Investment, Sustainability, Decent Jobs: Challenges and Promises for the Sub Saharan African Auto Industry

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Sat, 07/17/2021 - 11:45
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By Lorenza Monaco et al

In a comparative research recently conducted for IndustriALL Global Union/ FES South Africa, we[1] tried to shed light on the high potential of the automotive industry in Sub Saharan Africa. At the same time, we explored the key challenges and pressing issues that need to be addressed for a sustainable industrial development path in the region. Our research report focuses on seven countries, identified as promising, fast-growing or broadly committed to supporting their Auto sector: Ghana, Kenya, Ethiopia, Namibia, Nigeria, Rwanda and South Africa.
 
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Charging Ahead—The Electrification of the Auto Industry

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Sat, 07/17/2021 - 11:31

By Thomas H. Klier and James Rubenstein

June 23, 2021
 
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France must negotiate its place in the new automotive Europe

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Sat, 07/17/2021 - 11:07

The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

Put at the foot of the wall by a kind of political overbidding in the decarbonisation requirements that are being placed on them, the players in the sector are paradoxically asking for both tax exemption and a reduction in charges and massive public support. Insofar as this demand is addressed in France as elsewhere, the Europe of the electric vehicle hardly breaks with its dominant software, which is that of competition between sites and countries. In this game, France's automobile industry has lost a lot so far and we can hope that, aware that this is a dead end, the government will take the opportunity to propose another Europe for the automobile, another positioning of France within it and ultimately another deal to our two manufacturers.
 In the preparatory documents for the meetings that will take place this Monday between Emmanuel Macron and the representatives of the industry, we read - in the form of a concession to minimal intellectual honesty - :
"The decline of automobile production in France is not linked to the energy transition since it began several decades ago, but the elements listed above show that the forced transformation to all-electric in the short term could accelerate this decline."
 
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The insurance of large firms to capture the anxiety market: who benefits from the figure?

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Thu, 06/24/2021 - 16:23

The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The growing anxiety of those involved in the automotive industry generates a demand for certainty such that any study is now sure to find its audience. To separate the wheat from the chaff in the statistical abundance thus generated, we propose a Sherlock Holmes method which consists in asking not who benefits from the crime but who benefits from the figures and let us try to apply it to two studies recently mentioned by Autoactu.com read more

What if 8 June 2021 became the anniversary of the French car revolution?

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Thu, 06/24/2021 - 16:18
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The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The six trade union organisations (OS) representing the employees of three of Renault's industrial sites all signed an agreement without exception, which provides for the creation of a new company, a wholly-owned subsidiary of Renault, which will manage the revitalisation of an automobile basin by mobilising electrification as a lever.
 
As the FO metals press release on this signature states: "For the first time since 2013, the agreement meets our ongoing demand, namely, the production of a B-segment vehicle on national territory (the future electric R5) and the allocation of new C-segment models."
 
In fact, FO, like the five other unions, had carefully read the "road map" that Luca de Meo had sent them in September and all of them, like us at the time, had stopped at this passage where, surreptitiously, the new boss indicated: "We must concentrate on the CMF-B-EV platform, developing a range of emblematic, profitable electric vehicles, with an entry price of less than 20,000 euros, produced in France."
 
L. De Meo, like the SOs, knew that if this intention were to become reality then, for Renault, we would be changing times: 
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Motor vehicle exemption Regulation 461/2010: what does the Commission's evaluation report say?

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Thu, 06/24/2021 - 16:10

The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

Published on 28 May, the Evaluation Report on the functioning of Regulation 461/2010 on the motor vehicle block exemption, seems to outline a continuation of the movement initiated during the transition to the general regulation: in the field of the sale of new cars and PR, manufacturers will be very free and their networks will only have to comply. Conversely, as was already the case with the 2010 regulation, DG Competition will support the interests of the independent repair industry and all stakeholders who consider that manufacturers are tempted to use technological developments to strengthen their market power.
 
The Commission published at the end of May 2021 its "Evaluation report on the functioning of Regulation 461/2010 on the motor vehicle block exemption".
 
Indeed, this Regulation concerns the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector1 (called the "Motor Vehicle Block Exemption Regulation" and abbreviated as RECSA). Article 7 of the Regulation requires the Commission to monitor the operation of the Regulation and to report by 31 May 2021. 
 
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Stellantis: terminate to re-sign?

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Mon, 05/31/2021 - 12:31

The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

 The management of Stellantis surprised everyone, and its distributors in particular, by indicating their termination. Although it is still difficult to determine precisely, the content of this decision seems to be associated with a quest for performance which Carlos Tavares wants to embody. It involves strong pressure on the networks to reduce both their size and their remuneration and to transfer part of the power and value to the manufacturer's head office. However, it risks coming up against the unavoidable obligation to have physical networks and the impossibility of integrating them. Negotiations will begin and will reveal the weapons that the stakeholders have to conduct them. It is not certain that Carlos Tavares has not overestimated his own. read more

Stellantis' Europe/North America bipolarity:asset or liability?

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Wed, 05/12/2021 - 12:48

The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The presentation of the results of the first quarter of Stellantis's activity brings out vividly what we already sensed: the entity is torn, as FCA was, between an American and a European division. The two do not call for the same products and the same technologies and therefore the expected synergies are difficult to achieve. If the question is an old one that Ford and GM faced very early on, it is posed in new terms in 2021 because others have to manage a European and a Chinese division and this seems less difficult.
 
The first quarter of Stellantis, which was almost complete, gave us an incarnation of this new group at the beginning of May and allowed us to grasp its originality.
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Electric vehicles: Volkswagen leads the race, it's time to get in

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Wed, 05/05/2021 - 13:04

The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The last week of April 2021 confirmed that in Germany as in France, the transition to electric vehicles is clearly accelerating. In Germany, it is wanted and led by VW. In France, the prevarications that VW has tried to banish from the public debate persist. However, week after week, the last reticence is being lifted and the race towards a massive switch to battery electric vehicles (BEVs) seems to be on. Such a development is an opportunity for French industry that there is still time to seize, since most of the capacity has yet to be installed. The first bricks have been laid. The industrial edifice remains to be assembled.
 One week after the announcement by the European Parliament and the European Council of stricter CO2 targets for 2030, the very clear acceleration in the pace of the transition required of the automotive industry is being emphasised on both sides of the Rhine, but is not necessarily welcomed in the same way.
 
To understand this, we can compare what was said and decided at the meeting of the Comité Stratégique de Filière in Bercy on Monday 26 April and what we heard at the "Way To Zero" Convention organised by the Volkswagen group on Thursday 29.
 
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Renault's raison d'être: nebulous wording and sincere commitment

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Wed, 05/05/2021 - 12:22
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The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

Renault's managers honestly believe that the company, its teams and its past history fit easily into a project which, in accordance with the Pacte law, they call raison d'être and had approved last week by the Board of Directors.  By giving this "raison d'être" a somewhat nebulous formulation, they did not contribute to making this vote play the mobilising role that they hoped it would. Fortunately, the major principles were already being translated into concrete terms and this gives some reasons to take the commitment seriously.

 The Renault press release which reports on what was agreed at last week's General Meeting of Shareholders is surprising. The text begins with the following lines.   read more

Carlos Tavares or when the counter-revolution joins the revolutionaries

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Tue, 04/20/2021 - 13:23
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The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

 Between 2018 and today, we have seen and heard Carlos Tavares change his position on electric vehicles quite radically: all the indications are that the 360° examination of the dossier that he demanded of everyone and that he conducted himself has led him to consider that the dossier has changed in nature in this short space of time. As long as there were doubts about the ability of the battery electric vehicle (BEV) to become the global industry standard, his reservations were worth expressing. Now that this is no longer the case, then there is an urgent need not only to follow the movement but also to try to precede it. read more

The climate-energy law: an opportunity to de-hysterise the debate

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Wed, 04/07/2021 - 13:15
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The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

 The debates concerning the automobile, which since the end of March have involved the examination of the 'climate and resilience' bill, are, at first sight, rather caricatural: the majority is in turn criticised for going much too far and/or not going far enough in view of the 'climate emergency'. Nevertheless, as the deadlines that France and Europe have set for themselves become clearer, the positions taken by all sides in the role-playing that had finally taken place are being called into question and the hope of finally seeing the real issues addressed can be born. read more

PSA's industrial choices undermine French foreign trade in cars

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Wed, 03/31/2021 - 11:33
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The weekly column by Bernard Jullien Former director of Gerpisa, lecturer in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The 2020 foreign trade statistics are available and their analysis is edifying. It largely confirms the de-industrialisation and indicates that, coupled with the choices made by French manufacturers - and in particular by PSA for 2020 - the pandemic has led to a real collapse of French production. The drop in consumption has limited the size of the external deficit, which is nevertheless growing very seriously in terms of vehicles. Moreover, where political announcements suggested that electric or electrified vehicles could be an opportunity for the French site, the statistics cast doubt and indicate the extent to which politicians will have to be proactive in order to bring manufacturers to reverse old choices that were heavily unfavourable to the French site.
 
Well before the health crisis, the whole French car industry knew that the year 2020 would be catastrophic because of the acceleration of the phenomenon of the gap between the vehicles that French manufacturers decide to assemble in France and those that the French buy from them.
 
Thus, if we take the Top 10 of PC sales in France in 2020, we have 589,000 vehicles sold, i.e. 35% of the total.
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Hydrogen plan: the automotive sector remains on the sidelines

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Thu, 03/11/2021 - 13:46
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The weekly column by Bernard Jullien Former director of Gerpisa, Associate Professor in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The hydrogen plan is a clear victory for the hydrogen lobby obtained this summer thanks to the in-depth work undertaken over several years to form a common front, structure arguments, and forge alliances and strategic partnerships between companies and industries that are not very familiar with each other. The French equipment manufacturers are part of this rather large club which has been formed and strengthened over the years, but the manufacturers are not really part of it. Given the importance of the LCV dossier for our manufacturers as well as for the French site, this marginality of the automobile in the country's hydrogen plan stands out as an anomaly to be corrected.
 
Announced with great fanfare in the autumn, the "hydrogen plan" is becoming clearer week after week.
The last significant event in this clarification was the grand mass in Albi at the end of February where the ministers concerned (Economy, Industry, Environment and Research) came to enthrone the National Hydrogen Council which was meeting for the first time.
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Renault's 2020 results: already a de Meo effect?

Submitted by Lorenza Monaco, GERPISA, ENS Paris-Saclay, IDHES on Tue, 03/02/2021 - 12:27

The weekly column by Bernard Jullien Former director of Gerpisa, Associate Professor in Economics at the University of Bordeaux and scientific adviser to the Chair of Network Management of the Essca Group.

The presentation of Renault's results did not surprise many people: very heavy losses, very strong impact of Nissan's losses, good stock and mix behaviour, cost reduction plan due in 2023 already largely achieved and a clear improvement in H2, all this was expected. Paradoxically, this seems to indicate that, even before Luca de Meo had time to really make his mark on the company, it would be able to pull through. Meo's effect would then be expected by 2022 or 2023 in a context where the company would already be in a better position.
 
The presentation of Renault's financial results - like the presentation of the Renaulution plan a month earlier - was particularly well prepared and was finally not much commented on, as it contained few surprises.  
Like the speech made by Luca de Meo (LDM) and his teams, the accounts and their deterioration seemed to reflect not only the impact of the Covid crisis but also the damaging effects of the past strategy. Likewise, the marked improvement in the second half of the year is supposed to reflect both the initial effects of the recovery plan and the improvement in production and sales conditions throughout the world once the worst of the health crisis is over.
 
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