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The head of UNRAE, the Italian foreign automakers association
operating in Italy, has said the European Union (EU) should
reassess implementing its plan for stricter emissions targets as a
response to the coronavirus disease 2019 (COVID-19) virus outbreak,
according to an Automotive News Europe (ANE) report. With
Northern Italy both the base for the Italian automotive industry
and the epicentre of Europe's COVID-19 virus outbreak, it appears
it will be some time before production and sales activity in the
region returns to any kind of normality. Therefore UNRAE's
president, Michele Crisci, backs the EU holding off its more
stringent implementation of the 95g/km CO2 fleet emissions average
for 2021 in order to lower the short-term cost burden on Italy's
carmakers. He said, "A significant part of the components needed
for electrified cars come from China. It is not clear yet how long
this supply chain will take to resume its normal production flow.
Automakers made plans to be compliant with these new, stricter CO2
targets, effective this year. But what about if we miss crucial
components from China that are needed to build electrified cars?."
Asked what the response should be, he said, "Move the 2020 CO2
targets to 2021. Due to the coronavirus, 2020 is going to be a very
delicate and complicated year for automakers. Adding huge fines on
an industry already under enormous pressure on the cost and margin
sides would not help."
Significance: Given the massive implications
for the global economy from the COVID-19 virus outbreak, of which
the automotive industry is just one part, it might be wise for the
EU to follow the course of action being suggested by Crisci. That
said it would still face opposition from the green lobby in the
European parliament and by other pressure groups. If it wants to
ask for this delay the manufacturers will need to agree to
implement a concerted lobbying effort through their membership of
ACEA, putting a major emphasis on the threat to jobs and
livelihoods that the outbreak represents and that adding further
cost burdens to the carmakers at this time would be highly
undesirable.
Posted 23 March 2020 by Tim Urquhart, B.A., Principal Analyst, Automotive, IHS Markit
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