Ivan Hodac has been Secretary General of Acea since 2001. Building on large experience in EU affairs, he maintains close relationships with the European Commission, the European Parliament and the representatives of the EU Member States.
Representing the 15 major European automobile manufacturers at EU level, he is also counterpart for other industry associations, NGOs and consumer organisations. He talked to Simon Warburton in Brussels about FTAs, overcapacity and alternative mobility.
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j-a: There has been much discussion of the CARS2020 initiative – what is ACEA’s view?
IH: CARS2020 is not [just] about making clean vehicles – it is about that but [also] about competitiveness and survival of the industry. We have 30% overcapacity – we are closing down factories as we speak.
Our first way should be to keep the global competitiveness of this industry – to keep jobs in Europe [or] we will not have an industry in Europe. Yes, we need to improve, but we need also to survive, that is what the whole thing is about.
We have had input into it – there are specific areas in which the European Commission and the CARS2020 initiative have to start delivering. [We have] to have impact assessment before we put legislation on the table.
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By GlobalDataCARS2020 is there to create a regulatory framework in which the industry can grow and keep its global competitiveness. The fact the European market goes down is directly linked to the economic situation in Europe.
Can we have a European solution? Ideally yes, but it is very difficult. Not everybody suffers in the same way
The centre of gravity is going away from Europe to BRIC [countries]. The US has reduced overcapacity and today is the most profitable market in the world.
j-a: Free Trade Agreements are high on the Commission’s agenda – could more be done?
IH: The Korean deal is a disaster – it is a one-way street. We are eliminating customs tariffs in Europe and they are not moving on non-tarrif barriers at all.
We have to make sure there is a level playing field and there is no level playing field. If the Indians have around 60% – 100% rates, that means the market is basically closed.
We are very competitive in premium segments and even some of the mid-size and small cars would be competitive if the markets would be open.
j-a: In an age where younger people in particular appear not to be enamoured with buying cars, is the industry doing enough to address alternative transportation ideas?
IH: Manufacturers are already looking at it [for] a long time. They know we have to rethink mobility and get things like car sharing. Many of them next to selling cars, will be selling mobility.
You will be selling mobility rather than the vehicle, there is no doubt about it, it will come, the manufacturers are thinking about it. We have to demonstrate how seriously we are taking this.
j-a: To that extent ACEA recently set up a day where mobility issues were discussed by younger people – how did that work?
IH: We had a debate – we had around seven or eight CEOs and five Commissioners.
Going away from ownership, young people getting into a car want to stay connected. I would say the industry has been thinking about it [for] some time. In every company, they have strategic decisions where people are thinking about future mobility – you have other toys to play with – iPhone for example.
j-a: How would you characterise European competitiveness compared to emerging countries for example?
IH: One of the problems we have, we have simply missed the global train in Europe. People [say] we have a technological edge over the Chinese and others – it is not going to last for ever and that is one of the problems.
They are beginning to develop their own cars which will be competitive very quickly.
j-a: How do you view the role of trade unions in the car manufacturing sector?
The trade unions have to start thinking what is happening. I am not against the unions. The unions should realise…more than ever a common interest to keep the industry in Europe.
It is extremely difficult to close anything – the trade unions don’t let you do that. It is a global industry and it can go anywhere and produce cars anywhere.
It would be fantastic if they would give us support on regulatory issues that make the cost of producing in Europe too expensive. I would like to have a better understanding and better co-operation with the unions. But it is a tricky issue because it is done on a Member State basis.
These things are being negotiated at Member State level and company level – I am talking about the overall relationship.
j-a: Reducing overcapacity in Europe appears to a common theme among many manufacturers – how practical will this be in reality?
IH: If you admit there is 30%-35% overcapacity in Europe, then you can not endlessly keep it, it is not healthy. I don’t have a system to take it away as we are 27 Member States.
You can’t sustain 15 factories running under 50% capacity – you can do it for a few months or a year but not for ever. We have seen [in] January, 2013, a dip of about 8.5%. For this year, we are looking again at between -5% and 10% – it has a direct relation to consumer confidence.
j-a: Given the fact ACEA is based in Brussels, how would you describe the organisation’s role in shaping European Commission policy?
IH: ACEA represents the whole European automotive industry. We get involved with everything that is about creating new legislation – we try to make sure the industry does not take a beating.
The EC listens to us in the function of the importance of the industry – we have 10m-15m jobs – they have [to] take it into consideration. We have influence on the European Parliament and with the Member States.
Do they listen to us all the time? No. Are we being consulted? To a large extent. Your influence in Brussels is not based on the number of people you know. It is measured by the arguments you put on the table.
We have a possibility to do that and this industry has enormous scientific and technical knowledge – they need it.
j-a: Where is Europe leading the way at the moment?
IH: Where we keep ahead of the game – and lots of people would tell you – that heavy trucks still and will be for a long time state of the art. It is also an important part of the European economic issue.
I am very much afraid we are going to lose this step by step. Do we believe the others will just watch us?
j-a: Many people have lauded the UK for its approach to auto manufacturing – what is your view?
IH: The UK automotive industry is doing very well and the market is moving. The transformation we have seen with Jaguars and Landrovers – these are different cars [compared to previously].
[But] each time I talk to the UK government, they [appear as if] they do not want to have an automotive industry. I fully disagree with this – it is nonsense. The fact it is owned by TATA – stop saying this is not a British industry.We have to admit we do not see much support from the UK government on some of the key issues like CO2. It would be appreciated if we got, on some of the legislative developments, more support from the UK government.
The fact you come to them and say the Korean and Japanese market [s] will not open for us, India, et cetera…I think they should take this into consideration. The British government should be a little bit more receptive.
j-a: What is ACEA’s estimation of the popularity of electric vehicles?
IH: The market share of electrically charged vehicles is 0.3%. Our position is we will not [see] more than 8% by 2020 – we need infrastructure.
