehicle manufacturer to change a simple switch in the car. Tesla can do this overnight. Traditional approaches in the auto industry lead to inflexibility and car manufacturers need to address that.

With the landscape changing so much, how has this affected the traditional relationship between vehicle manufacturers and automotive suppliers?
Automakers are realising that a traditional supplier relationship does not work when it comes to autonomous driving. Here, automakers are looking for reliable equal partners, as few automakers have the capability, resources, and speed to develop their own systems. Which is why they need technology partners that are ahead of the curve, thanks to their experience of working with multiple vehicle manufacturers. Automakers are looking for trusted core technologies upon which they can build a different user experience. It is also beneficial to have a partner that is in a position to understand the entire vehicle, see the big picture, and not just focus on individual components or systems.

If we look at some of these new core technologies, how crucial is artificial intelligence (AI) for autonomous driving?
The role played by AI in autonomous driving today and in the future is a hot topic. AI is certainly a key requirement for specific areas of the driverless car, in particular in the field of perception and the classification of objects based on large data. But I would hesitate to say that AI alone is sufficient to make an autonomous vehicle safe. Safety is one of the major challenges we face today. There are no agreed-upon approaches to make a purely AI-driven system safe, which is why Aptiv is relying on a combined deterministic system and AI machine-learning approach.
The next generation of cars will be electric and highly automated, but there are still a lot of problems to overcome in both areas. When we’re talking about electric vehicles in smart cities, there is a chicken-and-egg problem. The industry wants people to buy more EVs, but they aren’t doing so because the infrastructure isn’t there yet. You have to provide an infrastructure that makes it easy for people to charge their EVs. And they want short charging times; you cannot expect people to wait for hours. With autonomous driving, the challenges are even more complex: If you want to offer a high level of automation such as level 4, you have to provide an infrastructure where cars can interact with the road they are driving on. That’s a major investment and an undertaking that must be backed by national governments and policy making.

Is Europe lagging behind China and the US in adopting that higher level of automation in vehicles?
We have some regulatory challenges in Europe, and we are behind what is happening in the US. There, getting approval for self-driving cars on the road is much easier than in Europe. Take London, for example. If you want to operate a test fleet of autonomous vehicles there, you have to get approval from every district authority in the greater London area. In Europe, there is no uniform approval process in place for testing level 3 and level 4 autonomous vehicles. And since road transport and vehicle approval is subject to national legislation, it is extremely hard to move things forward on a pan-European level.

Does Europe need a more coordinated industrial policy so industry can stay ahead in new-mobility technologies?
As long as you have individual approval processes in each country, this inevitably slows things down, which puts you at a significant competitive disadvantage. Major mobility companies such as Aptiv, however, maintain a competitive advantage by having a global footprint. We combine a European safety and engineering track record with an American business approach, and the agile mindset that you find in China. I believe a combination of the three is ideal and gives us a decisive competitive advantage.

In your area, autonomous driving, can the European auto industry continue to play a major role as this global megatrend picks up steam?
The importance of safety in autonomous vehicles plays into the hands of European automakers and suppliers, which have a strong track record in safety and engineering. In the near future, we will see greater numbers of safety regulations being introduced that will impact the approval of autonomous vehicles. Most European car manufacturers and suppliers have focused on integrating a high level of safety at an early development stage. Although it seems like Europe is slow to start, once more stringent regulation is in place, their more considered approach could well put them ahead of the game.

How is the supply chain evolving as automotive requirements change and digital technology plays an ever bigger role in the vehicle?
Twelve years ago, we were mainly delivering components to tier 1 automotive suppliers. There was comparatively little interaction with the automakers themselves. Today, semiconductor and software companies are the true providers of innovation. That’s because 90% of innovation is electronics related. As a result, we’re having much more direct discussions with auto manufacturers. The value chain has become more of a value network. Car manufacturers want to know about the hottest new technologies very early and when they will be available.

You’re saying that the relationship is, much more than before, characterised by two-way communication?
Yes, especially some of the premium car makers are asking us how we would build the car and how we would help design the best domain architecture. Contrary to earlier practice, automakers are asking us to do joint public relations activities as well.

How has this affected your relationship with tier 1 automotive suppliers?
There’s one clear effect: Because we have become trusted partners for a lot of automakers, we often no longer have to convince tier 1 suppliers to deploy our technology. Sometimes now, we see that automakers, in their discussions with tier 1 suppliers, are specifying our components and systems.

Only about 50% of NXP’s revenue is automotive. Do you benefit from your footprint in other industries?
The ability to use technology deployed elsewhere is a big value driver. I can copy solutions from other markets. Biometric chips in passports for example, can be used for car-to-cloud communication. Chips for electric drives can be used for conveyor belts and drones. The technology in car keys is also used to access domestic smart meters.

As embedded software plays such a crucial role in auto manufacturers’ plans for the next generation of cars, what is the likelihood that a company such as NXP would be acquired by an automaker? Or that you would buy a car manufacturer?
In addition to the fact that we like our independence, here’s the math: You need to sell 500 million products over the lifetime of a semiconductor. That’s to recoup an investment of, in some cases, up to 50 million or 60 million euros. Globally, fewer than 100 million cars are sold annually, so every car sold would need to have your product in it for at least five years for this to make sense. We need to supply a big part of the market. If we were part of a big supplier group or an automaker, we would have access to a much smaller part of the global market.

You operate at the heart of the mobility transformation. Please give us your views on where we are with the move toward electric – and autonomous – vehicles.
With regard to driverless cars, two or three years ago the main question seemed to be: “How many months do we have to wait before the car is more intelligent than you are?” Today, the super-mega hype has declined to a more realistic level. Self-driving technology - with restrictions - is available today and consumers can buy it. But more advanced forms of autonomy are today only offered by ride-hailing companies such as Uber and Lyft. Level 3 and Level 3+ autonomy will come, but near-term market potential for more advanced autonomy is very limited.

And electrification?
Here, the optimists may be in for some disappointment as well. Infrastructure for EV charging poses a major challenge. Just assume that if today you converted all 47 million vehicles in Germany into EVs. You would immediately need up to 10 to 20 million charging points which would be an infrastructure challenge. Also, studies show you need to drive 150,000 to 200,000 kilometres on today’s energy mix, to have a better carbon footprint than a diesel-powered car. During that time, you will have to replace the battery twice and the average driver will probably take something like 10 years to drive that many kilometres. Then there are continuing driving-range concerns and worries over the environmental impact of lithium mining for battery production. The question marks over the path toward electrification are creating insecurity in the entire auto industry.

A pretty cautious outlook, then, for electric vehicles?
A big question is whether battery-electric vehicles are the only solution. I think they can serve a purpose in urban areas, but they are not the only solution. You also have to continue to boost the efficiency of the internal combustion engine and take a close look at the prospects for hydrogen fuel cells.

Is the traditional auto industry prepared to meet the myriad challenges it faces today?
The European industry brings a lot to the table. It’s nonsense that EVs will quickly become the only solution and that traditional vehicles will become extinct. There’s also a role for machine learning and neural networks, but human drivers will continue to play a role for a long time. The biggest danger occurs when carmakers have no clear view of the future, and don’t engage in strategic thinking and then take an extreme approach. This lack of vision, I see as one of the biggest dangers facing the industry.

So, will the auto industry manage the transformation and be successful in the future as well?
If companies adopt the right strategic clarity, yes, but, if not, they will not manage the turnaround. But there’s time yet. Look at startups, which were funded with huge amounts of money as recently as four years ago. Today, many are partnering with big automotive companies or have been acquired by them. Or, think about predictions that all cars will be shared. It’s not going to happen in the countryside anytime soon. I live in the countryside; I can park 10 cars in front of my house, so space is not an issue. But if I call a taxi or would book a shared vehicle, I would likely have to wait 25 minutes.

Agility, flexibility and shorter development times are the key to success in the new automotive age. How agile is the industry becoming?
NXP believes cars need a domain-based architecture that groups functions in five areas: connectivity, driver replacement, powertrain and vehicle dynamics, body and comfort, and in-vehicle experience. You can make changes and upgrades in one domain without affecting others. If you make a change in one area, you don’t need to requalify software in all other parts of the car. If an automaker distributes his core functions across these five domains, he can be pretty fast. For sure, it takes a while to make the change to a new automotive platform. But new car models will all have this kind of architecture.

Once we’ve decisively entered this era of new mobility, where will NXP be in the automotive space in, say, 25 years?
We will be THE supplier of silicon for secure connected devices across all industries. We plan to have a leading portfolio across all automotive domains. Our products will be more software-heavy than they are today. Building on our DNA as a silicon provider, we are evolving each of our products into systems with many more microcontroller capabilities. We have to add software. Examples are software-defined radios, domain controllers and smart transceivers for radar. Also, you have to pre-process data at the sensor nodes. We will be more focused on defining the systems than on just producing the chips. A lot of our value proposition will involve looking at entire systems.

How do your software activities relate to the massive software expertise buildup we’re seeing at auto manufacturers?
The closer the components and systems are to the hardware, that’s our domain. We’re talking about software needed to operate the chipsets. Automakers write their own applications and make sure they have automotive-grade systems that meet their requirements. For example, they want to own the user interface and define how driver assistance technologies respond. That is a core part of their value proposition.

How are European suppliers to the auto industry positioned in the market compared with competitors from other parts of the world?
With increasing trade tensions, being a company based in Europe has provided clear benefits in recent years. Whether that will continue to be the case, we’ll have to wait and see.

Could you please characterise the mobility revolution from a 10, 20 or 30-year perspective?
The automotive industry has experienced great changes in recent years and we are sure that it will continue to evolve. It is clear that mobility is changing in different ways as the CASE (connectivity, autonomous driving, shared mobility and electrification) trends progress. For us the clearest trend right now is electrification, but we think it will be progressive. The automotive industry has constantly improved over the years and we have seen improvements in all kinds of vehicles. At Gestamp, we have been part of all these important changes through light weighting all these vehicles and decreasing their energy consumption and emissions. Electric and hybrid technologies also require lighter vehicles to extend the mileage per battery load, which plays well into our product offering. Furthermore, batteries need to be stored safely, which is one of our core product focuses: battery boxes. What we know for sure is that mobility is changing, has changed a lot and will continue to change.

How is the Corona crisis changing the longer-term outlook for auto manufacturers and suppliers?
It is too early to say which are the concrete consequences as the exceptional nature of the situation makes it very difficult to predict what the economic recovery will be like. The return to normal will depend on many factors. We hope for a recovery in the next months that runs in parallel to the recovery of our clients. Undoubtedly, we will need to stimulate demand to recover previous volumes.

Assuming car production and new car demand will pick up again in the near term, how long do you think the post-Corona revival of the industry will take?
It will depend on how quickly each country recovers, as the development of the crisis has been different in each one. In China, for example, we are already recovering production levels. We expect production levels to recover as soon as possible in different markets, progressively. But ill will vary from region to region and from country to country. What is clear is that the automotive industry has to be supported and that support should include demand stimulus plans.

Do you see fundamental shifts in the industry resulting from the Corona crisis?
For example, in car demand, the actual products or the way they are manufactured.
Many experts are making predictions, but we believe that it is too early to foresee the real impact. We are living in an exceptional situation, which we have never faced before, not only as a sector, or as a company, but also as a society. Nonetheless, there is no doubt that stimulus measures will have to be implemented, both for companies and to reactivate demand from buyers. In this sense, it will be essential that private companies and governments work hand in hand to reactivate the industry.

Will sustainability continue to feature high on the auto-industry priority lists and how does the crisis affect Gestamp’s sustainability program?
Definitely. It is a crucial responsibility and commitment that we have as an industry in the long-term. Both vehicle manufacturers and the components sector have already shown ample evidence of their commitment to a more sustainable mobility. At Gestamp, sustainability is at the core of its corporate principles and is understood as a long-term business model that seeks to create value for all stakeholders. Our core activity is all about sustainability: light weight vehicles to be more efficient and environmentally responsible.

And looking post-Corona: With the focus on environmental threats heating up, should the auto industry accelerate its actions to support sustainability goals?
Sustainability must remain a priority. However, until we are able to assess the real impact of this crisis, we believe that all efforts should be concentrated on boosting activity and recovering the jobs that are currently paralysed. Right now, the most urgent need is to get the sector back on its feet. Taking into account the current situation, we should approach the environmental challenge in a realistic way and avoid radical measures that cause even more uncertainty in the market.

What is your expectation today for the trend toward more light-weight materials in vehicles?
The development and production of fuel-efficient vehicles is a growing key trend in the automotive sector and this is where the importance of light-weighting comes into play. To meet fuel-efficiency goals, one of the most requested requirements in the automotive sector has been weight reduction. We strongly believe that it will continue to be this way, especially with the growing trend towards electric vehicles. Lighter body-in-white and chassis components are essential to reduce a vehicle’s weight. At Gestamp, we are always innovating to be a global leader in light-weighting technologies and a technological partner that co-develops solutions together with its clients. That’s why we focus on innovation to create, day by day, lighter components that are better for the environment.

Looking beyond the Corona crisis, is the mobility transformation on track with more electrification, more sharing and gradual movement toward autonomous driving?
Yes, in recent years auto manufacturers have accelerated their CASE strategies, with a special focus on electrification. A big factor here are, obviously, the EU CO2 emissions regulation targets for 2020. At Gestamp, we are well positioned to take advantage of these trends given our focus on light-weight solutions and new products for electric vehicles (e.g. battery box).

Is this transformation a threat, a challenge or an opportunity for a company like Gestamp?
This is a positive trend for us. Increasing investments by automakers in the four pillars of CASE lead to less investment in other important areas of vehicle construction such as body-in-white and chassis development and production. This trend, together with continuing global platform standardisation among carmakers, has led to an increased need for outsourcing. Vehicle manufacturers entrust a select number of strategic supply partners with an increasingly high content of vehicle production. In parallel, specialisation has led to advancements achieved by strategic suppliers such as Gestamp, in certain technologies that car manufacturers find difficult to match in-house, both in price and quality. That is resulting in increased outsourcing. Furthermore, electric cars, with their relatively heavy batteries, provide an opportunity for a company such as Gestamp to offer new product and apply its light-weighting expertise.

How is the European automotive supplier industry positioned for the big changes in mobility? Is Europe competitive compared with China and North America?
Europe’s ability to innovate and join new trends will be crucial as a driving force for success. Europe cannot compete on costs, but its companies should be at the forefront of innovation and the digital revolution in the coming years. Innovation and knowledge are the keys to keep Europe in the global scene. We certainly have the technical and human capacity to do so. We cannot miss this opportunity. Changes in the European automotive industry are gaining speed and we believe some right steps are being taken, but there is still a long way to go and we must do it together with the support of government policies.

Digitalisation and Industry 4.0 will underpin the auto industry’s future competitiveness. How do you rate the European industry efforts in this area and where does Gestamp stand with implementing these new technologies?
Digitalisation and Industry 4.0 are key to the industry’s future. That is why Gestamp is on its way to creating the smart factory for more efficient and flexible manufacturing plants and more consistent and reliable processes through data analysis. In this way, the company adds intelligence to the processes and provides the right information to the right people. We are continuously working on new projects and initiatives to integrate and maximise the potential that new technologies can offer in order to complete our goal, to create the smart factory.

And what do you see as the biggest strengths of the European auto industry?
Europe has a strong position in the traditional automotive industry and is also taking a leading role in electric mobility and in the growing market for connected vehicle solutions. In general, Europe’s strength in the automotive sector comes from its continued commitment to invest in research and innovation. As such, Europe is a great breeding ground for future mobility solutions.

Will Europe manage to set the right priorities in funding research, creating a startup climate and, in general, assure that the auto industry in the region can continue to prosper?
We are confident that it will. Europe is fully aware of the industry‘s economic relevance and the need to be at the forefront of technology and innovation. We believe that all the relevant parties involved aim to implement the necessary measures to support the automotive industry evolution but we have to be dynamic on this.

How has the automotive industry overall – vehicle manufacturers and suppliers alike - so far handled the Corona crisis in your view? Is its relatively strong reputation as a tech-savvy and responsible provider of essential consumer products intact?
I believe that the industry has handled the crisis responsibly, always complying with each country‘s recommendations. We have adapted all our workplaces and safety protocols to the strictest safety measures in compliance with the measures established by each government to guarantee the safety of all employees.

With speed and agility now essential in being a competitive 21st century manufacturer, has the automotive industry become faster and is it fast enough? And how much “agility” has Gestamp introduced throughout the company?
I believe that the matter of speed is especially linked to a company’s ability to react in a flexible way to changing circumstances. From the beginning, Gestamp has applied flexibility measures that allow us to quickly adapt to our customers’ changing needs, seeking efficiency in all our processes. This has allowed us to grow above the market, accompanying our customers in their growth paths. Additionally, at Gestamp we are carrying out many projects to improve the efficiency and production of our factories through the use of new technologies.

How do you see the cooperation between automakers, suppliers and regulators evolve? Will the relationship be different in coming years?
This cooperation is key, especially under current circumstances. Now more than ever, we must join forces to overcome this crisis. We cannot afford to be late. The institutions must urgently plan how to recover from this economic and social crisis.

That is why business support measures must be urgently implemented and the message of support must be very clear. We must all work together in the same direction. We are facing an exceptional situation and as such, it requires exceptional measures to revive economic activity. The reactivation of industrial activity is key in order to achieve a quick recovery.

Where do you see a company such as Gestamp in 25 years?
I imagine Gestamp as a leading, sustainable and innovative automotive industry supplier. We want to be a long-term value creator for all our stakeholders. Our aim is to be a strategic supplier for our clients, creating value for them, but also for our employees and our investors, while maintaining social and economic development.

Looking at Europe as a whole, where do we stand with a more holistic approach to sustainability, which includes energy companies, regulators, national, city and EU governments and other mobility stakeholders?
Regarding sustainability, I truly believe that we have crossed the point of no return. From now on there is only room for improvement and it has already been demonstrated that there is a clear commitment to continue along this path.

If you were a super EU Commissioner tasked with managing transportation, mobility, industrial competitiveness, digitalisation and consumer protection, which three things would you prioritise?
Under the current circumstances, the priority must be to boost activity and retain employment. To this end, there are three key measures that should be taken into account: funding for companies, flexibility for the reactivation of production activity and incentives to increase demand.

European roads are the safest in the world, but unfortunately the number of fatalities is still far from the zero casualties’ goal that European countries, the automotive industry and other stakeholders have committed to achieve by 2050.

Road safety has been a priority for policy makers for years, resulting in a comprehensive EU road safety policy framework to work towards Vision Zero. The recent adoption of the revision of the General Safety Regulation was an important step forward as well. This new regulation will make mandatory an important set of safety measures for vehicles over the coming years, paving the way to a quick implementation of life-saving technologies.

But when it comes to saving lives, there is no other goal than zero. Automotive suppliers are technology leaders when it comes to the development of technologies that save lives, prevent injuries and allow safe mobility. Both active and passive safety equipment has evolved significantly in the past years and automotive supplies encourage the timely adoption of regulatory standards to help ensure that the latest technology is included to make vehicles as safe as possible.

Significant investment in research and development is allowing to keep European innovation leadership also in the safety area. Every year, new and improved safety systems that are enabling new mobility trends such as the vehicle automation, the use of artificial intelligence to detect human driving behaviour, pedestrian/cyclist detection, etcetera, are being developed and made available to be part of vehicle safety features. CLEPA recognises this important effort by awarding the most innovative solutions via our annual Innovation Awards.

As part of our commitment, CLEPA, work stogether with other stakeholders in the “Safety pledge”, a joint platform for complementing future regulation to improve road safety. The pledge was signed in the Hague in June 2018 and highlights the use of measures as targeted awareness campaigns, research efforts aiming to bring technologies to the market and informing drivers on the effective use of vehicle safety technologies, together with improvements to road infrastructure, accident reporting and post-crash interventions.

But if we want to achieve a zero-casualties world we need to ensure that the technology is made available also to areas of the world where the number of fatalities is not decreasing. We need to work towards improving traffic safety through a successful collaboration model between policy makers at all levels in society, citizens, industry, academia and research organisations. Also, the adoption of laws, the support via public education campaigns and the enabling of sharing relevant experience between member states and other road safety actors , as well as providing funding for the needed actions are priorities to achieve the common goal.

We look forward to participate in the 3rd Global Ministerial Conference on Road Safety, next February in Sweden, to show how automotive suppliers can contribute towards achieving the 2030 and 2050 global safety goals.

It is true that we are reaching the end of a year full of thrilling experiences for the industry. Over the past 12 months CLEPA has been closely looking into its 60 years of history and the big achievements of the automotive suppliers as enablers of the transformation of mobility. However, as the name of our vision well shows, the association is now very much focused on tomorrow’s opportunities.

2019 finishes with a new European Commission in place, aspiring to carry out one of the most ambitious ventures for the European Union. The Green Deal not only sets extremely challenging objectives transversally, for very different sectors, but also necessitates for a wide variety of actors to work closely together.

When we envision the future, we don’t picture a static, passive world of mobility but rather an advanced status with accessible and diversified mobility, and means of transport that are smarter, safer and more sustainable. Automotive are key technology solution providers and their role is absolutely essential.

Industry supports the Paris agreement and is ready to contribute to a reliable regulatory framework, with the subsequent technology-open environment. In order to move towards a sustainable economy, Europe should continue working on its strengths, leveraging the continent’s advanced technology competence and assuring a strong industrial base that enables and protects society when aiming for these objectives.

Climate policies must be deeply intertwined with a coherent industrial strategy, in order to ensure that environmental, economic, and social policies are balanced. Such balance is precarious and climate protection needs to condition the strategies towards a sustainable economy as much as the social and economic dimensions should.

Since their creation, subsequent mass production and global usage over the last century, cars and other motorised vehicles have certainly evolved. However, developments have not been as widely innovative and uprooting as the changes the mobility sector is encountering in these last decade or so. The automotive industry is undergoing a deep transformation, and this was a major feature again at the Consumer Electronics Show, commonly known as CES, that opened its doors on January 7th in Las Vegas, and where smart mobility has taken centre stage since a couple of years.

With over 4,000 exhibiting companies, CES is considered the global stage for innovation gathering technologies from all over the world. In 2020, European automotive suppliers have once more delivered powerful immersive and connected experiences.

The advancement of automated driving and connectivity are mutually reinforcing megatrends. With everyone turning their attention to so-called 'level 2 and level 3' advanced driver assistance systems (ADAS), automotive suppliers at CES demonstrated the next generation of smart mobility examples. And although regulatory challenges still put the brakes on full automation, it is evident that sophisticated ADAS solutions will be a part of our daily routines very soon.

This transition from driver focused mobility to automated driving will need to be combined with top-end sensors and advanced cockpits. Automotive suppliers such as Continental and Faurecia, among others, proved to be once more innovation leaders as their technology becomes central in the user experience.

CES was also the ideal scene for suppliers to present their vision of mobility, communicate partnerships and announce head-turning revelations. In fact, CLEPA-member Sony’s electric vehicle prototype disclosure of Vision-S was considered one of the biggest surprises at CES, divulging the electronics manufacturer’s aspiration to be more active in the field of mobility. Other automotive suppliers such as Bosch, Nvidia, Continental, and ZF contributed to this development.

While smart, connected and competitive technologies might have provoked exclamations with out of the box technologies, automotive suppliers also proved their A-game when it came to sustainable and safety solutions. Additionally, some 'inside the box' thinking was shown to be one of the most revolutionary, as Bosch’s Virtual Visor was named Best of Innovation in the CES 2020 Innovation Awards. Their technology picks a simple component of the vehicle, the sun visor, proposing an artificial intelligence unit that isolates only the necessary area for the driver’s view, contributing to a clearer perception of the road and helping to reduce the potential for accidents.

The many demonstrations at CES gave evidence of the leadership position that the automotive industry maintains at a global level. Even if automotive suppliers are going through a very challenging and disruptive transformation, they are ready to bring their competitive advantage and technology excellence at any level. Implementing cutting-edge sustainable and safety solutions, automotive suppliers are delivering essential value to the mobility sector, contributing to the well-being of society and planet.

Over the years, the complexity of road infrastructure and traffic evolves with society’s mobility needs. A wider variety of transport means implies also a broader concept of safety and its scope. We can no longer reduce it to a vehicle matter. In the increasingly diverse traffic ecosystem many modes coexist, from vehicles, to two- and three-wheelers and e-bikes, to pedestrians. Roads in 2020 are multifaceted spaces of interaction where infrastructure should act as a basis to protect all road users in a safe system.

In such a system, policy makers and industry players as well as many other stakeholders must work closely together when it comes to the deployment of safety solutions, both in-vehicle and in its surroundings, and cooperate for an effective implementation. The mobility world of today needs a cross-sector approach to integrating safety solutions that benefit all, with a clear focus on vulnerable road users. Industry and regulatory bodies need to make sure that both active and passive safety systems are used in an optimised way to avoid and mitigate accidents.

In this context of necessary exchanges, Sweden is hosting an influential event on road safety this week. The 3rd Global Ministerial Conference on Road Safety is co-sponsored by the World Health Organisation and received delegations of ministers from more than 80 countries to discuss with industry, research representatives and civil society strategies to accelerate saving lives all over the world.

CLEPA participated in the first day of the Conference in the high-level panel, “Building Effective Leadership for Road Safety”, sharing the views of the European automotive supply industry on how technology leadership contributes to the well-being of society by developing safe, smart and sustainable mobility solutions. Europe has the safest roads in the world and is setting the scene for other regions. Among other initiatives, a wide range of European member states, stakeholders and representatives from the automotive industry have committed to achieving zero casualties by 2050.

As a highlight, this year the Ministerial Conference wanted to bring to the table global road safety challenges being in line with the UN sustainable development goals. The big mobility trends transforming the automotive supply industry are set to boost safety and sustainability on the road. Highly automated vehicles are designed to be safer than those driven by human drivers today and offer more efficient performances (less breaking, unnecessary acceleration, less moves when parking…) that contribute to decreasing mobility's environmental impact as well.

When we declare that today road safety needs a system approach that includes infrastructure, it is important to stress the importance of connectivity. Cooperative safety systems could, for example, provide detailed traffic maps to enable collision avoidance alerts or automatic vehicle reactions. To set the safe driving environments, the collaboration between stakeholders, telecoms companies, road authorities and mobility industry is vital, as well as the continuation of the deployment of Cooperative Intelligent Transport Systems.

Also present at the Conference is a large community of researches that work on the development of effective and affordable solutions, from the individual components to a large scale demonstration. To continue delivering the most advanced safety solutions, it is necessary to ensure funding for studies and innovation, especially when it comes to testing, stimulation, naturalistic driving and accident findings.

Platforms as the Ministerial Conference are needed at a global scale to safeguard the sharing of best practices between member states, organisations and industry. It is for all actors to work together and bring society ready available safety technology, not only to certain regions but internationally, to achieve a zero-casualties world.

Given the impact of COVID-19 at a global scale, these are crucial times to reflect on the driving forces of Europe's economic and industrial fabric.

One job in vehicle manufacturing provides 3 more in the direct supply chain and a further 3 to 5 in the rest of the economic structure. European automotive suppliers rank among the most competitive, innovative and resilient players in industry, directly and indirectly employing a workforce of 5 million people.

Automotive suppliers also have an essential role when it comes to R&D. In fact, the automotive sector is the largest contributor to research and development, accounting for 30% of total private investment. This makes the automotive industry a leading force when it comes to technology sovereignty and strategic leadership of Europe. CLEPA welcomes the approach that the Commission has announced in this regard:

“The next era of industry will be one where the physical, digital and biological worlds are coming together. If Europe wants to lead the twin transitions (of decarbonisation and digitalisation), the industrial strategy has to be an industrial innovation strategy at heart”

Consistent with this philosophy, the European Commission has just launched an urgent call for applications for startups and SMEs regarding technologies that could help in treating, testing and monitoring the Coronavirus outbreak.

In fact, some automotive players are meanwhile involved in producing mouth masks and ventilators to help meet demand for these essential tools. But support can also come from digital technologies, in the form of apps to support people staying healthy or connected, or managing supplies.

The constant effort of bringing cutting-edge mobility solutions to markets and society is recognised annually through the CLEPA Innovation Awards competition which has just opened the 2020 call for applications, with deadline in June.

In its 5^th year, this contest celebrates outstanding achievements in the fields of environment, safety, cooperation and connectivity & automation. The competition is open to all organisations that have contributed to the supply of innovative automotive and mobility technologies.

European automotive suppliers are committed to maintaining the competitiveness of its industry, but big tasks cannot easily be delivered alone. Public support and co-funding for research and innovation projects, such as in the framework of the upcoming Horizon Europe programme, have an important role to play in the competition with other world regions. It is essential that policy makers push for strong budgets, and unbureaucratic and technology neutral procedures to keep boosting the core of the European industry.

Horizon2020, the predecessor of Horizon Europe, has succeeded in accelerating developments of more efficient vehicles thanks to research projects on optimised engines, lightweight design or advanced on-board energy management. H2020 has also pushed for the implementation of automation in road transport, increasing sustainability and safety in the mobility world.

Additionally, H2020 has been an example of cooperation, bringing together partners across the value chain, from industry and research entities. The past six years have shown that these long-term collaborative projects allow for still greater achievements and CLEPA and its members are strongly committed to make the future Horizon Europe a success.

While the health situation gradually improves, Europe is testing the meaning of solidarity in ways that would have been difficult to imagine only a few months ago. Some remarkable examples of cooperation all over the European Union were brought up by the President of the European Commission Ursula von der Leyen during her inspirational speech at the Parliament’s plenary. She also insisted that there is still a long way to go and called on all actors to believe in the strength of the Union and work together to protect society.

If there is something to note in the public sphere as well, it is that industries are no longer exclusively conceived as economic actors and providers of employment. In extreme circumstances, industries are recognised as essential forces for their capability of action and response, a key resource in times of crisis. Automotive supply companies are delivering technology that aids the Covid-19 relief efforts and working with governments to assist during emergencies, in addition to protecting their own employees and planning the reopening strategies.

Supporting the work on the ground, CLEPA has made decisive contributions too:

Last week, we co-signed with ACEA –the manufacturers’ representative body–a protocol without precedent in the history of the sector: The automotive industry Code of Business Conduct, which, in view of Covid-19, sets out the principles for a smooth and rapid restart and includes chapters on health and safety in the workplace, timely communication and contractual requirements.

Prioritising the health of their employees and the rest of the society, automotive suppliers are paving the way for a smooth restart of automotive production, combining protective equipment with clear guidelines, adoption of best practices and strong communications to everybody involved. CLEPA is gathering information on the different preparation strategies, guidelines and safety groundwork that companies and organisations have put together to guarantee the best health conditions in the workplace, with the aim to make these available to the wider industry community. The association has also organised a Webinar on Health & safety in the Workplace to help inform members.

Last but not least, CLEPA has widely disseminated a communication calling on governments to coordinate their restart strategies and stimulate demand to support economic recovery in Europe. In order to move forward to a sustainable, safe, smart and competitive future of mobility, recovery strategies must prioritise employment and innovation in Europe as much as underpin the transformation to carbon neutrality and digital society. The major tasks ahead need all of us to work together, and more than ever, cooperation and exceptional leadership will truly make the difference.

The European automotive industry is renowned for providing attractive employment and offering plenty opportunity to learn and develop new skills while contributing to the future of regional economies. This stability is challenged by the Covid-19 emergency, which abruptly halted automotive operations, massively hurt liquidity, and interrupted supply, production and demand in a way that may have a lasting impact on the economy.

Since the start of the crisis, guaranteeing the health & safety of the more than 13 million employees in the wider automotive sector has been the first priority since day 1 of the current situation, with several measures taken by companies even before the mandatory measures issued by governments were in place. CLEPA, together with the European association of automotive manufacturers also signed a “Code of business conduct”, to support a rapid, safe and smooth restart of the automotive industry and called for common criteria, standards and conditions under which employees can return safely to restart production.

This crisis is accelerating the need of having a European workforce able to support the transformation of the sector. The high value of the competences of the sector has become vividly apparent in the critical phase of the crisis, where several automotive companies have dedicated all their capabilities and know-how to support with manufacturing medical equipment and personal protective gear, see here for a few examples. The quickness of these actions showcases that flexibility and quick adaptation of the labour force is essential to guarantee the current and future competitiveness of the European automotive industry.

But also, it has accelerated the need of adapting to new environments and it underpins innovation as key element for the sector´s recovery. Decarbonisation and digitalisation remain urgent in the current scenario, and the new societal needs on mobility are demanding a quicker uptake of emerging technologies such as automated driving solutions, or pushing, as part of the coronacrisis recovery package, for a European stake in critical technologies such as the hydrogen economy and battery cells production, to boost Europe’s strategic autonomy.

In recent conversations with Nicolas Schmit, Commissioner for Jobs and Social Rights, CLEPA has underlined that the importance of sustained policy action to re- and upskill Europe’s workforce, as also outlined the recent publication 25 Actions For a successful restart of the EU's automotive sector. CLEPA, together with the other three associations representing the automotive sector (equipment, tyre suppliers, vehicle manufacturers, dealers and workshops) anticipates the delivery of the updated EU Skills agenda and urges to accelerate the establishment of a sectoral Skills Pact for the automotive sector.

In this light, CLEPA welcomes the recent announcement by the European Commission, together with the European Investment Fund (EIF), to launch a 50€ million pilot to develop skills and education across Europe.

Also, through the Project DRIVES in which CLEPA actively participates, set up to modernise the skills framework in European countries, enhance labour mobility across Europe and enhance the effectiveness of apprenticeships, a series of online course have been made available to support the reskill and upskill home education of the workforce in the automotive sector.

The European automotive sector is undergoing a structural transformation, and only with the right labour force the industry will be able to guarantee its sustainability and competitiveness long-term. Because employees amongst every company’s most valuable assets, industry will keep working to guarantee the safest work environment and the access to training to help bring about the new mobility of the future.

The Covid-19 crisis has put Corporate Social Responsibility (CSR) to the test, with a clear commitment from suppliers to prioritise the safety and wellbeing of their employees and partners.

Automotive suppliers have a longstanding commitment towards sustainability goals, with several aspects being worked on including ensuring a responsible supply chain, implementing socially responsible practices, and adopting production processes that respect the environment and the employees while offering safer and cleaner products and services. Nonetheless, the pandemic has put social challenges in focus and the sector has risen to the task, placing the support of communities and the health and safety of employees at the forefront of business goals. Clear examples include major efforts in the research and innovation area to find technology solutions which can be used against the Corona virus such as the deployment of location technology to provide more accurate information, the development of innovative Covid-19 testing systems, supporting the health services with protective equipment and donating goods and money to support hospitals worldwide.

Future-proofing of the sector means ensuring that business strategies remain effective and operations are resilient to change. All this needs to happen within an environment that is more challenging than ever. Complex production processes need to be adapted to minimise the risks for employees and to allow for changes in the capacity of production plants, all while companies build closer collaboration with business partners.

Companies have increased their focus on ESG (Environmental, Social and Governance) to enhance the companies’ long-term success. ESG is an important indicator of the performance of companies in fulfilling CSR and sustainable development goals, and is increasingly gaining attention not only from investors, but also from policy makers.

This increased attention comes hand in hand with the sector’s commitment to a 2050 carbon neutral economy. This long-term goal is an opportunity that provides planning capacity and business openness while enhancing competitiveness.

CLEPA, in its efforts towards a sustainable industry and alignment on the objectives of the EU Green Deal & the Industrial Strategy, is an associate partner of CSR Europe, promoting safe and cleaner mobility, valuing technology and stimulating innovation. All these factors will propel automotive suppliers to make positive adjustments in fulfilling CSR and ESG requirements, and the Covid-19 outbreak will only accelerate this transformation.

Within the EU Sustainable week, that this year focuses on the needed recovery measures that are consistent with the European Green Deal, automotive suppliers, more than ever, are part of this European sustainable strategy that focuses on the development of innovative solutions for future mobility. It requires a concerted effort to build a strategy that includes the key elements, builds trust and resilience through long-term integrated business and social purpose, supports a diversified and skilled workforce, enhances the social dialogue and collaborates with decision makers in an open dialogue.