Auto ANNUAL REPORT

Transcription

Auto ANNUAL REPORT

Auto ANNUAL REPORT
2005
Verband der Automobilindustrie
FOREWORD
optimism that an upturn is just around
Annual Report 2005
3
CARS 21, and with it the greater ori-
the corner. The European Constitution
entation of policies on the performance
is threatening to fail. Only recently we
of one of Europe’s key industries, is due
inspired new Member States with great
not least to intense pressure from the
hopes and welcomed them with open
German Government. But these devel-
arms, but now we complain of wage
opments are late coming – hopefully,
dumping and block their way with the
not too late. If there was any need to
Directive on the Posting of Workers.
justify the existence of CARS 21, a look
Brussels is known for being out of touch
at the Union’s clean air policy would be
with ordinary citizens and the Lisbon
sufficient. We are dealing with a host of
process is receding into the distance. It
rules that the Member States signed up
seems as if the contrast could hardly be
to without having the slightest idea what
greater.
consequences they would have, as the
German Government itself admits. At
Open borders within Europe, an
Brussels does not always make
least, there is no other way to interpret
life easy for us – and especially for the
the Government’s reply to the question
automotive industry. Our distribution
posed by the German Opposition about
system has been put at a greater disad-
the effects of the Air Quality Framework
vantage than that of any other sector of
Directive in Germany. The Government
consumer goods. Regional benefits are
freely admitted that when the directive
expected to be withheld in future. The
and its daughter directives were passed,
industry’s intellectual property rights are
it was not aware of the extent to which
being called into question by the plans
the limits for the particulate concentra-
to allow spare parts to be copied by
tions in the air would be exceeded.
any other party – no matter how much
internal market with potential and no
these designs deserve to be protected.
need to fear the large world markets,
And last but not least, the product itself
are now confronted with more legisla-
new members in the EU who see the
– the automobile – is subjected to more
tion than they can manage - and which
automobile as a symbol of the free-
rules and regulations than almost any
they cannot guarantee to comply with.
dom and superiority of the free market
other industrial product, and it seems
Courts are starting to look at the prob-
economy, and – on top of all this – a
that even more regulations are on the
lem. At this time the exhaust legislation
common currency. These are all shining
way. So it comes as no surprise that
is highly advanced and we are already
examples of a unique success story
the automotive manufacturers asked for
very close to having some final regu-
that should make the European Union
a discussion with the European Com-
lations. Nowadays modern passenger
and its institutions invulnerable and its
mission and the CARS 21 High Level
cars (both gasoline and diesel), like
citizens confident of its merits. Never
Group has been set up as a platform for
trucks and buses, make only a marginal
before have we had background con-
scrutinizing the existing forest of regula-
contribution to emission levels if any
ditions like those we enjoy now, a freer
tions and critically examining the effects
at all. But despite this, for the first time
market, or more favorable conditions for
future rules will have on growth, com-
since the beginning of the 1990s, there
growth and employment. But still there
petitiveness and employment, as recom-
is again talk of imposing driving bans. It
is a general uneasiness and no sign of
mended by the Competition Council.
does not seem to help to point out that
The result is that the Member States
4
F
OREWORD
IAA
Germany has cleaned up its traditional
Once the dust has settled, we will
At the same time, domestic demand
coal and steel industries, or that in the
see that the process of transition to par-
for cars is sluggish for the sixth year
1990s total particulate emissions in Ger-
ticulate filters has already been going
running. In a year that all in all will be
many fell by a massive 90 percent and
on for quite a while. German customers
a difficult one for the automotive indus-
that this trend will continue, at least in
can choose from a wide range of fil-
try, requiring some hefty adjustments,
road traffic.
ter systems that are durable, do not
our conclusion is this: this industry is
reduce performance, and do not even
responsible for the stable level of em-
The discussion of particulates this
cause any significant increase in fuel
ployment overall, because it is highly
spring received a good deal of media
consumption. In this field the German
efficient and increasingly competitive on
coverage. And unfortunately it must
producers are leading the market, since
all the important global markets.
be said that it was too often lacking
German brands account for over 80
in objectivity. But the situation is quite
percent of diesel cars registered in Ger-
different. Diesel cars contribute a tiny
many that have filters.
amount to total particulate emissions
in Germany – only 6.5 percent – and
But at the same time, the welcome
export figures must not hide the fact
that more and more of our success on
The German Government could
the world markets is due to compo-
it is very likely that most of this is
accelerate the process of introducing
nents and modules creating value-added
caused by “old faithfuls” that are still
particulate filters by taking action to
outside German borders. Over the last
on the road after many years of service.
follow up the Environment Minister’s
10 years the 130,000 new jobs created
However it is not a question of total
numerous announcements about
in the automotive industry in Germany
emissions, but of local particulate levels
introducing tax benefits. Building up
have been accompanied by 160,000
– the local concentration of particu-
expectations which then remain unful-
in Eastern Europe alone. The export
lates in the air. The official figures show
filled simply creates uncertainty on the
success of the German vehicle manu-
that only 3 percent of local particulate
market. Apart from the fact that this
facturers and the high labor costs in this
concentrations can be attributed to
disappoints automotive manufacturers
country can only be defended if there
exhaust from diesel cars. 3 percent
and their customers alike, such behavior
is a production network and a cost mix
– that’s all. As mentioned above, the
is not an expression of a responsible
including foreign plants with their high
German Government freely admitted
environmental policy that – no matter
efficiency and better cost. It will be even
that more than 70 percent of the days
whether justified or not – has played on
more important in future to maintain the
on which the particulate limits are
health issues again and again.
high level of research and development
exceeded in the most susceptible cities
of Munich, Frankfurt and Berlin coin-
in this industry.
The German automotive industry will
cide with still weather conditions – so
remain on course for success this year,
those who are aware of this will won-
even though we are experiencing one
under high labor costs and lack of
der whether the hysteria was justified
of the most dramatic hikes ever in the
flexibility. Overall unemployment has
and diesels should have been shown
prices of raw materials, which is making
reached an oppressive record level.
in such a bad light. They will also have
life difficult for the suppliers in particu-
Neither globalization – which we cannot
to ask themselves why official environ-
lar. The industry is exporting well and it
and indeed do not want to avoid – nor
ment policy-makers failed to provide
has a foreign trade surplus of over 80
the continuing competition from the
more information and instead began
billion euros, so it is making a significant
accession countries in terms of wages
to stab the domestic industry and the
contribution to the fact that Germany
(that that we cannot fight off with
national interests in the back.
still enjoys overall economic growth.
directives on posting workers) leads
The German economy is groaning
Annual Report 2005
5
us to expect any relief on the German
to be effective in the struggle against
The automotive industry does not
labor market in the foreseeable future.
unemployment. Nor can Germany sus-
need to feel that it is under fire from all
Reform of the labor market is therefore
tain a plague of “locusts”. So, midway
these discussions. It acts responsibly,
needed urgently and may turn out to be
through 2005, we have all the more
as demonstrated only recently by the
just as essential as reform of the social
reason to point out that it is not the
opening of an important new plant in
security systems in order to bring down
free market economy that is showing
Germany. But this key industry does
non-wage costs, along with a major tax
signs of weakness, but the policies.
speak up when we need to speed up
reform. No matter who assumes political
It is the policies that are increasingly
the reforms, so that we can generate
responsibility in the approaching elec-
weakening this free market economy
more value-added in this country again
tions, nobody can close their eyes to this
and preventing its competition mecha-
tomorrow.
fact – and all the more so because any
nisms from functioning. Those who
commitment to Germany as an industrial
want to blame financial investors for
production location is less a question of
the sorry state of the national budget,
patriotic attitude than competitive frame-
the inflexibility of the labor market, the
work conditions.
high labor costs and the standstill in
social security reform, are taking a far
Prof. Dr. Bernd Gottschalk
too simplistic view and at the same
President
drink cans, combined with well-meant
time distracting attention from their
but misunderstood mechanisms of
own responsibilities – quite apart from
protection and isolation, are not going
scaring off investors.
Wind turbines and the deposit on
Frankfurt am Main, July 2005
6
IAA
C
ONTENTS
FOREWORD 3
BUSINESS BACKDROP 11
The Future of the Automobile Manufacturing Base in Germany and the
Opportunities offered by the Globalisation Strategy
12
16
Future Challenges for German Automotive Manufacturing
Industrial and Tax Policy in the EU
20
24
Worldwide Reduction of Trade Barriers
Factors adversely affecting the World Economy: Currency Rates and
Raw Material Prices
26
GLOBAL MARKETS 29
30
The Economic Situation in the Global Automotive Industry
International Positioning of the German Car Industry
40
International Positioning of the German Commercial Vehicle Industry
The Trailer, Body and Container Industry
The Parts and Accessories Industry
Automotive Sales and Service
50
51
61
70
The Increasing Importance of the Automotive Aftermarket
TRANSPORT 75
The Car: The Undisputed Number One Means of Transport
76
81
83
The Bus: All-Rounder for all Mobility Requirements
Truck Transport: Indispensable for our Economy
Further Pressure on Road Transport – Production Sites at Risk
Infrastructure Policy
89
90
Transport Costs – A Factor in Globalisation and Location
City Traffic – Anti-Car Policies are Doomed to Fail
Telematics – For Sustainable Mobility
112
110
100
46
Annual Report 2005
ENVIRONMENT AND TECHNOLOGY
7
115
Environmental Protection: A Key Goal for the Automotive Industry
116
117
Emission Reduction 123
Climate Protection
Facts about Fine Particulates
135
Innovative Engine and Exhaust-System Technology: Steps towards
137
142
Sustainable Mobility
End-of-Life Vehicles
Energy
147
149
Occupational Safety
Hazardous Substances and Chemicals Legislation
150
SAFETY AND TECHNOLOGY 153
German Manufacturers: Focus on Quality
The Road Safety Success Story
154
155
Integration of Active and Passive Safety
157
161
163
Pedestrian Protection
Light and Visibility
Safety of Vans, Trucks and Buses
168
Increasing Importance of Electronics and Software
Technical Harmonisation
Standardisation
Logistics
173
174
178
181
IAA – THE WORLD’s LEADING MOTOR SHOW
187
FACTS AND FIGURES 193
INDEX 201
DIESELS AND THE DEBATE ON PARTICULATE MATTER 207
8
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F
IGURES AND TABLES
FIGURES AND TABLES
Business Backdrop
Car exports and the increasing share of production abroad 13
International locations of the German automotive industry 14
Regional distribution of international locations 14
Global Markets
World automobile production in 2004 30
Sales of light vehicles in the USA in 2004 31
Sales of light vehicles in Brazil by brand in 2004 31
Production of the Chinese automobile industry 33
Sales of passenger cars in China and India in 2004 33
Registration of new vehicles on Asian markets 34
Car sales in India by brand in 2004 34
Turkey: Passenger car production and exports 35
Registration of new cars on Central and Eastern European markets 35
Production and sales in the new EU countries in Eastern Europe 36
New car sales in Russia 37
Registration of new cars and market shares in Western Europe 38
Registration of new cars in Western Europe 38
Diesel share of new car registrations in Western Europe 39
Vehicle production of German manufacturers by region in 2004 40
Vehicle production of German manufacturers in Germany and abroad 41
Passenger car exports to the five most important markets 42
Car registrations by private owners by brand in 2004 44
Registration of new diesel cars by brand in 2004 44
Registration of new passenger cars by brand 45
Registration of new tractor units in Germany 46
Registration of new commercial vehicles in Germany by brand 47
Export of commercial vehicles to Asia 48
Export of commercial vehicles by country in 2004 48
Foreign production of German commercial vehicles by country in 2004 49
Sales and employment levels in the automotive supply industry 52
Labour cost difference between high- and low-wage countries 54
Advantages of producing in high-wage countries are declining 54
Production and added value of light vehicles (worldwide): 2015 forecast 56
Key modules: Development of supplier added value from 2002 to 2015 56
Degree of networking as evidence of a new quality of cooperation 57
The importance of strategic options 58
Reasons for company sales 59
Annual Report 2005
9
Transport
Growth in passengers services according to regions worldwide 77
Cars per thousand inhabitants: Growth potential and saturation 78
Characteristics of cars and public transport as assessed by population 78
Cars: Number one mode of transport travel; three quarters of all distances 79
Passenger transport in Germany up to 2015 81
Worldwide growth in freight transport according to means of transport 84
Growth in freight traffic according to region 84
Freight transport in Germany up to 2015 85
Road freight transport: Increasingly efficient, safe and clean 86
Investment per unit kilometre travelled 94
Development in fatality rates on motorways in Western Europe and the USA 98
German autobahn network 2020 – ADAC demands 99
Allocation of revenues from specific taxes on road haulage 101
Annual tax burden on a 40-tonne truck with trailer 102
Rejection of a toll on cars: The public is not counting on compensation 109
Environment and Technology
The automotive industry’s closed-loop environmental strategy 116
Trends in the Kyoto Protocol 116
Kyoto target: Debits and credits 118
Market-weighted fuel consumption (NEDC) of cars manufactured in Germany 121
CO2 emissions: Pledge made by the European automotive industry 122
Trends in CO2 emissions 122
CO emissions from road transport in Germany 1990–2020 124
HC emissions from road transport in Germany 1990–2020 124
NOx emissions from road transport in Germany 1990–2020 125
Particulate emissions from road transport in Germany 1990–2020 125
Ozone levels: Number of hours of exceedances in Germany have fallen sharply 126
Exceedances of the mean daily value for PM10 128
Fine particulate emissions in Germany 129
European exhaust emission limits for passenger cars 129
European emission limits for trucks and buses 130
Origins of fine particulate pollution in a Berlin street 131
Meteorological influences have a severe effect on PM10 levels 132
Diesel-engined passenger cars with a diesel particulate filter sold in Germany 133
Particulate size is dropping in emissions from modern engines 136
Further reductions in CO2 through new drive system technologies and new fuels 138
Diesel share of new passenger car registrations in Germany 138
Estimated AdBlue® demand trends in Europe 139
The route to regenerative fuels is a progressive one 140
10
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F
IGURES AND TABLES
Proportion of alternative fuels in Europe 141
Recycling quota makes weight-saving design difficult 143
IPP introduction timetable 145
Water consumption by vehicle manufacturing plants 146
Waste water discharged from vehicle manufacturing plants 147
Total waste generated by vehicle manufacturing plants 147
EU industrial electricity prices compared 148
Burden of state-imposed charges on the price of electricity 148
Index of notifiable industrial accidents in the German automotive industry 149
Safety and Technology
Safety innovations from 1978 until today 155
Accident statistics 156
Integrated approach to safety 156
Sensors to detect ambient conditions 158
Vehicle-to-vehicle communication 159
Stopping distances with and without brake assistant 162
Innovative lighting technology AFL (Advanced Forward Lighting) 164
Fields of view when taking a left-hand corner by day and by night 164
Dynamic hazard brake signal 166
Adaptive lighting management 166
Fields of view currently required 167
Fields of view required in the future 167
The digital control system 172
Registration certificate Part I 175
DIN 70070 – Qualitative Features of AdBlue® 179
Facts and Figures
Sales volume of the German automotive industry by manufacturer group 194
Workforce in the German automotive industry 195
Exports of automotive products (in million euros) 196
Imports of automotive products (in million euros) 197
Share of the German automotive industry in total economic expenditure on R&D and
gross investments 198
The ten largest automobile manufacturing countries in 2004 198
Freight transport in 2004 199
Passenger transport in 2004 199
Auto BUSINESS
BACKDROP
Auto
12
BUSINESS BACKDROP
The Future of the Automobile
Manufacturing Base in Germany
and the Opportunities offered by
the Globalisation Strategy
Automotive industry:
Linked to the German
manufacturing base but
at the same time a global
player
panies, particularly in Eastern Europe,
the economic competitiveness of the
German automotive industry worldwide
has greatly increased, and this has also
safeguarded employment in Germany.
The German automotive industry
is deeply rooted in the German manufacturing base. Germany is not only the
birthplace of the car; significant technical developments were also made here.
Germany is one of the most important
International activities:
Positive effect on the
German manufacturing
base
So not only exports but also a local
vehicle-producing countries in the
presence in the most important inter-
world. In 2004, 5.6 million vehicles were
national markets are of crucial impor-
produced in Germany, and to this can
tance for the worldwide success of the
be added 4.8 million vehicles of German
German automotive industry. As well as
brands manufactured abroad.
improving in the cost structure, international involvement also raises the repu-
In the last 10 years, the export quota
tation of Germany’s own brands. Local
has gone up from 55 to 70 percent. With-
investments, the passing on of expertise
out these exports, the employment level
and the creation of jobs all have a posi-
in Germany would be lower, and there
tive effect on the sales of associated
would be considerably lower investment
products, as many examples have shown
and lower expenditure on research and
(China, USA).
development. Without these exports,
the label “Made in Germany” would not
In parallel with the increase in
mean what it does today. However, with
international activities, the number of
a share of around 40 percent of export
people employed in Germany has also
proceeds, the low-cost sources of sup-
risen. This means that the argument that
ply developed in recent years in third
globalisation destroys jobs at home does
countries have also achieved a signifi-
not hold good for the German automo-
cant share in this success. Through the
tive industry. Jobs abroad – VDA mem-
involvement of German supply com-
bers employ a total of around 1.5 million
Annual Report 2005
Car exports and the increasing share of production abroad
13
countries belonging to manufacturers of
trailers, bodies and containers. Manu-
In billion euros
facturers of vehicle parts and accesCar exports
sites in 74 countries. There are also
71
ships and pure sales companies.
37
35
33
71
many cross-border projects, partner-
42
32
sories have a total of 1,758 production
71
69
67
65
61
60
58
57
55
Share of German production abroad
44
42
45
44
The success of the German supply
37
34
industry is based on a global presence
and proximity to their customers and
major markets. Companies must be
proactive in making use of the opportu-
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
19
94
nities offered by low priced production
Source: VDA statistics
sites abroad. Compared with 1996,
they have increased the number of
international involvements by 85 percent.
In contrast, the manufacturers of
trailers and bodies increased their international activities by 43 percent, and
people throughout the world – are
fered by globalisation – this is confirmed
vehicle manufacturers by 28 percent.
important in the world sales market and
by the latest VDA survey on the current
Between 1990 and 2004 the suppliers
are necessary for long-term market suc-
international activities of German manu-
have actually achieved growth of 188
cess. Sales in particular require a local
facturers and suppliers. With a total of
percent.
presence. Finally, brands win a much
1,959 operations, international involve-
better reputation with potential custom-
ment is at a record high: since 1996
ers, the public, the press and politicians
– that is, in less than ten years – the
if on-site involvement is recognised and
number of international involvements
Western Europe remains the focal
acknowledged.
has risen by 77 percent. At that time
region for the German automotive indus-
the VDA members had 1,105 foreign
try. However, its share of international
sites.
sites remained constant between 1990
Targeted international involvement
and 2004 at 34 percent. In contrast,
on the one hand, a clear understanding of the home manufacturing base in
Involvement in growth
areas
VDA member companies maintain
the importance of Central and Eastern
Germany on the other – this is the recipe
production plants in more than
Europe (including Russia, Ukraine,
for the success of the German automo-
80 countries throughout the world. The
Bulgaria, Romania etc.) has seen a sharp
tive industry.
automotive industry has a presence in
rise. Since the fall of the Iron Curtain,
all five continents. German automo-
the number of sites here has increased
bile manufacturers own a total of 147
fivefold.
Now around 2,000 foreign
sites
The German automotive industry has
made active use of the opportunities of-
assembly and production plants in 35
countries. Added to this are a further 53
assembly and production plants in 23
This is closely followed by the NAFTA
area with 333 sites. Here the presence
14
BUSINESS BACKDROP
of the supply industry in particular has
International locations of the German automotive industry
almost quadrupled. Involvement in the
Number of locations
rest of America has almost doubled
239
Western Europe
(158 companies in 2004 compared with
354
668
62
144
Central/Eastern Europe
87
NAFTA
79
Rest of America
25
China
With an increase of 440 percent as
349
compared to 1990 (from 25 companies
147
108
in 1990 to 137 in 2004), China is the
333
region with the most companies moving
in. The more than sixfold increase in
158
the presence of the German supply
67
137
140
Rest of Asia
industry has made a particularly large
contribution.
200
221
74
86
74
Africa
79 in 1988/1990).
1988/90
1996
2004
16
Australia/Pacific 16
18
This regional distribution of production sites allows the German automotive
industry to operate “natural hedging”.
The distribution of production makes it
possible to exploit cost advantages even
when they are subject to exchange rate
Regional distribution of international locations
In percent
Rest of
Asia
19
Africa
10
Australia/
Pacific
2
Western Europe
34
Rest of
Asia
11
Africa
4
Australia/
Pacific
1
Western Europe
34
China
7
China
3
Rest of
America
11
NAFTA
12
Central/
Eastern Europe
9
1988/90: 722 locations
Rest of
America
8
NAFTA
17
2004: 1,959 locations
Central/
Eastern Europe
18
Annual Report 2005
variations. At the same time, disadvant-
While manufacturing industry in
15
graduates, an increase of almost
ages resulting from changes in the
Germany as a whole had to suffer a
40 percent. This development shows
exchange rate affecting important sales
reduction in employment of 13 percent
that the availability and flexible em-
markets such as the USA can be offset.
over the last ten years, the automotive
ployability of highly qualified staff are
Even overcompensation is possible
industry saw an increase of around
increasingly important factors for the
to some extent, if advantages can be
one fifth (up by 130,000 workers). The
success of automobile manufacturing in
achieved through the purchase of prod-
automobile supply industry in particular
Germany.
ucts from the dollar-area.
proved to be the driving force behind
employment in Germany. If we include
The absolute figure for international
those indirectly employed (sale and use
sites has almost doubled since 1996
of cars), then a total of 5.3 million people
in almost all important regions of the
in Germany are dependent on the car –
world, that is in Western Europe, Cen-
one in seven of those in work.
The automotive
industry as a driving force
for investment and
innovation
In 2004, the automotive industry
again proved to be the most impor-
tral and Eastern Europe, the NAFTA
area and the rest of America, and in
Job factor qualification
tant force for innovation in industry. It
China.
In this respect, knowledge and expertise
has invested more heavily than other
are crucial factors for success in the
industries in the German research base.
competitive environment. So the trend
It has invested disproportionately high
towards an ever-higher qualification
amounts both in research and devel-
in the current publication “International
profile for employees in the German
opment and in R&D personnel: at just
Activities of the German Automotive
automotive industry reflects Germany’s
under 17 billion euros, the car industry
Industry”. The book can be purchased
role at the heart of a worldwide produc-
accounts for a good third (36 percent)
from
tion network and as a centre of research
of all the R&D expenditure of German
broschueren_aussenwirtschaft@vda.de.
and development.
industry, 28 percent of researchers and
A summary of the international
involvement of VDA members is given
developers in industry work on cars.
This can be confirmed by a few im-
Positive employment trend
for German automotive
industry
The positive effects of the active glo-
One job in every nine in the automotive
pressive statistics. While the number of
industry is located in the field of innova-
workers employed in the automotive in-
tion. According to the most recent data
dustry increased by 14 percent between
available on patent statistics, German
1994 and 2004, the number of salaried
companies had a clear lead with over
balisation policy of German automotive
employees rose by 40 percent. Within
3,300 European patents in the automo-
companies can also be seen at home, as
this group, the numbers of university
tive sector.
international involvement does not nec-
and college graduates in particular rose
essarily mean “either/or” for the German
by a disproportionate amount. Accord-
In 2004 Germany also received
companies, but usually “both…and”.
ing to the data provided by the Institute
lasting benefits from investment in
This is because combining production
for Employment Research of the Federal
the automotive industry. At 11.9 billion
from domestic and foreign sites enables
Employment Services, in the period from
euros, the German automotive industry
many companies to increase their inter-
1999 to 2003, 34.3 percent more aca-
is one of the most important investors
national competitiveness and thus help
demics were employed in the automotive
in the country. Last year its share of the
to safeguard the German manufacturing
industry. Automobile suppliers employed
total investment expenditure of German
base.
an exceptionally high proportion of
industry reached 25 percent.
16
BUSINESS BACKDROP
Future Challenges for German
Automotive Manufacturing
■ Labour market. According to the
international definition, the German
unemployment rate is far above
the EU-15 average. Moreover, from
1990 to 2002, with a growth of only
around 3 percent, Germany (together
Germany compared with
the global manufacturing
base
Foreign sites are not only an important factor for the global competitiveness of the German automotive industry,
right can a climate of growth and invest-
with Denmark and Italy), achieved
ment come about.
the lowest rise in employment of all
the EU member states.
New impetus for growth
needed in Germany
For more than a decade now,
■ National budget. For the last three
years Germany has not once met the
they also pose challenges to the sites
Germany has been performing less and
Maastricht criterion of a maximum
in Germany. Germany is faced with
less well in almost all international
of 3 percent new borrowings. The
increased international competition for
comparisons. With around 5 million
debt-mountain has grown from
new investments and job creation.
unemployed, 40,000 company bankrupt-
40 percent of gross national product
cies a year, a deficit of billions in social
in 1991 to almost 65 percent – here
In comparison with other countries,
welfare insurance, ever-increasing
too the Maastricht requirements
labour costs and taxes in Germany are
national debt and deficits in education,
have not been met for many years.
high. However, the German manufactur-
Germany has a number of challenges to
ing base is also distinguished by its high
face. Lastly, dynamic international eco-
productivity, largely due to the strenuous
nomic growth has become a thing of the
a number of taxes have immediately
efforts made by the industry. According
past. Without exports, growth in recent
been (over)compensated for through
to current calculations by the University
years would have been considerably
tax increases in other areas and the
of Munich (LMU), per capita productivity
lower or even negative. As calculated
increasing burden of provision for
growth in Germany has risen from 0.7 to
by the Institut der deutschen Wirtschaft
retirement and health. The firmly
1.2 percent in the last three years. This
Köln (Cologne Institute for Business
established expectation of further
is also true of the international activities
Research, IW), during the 1990s the
increases in taxation is a lasting bur-
of German companies: importing low-
Germans slipped from fourth to eighth
den on domestic economic activity.
priced primary products has enabled
place for pro capita gross national
production as a whole to be made more
product in the EU-15 rankings. There are
efficient. According to calculations by
many reasons for this.
the Deutsche Bank, unit labour costs in
Germany in 2004 fell by 1.8 percent – the
■ Taxes. The most recent reductions in
If the domestic economy had grown
as fast between 1991 and 2003 as, say,
that of the USA (i.e. a total of 46 rather
■ Economic growth. In every single
than 16 percent), the price-adjusted
biggest reduction within the Eurozone
year since 1993, German growth has
GNP per inhabitant in 2003 would have
countries.
remained below the EU average. In-
been almost 3,500 euros higher than
deed, more than once Germany has
was actually the case, according to the
finished in last place. The stagnation
IW’s calculations.
However, efforts to improve productivity should not be restricted to the
from 2001 to 2003 was the longest
companies and their employees alone.
since the founding of the Federal
Only when the business backdrop is also
Republic.
However, more growth and prosperity
do not come without a price. To achieve
Annual Report 2005
them, the state must improve the condi-
■ Logical consideration of competi-
17
that the German manufacturers and
tions for investment, consolidate its ex-
tiveness in the development of new
suppliers had secured for themselves
penditure and invest in more provision for
regulations at national and suprana-
by early involvement in Eastern Europe
the future by individual citizens. Legisla-
tional levels,
and the associated low-price procure-
tors, unions and management have been
ordered to further increase the flexibility
of working hours and pay.
ment mix is shrinking. The price-sensi■ Modernisation and expansion of the
transport infrastructure in Germany,
tive segments of small cars and the
lower middle range in particular have
come under increasing pressure from
Better business backdrop
required for the automotive
industry
Until now, the huge progress in the
■ A calculable development of environmental and safety regulations
that foreign competitors with new
synchronised with the industry’s
production sites in Eastern Europe have
development cycles.
targeted at the Western European mar-
globalisation of vehicle production by
German manufacturers and the expansion of German supply companies that
took place in the 1990s has been a success – both for the companies and for
their employees in Germany.
the competition through the offensive
ket as a whole and the German market
Continue to increase
flexibility, reduce labour
costs
The German automotive industry’s
in particular.
These factors, together with cost
increases on the raw materials side,
globalisation strategy has been suc-
over which they have very little active
cessful in positioning it in the inter-
influence, mean companies are forced
national market. However, we must
to use all available leverage to further
the future of automobile production in
not overlook the fact that the pressure
reduce production costs in the German
Germany show that this can only remain
of costs on automobile production in
manufacturing base. Since 2004, the
so if the performance of the German
Germany has greatly increased for vari-
established system of collective wage
manufacturing base improves long term.
ous reasons. Firstly, stagnation in the
agreement regulations and additional
The business backdrop of wages, ancil-
German car market has contributed to
benefits has offered little room for
lary wage costs and business taxes and
putting pressure on the relative value of
manoeuvre when implementing the
the efficiency of the German educa-
Germany in the international portfolio of
measures necessary for safeguarding
tion system must keep pace with the
the automotive industry. Between 1994
the production base and employment in
increased speed at which competitive
and 2004, production in Germany only
the German automotive industry.
locations are making themselves more
increased by 27 percent, and domestic
attractive to investors from the automo-
sales by 67 percent. By contrast, exports
tive industry. In the opinion of the VDA,
rose by 62 percent, foreign car produc-
when the Pforzheim wage agreement
the following points are particularly
tion rose by 149 percent and foreign
at the beginning of 2004 created the
important:
sales in the sector rose by as much as
option of not only being able to reach
168 percent.
industrial agreements in the light of
However, the current discussions on
■ Greater flexibility over pay and working hours,
It therefore set an important course
existing difficulties and thus being able
In addition to these market factors,
to depart from wage standards, but also
the investments made by Japanese,
being able to react much earlier to any
Korean and even French competitors
risks to competitiveness. Against this
costs and the taxation burden on
in sites in the new EU member states
background, in 2004 a whole series of
companies,
show that the “first mover advantage”
agreements were reached at company
■ Further reduction of ancillary wage
18
BUSINESS BACKDROP
and industry level that allowed employ-
also contributed to the acceptance
company tax in respect of rates calcula-
ment in Germany to be safeguarded, or
of the negotiated packages by the
tion, Germany, with its unemployment
at least enabled the extent of unavoid-
workforce, as have the contributions
rate of over 10 percent, must urgently
able redundancies to be considerably
of management and executives.
set about tackling a sustainable reform
reduced. So far, of the 200 or so cases
where the Pforzheim saving clause has
of company tax law to give a considerThe VDA has emphatically sup-
been used, around 30 percent are ac-
ported the policy of opening up the
counted for by the automotive industry.
wage agreement system and making the
parameters determining labour costs
Under the workplace safeguarding
able reduction in tax revenue and a
simplification of the system.
In recent years in Germany, dis-
more flexible. The current development
cussions took place that were mainly
agreements, a large number of German
also shows that the pressure for even
concerned with income tax and its rate
sites of importance for the safeguarding
greater efficiency in automobile produc-
structure and produced no tangible
of competitiveness were able to receive
tion in Germany will continue to grow. It
result in the sense of a radical reform
a considerable amount of help.
is all the more important to make active
– if we ignore the changes to the length
use of every option to reduce unit labour
of time of the wage agreements, which
costs in future as well.
were in any case long overdue, because
■ Measures for offsetting the latest wage rate agreements against
industry-wide pay components, the
cancellation of special payments,
and even the already agreed reduc-
taxation of income from capital was
Tax burden on companies
should be reduced
Comparisons show that the tax
not in linear progression. In a countermove, companies were confronted with
changes that cannot be reconciled with
tion of future agreements all directly
burden on companies in Germany is
basic constitutional requirements on
lower labour costs.
higher (at around 38 percent) than
norms, such as so-called minimum taxa-
in other European states and in the
tion, resulting in consumption of capital
■ The extension of working hours
rest of the world. As a consequence
by the treasury or the reform of the
corridors without extra costs and
of the lack of harmonisation of the tax
taxation of shareholder debt financing,
making weekend working easier
systems in Europe, the way in which
which has harmed Germany – especially
considerably improve companies’
the type and amount of “public taxes”
as a holding location.
efficiency.
is linked to labour costs or the qualification of employees and infrastructure
■ Increased flexibility of transfers,
Fortunately there have recently
in any state is of significant importance
been deliberations and assessments
moving further training measures to
for its economic power and positive
in politics and science (Sachverstän-
free time and shortening breaks makes
growth.
digenrat (Council of Expert Advisors),
adaptation to the needs of the company easier and also increases the
“Stiftung Marktwirtschaft” (“Market
Most EU member states recognised
Economy Foundation”)), on reaching an
this long since, and passed drastic tax
early “genuine” reform of company taxa-
reduction laws. By way of comparison:
tion. In doing so, from the point of view
Poland has an attractive rate of 19 per-
of the economy, elementary economic
in the factories under realistic condi-
cent, Latvia 15 percent, and in Estonia
principles and the background condi-
tions and promises of training and
reinvested profits are not taxed at all.
tions laid down by Europe and constitu-
social welfare arrangements in the
As decisions on location are particularly
tional law must be taken into account.
case of unavoidable job losses have
dependent on the effective amount of
This includes, for example, a ban on the
efficiency of the workforce input.
■ Promises to safeguard employment
Annual Report 2005
19
retroactive effect of tax intensification
with the basis of neutrality of taxation
of the state – and because of interest
interventions, strict adherence to the
and represents an intervention in the
payments for delayed reimbursements
efficiency principle, the long-term reli-
financing freedom of the company.
for foreign deliveries. Here we should
ability of legislation and not overburden-
Medium-sized businesses are particu-
think about replacing VAT throughout
ing the financial sector with the risks of
larly affected by this, as shareholder
Europe with a cumulative all phase tax
a shortfall in tax revenue.
loans are often made to them, which
at a very low rate (e.g. 2 percent). This
are converted into disclosed chan-
would have the side effect of leading
nelling of profits.
to a considerable incentive in the case
The way of safeguarding economic
efficiency includes, in particular, bringing about neutral incidence of tax, root-
of low production and the risk of deficit
A further component of a modern
would become insignificant. At the
ed in substantive law, on various legal
company tax law is the substitution of
same time, the principle of the country
forms of business organisations. Over
the current group taxation regulations
of origin should be brought in through
90 percent of businesses in Germany
by a group tax that would also have to
the whole of Europe.
are “Personenunternehmen” (one-man
apply to cross-border cases. Instead of
businesses and partnerships), which,
the profit and loss transfer agreement,
in contrast to “Kapitalgesellschaften”
in the case of a minimum interest (e.g.
cussed, the well-worn phrase of exten-
(companies), must not be disadvantaged
50 percent), there is the option of group
sion of the basis of assessment and
as far as tax is concerned. For this,
taxation. In the case of transfer of as-
reduction of rates come up again and
adaptations are needed, perhaps
sets, taxation should only start when the
again in the debate. From the eco-
by making the rates of income and
assets leave the group.
nomic point of view it should be noted
corporation tax the same when determining the assessment basis and when
Whenever tax reforms are dis-
that this already produced advanced
Another important point is the
concessions under tax reduction law in
taxing withheld and distributed profits.
reform of the tax system for pension
In particular, the abolition of trade tax
contributions. The system must make it
So trade and industry should not – by
and the integration of its local financing
possible to have retrospective taxation in
being called on yet again to subsidise
function into the two main types of tax
all kinds of companies under compar-
the tax shortfall – be asked to foot the
is an essential step. Particular atten-
able conditions.
bill in order to keep up the appearance
tion must be paid to the lowering or the
previously discussed possible exemption
1999/2000/2002, and even before then.
of achieving lower tax rates. It is the
Turnover tax, theoretically the tax
effective tax burden as a product of the
from inheritance tax when a company
on consumption, so only conceived for
basis of assessment and rates that pre-
continues to be run by the heirs.
companies as “transitory items”, also
vents entrepreneurs in Germany from
requires fundamental changes in con-
making direct investments. How heavy
nection with company tax reform. The
the tax burden in a future location will
be tax neutrality in respect of company
impenetrable web of regulations and
be can be verified by companies with-
financing. The amount of taxation should
exceptions is a burden on companies
out further ado.
in future no longer depend on whether
not least because of the bureaucratic
the company is predominantly financed
effort they must expend in order to
by equity capital or loan capital.
keep the risk of revenue deficit, which
Germany, it must eliminate the inconsist-
in Germany alone is estimated at 15 bil-
encies between the taxation of capital
lion euros, as low as possible – some-
and personal companies. It is hoped
thing that should actually be the task
that this Herculean task can be accom-
Furthermore, there must eventually
For example, the taxation of shareholder loan financing is not compatible
If it comes to a radical tax reform in
20
BUSINESS BACKDROP
plished during the coming legislative
European Union should be stopped. It is
insufficient heed was paid to the in-
period.
more than just a mere blemish that the
teraction between the individual legal
biggest net payer indirectly subsidises
provisions. As a result, the cumulative
In general, Germany should continue
the benefit recipients in the fringe states
costs of the regulation for the automo-
to insist to Brussels that rejections on
and thus finances the reduction in its
tive industry were high and potentially
the grounds of tax dumping within the
own prosperity.
made up a very high proportion of the
costs of a new car.
The paper therefore recommends
Industrial and Tax Policy in the EU
that clear policy goals and priorities
should be formulated, that the industry
should be involved at an early stage in
the drawing up of legislation, that retro-
At a summit meeting in Lisbon
Commission strategy. But above all, the
spective measures should be avoided,
in 2000, the EU Heads of State and Gov-
Commission also considers improve-
sufficient lead time and transitional peri-
ernment set the target of making Europe
ment of the regulatory environment for
ods should be laid down, that the times
into the most dynamic and competitive
companies to be an important part of
when the various pieces of legislation
economy in the world by the year 2010.
improving the prospects for growth. In
come into force should be coordinated,
It has long been clear that this target will
this it is taking up a key demand of Euro-
all proposals should be subjected to a
not be achieved. The so-called Lisbon
pean industry – especially the automo-
comprehensive impact assessment, alter-
Process was too weighed down by a
tive industry – which has already been
natives to legislation such as voluntary
plethora of targets, and the policy was
asking for a better quality of legislation
agreements should be tested, worldwide
too incoherently directed at the target of
in Europe for a long time.
harmonisation of technical regulation
growth and employment at both com-
should be sought and a systematic
munity and national level.
Better regulation in focus
Competitiveness of
European industry must
have priority
ated with the EU Council of Ministers. In
This demand had also been associ-
For this reason we should welcome
the fact that the new EU Commission
evaluation of legislation should also be
carried out after it has come into force.
November 2004, a discussion paper on
The Council of Ministers welcomed
the cumulative effects of regulation on
the conclusions and recommendations
the competitiveness of the automotive
in the paper. According to the Presi-
industry was presented to the Council.
dency of the Council in its summary of
that has been in office since November
the discussion in Council, it showed that
2004 considers the promotion of growth
This paper had been prepared by a
the competitiveness of the automotive
and employment and the strengthening
group of member state experts chaired
industry could be improved through a
of European competitiveness as a focal
by Germany in close dialogue with the
predictable regulatory framework and
point of its work. The completion of the
automotive industry. The outcome was
that in the case of new proposals an
single European market, an increase in
that in the case of proposals for EU
impact assessment taking cumulative
expenditure on research, the promo-
regulation there was often insufficient
effects into account was necessary. The
tion of innovations, open markets and
prioritisation and too many regulations
ministers agreed that the conclusions
expansion of the European infrastructure
and directives were adopted too closely
were a good basis for future work and
are the elements of a corresponding
after one another. In consequence,
forwarded the paper to the Commission.
Annual Report 2005
The situation in the automotive
21
of the European automotive industry.
tiatives in the automobile field are better
industry was also one of the central
In order to do this, it should advise
coordinated and the cumulative effects
themes of the most recent competitive-
about and discuss optimal forms of
of different regulations on the costs and
ness report from the Commission. In this
regulation and how to enhance the
competitive position of the automotive
it was noted that the regulatory pro-
predictability of regulation in order to
industry are taken into consideration.
cesses in Europe must be improved with
create the conditions in which the in-
a view to transparency, predictability,
novations of the European automotive
early involvement of all those affected
industry can achieve an international
tory framework must be to respect the
or consideration of cumulative effects.
pioneering role and associated competi-
necessary lead time for the implementa-
In addition it was noted that, because of
tive advantages.
tion of new requirements by the industry.
The most cost-efficient way is generally
different tax regulations in the individual
member states, the single European
Another part of an optimised regula-
The industry welcomed the setting
to bring in new requirements when a
market for vehicles in particular was
up of the high-level group. However,
new model is about to be launched on
still too fragmented, so that greater
it will now come down to achieving
the market anyway. Retrospective reper-
tax harmonisation was to be urged.
concrete results and not just following
cussions on model series that have al-
Further recommendations concerned
up the current paper with another one.
ready been launched should be stopped,
the improvement of access to foreign
And above all, it will then be necessary
as this often leads to disproportionately
markets, especially through the con-
to put it into practice and take care that
high costs resulting from the modifica-
tinued removal of non-tariff trade bar-
it actually leads to positive changes in
tions needed. Moreover, it should not be
riers and increased efforts to extend the
everyday operations in Brussels and
the legislator’s role to prescribe specific
road infrastructure.
a reduction in the cumulative costs of
technical solutions. Regulation should
regulation for the industry.
therefore be restricted to prescribing
EU Commission sets up
Group CARS 21
The Commission has tackled these
targets and remain technologically neuSo we need to draw up a checklist of
tral.
requirements for a regulatory framework
requests and recommendations put
that will promote the competitiveness of
It is also important that European
forward on various sides and at the start
the industry. The first prerequisite here is
regulation takes account of the require-
of the year it set up a high-level group
the clear setting of priorities. Until now,
ments in other parts of the world, as
on the competitiveness of the automo-
EU policies in the automobile field have
there is otherwise a danger of vehicles
tive industry. The group operates under
often simultaneously pursued contradic-
being produced under the regulatory
the name CARS 21 (Competitive Auto-
tory goals. For instance, requirements
conditions in Europe with properties
motive Regulatory System for
in the area of road safety or exhaust
for which there is no demand in other
the 21st Century). Its members include
emission purification sometimes lead to
markets and for which people are not
representatives of the automotive
increased vehicle weight, which clashes
prepared to pay. Against this back-
industry, the Commission, the member
with the target of reducing consumption
ground, the automotive industry is also
states, the European Parliament, the
and CO2 emissions. So an integrated
firmly in favour of global harmonisation
automobile clubs and the trade unions.
approach is needed, that will consider
of technical requirements for vehicles.
Its task is to draw up, by the end of the
this kind of conflict of goals right from
Furthermore, individual member states
year, recommendations for a regulatory
the start and include them in the decision-
must also be prevented from implement-
framework that can contribute to an
making. This kind of integrated approach
ing EU legislation in different forms. For
improvement in the competitiveness
can also help to ensure that political ini-
this reason, legislation in the automobile
22
BUSINESS BACKDROP
sector should be based on Art. 95 of the
of the costs of new regulation with its ben-
of road transport taxation. The Federal
EU Treaty, which requires uniform im-
efits. We must also test whether measures
Government and the Bundesländer
plementation of directives with a view to
in other sectors would produce a com-
have come to an understanding in the
maintaining the single European market.
parable benefit at a much lower cost to
Federalism Commission to exchange the
the economy as a whole. Finally, we need
circulation tax that until now has gone to
Within the framework of the proceed-
early involvement of the affected sectors
the Bundesländer for the insurance tax.
ings of CARS 21, these are the kind of
in the impact assessment process. It will
Regardless of whether there is an overall
criteria that should be used for testing
certainly not be sufficient to meet the re-
agreement with respect to a federalism
existing and planned regulations. For
quirement for involvement just by carrying
reform at a later date, it is conceivable
example, a test of this kind should be
out an Internet consultation. There must
that both sides could implement this
brought in for measures planned in the
be an opportunity for true discussion and
kind of exchange of taxes separately.
areas of exhaust emission purification,
a real exchange of ideas.
This could be the occasion for discuss-
pedestrian protection, vehicle taxation or
the future climate protection strategy of
the EU in the field of road transport. For
this it is necessary to find a reasonable
ing a more extensive reform of taxation
Simplification of legislation
an ongoing task
However, the improvement of the
specifically affecting road transport.
Perhaps the abolition of circulation tax
and making it part of fuel tax or even the
balance between societal goals such as
quality of future legislation must not
introduction of a car toll instead of vehi-
environmental protection and road safety,
be the sole focal point of European
cle tax would be brought into the debate
technical feasibility and economic reali-
politics. It is also important to tackle
by various parties. However, it should be
ties. But in addition, the test should cover
the simplification of existing legislation.
noted that in the light of existing Euro-
proposals already made, such as the draft
For this purpose, the Council of Minis-
pean legal requirements, the abolition
directive on design protection for spare
ters drew up a list of priorities last year
of circulation tax for HGVs would not be
parts and – in the sense of a simplifica-
and asked the Commission to take the
possible.
tion and optimisation of the legal frame-
corresponding initiatives. Among the
work – also cover existing legislation such
legal provisions listed by the Council are
as the end-of-life vehicle directive.
directive 71/320 on braking systems and
of vehicle tax, its conversion to a CO2
directive 76/756 on lighting and light
based tax is also under discussion. This
As well as considering the abolition
signalling systems. Here we need to be
is also a component of the coalition
future regulation is always subjected to
sure of a direct application of UN-ECE
agreement for the current legislative
a competitiveness test in respect of the
regulations and the adaptation of EU
period, but in the light of the advice of
above criteria is a comprehensive impact
provisions to these requirements. This
the Federalism Commission and the
assessment. In order to ensure objective
year the Council of Ministers might put
discussion about using taxation to pro-
testing of proposals, this kind of impact
together a further list of provisions that
mote particulate filters, this idea was not
assessment should be carried out in the
need to be simplified. From the point of
immediately followed up.
Directorate-General of the EU Commission
view of the automotive industry, the ELV
responsible for industry and competitive-
directive has particular potential for this.
One instrument for ensuring that
ness. As part of this, the possibility of
alternatives to regulation (e.g. voluntary
agreements) should also be tested. The
requirements existing outside the EU must
also be covered, as well as a comparison
Circulation tax in Germany
under discussion
German circulation tax has become
the centre of the discussions on a reform
EU proposal for a CO2
component: Revenue
neutrality a prerequisite
In autumn 2002, the EU Commission
published a communication on a reform
of vehicle taxation in the EU, in which
Annual Report 2005
23
the increased introduction of CO2 ele-
a disproportionate burden on particular
taxation on the basis of CO2 emissions
ments into circulation tax was also put
classes of vehicle or segment such as
of cars. These proposals would have hit
forward for discussion. On the basis of
vehicles with bigger engines must be
imports in the premium segment par-
this communication, an Internet consul-
avoided. The tax rate must be in direct
ticularly hard. A European directive that
tation on the proposals was carried out
linear relationship to CO2 emissions. In
would allow this kind of discrimination
last year.
addition, the VDA points out that in the
through vehicle taxation is very much
past, tax incentives had proved to be a
disapproved of. The EU Commission is
particularly good instrument of control,
requested to continue to test national
mission, the VDA made it clear that,
when they were given in the form of tax
initiatives, such as those currently being
whatever happened, if there were to be
exemptions and reductions and led to
discussed in Italy, for compatibility with
a change in taxation affecting transport,
a decrease rather than an increase in
the principles of the single European
any additional burden on motorists was
payments. All proposals for a change
market and freedom from discrimina-
to be avoided at all costs, in view of
in vehicle taxation must be measured
tion.
the size of the existing fiscal burden on
against this prerequisite.
In stating its position to the Com-
mobility. The huge additional burden
placed on motorists by the ecological
tax reform introduced in Germany had
Prevent discrimination
It is to be feared that, in its pro-
Abolition of purchase tax
has priority
The automotive industry also re-
already led to more and more replace-
posal announced for this year to
grets the fact that, with the gearing of
ment investment being postponed. The
introduce CO2 elements into taxation,
circulation tax to CO2 only, one aspect
process of renewing the vehicle fleet
the Commission will not place similar
of the EU Commission’s proposals
with modern, economical, low-emis-
constraints on member states and will
for reform might be implemented. The
sion vehicles has been considerably
allow them very great freedom in their
gradual abolition of registration taxes in
slowed down by the increased burden
tax arrangements. However, the Ger-
the EU, which was also proposed, must
of the citizens’ “mobility budget”. The
man automotive industry regrets the
not be allowed to vanish into oblivion,
increase in the average age of the car
way in which a number of European
as, from the automotive industry’s point
fleet shows the growing gap between
countries are already using ecologi-
of view, this plan is a clear priority.
the “state of technology” and the actual
cal and other arguments to target the
The existence of vehicle registration
condition of vehicles. Any change in
buying and running of particular types
taxes at a rate of up to 180 percent in
vehicle taxation must therefore take
and classes of vehicle for increases
individual member states is one of the
place under conditions of strict revenue
and thus hold down the sales of these
most important causes of the differ-
neutrality.
specific categories.
ences between the pre-tax prices of
new cars in the EU and is incompatible
Avoid market distortions
A readjusted tax system must
In the view of the VDA, vehicle taxa-
with the basic idea of the single Euro-
tion on the basis of CO2 must not be
pean market. The automotive industry
not be allowed to disadvantage any
allowedto lead to structural intervention
is conscious of the fact that the total
particular technologies because of a
in the vehicle stock. So the VDA also
abolition of vehicle registration taxes
political evaluation of their ecological
emphatically welcomed the Federal
cannot happen overnight, but must be
effectiveness. So there must be no dis-
Government’s procedure against the
carried through gradually. However it
crimination against particular types of
French government’s proposals dis-
is high time a start was made on this
vehicle or the diesel engine; any arbi-
cussed last year – but not immediately
almost 15 years after the creation of the
trary determining of taxation classes or
pursued – for a bonus malus system of
single European Market.
24
BUSINESS BACKDROP
Worldwide Reduction
of Trade Barriers
licences, additional duties on imported
vehicles, barriers to investment and
discriminatory technical and other
requirements. If the Doha Round is to be
seen as a success, it must deliver visible
Free trade is a basic
prerequisite for export
success
The figure of 3.6 million cars exported from Germany in 2004 makes it
World trade at the
crossroads: WTO
Ministerial Conference in
December 2005
Since the start of the Doha Round, the
improvements.
Automotive industry badly
hit by trade barriers
The automotive industry is one of
clear how important it is for this country
German automotive industry has support-
the sectors that is hardest hit by tariff
to encounter open markets all over the
ed the aims of the WTO. The dismantling
and non-tariff trade barriers worldwide.
world. Closed borders, tariff and non-
of trade barriers in particular is seen as
In a number of countries, especially
tariff trade barriers restrict sales opportu-
the most important task of the WTO. This
developing countries, it is confronted
nities and promote local involvement in
should not be impeded by other activities,
with extremely high rates of duty, as
manufacturing bases outside Germany
as might be the case with special treat-
well as a whole bundle of non-tariff
that would not otherwise be competitive.
ment of as yet undefined “environmental
trade barriers.
Customs duties, taxes and administra-
values”. The successful conclusion of
tive barriers to imports make imported
the Doha Round is fraught with many
products so much more expensive that
difficulties, especially in the WTO with
for the desired method of negotiation,
they are no longer able to compete in
its 148 members representing a wide
especially possible sectoral negotiations,
the market, and force companies into
variety of interests. Hopes now rest on
so the German automotive industry
local production, which in other circum-
the coming sixth WTO ministerial confer-
– like its European partners – has always
stances would not be competitive.
ence, which will take place in Hong
expressed itself in favour of sector-wide
Kong in December 2005.
negotiations. A horizontal, ambitious for-
This particularly affects the request
mula for the abolition of customs duty
The German automotive industry has
therefore been campaigning for many
The VDA is actively involved in the
years for a worldwide liberalisation of
preparations for this important confer-
barriers throughout the world. How-
international trade. This would not only
ence. As well as our fundamental WTO
ever, the following points are crucial for
increase prosperity in many different
position paper from 2003, together with
success from the automotive industry’s
parts of the world. Free trade also has a
our members and European partners we
point of view:
positive effect on the German manufac-
have drawn up further proposals, includ-
turing base. If a foreign market is open
ing one on non-tariff trade barriers.
to imports, full use can be made of the
Situations that are incompatible with WTO
structure it would not be very
advantages of the German manufactur-
rules should be reported by companies
sensible for the European automo-
ing base. Scenarios that suggest free
through the VDA and its partner or-
tive industry to negotiate just for the
trade is responsible for job losses should
ganisations, so that there may be an
dismantling of tariff trade barriers. At
be looked at in a different way, as it is
opportunity of abolishing them through
the same time as customs duties, the
not free world trade, but rather unfair
the mechanism of the WTO. Examples
non-tariff barriers must also be in-
competition and high manufacturing
of such trade barriers are complicated
cluded in the negotiations and given
costs that restrict investment and jobs.
customs formalities, import quotas and
equal importance. Binding rules
is the best way to dismantle tariff trade
■ In light of the world customs duty
Annual Report 2005
should be agreed for non-tariff bar-
The combination of a general formula
25
respect of the worldwide harmonisation
riers. Countries must be prevented
for the reduction of duty and possible
of vehicle registration standards and the
from abolishing customs duties and
exception regulations for less developed
application of the UN ECE standards. In
at the same time raising or introduc-
countries should not mean that there are
the area of technical requirements, there
ing taxes on cars.
no improvements for the automotive indus-
are some arbitrary decisions that are un-
try. This is all the more true because the
ambiguously directed against imported
■ We must ensure more strongly than
automotive industry in these countries is
vehicles. In order to dismantle these
hitherto that all WTO members keep
certainly part of the sector to which any
barriers, the VDA has come to the WTO
to the agreements. The current
exceptional options for the retention of
negotiations with its partners at national
existence of many non-tariff barriers,
high rates of duty might be applied. But
and international level.
even in cases that should no longer
at the same time, there are also a large
exist according to existing WTO
number of considerable non-tariff trade
rules, seems to require that enforce-
barriers in these countries.
for ensuring worldwide harmonisation
ment be improved.
Abolition of customs duty
needed in major developing
countries
With the UNO agreements of 1958
and 1998, legal instruments are available
Demand for further
liberalisation of
investments
of registration procedures. The 1958 UN
ECE agreement is applied by more than
40 states throughout the world. Accord-
The WTO member states should
ing to the existing 115 ECE regulations
pledge themselves to further consider-
for the certification of road vehicles or
consider reductions in current import
able improvements in the zone of validity
their parts, almost worldwide certifica-
duties for vehicles or parts in a number
of the TRIM agreement (TRIM = Trade-
tion of vehicles is possible.
of developing countries in Asia (espe-
Related Investment Measures). For
cially India, Thailand, the Philippines,
instance, the restrictions on companies
Malaysia and Indonesia) with high
moving in and on cooperation between
based on the principle of type authorisa-
rates of duty to be very important for
foreign and domestic vehicle manufac-
tion and as the USA in particular, because
sharpening the competitiveness of the
turers that still exist even after China
of its legal practices intends to use self-
automotive industry in these increas-
joined the WTO or were introduced by
certification, the 1998 agreement – the
ingly important markets: in Thailand, for
the policy, and also the measures for
so-called global agreement – was created.
example, the import duty on cars is 80
actually enforcing the localisation of
The Triad countries – USA, Japan and the
percent and in Indonesia between 25
the production of important vehicle
European Union – were the originators
and 60 percent. In a few countries
components, are not compatible with
and the first signatories of this agree-
duties are being reduced, but other
the overall goals of a comprehensive
ment. In the meantime the first global
levies are being considerably raised:
liberalisation of trade, nor do they make
regulation was agreed (see also the
for example, in 2004, the import duty
use of the rapid development of the lo-
subsection “Technical Harmonisation” in
on cars in Malaysia was still between
cal market to a high technical level.
the section “Safety and Technology”).
Manufacturers and suppliers
As the system of ECE regulations is
80 and 200 percent, depending on
capacity. Though these customs duties
reduced to a uniform 50 percent in
2005, the excise duties were raised at
the same time and now lie between 90
and 250 percent.
Global technical
harmonisation must be
continued
Finally, the WTO Round should also
bring about considerable progress in
The automotive industry sees great
potential in the worldwide harmonisation
of technical requirements, especially as
small differences in vehicle versions for
different target markets lead to avoid-
26
BUSINESS BACKDROP
able costs without added value for the
abolition of and policy on customs duties
tion. As a consequence of international
customer. The aim is “tested once – ac-
and campaigns for an improvement
competition for manufacturing sites it
cepted everywhere”. Even if the registra-
in the background conditions. As well
must also be noted that agencies for the
tion systems were not to be completely
as its trade policy activities, the VDA
promotion of investment from all over
harmonised to begin with, harmonisation
supports its members by making avail-
the world seek contact with the German
of the test procedures as such would
able information on foreign markets.
automotive industry – proof of the sec-
already be an important step in the right
We offer special information events on
tor’s attractiveness as a driving force for
direction associated with measurable
interesting markets, such as recent-
economic development.
cost savings, without affecting environ-
ly on Russia and Iran. In 2005, we are
mental protection or safety targets. As
offering events on Turkey, India and
a prospering market, China has already
Thailand.
signed the 1998 global agreement.
share in German shared stands at foreign
The VDA makes information avail-
Nevertheless, the fact that the global
To facilitate market access, the VDA
offers its members the opportunity to
trade fairs. The foreign trade fair pro-
able in the form of market data, special
gramme promoted by the Federal Min-
agreement only contains a single regula-
legal features or even by passing on
istry of the Economy and Labour offers
tion must not be overlooked. So as a
contact addresses. Conversely, many
companies the chance to participate in
first step, the best approach would be
foreign companies approach the VDA
fairs at reduced prices and under easier
the recognition of the 1958 agreement,
with requests for cooperation. In ad-
conditions, such as organised setting up
as this already presents all the required
dition, foreign economic and political
of stands and common meeting rooms
regulations. The second step, that of
delegations visit the VDA, to exchange
and communications equipment (cf. also
actual worldwide harmonisation, could
information and intensify coopera-
“The Parts and Accessories Industry”).
then follow.
Improvement of market
access: VDA trade policy
activities
As part of its trade policy activities,
the VDA is campaigning for a worldwide improvement in the business
background for the automotive industry.
Factors adversely affecting the
World Economy: Currency Rates and
Raw Material Prices
The members of the Committee for
International Trade and World Economic
Questions (IHW) are concerned with
matters such as trade policy, and the
working group on trade policy, supported by the IHW and other interested
Developments in raw
material prices: A burden
on the automotive supply
chain
sheet metal between 50 percent and
70 percent. The price index for iron ore
and scrap rose by almost 40 percent
in 2004 compared to the previous year.
The year 2004 saw a steep price in-
However, because of the change in the
and positions on current questions of
crease in raw materials for the automo-
calculation procedure used by the steel
market access in third countries. The
tive industry that was unique in recent
producers, their customers were bur-
VDA working group on customs matters
decades. Prices for steel long products
dened to a much greater extent. At the
works on all topics connected with the
rose by up to 120 percent, and for
same time, developments in the crude
member companies, prepares data, facts
Annual Report 2005
27
Developments in
exchange rates
oil markets – with a price rise of
ers worked together in the first half of
33 percent in dollar listings and 21 per-
2004, by which the vehicle manufactur-
cent even in euros – also caused a rapid
ers were basically prepared to take over
rise in the prices for primary plastics. Im-
varying proportions of the additional
has lost about 40 percent in value in
portant metals such as copper and alu-
cost burden depending on the product
relation to the euro. Just on average in
minium also increased by double figures.
and the situation of the company, and
2004, the value of the US dollar has de-
The earliest steps in the supply chain
the suppliers, for their part, made their
creased by almost 10 percent compared
were affected first; this was followed by
cost situation extremely transparent. The
to the euro. In the first half year of 2005,
the longer-term six-month and one-year
VDA was heavily involved, especially
the euro also remained strong. This de-
contracts of medium and larger supply
through its Raw Materials Committee,
velopment has a considerable effect on
companies. The accumulation over the
but also in talks with the associations of
manufacturing companies in Germany
supply stages has led to a collective
the steel industry and the foundry and
and in the Eurozone.
pressure on vehicle manufactures as
metalworking industry. The readiness to
well, who were themselves confronted at
accept a fair division of the burden and
the year end with demands of the same
transparency proved – in the teeth of the
an effect on profitability. Prices in the
size. Short-term price rises, particularly
competition – to be the sensible way of
dollar markets can scarcely be raised at
in the first six months of 2004, placed an
reaching agreement under the umbrella
present. At the same time, the effects of
extremely heavy burden on the supply
of the VDA (cf. also “The Parts and Ac-
the weak dollar reach beyond trade with
chain. The existence of a large number
cessories Industry”).
the USA – they also affect the countries
The changes in exchange rates have
in which calculations are made on a
of companies depended on agreeing
with their customers about taking over
Since the start of 2002, the US dollar
In addition, the VDA has also
dollar basis or whose currencies are
additional burdens. In addition to the
pledged to the Federal Government in
tied to the US dollar (such as China). In
sheer burden of costs, planning uncer-
collaboration with the BDI and every-
addition, exports from these countries
tainty also has a negative effect.
where where the framework conditions
become cheaper, which sharpens the
policy for the raw materials market can
competition for German products.
The figures show that the increase in
the cost of raw materials had a consid-
improve things – for instance in trade
policy – to help to improve the situation.
motive industry have insured themselves
erable negative effect on the profitability
of supply companies. And the curtail-
The companies in the German auto-
At present, we must assume that,
against the negative effects of changes
ments or interruptions in production
as a result of a calmer relationship
in exchange rates in various ways: firstly,
that some Japanese manufacturers have
between supply and demand than in
there is much financial hedging, which
been forced to make as a consequence
2004, we can reckon on a certain eas-
offsets the fluctuations. However, they
of short supply on the raw materials
ing of the market and a slight reduction
cannot guarantee complete protection
side have drawn attention to the risk
in the pressure of costs. Nevertheless,
for an unlimited time. So the companies
that sudden relative shortages in the
it would be unrealistic to assume there
have also reacted by intensive natural
steel supply in relation to a consider-
will be drastic easing. The raw materials
hedging, by increasing production in
ably increased demand can hold for the
situation therefore remains a burden-
dollar areas and thus turning the cur-
stability of the supply chain. A similar
some factor. The pressure on compa-
rency fluctuations to their advantage.
situation did not occur in Germany. The
nies to reduce costs therefore remains
supply chain held firm. The basis for this
no less high in relation to the weak
was the way manufacturers and suppli-
state of the market.
In the discussions on the negative
effects of the strength of the euro, it
28
BUSINESS BACKDROP
must not be forgotten that the current
be regarded in different ways from
investments throughout the world. To
level makes imports – of raw materials
the point of view of both exports and
that extent, the European Currency
for example – correspondingly cheaper.
imports. For the German automotive
Union also represents a big advantage.
industry with its global activities, it is
Politics and economics should work to-
In this way the rise in raw material
particularly important that there should
gether worldwide towards international
prices could be partly offset, which at
not be sudden major fluctuations in the
cooperation and thus stabilise the ex-
least in part lightened the burden for
international exchange rate structure.
change rate structure, though of course
both the companies and for consumers.
Planning security is an important aspect
the economic situation in the individual
So the currency situation can always
of the automotive industry with its high
countries must also be considered.
Auto G LOBAL
M AR KETS
Auto
30
GLOBAL MARKETS
The Economic Situation in
the Global Automotive Industry
Increased global demand
for automobiles
Global demand for automobiles rose
in 2004. The US and Western European
markets recorded slight gains; sales
Asia and Eastern Europe
increase their shares of
worldwide automobile
production
Last year, a total of around 63 million
in the Mercosur countries picked up
motor vehicles were produced world-
strongly. In Central and Eastern Europe,
wide – 5 percent more than in the previ-
automobile sales once again showed
ous year. Car production (including
marked growth and the dynamic sales
light trucks in the USA) grew by 4 per-
trend in most of the Asian markets con-
cent to 52.8 million and commercial
tinued. Overall sales of automobiles in
vehicle production grew by 11 percent
these regions increased by 5 percent to
to 10.2 million. Car production in the
59.2 million. Demand for passenger cars
NAFTA countries, at 16.2 million, re-
(a category that includes light trucks in
mained at the same level as last year.
the US) grew by 4 percent to 49.5 mil-
North America’s share of global auto-
lion, while sales of commercial vehicles
mobile production fell to 25.8 percent.
grew by 12 percent to 9.7 million.
Production in the EU-15 countries re-
World automobile production in 2004
Shares in percent
Previous year’s values in brackets
Other countries
10.1
India (9.6)
2.4
(1.9)
EU-15
26.7
(28.1)
New EU
countries
2.3
(2.1)
Eastern
Europe
4.0
(3.5)
Japan
16.7
(17.2)
China
8.1
(7.4)
Mercosur
3.9
(3.3)
NAFTA
25.8
(27.1)
Annual Report 2005
mained steady at 16.8 million units;
31
Sales of light vehicles in the USA in 2004
their share of global production fell to
Units
+/- %
Share 2004
Share 2003
Chrysler Corp.
Ford
GM
Big Three
Asian brands
BMW
Mercedes
Porsche
Audi
VW
VW in total
German brands
2,206,024
3,271,088
4,357,402
10,134,514
5,848,828
296,111
221,591
31,471
77,917
256,111
334,028
883,201
3.7
-4.8
-1.2
-1.4
7.4
6.9
1.2
10.7
-9.8
-15.4
-14.2
-3.3
13.1
19.4
27.6
60.1
34.7
1.8
1.3
0.2
0.5
1.5
2.0
5.2
12.8
20.7
28.3
61.8
32.7
1.7
1.3
0.2
0.5
1.8
2.3
5.5
Total
16,866,543
1.4
100.0
100.0
26.7 percent.
The new EU countries were able to
increase their production by 24 percent
to nearly 1.5 million vehicles. Production in Eastern Europe (including Turkey) rose by 24 percent to 2.5 million
vehicles. The Asian countries increased
production by 9 percent to 22.7 million
vehicles – boosting their share of global
automobile production to 35.9 percent.
USA: Light vehicle sales
up slightly and truck sales
booming
Source: Ward’s Communications
16.9 million light vehicles were sold
General Motors and Ford
lose further market shares
year, German manufacturers suffered
tional passenger cars fell by one percent
The Detroit Big Three (GM, Ford,
hicles, a fall of 3 percent. Sales of cars
to 7.5 million units, the light trucks seg-
Chrysler) held 60.1 percent of the mar-
imported from Germany increased by
ment grew by 4 percent over the same
ket in 2004. While Chrysler was able to
4 percent, while sales of German vehicles
period, reaching a record level of 9.4
increase its share of the market, General
from the transplants in North America
million units. The trend towards light
Motors and Ford once again lost ground.
declined. While BMW, Mercedes-Benz
trucks (sport utility vehicles, MPVs and
Despite a strong rally at the end of the
and Porsche achieved record sales, VW
in the USA last year – one percent up on
the previous year. Whilst sales of tradi-
a slight decline in sales to 883,200 ve-
pickups) continued.
Sales of light vehicles in Brazil by brand in 2004
Sales of light trucks accounted
for 55.5 percent of all light vehicle
sales last year. In 2000, this figure was
49.0 percent, and in 1990 a mere
32.8 percent. There was a significant
31 percent growth in the market for me-
Shares in percent
Toyota
Honda 3.4
3.4
Renault
3.6
Fiat
23.6
year, with 431,700 trucks sold. Whereas
grew by 23 percent, heavy trucks did
Ford
11.4
even better, with 43 percent more vehicles – a total of 203,200 – reaching the
market than in the previous year.
GM
24.6
PSA
4.3
dium and heavy commercial vehicles last
sales of medium commercial vehicles
Other
2.7
Source: ANFAVEA
German
manufacturers
23.0
32
GLOBAL MARKETS
and Audi sales fell because of impend-
nomic conditions in both countries, the
in no small part to changes in licensing
ing model replacements. In the light
reason for this development was a series
regulations introduced at the start of the
trucks growth market, German manu-
of stabilising political measures which
year; from 2004, minivans, which had
facturers achieved an above average
restored the confidence of investors in
previously appeared in the statistics as
increase of 31 percent in sales and a
the region. Motor vehicle production in
commercial vehicles, were classed as
larger market share of 1.6 percent.
both countries rose by 24 percent to
cars. Without the effect of this change,
2.47 million.
sales of cars would have in fact risen
The main winners in the light vehicle
market were the Asian manufacturers.
by 1 percent, while sales of commercial
German producers were well
vehicles would have fallen by 2 percent.
The Japanese increased sales by 7 per-
placed to take advantage of this posi-
The demand for cars also benefited from
cent to 5.1 million vehicles. Toyota sold
tive trend. Their sales of light vehicles
the gradual increase in demand in the
10 percent more light vehicles than in
in Brazil rose by 13 percent to 340,000,
domestic markets. Car imports totalled
the previous year, passing the 2 million
thereby increasing their market share
270,500, the equivalent of almost 6 per-
sales mark for the first time. The Korean
to 23.0 percent. In the market for me-
cent of the entire car market. Imports
suppliers increased sales by 8 percent.
dium and heavy commercial vehicles
were dominated by German brands with
Together, the Asian producers captured
(including buses), they increased sales
a share of over 60 percent. Japanese
34.7 percent of the market. Again last
by 14 percent to 63,400. With a market
manufacturers exported nearly 5 million
year, discounts and attractive finance
share of 61.7 percent, German manu-
cars in 2004. Thanks to this brisk export
deals were used to promote sales, par-
facturers have earned a dominant
demand, the number of vehicles pro-
ticularly by US manufacturers Ford
position in the Brazilian commercial
duced by plants within Japan rose by
and GM. The value of the incentives
vehicles market. In Argentina, German
2 percent to 10.5 million.
climbed from an average of 3,679 to
manufacturers increased their sales of
3,942 dollars per car, with GM offering
light vehicles by 133 percent to 71,000.
up to 5,000 dollars against certain mod-
This equates to a 3.6 percent increase
els. The stock inventory of light vehicles
in their market share to 24.1 percent.
was slightly lower at the end of the year
They also improved their position with
registered in China last year – approxi-
but still totalled over 3.9 million vehicles,
medium and heavy commercial vehi-
mately 16 percent more than were sold
or 4 percent more than 12 months previ-
cles, extending their market share to
the previous year. Sales of passenger
ously.
53.7 percent.
cars increased by 17 percent to 2.3 mil-
Significant recovery
in the Mercosur area
Japan: Export sustains
production
"Controlled" cooling off in
the Chinese car market
Almost 5.1 million new cars were
lion. Although the rate of increase for
Sales of new vehicles in the Merco-
Demand for automobiles in Japan
commercial vehicle registrations was
slightly lower at 14 percent, a record
number of more than 2.7 million com-
sur countries Brazil and Argentina were
increased slightly in 2004 to 5.9 million
mercial vehicles was nevertheless sold.
buoyant last year after a long period of
vehicles. At just under 4.8 million, sales
After the boom years of 2002 and 2003,
economic and political depression. Last
of passenger cars were 7 percent higher
growth in the automotive sector slowed
year, nearly 1.5 million light vehicles
than the previous year, while only
down noticeably last year as a result of
were sold in Brazil and 295,000 in Ar-
1.1 million commercial vehicles found
a "controlled" brake on demand. As part
gentina – increases of 10 and 99 percent
buyers – 21 percent down on the previ-
of its package of measures aimed at
respectively over the previous year. In
ous year. The contrasting sales perfor-
dampening down the economy, the Chi-
addition to the much-improved eco-
mance of cars and commercials was due
nese government severely restricted the
Annual Report 2005
33
Production of the Chinese automobile industry
In million vehicles
1.24
Buses
Trucks
1.20
Passenger cars
1.51
1.06
1.23
0.83
0.32
0.79
0.41
0.72
0.40
0.69
0.70
0.50
1.10
0.44
0.46
0.66
0.66
0.73
0.76
0.56
0.60
0.70
1999
2000
2001
0.80
2.02
2.32
1.09
0.25
0.33
0.39
0.49
0.51
1994
1995
1996
1997
1998
2002
2003
2004
Source: CAAM, CATARC
availability of low-interest car loans from
hicles, while production of commercial
put of 5.1 million vehicles, China is the
state controlled banks.
vehicles increased by 14 percent to nearly
world’s fourth largest producer of motor
2.8 million. With a manufacturing out-
vehicles after Germany. Last year, the
Public sector cuts, higher oil prices
Sales of passenger cars in China and India in 2004
and consumer expectations of lower car
prices were further contributory factors.
Increased price competition by the manu-
In units
220,000
facturers, initiated by the US supplier
General Motors, caused new car prices
to fall by an average of 10 percent. With
180,000
car sales of around 670,000, German
160,000
manufacturers were not quite able to
140,000
achieve the previous year’s result. VW
120,000
maintained its position as market leader
100,000
by a large margin with a 28 percent
China
India
200,000
80,000
share of the market, followed by GM,
Honda and Hyundai.
60,000
40,000
Production of cars in China increased
by 15 percent in 2004 to 2.3 million ve-
2000
Monthly figures, trend
2001
2002
2003
2004
34
GLOBAL MARKETS
Beijing government introduced measures
to consolidate the smaller Chinese manu-
Registration of new vehicles on Asian markets
Changes in percent 2004/2003
facturers, most of whom were operating
27.3
24.9
at a loss. Since then, insolvent manufacturers have been forbidden to pass on their
18.3
15.5
17.4
16.7
production licenses. Government plans
0.4
anticipate that a domestic car manufacturer
will feature among the top six automo-
-4.6
bile companies within the next ten years.
Car sales in India exceeded 1 million
ila
Th
a
h
So
ut
nd
ea
Ko
r
ne
s
pi
ilip
Ph
In
do
ne
sia
In
di
a
n
wa
Ta
i
M
al
ay
sia
Ch
in
a
Ja
India: Sales exceed
1 million cars for the first
time
pa
n
-16.2
for the first time during the past calendar year – an increase of 24 percent.
A new production record of
Toyota, Ford, Fiat and Mitsubishi. There
Higher incomes in agriculture, improved
1.5 million vehicles was reached last
is a great deal of potential in India’s
availability of the latest vehicles and
year. Car production rose by 30 percent
car market. The country is expected to
keener interest rates were largely re-
to approximately 1.2 million vehicles;
achieve an average annual increase in
sponsible. Market leader is the Indian
the production of commercial vehicles
GDP of 5.5 percent in the next 15 years.
manufacturer Maruti Udyog with a
rose by 31 percent to 333,000 vehicles.
Its one billion inhabitants have one of
market share of 51 percent, followed by
Of German manufacturers, Mercedes-
the lowest rates of car ownership in the
Hyundai Motor and Tata Motors. In 2004,
Benz and the VW Group brand Skoda
world, at just six cars per 1,000.
29 percent more commercial vehicles
have a production plant in Pune and
were sold than the previous year, bring-
Aurangabad respectively. Other foreign
ing the total up to 305,000.
manufacturers are General Motors, Honda,
Car sales in India by brand in 2004
Shares in percent
South East Asian car
markets maintain their
dynamic performance –
South Korea in decline
The positive development in most of
Other
5.1
General Motors India
2.2
Ford India
3.1
Honda India
4.2
the South East Asian tiger economies
Maruti Udyog Ltd
51.2
was maintained last year. Vehicle sales
in Indonesia, Malaysia, Taiwan and Thailand enjoyed strong growth. Reduced
demand resulted in lower sales of commercial vehicles in the Philippines.
Tata Motors
16.8
There was a marked downturn in
vehicle sales in South Korea due to the
sluggish economy. Passenger car sales
Hyundai Motor India
17.4
Source: SIAM
in South Korea fell by 16 percent overall.
While new registrations of vehicles pro-
Annual Report 2005
duced by domestic manufacturers fell by
16 percent to 858,000, sales of imported
cars rose by 13 percent to 25,600. Imports accounted for 2.9 percent of the
35
Turkey: Passenger car production and exports
In thousand vehicles
450
market. German manufacturers sold
400
41 percent of the cars imported.
350
Production
Exports
300
Mirroring the higher sales figures in
the above Asian countries, automobile
250
production also expanded by approxi-
200
mately 11 percent to reach a total of
150
5.6 million vehicles. This increased these
countries’ share of global automobile
production to 8.9 percent. Including the
100
50
major car producing countries, Japan,
0
1994 1995 1996 1997 1998 1999
China and India, the Asian region was
responsible for 36.1 percent of global
2000 2001 2002 2003 2004
Source: OSD
car production.
Turkey: Automotive industry
booming in 2004
prus) experienced mixed performance
than in the previous year. After a strong
last year. Five percent fewer passenger
start in the first four months, consumers
cars – a total of 818,300 – were sold
exhibited a degree of uncertainty and
Aided by political reforms and continued economic growth, 2004 was a
Registration of new cars on
Central and Eastern European markets
boom year for the automotive industry in
Turkey. New registrations of passenger
cars rose by 99 percent to 451,000, whilst
98.7
commercial vehicle registrations grew by
74 percent to 302,000. The production of
35.9
commercial vehicles in Turkey rose dramatically last year by 54 percent to over
823,000. Turkish car exports rose by
16,6
15.9
43 percent last year to 305,000. Sales of
5.8
imported cars, at 312,000, were twice
1.6
as high as in the previous year, with
-0.1
German manufacturers holding 46 per-
-4.9
-10.0
EU
y
ke
Tu
r
ss
Ru
an
m
ia
ia
ie
Ro
co
un
at
tr
es
y
ew
Ba
lti
c
St
ng
ar
ia
Hu
en
ov
la
nd
ia
Po
ak
ov
Sl
Re
h
ec
N
The automotive markets in the new
EU countries (excluding Malta and Cy-
Cz
Mixed performance in
the new EU countries
pu
bl
ic
s
-12.6
Sl
cent of the market.
36
GLOBAL MARKETS
economic restraint following accession
Production and sales in
the new EU countries in Eastern Europe
to the EU. Purchases brought forward,
higher consumer taxes, compulsory
2002
saving measures introduced by the
2003
2004
Change
04/03 in %
1.6
government and the removal of import
duties on used cars all had an appreci-
Car produktion
able effect as the year went on. Demand
Czech Republic
441,312
436,297
443,065
for new cars is expected to revive in the
– German manufacturers
441,308
436,279
443,049
1.6
medium term, as the conditions for an
Slovakia
201,742
186,807
171,888
-8.0
201,742
186,807
171,888
-8.0
Poland
298,228
307,015
516,152
68.1
133.2
upturn are in place. The economic prospects of the new EU countries remain
good and there is a considerable backlog of demand for new vehicles.
85,728
77,070
179,708
Slovenia
126,661
118,172
116,609
-1.3
Hungary
138,681
122,338
118,590
-3.1
53,606
33,953
23,605
-30.5
1,202,192
1.170,115
1,365,441
16.7
782,384
733,921
817,387
11.4
65.1
62.7
59.9
147,754
149,546
130,764
65,312
57,513
57,430
-0.1
308,158
353,635
318,111
-10.0
Spurred on by the dynamics of a
New EU countries
growing economy and an increased
volume of transport, the market for com-
– Share in %
mercial vehicles in the new EU countries
Registration of new cars
experienced a strong upturn. Total sales
Czech Republic
of commercial vehicles reached 134,000
Slovakia
last year – 15 percent up on the previous
Poland
year. Sales in the Czech Republic and in
Slovenia
58,849
59,548
62,986
5.8
Poland in particular were much higher
Hungary
172,338
208,426
211,792
1.6
than in 2003. Slovakia, Slovenia and the
Baltic states also achieved higher levels
of sales. The only country where sales
Baltic States
New EU countries
– German group-owned brands
-12.6
30,445
31,876
37,196
16.6
782,856
860,544
818,279
-4.9
327,000
369,000
364,000
-1.4
41.8
42.9
44.5
– Share in %
were down on the previous year was
Hungary.
Poland: A tough market for
new vehicles
In Poland, the largest market
cars, averaging 4 percent. Above all,
sales of new cars were hampered by
German manufacturers
exploit the opportunities
presented by EU
enlargement
among the new EU countries in terms
the importation of used cars into the
of sales, 318,100 new cars were regis-
country. To stem the rapid rise in im-
tered in 2004 – 10 percent fewer than
ports, particularly of older vehicles,
in the previous year. On May 1, 2004,
the Polish government plans to intro-
taken up a dominant position in the new
the Polish government severely reduced
duce an emissions-based tax on import-
EU countries thanks to a strong local
the possibilities for registering vehicles
ed cars. This will replace the old excise
presence and export figures which rose
for business use, and thus the associ-
duty on imported cars and will act as an
yet again last year. Germany’s automo-
ated tax benefits. Car sales were also
incentive for consumers to buy newer
tive industry is a key industry for these
hindered by price increases on new
models.
countries and by far their most impor-
German car manufacturers have
Annual Report 2005
37
tant trading partner. German manufac-
man cars produced abroad were built
sales of foreign-built cars. This positive
turers achieved a new export record
in these countries. The presence of
trend in the demand for new vehicles is
with approximately 164,000 vehicles
German manufacturers in these high-
being driven by the bull market for crude
exported.
growth markets ultimately safeguards
oil and strong growth in the real income
jobs in Germany.
of the population. The vehicle market
German passenger car manufactur-
certainly offers potential for further
Russia: Foreign sellers
make substantial gains
ers have achieved a market share of
44 percent in the five largest automo-
growth, since, with a total population of
145 million, there are only 161 cars per
Over 1.2 million cars were sold in
tive markets. In Poland, Hungary and
1,000 people.
Slovenia they have managed to capture
Russia in 2004 – 16 percent more than
between 36 and 39 percent of the
in the previous year. Domestic brands
market. There was a German brand
such as Lada, Moskvitsch and GAZ
name on over 50 percent of all new
dominate the market but are steadily
cars registered in Slovakia and on over
losing ground. Russia is becoming an
60 percent of all new cars registered in
increasingly important market for inter-
Central and Eastern Europe (includ-
the Czech Republic. In 2004, a total of
national automakers. Sales of cars from
ing Turkey) was 24 percent above the
879,000 German cars were produced in
foreign manufacturers increased by
previous year’s level at nearly 4 million.
Poland, Hungary, the Czech Republic
87 percent in 2004 to capture one
The new EU countries increased their
and Slovakia – 19 percent more than
third of the entire market. German
production by 24 percent to nearly 1.5
the previous year. 18 percent of all Ger-
brands account for 19 percent of the
million vehicles. Whilst more vehicles
Vigorous expansion of
production in Central and
Eastern Europe
Car production in the countries of
New car sales in Russia
In ‘000s
Foreign manufacturers
Domestic manufacturers
68
45
46
71
892
406
79
902
877
936
1999
2000
2001
112
217
860
829
806
2002
2003
2004
721
1997
Source: ASM-Holding
1998
38
GLOBAL MARKETS
left the production lines in Poland, the
Registration of new cars and market shares
in Western Europe
Czech Republic and Slovenia, production
figures in Slovakia and Hungary were
2001
Units
in %
down. Production in the Russian Fed-
2003
Units in %
2004
Units in %
eration and Ukraine rose by 8 and
81 percent respectively.
German group-owned
brands
6,889,123 46.5
6,683,944
46.4
6,543,565 46.1
6,697,350 46.2
French
brands
3,714,879 25.1
3,704,987
25.7
3,611,243 25.4
3,526,618 24.3
Japanese
brands
1,540,137 10.4
1,644,768
11.4
1,799,554 12.7
1,901,992 13.1
Italian
brands
1,415,167
9.6
1,177,183
8.2
1,056,113
7.4
1.037,742
7.2
Korean
brands
409,973
2.8
391,502
2.7
469,576
3.3
608,294
4.2
British
brands
511,505
3.5
461,960
3.2
410,095
2.9
353,400
2.4
Other
brands
330,478
2.1
327,015
2.4
312,828
2.2
382,513
2.6
Production plants located in Central
and Eastern Europe are actively competing with the established automotive
plants in Western Europe for investment.
This development is likely to further improve the efficiency and competitiveness
of the new plants. Car production in the
new EU countries and in the EU candidate country of Romania, as well as in
the major markets of Russia and Ukraine
will continue to grow in importance.
Additional production capacity is likely
Total
Units
2002
in %
Manufacturer
14,811,262 100 14,391,359
100 14,202,974 100
14,507,909 100
to be created in all of these countries in
the near future.
Registration of new cars in Western Europe
Western Europe:
Car sales up for the first
time in three years
Belgium
5.6
Denmark
25.5
Germany
United Kingdom
in the previous year. This was the first
-0.5
increase in vehicle registrations for three
0.7
Italy
Netherlands
Europe in 2004 – 2 percent more than
0.9
0.2
France
14.5 million cars were sold in Western
years. Of the large volume markets, vehicle
-1.0
sales in Spain grew at an above average
Austria
3.7
10 percent to reach a record level of over
Portugal
4.1
1.5 million. The robust development of
Sweden
1.2
the Spanish economy, the extension of
Greece
12.6
Spain
Switzerland
9.8
-0.4
the government-backed incentive scheme
for scrapping old cars and favourable
interest rates below the rate of inflation
all contributed to the sales records.
Annual Report 2005
Two million new cars were registered
39
from the Italian manufacturers stabilised
more than most from this trend. They
last year in France – 0.2 percent more
at just over 1 million, the equivalent of
increased their sales of diesel cars by
than in the previous year. Sales of cars in
a 7.2 percent market share. Once again,
15 percent and now hold 50 percent of
Italy, at nearly 2.3 million, were slightly up
the big winners were the Asian manu-
the market volume. As far as diesel own-
on the previous year. 2.6 million vehicles
facturers. The Japanese increased their
ership is concerned, Luxembourg heads
were registered in the United Kingdom,
market share to 13.1 percent. The Ko-
the league table in Western Europe with
12,000 fewer than the record number
reans sold 4.2 percent of all new vehi-
72.5 percent, closely followed by Austria
of registrations in 2003. Both Denmark
cles registered in Western Europe.
and Belgium. In Germany, diesel owner-
(+26 percent) and Greece (+13 percent)
ship stands at 44.0 percent, slightly be-
More buyers choose
diesel cars
experienced double-digit growth.
German automakers
consolidate their position
low the European average.
Considerably more new car buyers in
Western Europe opted for a diesel-pow-
German manufacturers were able
ered car in 2004. Increases in fuel prices,
Upturn for commercial
vehicles
In 2004, sales of commercial vehicles
to consolidate their market leadership
a wide chose of attractive diesel models
in Western Europe rose by 9 percent to
position in Western Europe, increasing
and a new generation of engines are driv-
approximately 2.3 million. This was the
their market share slightly to just over
ing this trend. In Western Europe, diesel
first time in four years that registrations
46 percent. Amongst the most success-
engine cars captured a further 4.7 percent
of commercial vehicles had increased.
ful performers last year were the BMW
share of the market in 2004. They now
The upswing was due to the gradual
Group and the group brands Smart and
account for 48.4 percent of all cars sold.
recovery of the Western European
Skoda. French manufacturers experi-
7 million diesel cars were sold in 2004
economy, the expansion of trade with
enced a drop in sales; their market
– 13 percent more than in the previous
the countries of Eastern Europe and the
share fell to 24.3 percent. Sales of cars
year. German manufacturers benefited
move by freight companies to renew
their fleets. In the light truck category up
Diesel share of new car registrations in Western Europe
9 percent; in the medium to heavy class-
Shares in percent
Sweden
Denmark
Switzerland
Norway
United Kingdom
Germany
Western Europe total
Italy
Spain
France
es, registrations were up by 7 percent.
8.0
Sales of medium-sized trucks from 6 to
24.2
16 tonnes rose to 80,000. 230,000 new
25.2
trucks over 16 tonnes were registered.
28.1
32.6
The bus market stayed at the same lev-
44.0
el as the previous year, with 32,000 vehicles
48.4
sold. Budgetary restrictions in many cities
58.3
and towns meant that fewer buses were
65.4
69.2
Belgium
70.2
Austria
70.9
Luxembourg
Source: VDA statistics, AAA
to 6 tonnes, new registrations rose by
72.5
purchased for local public transport. German manufacturers were able to substantially increase their sales of commercial
vehicles in Western Europe last year. In the
weight class up to 6 tonnes, they improved
their sales by 13 percent to 528,300, cor-
40
GLOBAL MARKETS
responding to a 30 percent share of the
of vehicles over 6 tonnes by 10 percent
commercial vehicles (aided by the inclu-
market. They also increased their sales
to 127,000 – a market share of 41 percent.
sion of Mitsubishi Fuso), which rose by
23 percent to 964,000. Passenger cars
also registered a substantial 3 percent
International Positioning of
the German Car Industry
increase to 9.4 million. German cars are
produced in a total of 24 countries with
every sixth vehicle produced globally in
2004 bearing a German brand name.
maintain a successful
globalisation strategy
ed by the issue of globalisation. Thanks
In 2004, German automakers, includ-
to a higher global demand for cars, they
ing Chrysler, increased their production
increased their production volumes
volumes by 4 percent to 13.0 million
For the German automotive industry,
by 4 percent to 10.4 million cars. Par-
units. Every fifth vehicle produced world-
the year 2004 was once again dominat-
ticularly robust was the production of
wide (20.7 percent) was built in a Ger-
Vehicle production of German manufacturers by region in 2004
3,250,800*
(+2 %)
863,800
(+12 %)
7,331,400
(+2 %)
711,300
(+12 %)
186,100
(+16 %)
662,000
(+22 %)
* Including Chrysler
Annual Report 2005
man automotive company’s production
and Belgium caused production levels
plant.
to fall.
41
Germany: Once again, over
5 million cars produced
The German automotive industry also
After a slightly weaker year in
increased output at its domestic pro-
Last year, German manufacturers ex-
2003, the production of German pas-
panded their foreign production in most
duction plants. For the seventh year in
senger cars at foreign-based plants
market segments. The most substantial
succession, car production in Germany
made a marked recovery in 2004 with an
increase was in the upper range, where
broke through the 5 million barrier. Ap-
increase of 5 percent. Local production
production increased by a factor of five.
proximately 5.2 million vehicles came off
supplies not only the local market but
Thanks to new models, the lower mid-
the production lines last year – 1 percent
an entire region. Outside Germany,
range was the most important segment
more than in 2003. This achievement was
Spain was the country where most
with 1.4 million vehicles (+9 percent).
possible thanks to buoyant exports and
to slightly improved sales in Germany.
German passenger cars rolled off the
Foreign production of diesel cars
The German automotive industry contin-
number of units produced here in
grew strongly during the 1990s and sta-
ued its diesel campaign at home as well.
2004 was 3 percent up on the previ-
bilised at a high level during the last four
A new record number of 2.4 million
ous year’s figures. The highest rates
years. In 2004, 964,300 diesel engine
diesel cars were produced – 11 percent
of growth were enjoyed in Poland,
passenger cars were manufactured out-
more than in 2003. Production has thus
Austria and the Netherlands as a
side Germany. This makes nearly every
increased by 50 percent over the last
result of the introduction of new mod-
fourth German car produced abroad a
five years or, compared with 1994, by
els. On the other hand, impending
diesel. Ten years ago diesels accounted
150 percent. Today, nearly every second
new models in China, the Czech Republic
for only 9.9 percent.
car built in Germany is a diesel.
production line. At 698,500 units, the
Vehicle production of German manufacturers in Germany and abroad
In million units
Production abroad
Production in Germany
2.8
2.5
3.5
4.2
4.4
4.5
4.4
4.8
3.3
5.7
5.7
5.5
5.7
5.5
5.5
5.6
3.1
20
04
03
20
02
20
01
20
20
00
19
19
98
5.0
19
97
96
19
95
19
94
19
4.8
4.7
4.4
99
2.2
42
GLOBAL MARKETS
Deliveries to Asia
declining
The production of new vehicle types
The principal export markets for Ger-
and niche models also flourished in 2004.
man manufacturers are still their European
They accounted for 874,100 units, which
neighbours. They delivered nearly 2.4 mil-
Exports to Asia slowed down in
was 19 percent more than a year ago.
lion passenger cars to the EU-25 in 2004.
2004. A total of 276,000 passenger cars
Convertibles (+28 percent) and MPVs
Despite weaker markets, deliveries to the
were delivered to this region. Exports fell
(+18 percent) were particularly success-
new EU member states in 2004 (141,900)
by just under 6 percent. Export perfor-
ful last year.
were similar to those of the previous year.
mance in the key export countries was
Exports to Turkey rose steeply to 87,400
uneven. Deliveries to China weakened
passenger cars (+57 percent). Numer-
for the first time in five years. Following
A new export record
ous new models and a booming market
the move by the Chinese government to
profited from the upturn in the global
provided favourable conditions for Ger-
tighten up on credit awarded to private
automobile sector and achieved a new
man manufacturers to improve sales.
consumers to avoid overheating the
record for exports, despite the strong
They delivered over 2.2 million cars to
economy, German manufacturers were
euro. The industry delivered 3.7 million
the EU-15, which was almost the same
forced to cut back their exports to China.
cars to over 160 countries.
number as a year ago. This market thus
Additionally, models that had previously
accounted for 61.3 percent of total exports.
been exported were now being built lo-
Despite experiencing a fall in export
cally. In Japan too, it proved impossible
ingly important to German production
sales to 623,100 units, the United King-
to maintain the previous level of sales:
plants. While ten years ago, over half of
dom remained the most important single
exports to this country fell by 3 percent
all cars produced in Germany were
market, even though exports to this
to 90,900 vehicles. These two countries
exported, this has now risen to 71 per-
country were considerably hampered by
alone accounted for two thirds of the
cent.
the increasing value of the euro.
entire export sales volume to Asia in 2004.
In 2004, German manufacturers
Export markets have become increas-
Passenger car exports to the five most important markets
In million units
Spain
France
Italy
USA
United Kingdom
2.0
1.6
A weaker dollar impacts
negatively on exports to
America
Exports to America weakened for
the second year in succession. In 2002,
660,800 cars had been exported to this
region; in 2004 this figure was only
618,400. This development is linked to
the steady decline in the value of the
1.2
dollar against the euro. The dollar fell
in value by one quarter in the past two
0.8
years alone. The effect was felt mainly
in the USA, where car deliveries in 2004
0.4
fell to 545,700 – 4 percent down on
2003. Thanks to strong growth in the
4
20
0
20
03
2
20
0
01
20
00
20
99
19
98
19
97
19
96
19
95
19
19
94
0.0
Brazilian and Argentinean markets, German car exports to Latin America rose
by 2 percent.
Annual Report 2005
Diesels and MPVs gaining
ground
43
velopment. Falling income in real terms
isfactory situation in the German market.
and changes to social welfare legislation
Car sales to this group fell by 2 percent
have motivated consumers to save more
in 2004. Private owners accounted for
together with new, attractive models
for health care and pensions, with the
only 47.5 percent of new registrations. On
have driven demand for German diesel
result that the savings ratio rose once
the other hand, there were 5 percent more
cars to record levels. The export of
again in 2004 to reach 10.9 percent – the
company cars registered than in the
diesel powered passenger cars rose by
highest level since 1995.
previous year. The car rental business
The wide range of diesels available
11 percent last year to 1.6 million. Die-
experienced a noticeable upturn (+9 per-
sels thus accounted for 43.3 percent of
This development also affected the
total car exports; ten years ago the fig-
demand for cars. After six years of fall-
tered fewer passenger cars than a year
ure was only 24.0 percent.
ing sales, new orders in 2004 remained at
ago (-0.5 percent). Short-term registra-
the same level as the previous year, and
tions, which are carried out primarily
that of 1994. New models from German
by the retail sector, increased towards
the highest-volume export segment, Ger-
manufacturers during the course of the
the end of the year but still accounted
man manufacturers shipped 7 percent
year improved the level of new orders.
for only 4.0 percent of new registrations
fewer mid-range vehicles abroad – a total
Although domestic orders in the first half
compared with 5.0 percent in 2003.
of 1.0 million. The downturn reflected the
of 2004 were 2 percent down on the previ-
imminent arrival of new models from many
ous year, during the second half of the
manufacturers in this segment. 2004 was
year they were 3 percent up. German
strong in sales to business and to car rental
the year of the MPV. Exports increased
manufacturers increased their orders from
companies. In 2004, they were responsible
by 27 percent compared with 2003, to
the home market by 4 percent, while de-
for 84.7 and 82.7 percent of sales to these
394,200 units. Convertibles, utility vehi-
mand for foreign brands fell by 6 percent.
groups respectively. The German group
While the mid-range category remained
cles (each +26 percent) and small cars
(+14 percent) were also very successful.
cent). The automotive retail sector regis-
German manufacturers are particularly
brands supply nearly two thirds of all
Germany: No turnaround in
the home market
new cars purchased privately (63.8 percent), although short-term registrations
Lower consumer spending
in Germany depresses
demand for cars
in the fourth quarter, new registrations
Although the German economy im-
under 3.3 million vehicles (+1 percent).
The steep rise in fuel prices has also
proved during 2004, the recovery was
However, the upturn in the fourth quar-
depressed demand from private buyers.
strongly linked to the performance of
ter 2004 (+12 percent) was caused pri-
Prices for petrol and diesel at the pumps
the country’s exports. Consumer spend-
marily by an increase in sales of newly
have risen for the sixth year in succession
ing fell once again (-0.4 percent) for the
introduced models, purchases brought
– since the introduction of the environmen-
third year in succession.
forward as a result of the abolition of tax
tal tax in 1999. In 2004, motorists paid 4
exemptions and by the numerous sales
percent more for petrol and 6 percent more
The consumer climate in Germany
As a result of higher sales volumes
of new German-built cars by the retail
sector were below the industry average.
of passenger cars rose last year to just
incentives offered by manufacturers. It
for diesel. The price of fuel has increased
is marked by a deep uncertainty on the
cannot therefore be viewed as a stable
by 34 percent since 1999, while the overall
part of consumers and a lack of confi-
recovery of domestic sales.
cost of living has risen by only 8 percent.
dence in the future. The continuing rise
in unemployment (2004: +2.1 percent)
has played an important part in this de-
New registrations by private owners
were particularly affected by the unsat-
Weak growth in real incomes has
boosted demand for used cars. The high
44
GLOBAL MARKETS
Car registrations by private owners by brand in 2004
facturers were the most prolific with
new versions of the Opel Astra, the Ford
In percent
Korean
brands
4
Other
brands
4
German
group-owned brands
64
Focus, the Mercedes A Class, the BMW
5 Series and the Audi A3.
The growth in sales of diesel cars
Japanese
brands
16
continued. In 2004, over 1.4 million units
were registered, a year-on-year increase
of 11 percent. The market share of diesel
cars rose by 44.0 percent for the year as
a whole, and was 47.9 percent up in the
French
brands
12
fourth quarter. By contrast, new registrations of petrol engine cars declined,
with sales last year 6 percent down to
Source: VDA statistics, Federal Motor Transport Authority
1.8 million units. While new registrations
of petrol engine cars fell by 38 percent
over the past five years, sales of diesels
demand for nearly new vehicles from
the wake of EU enlargement on May 1,
increased by 70 percent during the same
abroad was reflected in an 18 percent
2004, was not in evidence.
period. The market share of diesels has
increase in sales to 147,700 cars, compared with just 40,000 in 2000, although
increased demand from abroad for used
thus doubled since 1999.
New models and diesels
stimulate the market
The diesel car market was particu-
The launch of more than 80 new
larly buoyant for German manufacturers,
cars. After the dip in 2003 (-43 percent),
models provided a strong positive stimu-
who increased their sales by 14 percent
535,000 (29 percent) more used cars
lus for car sales in 2004. German manu-
to 1.1 million vehicles, taking a 78.8 per-
German cars assisted the sales of new
were shipped abroad than in the previous year. The most important market
Registration of new diesel cars by brand in 2004
remained the EU-15. Deliveries to
these countries rose by 10 percent to
In percent
115,000 cars. As a result of the strong
Foreign
groups
21
VW Group
40
34 percent downturn, the new EU countries were placed only fourth in the
league table, behind Africa (97,000) and
Asia (96,000).
New car sales were not affected by
Ford (D)
6
re-imported vehicles last year. Their importance decreased from the third quarter of 2003 and, in 2004, their numbers
Opel
8
BMW
10
were substantially below the level of
2003. A revival of re-imports, expected in
DaimlerChrysler
15
Annual Report 2005
cent share of the market. Almost one out
of two new German cars registered is a
diesel; for importers, the proportion was
New vehicle types shape
the market
45
The German automakers have made
great strides with new vehicle types in
With the various market segments
the last few years. Last year, they were
less than a third. German manufacturers
faring differently, the German market
responsible for 546,600 registrations in
thus further consolidated their domi-
developed unevenly in 2004. While the
this segment – an exceptional increase
nance of this market. This is seen in the
traditional segments experienced falling
of 26 percent over the previous year.
registration figures for the top 15 diesel
sales, the new registrations of newer
Their market share rose from 63.3 per-
cars: all models were German brands.
vehicle types rose by 19 percent to cap-
cent to 66.9 percent. For German
ture a quarter of the market. 2004 was
manufacturers, 2004 was also a suc-
The Germans are also leading the
a particularly successful year for MPVs,
cessful year in most of the other vehicle
way in terms of diesel vehicles equipped
with 385,700 being registered – 22 per-
classes. They occupied the top place for
with a diesel particle filter. Of the
cent more than the previous year. SUVs,
the best-selling car in eight of ten seg-
210,000 diesel cars with particle filters
convertibles and utility vehicles also
ments.
registered in Germany, 163,000 are Ger-
experienced double-digit growth. Car
man brands and just 40,000 are French
manufacturers responded to consumer
German market share
increases again
brands. Vehicles with particle filters are
demand for individuality and the efficient
becoming increasingly popular with buy-
use of space by introducing additional
ers. Their share of total diesel registra-
models. In 2004 alone, over 20 new
and an extensive range of diesel cars,
tions is rising steadily.
models were launched in this segment.
German manufacturers sold 2.3 million
Thanks to a host of new models
Registration of new passenger cars by brand
Japanese
brands
German group-owned brands
French
brands
Korean
brands
Italian
brands
72
Shares of all brands in percent
70
68
12
10
8
6
4
2
0
1999
2000
2001
2002
2003
2004
46
GLOBAL MARKETS
vehicles across all segments, which was
contrast, French manufacturers lost
The average order backlog was 21 per-
2 percent more than the previous year.
much ground in 2004. Total registrations
cent higher at 64,100 units.
German group brands thus account for
of French cars were 345,600, which was
70.1 percent of all new registrations – a
12 percent below the previous year’s
New registrations of commercial
rise of 0.6 percent.
figure. Their market share fell to 10.6
vehicles in Germany recovered in 2004
percent. The Italians continued to per-
after four years of decline. Nevertheless,
form poorly in 2004. After five years of
they were still 13 percent below the fig-
also successful in increasing sales. Sales
falling sales, just under 8 percent fewer
ures for 1999. Sales improved in virtually
of Japanese cars rose by 3 percent to
passenger cars were registered in 2004
all weight classes.
378,900; sales of Korean cars rose by a
(82,800 vehicles) than in 2003. Their
substantial 31 percent to 96,800. They
market share fell to 2.5 percent – not
thus held 11.6 percent and 3.0 percent
only the lowest since 1991 but less than
of the German market respectively. By
the Koreans for the first time.
In 2004, Asian manufacturers were
Successful year for German
commercial vehicle
manufacturers
In the market for light commercials
up to 6 tonnes, 196,900 new vehicles
were sold – a 5 percent increase. Ger-
International Positioning of the
German Commercial Vehicle Industry
man manufacturers profited more than
most from the increased demand and
sold 120,900, or 11 percent, more vehicles than in the previous year, thereby
The commercial vehicle
market has not followed the
general economic trends
2004 was the year of the commer-
The market for trucks below 6 tonnes
increasing their market share from 58.0
also grew by 5 percent. The improved
to 61.4 percent. Although the Italians
order situation was reflected – as in the
enjoyed 4 percent higher sales than in
previous year – by a larger order book.
the previous year (33,300 units), their
cial vehicle. Although total investment
in infrastructure increased by a mere
1 percent and investment in construction fell for the fifth year in succession,
sales of commercial vehicles grew by 7
Registration of new tractor units in Germany
In thousand units
percent to 283,400 units, thanks to the
improved investment climate, increased
volumes of transport (also as a result of
EU enlargement) and new products.
28
25
Domestic demand for commercial
vehicles was 9 percent higher overall.
16
Heavy and medium-sized trucks were
17
27
31
26
24
26
19
11
increased by 25 percent in both cases.
04
20
03
20
20
02
20
01
20
00
99
19
98
19
97
19
96
19
95
19
16 tonnes and for trucks over 16 tonnes
19
order levels for trucks between 6 and
94
particularly successful in 2004. Domestic
Annual Report 2005
47
Registration of new commercial vehicles in Germany by brand
Shares in percent
65.3
62.9 62.7
2002
2003
2004
15.1 14.1
German
brands
13.8
Italian
brands
12.7 12.9
10.7
French
brands
3.4 4.1 3.8
3.0 3.1 3.1
1.3 1.4 1.8
Japanese
brands
Swedish
brands
Dutch
brands
1.6 1.7 1.5
Other
brands
Source: Federal Motor Transport Authority
market share fell to 16.9 percent. French
Sales of trucks over 6 tonnes rose by 15
German manufacturers maintained their
manufacturers were unable to match
percent to 81,000. German manufactur-
leadership position, but were unable to
their previous year’s sales figures. Their
ers, who sold 15 percent more trucks in
do anything about the shrinking market
sales fell by 12 percent to 28,700 units
Germany (59,400 units) than in the pre-
and sold 6 percent fewer vehicles than
and their market share to 14.6 percent.
vious year, were largely responsible for
in 2003. Their market share also fell
the increase. With a market share of 73.3
slightly by 0.7 percent, to 88.0 percent.
Eleven percent more commercial
percent, German brands accounted for
vehicles in the weight class between 6
three out of every four trucks registered.
and 16 tonnes were registered last year.
Swedish brands achieved a below-
exported fell again in 2004. Between
This was the highest sales figure since
average increase of 8 percent to 8,600
January and December, 120,200 used
2001. The market for vehicles above 16
vehicles, which resulted in their market
commercial vehicles were exported – 12
tonnes displayed the strongest growth.
share falling to 10.6 percent.
percent fewer than a year earlier. Trucks
New vehicle registrations in this weight
class rose by 17 percent to 53,800 units.
The number of commercial vehicles
under 5 tonnes fell by 26 percent, while
The bus market continued to de-
the export of vehicles over 5 tonnes
The trend towards tractor units con-
cline for the fifth successive year. 5,400
remained relatively constant. The used
tinued, with new registrations increas-
new buses were registered last year – 5
vehicle market in the heavy weight
ing last year by 20 percent to 30,900.
percent fewer than the previous year.
classes has almost disappeared. The key
48
GLOBAL MARKETS
factor in the poor figures for trucks up
Export of commercial vehicles to Asia
to 5 tonnes was weak demand from the
In units
new EU member countries (-58 percent).
45 percent fewer used vehicles (21,300)
were shipped to this region. However,
exports to Asia increased by 22 percent
to 22,900 units.
25,000
20,000
Saudi Arabia
Kuwait
Iran
Other
China
United Arab Emirates
15,000
benefit from keen demand
for commercial vehicles
10,000
5,000
German manufacturers improved
their market position not only in
0
Germany, but abroad too. They par-
1999
2000
2001
2002
2003
2004
ticipated to a significant degree in the
worldwide upturn in the sales of commercial vehicles. In 2004, 26 percent
more orders for German commercial
Thanks to the positive order situa-
tonnes rose substantially by 19 percent
vehicles were received from abroad than
tion, German manufacturers exported
to 104,800. Exports of heavy vehicles
in the previous year. There was substan-
257,000 commercial vehicles – 9 percent
above 16 tonnes, which were 23 percent
tial growth in foreign orders for vehicles
more than in the previous year. While
up on the previous year – were largely
under and over 6 tonnes (+28 and +24
the export of light trucks was only
responsible for the upswing. In the bus
percent). Orders for buses, however, fell
slightly above the previous year’s level at
market, German manufacturers exported
by 3 percent.
145,200 units, exports of trucks above 6
7,400 units – 8 percent more than in
2003.
Export of commercial vehicles by country in 2004
Shares in percent
United Kingdom
16
Other
13
German manufacturers increased
their exports to virtually every region in
the world. The EU-25 was the most im-
France
11
portant market for the German commercial vehicles industry, which increased
its exports to the region by 2 percent
New EU
countries
8
Italy
8
to 190,600 units. With the exception of
Italy and France, the industry increased
its sales to all significant export markets
Spain
8
Asia
13
Other
EU-15
8
Belgium/
Luxembourg
4
Netherlands
6
Austria
5
compared with the previous year. The
United Kingdom remained the largest
single market (+4 percent to 44,400
units). Exports to Poland were particularly vigorous with an increase of 33
percent. Poland took 6,700 vehicles last
Annual Report 2005
year, making it the largest market of the
new EU member countries.
The American continent remained a
49
by 4 percent to 10,000 vehicles. At the
marginal export market. A total of 4,400
same time, some parts of bus production
commercial vehicles were exported to
were relocated abroad. The production
the region, 4 percent more than in the
of low specification public service buses
as the second most important export
previous year. Domestic manufacturers
and coaches is increasingly moving to
region for German manufacturers, after
supply the vast majority of vehicles sold
neighbouring countries where labour
the EU-25. Export sales of 21,040 com-
in the region.
costs are lower.
Domestic production
expanding strongly
Foreign-based production
at record levels
Asia confirmed its position last year
mercial vehicles to Asia represented
a year-on-year increase of 36 percent
and established a new export record.
Nevertheless, it was not possible to in-
In response to improved sales at
In 2004, German manufacturers
crease exports to all countries. Iran and
home and abroad, German manufactur-
produced more commercial vehicles
Kuwait registered strong growth, but
ers increased their production in Ger-
abroad than ever before. Their total pro-
exports to Saudi Arabia and the United
many by 9 percent to 377,900 vehicles.
duction volume increased by 35 percent
Arab Emirates did not match their pre-
The production of light trucks increased
to 487,300 units. This achievement was
vious year’s level. German manufactur-
by 1 percent to 207,800 units. In the
assisted by the worldwide upturn in the
ers increased their exports to China by
weight class above 6 tonnes, production
sales of commercial vehicles as well as
17 percent. Compared with the other
increased by 22 percent to 160,100 vehi-
by gains in market share and new mod-
Asian countries, the growth of export
cles. The weight class above 16 tonnes
els.
business with China in recent years
proved particularly robust, with manu-
has been below average. The Chinese
facturing volumes 25 percent higher
market is still dominated by domestic
than the previous year at 132,500. The
foreign plants produced 305,600 Ger-
manufacturers.
production of buses was pulled back
man commercial vehicles – 47 percent
In the weight class up to 6 tonnes,
Foreign production of German commercial vehicles by country in 2004
In units; changes against previous year in brackets
Argentina
15,625 (+120%)
Belgium
9,038 (+88%)
25,490 (+34%)
Brazil
Japan
Canada
20,562 (+24%)
18,089 (+49%)
Mexico
21,310 (+2%)
Austria
58,288 (+279%)
Poland
54,132
(-25%)
Spain
South Africa
9,298 (+21%)
1,125 (-12%)
Czech Republic
Turkey
9,490 (+117%)
USA 12,745 (+43%)
0
20,000
40,000
62,447 (+33%)
119,137
2004: 304,900 commercial vehicles
under 6 tonnes (+47%)
2004: 233,300 commercial vehicles
over 6 tonnes (+30%)
101,143 (+31%)
60,000
80,000
100,000
120,000
50
GLOBAL MARKETS
more than in 2003. Because the majority
range and heavy commercial vehicles by
especially wheels) caused by the rise in
shareholding in Fuso led to the company
30 percent to 232,200 units. They in-
prices at the commodity markets made
becoming a German-owned, foreign-
creased production levels in nearly every
matters worse. This had repercussions
based manufacturing resource, a com-
country in 2004. On the American conti-
on the profitability of the German body
parison with the previous year’s figures
nent, German manufacturers expanded
and trailer industry.
is misleading. Manufacturing volumes in
production by 32 percent, to 202,200
Spain suffered a severe decline as a re-
units. The USA, Brazil, Canada and
sult of the relocation of a volume model
Mexico thus accounted for 86.7 percent
be a very positive year for the sector.
to Poland. In Belgium, a light truck model
of all foreign-based production.
Domestic sales of heavy trailers over 6
ceased production, which led to a serious decline in production volumes. Ger-
Overall, however, 2004 proved to
tonnes increased by an encouraging 24
Production of German buses abroad
percent last year (almost 41,000 units)
man production plants on the American
reached a record high in 2004. A total
and the trend towards the semi-trailer
continent benefited from an increased
of 49,500 buses were produced – 1
maintained its impetus. 25,400 or 29
demand for light trucks and expanded
percent more than in 2003. Last year,
percent more semi-trailers were deliv-
their production by 53 percent.
foreign-based production accounted
ered to customers within the semi-trailer
for an increased 83.2 percent of the
segment. Swap body trailers over 6
entire manufacturing volume of German
tonnes (+46 percent), platform trailers
buses.
(+36 percent) and tippers (+28 per-
German manufacturers increased
their foreign-based production of mid-
cent) made a strong contribution to this
achievement.
After three years of declining sales,
The Trailer, Body and Container
Industry
manufacturers of standard trailers over
6 tonnes also had a successful year in
2004, increasing their sales by just under 18 percent. Virtually all of the major
trailer types increased their sales. Only
insulated bodies suffered a drop in reg-
2004 was a very dynamic year for the
German body and trailer industry. After
a number of difficult years during which
Marked recovery in the
domestic market
The state of the body and trailer
istrations (-28 percent), attributable to
continued weak consumer demand in
Germany and the trend towards smaller
restructuring measures were unavoidable,
industry is closely linked to the perfor-
trailers with insulated bodies under 6
orders started to pick up in 2004. Strong
mance of the commercial vehicle indus-
tonnes, which last year enjoyed a 24
growth was achieved, particularly in ex-
try, and this applies even more to the
percent increase in registrations.
port sales, with sales holding steady at a
export markets than the home market.
high level during the last months of 2004.
However, the unsatisfactory economic
The domestic market of trailer, body and
situation combined with continued lack
container manufacturers profited from
of investment confidence in the plant
the booming demand in the commercial
and equipment sector and in the con-
2004 were worth 8.6 billion euros – 26
vehicle industry, even though new orders
struction industry had a negative impact.
percent more than the previous year.
slowed down towards the end of the year.
A shortage of materials (steel, tyres and
This growth is due primarily to the way
Successful positioning in
the export markets
Body and trailer industry sales in
Annual Report 2005
51
that German body and trailer manufac-
increase sales by 6 percent in 2004 to
tomer demand moved from used to new
turers have positioned themselves suc-
4.53 billion euros. Strong export demand
vehicles. While new vehicle business
cessfully in export markets, as export
as well as a particularly keen domestic
increased by 14 percent to 2.47 billion
sales increased strongly by 44 percent
demand were responsible for this result.
euros, used vehicle sales suffered a mild
to 4.6 billion euros. Indeed, exports ac-
The figures for 2004 also show that cus-
2 percent decline to 1.66 billion euros.
counted for just under 54 percent of the
industry’s total business volume in 2004.
After years of decline, the sector also
witnessed an upturn in domestic sales,
The Parts and Accessories Industry
with growth running at 10 percent (just
under 4.0 billion euros). The increase in
demand in 2004 meant that domestic
sales made a positive contribution to
operating profits for the first time since
The supply industry
continues to grow
The German automotive supply
it employed was 2,000 higher than the
previous year, at 329,300 (annual average). This represents an increase of
2000. A further slight increase in do-
industry is enjoying continued suc-
nearly 91,000 – or more than one third
mestic sales is expected for the current
cess. The increased production levels
– over the low point reached in 1994.
year 2005, with export growth slightly
of German car manufacturers, the con-
The supply sector currently accounts for
lower than previous years but still sub-
tinuing trend towards vehicles with a
over 40 percent of all jobs in the auto-
stantial.
higher specification and more on-board
motive industry.
electronics have helped these compaIt is also most encouraging that the
nies to increase their sales revenues to
There can therefore be no question
body and trailer industry was able to
the record figure of 65.4 billion euros – a
of supply industry jobs being relocated
stem the tide of job losses that had trou-
year-on-year increase of nine percent
abroad. The German automobile regions’
bled the industry for a number of years.
(2003: 60.1 billion euros). Sales rev-
dense supplier network is a decisive
In December 2004 there were 36,500
enues now stand at approximately 130
argument for operating in Germany
people employed in the sector – 3 per-
percent of the level of the early 1990s.
itself. Only reliable supply chains can
cent more than at the end of 2003. Job
Compared with the previous year, sales
meet the need for on-time delivery of
losses thus appear to have bottomed out
in 2004 exhibited a marked increase
components for installation, and they are
last year.
both at home (+8 percent to 38.1 billion
best achieved by the close proximity of
euros) and abroad (+11 percent to 27.3
suppliers and manufacturers.
Successful year for the
caravanning industry
The sales performance of caravans
and motor caravans was mixed last year.
billion euros). Exports thus accounted
for approximately 42 percent of the in-
for automotive suppliers to set up lo-
share to date (2003: 41 percent).
cal operations close to new automobile
While 5 percent fewer caravans were
sold (21,600 units), sales of motor caravans rose by some 9 percent to 19,400.
The trend of recent years away from
However, there is evidence of a trend
dustry’s total sales revenues, the largest
manufacturing plants – in China and in
The supply industry
provides secure jobs
Car manufacturing is one of
Eastern Europe, for example – in order
to take advantage of lower costs as well
as the market opportunities these new
caravans and towards motor caravans
Germany’s key industries, and the parts
locations have to offer. The automotive
continued in 2004. The German caravan
and accessories supply industry a major
suppliers themselves are also sourcing
and motor caravan sector was able to
employer. In 2004, the number of people
more and more components from sup-
52
GLOBAL MARKETS
350
60
300
50
250
40
200
30
150
20
100
10
50
0
0
Employees in ‘000s
70
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
Sales in billion euros
Sales and employment levels in the automotive supply industry
pliers abroad, which in turn creates new
manufacturers of threaded fasteners
their sales revenues significantly, gains
jobs at foreign locations. The onus is on
or pressed metal parts – have experi-
have often been completely eroded by
political and social partners to support
enced a reduction in earnings. Many
increased costs. At the same time, the
medium-sized companies in particular
suppliers are also indirectly affected by
cumulative effect of higher costs in the
in their efforts to safeguard the future of
the increased raw material prices as a
supply chain has put manufacturers
domestic production locations.
result of the higher prices they are pay-
under greater pressure.
ing for parts preceding the automobile
Rising cost of raw materials
puts pressure on margins
chain. Manufacturers are experiencing
Because of the wide variations in
a similar situation; they are affected
customer/supplier relationships within
The explosion in the cost of raw
both by the increased cost of materials
the added-value chain, there is no sign
materials – particularly steel – continues
purchased directly and by the cost in-
of a ready-made solution in this problem
to have a negative affect on profit mar-
creases passed on by their suppliers.
area. Both sides are obliged to show un-
gins. Since raw materials such as metal
derstanding and a willingness to discuss
and plastics can account for between 10
These increased costs have led to
the problems and find mutually accept-
and 60 percent of the cost of the supply
a significant deterioration in the earn-
able solutions. German car manufactur-
industry’s end products, supplier groups
ings situation of many suppliers. Even in
ers have demonstrated their readiness
primarily producing metal-based raw
markets such as supply to commercial
to discuss the situation and negotiate. To
materials in their first process stages
vehicle manufacturers, where buoyant
gain this cooperation, suppliers need to
– such as cold-rolling mills, foundries,
sales have enabled suppliers to increase
provide a clear and detailed explanation
Annual Report 2005
53
of the cost increases caused by higher
sues must not be allowed to reduce the
er margins necessary to finance all these
raw material prices.
competitiveness of supplier companies,
challenges. However, the greatest chal-
which would adversely affect the com-
lenge facing the automotive suppliers is
petitiveness of the German automotive
to be found in the changes taking place
industry as a whole.
in the value chain. According to the
The VDA, as the umbrella organisation for automobile manufacturers and
consultancy firm Mercer Management
parts and accessories suppliers, makes
Consulting (FAST 2015 study, pub-
use of its committees to act as an inter-
Operational excellence is a basic
mediary between the parties and above
requirement for competitive success,
lished as volume 32 in the VDA series
all to establish a common position for
but it is not enough on its own. Future
“Materialien zur Automobilindustrie”
its members in dealings with producers
growth of the automotive supply industry
(Materials for the Automotive Industry),
of steel and other raw materials and to
will be based on three cornerstones: vol-
added value from the world’s suppliers
make this position clear to the public at
ume (that is to say growth in the world
will increase by 70 percent, from 417
large. The objective is to reconcile con-
automotive markets and growth due to
billion euros today to 700 billion euros by
flicting interests by means of bilateral
the globalisation process), an increase
2015. This forecast includes not merely
discussion and to work towards achiev-
in the proportion of the vehicle’s value
a relative but also an absolute drop
ing a substantial reduction in the cost
generated by suppliers and growth in
in added value by the manufacturers.
of raw materials in the medium to long
the value of vehicle content.
However implausible the latter scenario
term in order to avoid any further deterio-
may appear, there is no doubt that there
ration of the situation in the automotive
is significant potential for growth in the
supply chain.
supplier industry throughout the world.
Globalisation and
competition for locations
Action is above all needed if the
German automotive industry wishes
The development and production of
to retain an effective supplier base in
Germany and Western Europe in the
motor vehicles is by no means restricted
long term and avoid the risk of delivery
to the Triad countries. The surge in
shortfalls in the short and medium term.
demand for cars in China and Eastern
Europe shows that now, more than
The financial situation
remains strained
ever, manufacturing locations must be
planned at a global level. Manufacturers
As a result of the new Basel II rul-
are reacting to this development by cre-
ings on equity capital, the monitor-
ating added value locally in areas where
ing of operational risks and banking
demand for cars is expected to be high.
supervision, many suppliers now find
themselves exposed to more restrictive
lending policies on the part of the banks.
Challenges for the supply
sector
The supply sector faces a host of
Since manufacturers require their suppliers to deliver worldwide, the latter are
also establishing production facilities in
This, together with greater pressure on
challenges – increasing demand for
costs from manufacturers and increased
innovation and funding, continued cost
raw material prices, could accelerate
pressure, pressure to internationalise
the trend towards consolidation in the
and to provide job security, and, at the
close to the car production plants, sup-
supply industry. However, financing is-
same time, the need to achieve the high-
pliers are in a position to increase their
different parts of the world.
By locating their production facilities
54
GLOBAL MARKETS
Labour cost difference between high- and low-wage countries
also higher than local competitors.
Real GDP per capita in 1,000 US dollars per year
Uniform development
with positive growth
40
location. As a rule, their productivity is
The report concludes that the ad-
Japan
USA
vantages of producing in high-wage
countries are disappearing. It forecasts
30
that the benefits of a production base
Germany
Singapore
in Western Europe, namely the local
market, know-how, the availability of
20
skilled workers and the infrastructure,
will have reduced priority by 2010. The
South Korea
key factor for a production facility in a
10
high-wage country is the presence there
of research and development know-how,
0
1950
China
1960
1970
1980
1990
2000
since this is what drives product innova-
2010
tion.
2020
Source: Global Insight, ProNet analysis
The trend towards competition for
locations was confirmed by a survey of
“new production facilities” which the
share of added value. Production plants
similar levels of productivity for standard
VDA carried out last year among its
in the “new” car producing countries
production processes irrespective of the
member companies. This revealed that
offer the additional benefit of labour
Advantages of producing in high-wage
countries are declining
rates that are often considerably lower.
Surprisingly, the labour cost difference
between high- and low-wage countries
is actually increasing as time goes by.
Significantly lower effective levels of
Site advantages (averaged)
1 = no advantage /disadvantage
5 = substantial advantage
corporate taxation and of income tax,
particularly between the countries of
North America
3,3
3.3
Availability of
skilled workers
Western Europe
3,3
a production facility has little or no ef-
2,8
fect on product quality or productivity.
Infrastructure
factor than the location of its plant.
Source: ProNet
-21%
2.6
2.3
-9%
2.1
-15%
Existing
capacities/
restructuring
obstacles
The company itself is a more important
-22%
2.8
-6%
tions.
Major international companies achieve
3.6
Know-how
3,6
shown that the geographical location of
-16%
3,1
Western and Eastern Europe, serve to
A study by McKinsey (ProNet) has
3.7
Local market
2004
2010
heighten the competition between loca-
Specific site advantages in Western Europe
3.7
3.3
-11%
Annual Report 2005
55
supply industry member companies have
consumers), who will have a consider-
of foreign-owned companies in China.
three times as many production facili-
able influence on whether the country
For example, attempts to speed up the
ties abroad now as they did at the time
achieves the growth rates the sector is
localisation of the entire supply chain
of a previous survey in 1988. Growth in
hoping for. Although per capita income
by classifying imports of vehicle com-
Western Europe mirrored this trend. Over
has already risen substantially in urban
ponents and adding them to the local
the same period in Central and Eastern
areas, cars that cost the equivalent of
content have served to slow down the
Europe, the number of production plants
20 times the average annual income are
introduction of the latest vehicle models
increased by over 500 percent, and in
still very expensive, at least by Western
and technologies, a process which can
China by over 600 percent.
standards. Hopes of a sustained growth
be accomplished best only via the im-
in demand have been fuelled by the
port route at this stage of the industry’s
positive developments such as the
development. Unlike the German gov-
emergence of a middle class and the
ernment – and the EU – the VDA there-
low density of vehicles on the roads.
fore supports further liberalisation of the
China – market of the
future
The automotive industry is focusing
more closely on China than on virtually
any other market. Nearly all global auto-
motor vehicle market and the automoWhen China joined the WTO in 2001,
tive manufacturing industry in China.
mobile manufacturers are now repre-
this provided the decisive impetus for
sented there. The internationally estab-
opening up the Chinese economy to for-
China has allocated the highest
lished tier 1 supplier companies followed
eign trade, although foreign investment
political priority to the development of
the manufacturers to China because, in
activity in China and its intensity remain
an automotive industry that not only
addition to its value as a manufactur-
heavily regulated by national govern-
satisfies the needs of the domestic mar-
ing location, China offers a base for
ment measures. It is clear, however, that
ket but is also geared to serve export
exporting to the Asian markets and is a
the government wishes to encourage the
markets. Regardless of a forecast rise in
focus for global purchasing strategies.
sustainable development of the automo-
imports, the automobile sector continues
Despite the attractions of the Chinese
tive industry. By opening up its markets,
to expand its production capacities in
market, there are risks and uncertain-
it wants to boost foreign links while at
China. This is making competition more
ties for automotive suppliers who set
the same time continuing to exert as
intense as well as exerting additional
up in business in this region, including
much influence as possible over the
pressure on prices, which fell by nine
the danger of overcapacity and product
companies concerned. To achieve this, it
percent in 2004.
piracy as well as red tape, an inadequate
continues to invest in the expansion of
infrastructure and persistent regional
the infrastructure and to offer tax con-
protectionism in some cases.
cessions.
Investors should give careful consideration to involvement in this market,
which is characterised by business
The consultants Pricewaterhouse-
At the same time, the Chinese gov-
risks and entry barriers. Ultimately, the
Coopers believe that the future develop-
ernment plans to introduce a number
question is not “whether” but “how” to
ment of the Chinese automotive industry
of legislative measures in areas of
invest, with success depending greatly
will be influenced by four key factors:
importance for the development of the
on the targeted business sector as well
the consumers, foreign investors, the
automotive market, which could prove
as the chosen business strategy. To ex-
state and globalisation.
to be counterproductive. They include
ploit market opportunities successfully
regulations governing distribution or-
requires careful planning. There is every
ganisations, company formation and
chance of achieving business success
acquisitions and on the establishment
with investments that deliver a competi-
China has a population of 1.3 billion
people (although not nearly as many
56
GLOBAL MARKETS
tive advantage at minimum risk – even
that this trend will increase in the years
in China.
up to 2015. As the technical differ-
Production and added
value of light vehicles
(worldwide): 2015 forecast
ences between products become less
The VDA supports its member
marked and customer relations, image
Production (units)
companies’ activities in China and,
and brand differentiation take over as
following its successful participation
decisive success factors in the competi-
at AUTO CHINA in Beijing in June
tion between brands, manufacturers
2004, hosted a national pavilion and
will devote more of their resources to
organised other activities at AUTO
post-production activities such as sales,
SHANGHAI in 2005.
service and customer support.
As manufacturers increase their focus on this downstream business and on
Many people view cars as emotion-
brand-specific elements such as styling,
ally charged consumer products, the
brand experience and image-building
brand image of which is often just as
features, parts and accessories suppli-
important as performance or value for
ers will assume greater responsibility for
money. A study compiled by Mercer
vehicle development and for carrying out
Management Consulting and the
production tasks with no brand-determi-
903
OEMs
645
700
(77%)
417
(65%)
228
(35%)
203
(23%)
2002
2015
Source: Mercer/Fraunhofer
nant character.
Fraunhofer Gesellschaft has indicated
76 million
Suppliers
including
service
providers
Added value in billion euros
The structural change in
the added value system
57 million
Key modules: Development of supplier added value from 2002 to 2015
Growth rate for suppliers1
Share of suppliers
in percent
1
Average per year
1.2 %
85
Absolute
+13 billion
5.9 %
+38 billion
3.3 %
+30 billion
19.5 %
+19 billion
3.7 %
+19 billion
Chassis
2002
2015
Drivetrain
2002
2015
Engine and
assemblies
2002
2015
Body
structure
2002
2015
Body
(exterior)
2002
2015
Interior
2002
2015
84
85
0.5 %
+7 billion
Electrics/
Electronics
2002
2015
84
84
7.2 %
+157 billion
Including service providers
Source: Mercer Added Value Model 2015
77
63
80
50
64
4
41
45
71
Annual Report 2005
57
Degree of networking as evidence of a new quality of cooperation
Low
Degree of networking
Independent strategies
Short-term
Independent competence profiles
Independent orientation of resources
“No management”
Uncoordinated individual planning
Self-optimisation
Opportunism
Asynchronous, separate processes
Technical compatibility
Supply/performance agreement
No equity participation
Joint business model
Long-term partnership
Complementary competences
Complementary resources/assets
Joint management
Integrated planning/controlling
Profit and risk sharing
Joint mission/trust structure
Joint process model
Joint infrastructure
Joint venture
Mutual equity participation
New quality of cooperation
Source: FAST 2015, Mercer Management Consulting
The study predicts that added value
High
responsibility than before, particularly
allocation of roles and its challenges, is
in car development and production (ex-
with regard to body design and the ex-
leading to a new quality of cooperation.
cluding sales, spare parts and service)
terior but also in the engine, mechanical
will increase by 2.6 percent annually,
assemblies and chassis areas.
closely coordinated systems, which are
from 645 billion euros today to 903 billion by 2015. The manufacturers’ share of
This is nowhere more evident than in
This will change the relationship
notable for a high degree of networking.
added value will decrease from its cur-
between companies in the value chain
Ultimately, there is a need to optimise
rent level of 35 percent to approximately
and strengthen the position of the
the entire value chain rather than leave
23 percent over the same period. The
automotive suppliers. Relationships
participants to optimise individual parts
key electrical and electronics module will
between customers and suppliers will
of it. Innovative suppliers have therefore
experience particularly strong growth
develop into partnerships and alliances.
begun for example, by identifying key ac-
and is forecast to increase from 127 bil-
However, this will require changes in the
counts, developing new business models
lion euros to 316 billion euros by 2015.
attitudes of those involved, reallocation
with or for them, extending their range of
Suppliers will deliver 84 percent of this.
of jobs, responsibilities, opportunities
competencies in order to take on a wider
and risks, and the modification of sys-
range of projects, creating new products
tems and processes.
and services in areas previously handled
Apart from this key module, to which
OEMs currently contribute a comparatively small share, the study concludes
that manufacturers will reduce their
share of added value in all the other six
automobile modules. Suppliers and service providers will assume much greater
by the manufacturers, raising competitive
Innovative business
models – a greater degree
of networking
The change in the structure of the
added value system, with its revised
barriers and pursuing a unique competitive position to a greater degree.
Despite these closer relationships, competition between market
GLOBAL MARKETS
participants needs to be maintained.
The importance of strategic options
In percent
75.9
agreed target systems are particularly
successful, since they maintain a con-
65.8
63.5
Important
Moderately important
58.8
structive tension between the parties.
Unimportant
21.2
20.0
25.6
31.8
18.3
ways in which companies with an on-
21.2
to take action. There are a number of
28.2
ing suppliers to considerable pressure
39.0
39.0
42.7
Challenges and changes in the
automotive value chain are subject-
35.4
50.6
Strategic options for action
4.7
monitoring can respond to these market
9.2
going programme of strategic planning
forces: buying or selling companies or
11.4
Partnerships governed by mutually
22.8
14.9
58
liances are considered to be the most
worthwhile, closely followed by acquisi-
tu
en
tv
in
St
al rate
lia g
nc ic
Pr
e
od
uc
tal ba
lia se
nc d
e
re
r
ge
er
Jo
According to a survey by PwC, al-
M
alliances, mergers and joint ventures.
st Ma
at in
Co
us ta
m
qu in
pa
o
ny
ac
qu
isi
tio
n
Co
m
pa
ny
sa
le
operations, product-based and strategic
Source: PwC
tions and joint ventures, with the latter
two options enjoying growing popularity.
Alliances and joint ventures are favoured
adopt a new one in the wake of acquisi-
terms of acquisitions as: consolidation
primarily by family-owned suppliers and
tions or sales.
of core activities (84 percent), expan-
by companies that have not concluded
any deals within the past two years,
sion of the product portfolio (83 percent)
As the principal reasons for consid-
and acquisition of new customer groups
although by their own admission the
ering acquisitions, suppliers mention
(79 percent). The factors influencing the
pressure to act is keenly felt. In contrast,
consolidating core activities and round-
large suppliers with an annual turnover
suppliers who have acquired other com-
ing off their product portfolio. They have
of over 250 million euros are slightly
panies within the past two years view
two important strategic objectives in
different in emphasis. All of these com-
acquisitions as their most important
mind: gaining market shares in the com-
panies mention completing their product
strategic option, and so do suppliers that
pany’s core segment and repositioning
portfolio as the most important reason.
are not owner-managed.
the company as a supplier of modules or
systems in order to move up from being
Mergers and acquisitions
are gaining in importance
a mere parts supplier to the status of a
on core activities as the most important
car manufacturer’s key system partner.
reason for disposing of companies or
Many suppliers attach great importance to the issue of whether the com-
Suppliers also quote concentration
operations (see graphic). Other imporFor the smaller suppliers with an an-
tant reasons for such sales are restruc-
pany or individual business divisions will
nual turnover of up to 50 million euros,
turing, unsatisfactory profitability and
have to revise its strategic alignment or
the PwC study lists the key factors in
the need for capital. It is noticeable that
Annual Report 2005
whereas large suppliers give low priority
organisation for all companies operating
to the need to raise capital as a reason
in the automotive industry, successful
for selling off sections of their company,
cooperation within the value chain is
this has a relatively high priority for
a consistently recurring theme for the
smaller suppliers.
principal VDA committees. Our members
59
are also committed to the pursuit of this
The VDA promotes
cooperation
objective and, under the auspices of the
VDA, have formulated the key principles
The challenges of the future can only
of their cooperation in a paper entitled
“Success through partnership”.
be mastered if every link in the value
chain is strong. It is therefore vital for
With its numerous committees, con-
the process of development and production to be optimised throughout the
ferences and services, the VDA offers
value chain.
convincing reasons for membership.
This is demonstrated by the 100 or more
automotive supply companies that have
The factors governing the success
of the German automotive industry
joined since the end of the 1990s. Most
– technological leadership and innova-
of these are small and medium-sized
tion – are underpinned by the complex
companies, although larger companies
network of relationships in the value
from the supply sector have also joined
the VDA’s definition of a medium-sized
chain. Because the VDA is the umbrella
our ranks during this time.
company. No matter what the turnover,
The VDA ‘Mittelstandskreis’
Company size is not the yardstick for
assets or number of employees, mediumsized companies are notable for a readiness to take risks, a capacity to innovate
Reasons for company sales
and a high degree of flexibility. These
Revenue-based evaluation in percent
100
< 50 million euros
50-250 million euros
> 250 million euros
86 90
71 70
67
57 60
57
50
attributes are particularly common in
businesses with a strong family influence.
In August 2000, the VDA formed a
63
committee for these companies – the
44
VDA ‘Mittelstandskreis’ – with the aim
of highlighting issues of major and
21
10
14
sometimes crucial importance. The
Mittelstandskreis has examined the
Su
c
dif cess
ficu ion
ltie
s
pro Lac
fita k o
bili f
ty
uir Cap
em ita
en l
ts
req
g
rin
ctu
str
u
Re
Co
nc
e
cor ntra
e a tion
ctiv on
itie
s
issue of cooperation and strategic alliances intensively. The web-based
“VDA cooperation portal” (www.vdakooperationsportal.de) was created as
a result of this work. In addition to a
wealth of information on the subject of
Source: PwC
cooperations, it includes an electronic
60
marketplace where companies can find
potential partners seeking cooperation.
The committee has focused, and
GLOBAL MARKETS
The VDA cooperation portal is an
Internet platform providing news, event
VDA rating tool
New banking regulations relating
details, literature, service provider in-
to companies, and known as Basel II,
formation, links and checklists relating
are expected to be implemented on
continues to focus, on the issues of
to the formation of alliances within the
December 31, 2006, beginning with a
“Financing”, “New methods of financ-
automotive industry. A special feature
one-year transitional phase. These new
ing” and “Cooperation in the automotive
of the cooperation portal is the virtual
rules will affect the banks’ lending terms
value chain”. “Corporate governance for
marketplace – available in German and
and credit rating procedures. Companies
family-owned companies” will also be an
English – where requests for coopera-
will be rated according to their ability to
important topic during the current year.
tion can be matched with offers from
settle their future financial liabilities.
other companies.
The annual VDA Mittelstandstag
(conference for small and medium-sized
This will impact small and mediumThe cooperation portal at www.
sized companies in particular by making
companies) provides a discussion forum
auto-world.org is gaining in impor-
borrowing more difficult. As many small
for representatives of the car manufac-
tance as an international service tool.
and medium-sized companies cannot
turers and major suppliers. It offers an
This site links the databases of auto-
afford an expensive external rating, the
opportunity for top executives from the
motive initiatives from North Rhine-
VDA has developed its own rating tool
entire automotive industry to discuss
Westphalia, Baden-Württemberg, the
in association with the Prof. Dr. Schneck
and exchange information with top-
Saarland and the Netherlands with the
Rating GmbH company, and is mak-
ranking figures from politics and
classified VDA database currently com-
ing this tool available to members free
industry.
prising 1,500 companies.
of charge. The tool makes it easier for
VDA Internet platforms
support the value chain
To support the activities of our member companies, the VDA has created the
Internet platforms www.vda-herstellernachweis.de and www.vda-kooperationsportal.de.
The VDA manufacturer database
provides VDA member companies with
a vehicle for publishing pertinent details
about their company and their products,
all classified according to a special
product key. Users of the manufacturer
database can carry out a detailed and
accurate search for companies and
products by region and send an e-mail
to the relevant contact person at the
company in which they are interested.
Annual Report 2005
61
VDA members to assess how they will
attractive rates in the German pavilion at
substantiate the claim that the Block Ex-
be rated by banks. It can also be used to
foreign exhibitions. This provides smaller
emption Regulation is highly relevant to
enhance members’ existing controlling
companies in particular with an op-
strategies and processes. Moreover, the
systems.
portunity of learning more about foreign
current Block Exemption Regulation lim-
markets and exhibiting their products
its the choice of certain forms of selling
cost-effectively and with relatively low
and makes it difficult for a manufacturer
administrative overheads.
to develop the kind of close relationship
The results of a quantitative selfassessment prepared with the VDA
rating tool are now recognised by
German vehicle manufacturers as proof
that it needs with its brand network. The
Last year, the VDA focussed on
strategies of industry and commerce are
of their suppliers’ creditworthiness. It
China with a pavilion at Auto China
being tested more than ever before and
has consequently become a standard
in Beijing. The VDA also supported
strategic reorientation will be unavoid-
tool for the entire German automotive
German suppliers at the SAE Congress
able in many areas.
value chain. The VDA rating tool is
& Exhibition in Detroit, USA. In 2005,
available from non-members of the VDA
the VDA attended AUTO SHANGHAI,
and also on CD-ROM for a fee from
where 60 German supplier companies
the VDA’s Vehicle Parts and Accessories
exhibited under a common flag, the
department.
SAE Congress & Exhibition in Detroit,
an option for improving the profitability of
AUTOMEC in Sao Paulo, the Tokyo
the retail motor trade has been dismissed
Motor Show and Auto Components +
by many as a delusion on the part of the
Aftermarket in Bangkok. In addition,
Commission. The dealerships have been
the VDA organises numerous confer-
questioning the wisdom of attempting
companies with a host of activities. For
ences, discussion forums and delegate
to gain extra sales volume by taking on
example, German companies, their sub-
tours, and supplies information mate-
additional brands, since these additional
sidiaries and agents can rent space at
rial on foreign markets.
brands also generate additional costs.
VDA international trade fair
programme
The VDA supports its member
Multi-branding – a valid
option?
The introduction of multi-branding as
In practice, multi-branding has often
Automotive Sales and Service
been nothing more than a zero-sum
game for motor dealerships. The view
that a dealership can compensate for
reduced sales of an (exclusive) brand by
The future of vehicle
retailing
stimulate the market for new vehicles,
adding further brands has been shown
servicing and spare parts (known as
to be fallacious. For the dealer, taking on
the three markets concept). However,
a new brand involves more than simply
motive retail sector means that sales
it is unlikely that the individual vehicle
investing in showrooms, sales staff and
network partners – dealerships in par-
manufacturers and importers will view
workshops. He must fully comply with
ticular – are having to work harder to
the requirements of the competition law
all of the standards stipulated by the
gain new business.
as helpful in stimulating sales. Indeed,
brand. From a commercial point of view,
all of these companies are formulating
the additional cost of running a multi-
and implementing their own strategic
brand business only makes sense when
emption Regulation (MVBER 1400/02)
sales objectives. There has been very
the increased infrastructure costs are
signals the EU Commission’s intent to
little evidence during the past year to
amortised by increased sales volumes.
Increased competition in the auto-
The new Motor Vehicle Block Ex-
62
The above drawbacks of multi-brand
GLOBAL MARKETS
even its brand value will weaken against
Dealerships are also investing heav-
marketing make it clear that the sin-
competitive brands. As a result, the price
ily in new technologies for their sales
gle-brand dealership is usually the best
premium achieved by various brands
and service departments. Sales depart-
option. Even the smaller single-brand
(in which the dealer shares a vital inter-
ments need to deliver information to
dealership has every chance of be-
est) will be put at risk. This is why both
customers quickly and this is an ideal
ing successful in the face of increased
manufacturers and dealers are keen to
task for the Internet. Internet-based
competition when he has a good sales
maximise brand equity and why manu-
logistical links between the dealer and
organisation and a close relationship
facturers still rely on the active participa-
the car manufacturer or parts supplier
within the manufacturer’s brand network.
tion of their dealers in brand advertising.
are also extremely effective. Small and
Whilst offering no economic benefit,
multi-branding makes it impossible for
a dealer to concentrate all of his efforts
on a single brand. As product ranges
expand to include models such as SUVs,
medium-sized businesses now have
Standards for the
investment decisions
of the retail sector
When the manufacturers changed
access to powerful stock management
and accounting software, and electronic
diagnostic equipment has been a fixture
in the workshop for some time now.
motorhomes and sports cars, the sin-
their sales and service standards and
Also, process management has become
gle-brand dealer is able to offer a com-
the associated margin systems to en-
a basic requirement for achieving high
prehensive and “tailor-made” range of
sure compliance with the conditions of
quality in dealerships.
vehicles to a wide spectrum of customer
the Block Exemption Regulation, they
groups. Good results have also been
once again attracted fierce criticism. The
achieved by improving customer relations
manufacturers would be the first to point
via Customer Relationship Management
out, however, that the new standards are
(CRM), particularly for those dealerships
aimed primarily at meeting the changing
selling the more exclusive brands.
needs of both customers and market.
Removal of the Location
Clause puts pressure on
medium-sized businesses
The MVBER Location Clause will
come into force on October 1, 2005,
allowing dealers to establish additional
Manufacturers’ brand
management at risk
There is evidence that many suc-
sales outlets or delivery depots without
cessful German dealerships are cur-
having to obtain the prior agreement of
rently investing heavily in their sales and
the vehicle manufacturer. Dealers will
Regulation and constantly changing
workshop facilities, but not because of
nevertheless have to adhere to the sales
market conditions, manufacturers must
the new Block Exemption Regulation.
standards that the automakers apply to
further develop the strategic and op-
Many dealers are erecting architectural
their existing dealerships.
erational pillars of their present sales
“landmarks” in town centres or trading
strategy – brand exclusivity and the
estates. For customers as well as for the
integration of sales and workshop at
public, the lavish design of car dealer-
elimination of the location clause to
a single location. Brand management
ships and manufacturers’ subsidiaries
increase the amount of cross-border
is extremely important to this strategy.
enhances specific brand characteristics
trade in new cars and thus to further
Now that multi-branding is a reality, we
that relate directly to the vehicles in the
harmonise car prices in the EU.
fear that the retail motor trade’s contri-
showrooms. The high quality exhibition
bution towards consistent brand man-
stands at the IAA Cars are an excellent
In the opinion of the VDA and of
agement will decline. If a brand’s target
example of a successful design whose
CECRA, the European Council for Motor
is merely to increase sales volumes, the
structure is tailored to a particular brand
Trades and Repairs, large retail groups
brand core, its positioning, profile and
image right down to the smallest detail.
will be keen to establish additional
Faced with new Block Exemption
The EU Commission expects the
Annual Report 2005
63
sales and delivery points in the major
population centres. In Germany, 70
The automotive advertising watchdog
percent of new cars are now registered
in towns with over 50,000 inhabitants,
Since 1988, the automotive adver-
Television advertising, which is assessed
although competition is also keenest in
tising watchdog has been examining
using a monthly video compilation, has
these towns, where disposable income
and ruling on the advertising of the
been included since 1998. If the aver-
is higher. The impact of such a fiercely
member companies of the VDA, the
age rating for an ad exceeds a specific
competitive environment will likely be
German Association of the Automotive
maximum value, the watchdog contacts
felt mainly by medium-sized and smaller
Industry and the VDIK, the Association
the person responsible within the com-
firms outside these areas, which will
of Motor Vehicle Importers in Germany,
pany involved. The watchdog expresses
eventually lead to a fall in the number of
and the tyre and mineral oil industries.
its reservations, provides an in-depth
dealers outside the major conurbations.
The watchdog’s ongoing analysis of
review, and asks for the advertisement
print and television advertising is de-
to be altered or withdrawn.
This would put the stability of brand
signed to detect any undesirable mes-
networks at risk. The elimination of the
sages, such as encouraging dangerous
location clause will greatly reduce the
driving, for example. The watchdog
140 advertisements each month, 15
ability of manufacturers and importers to
does not publish its findings publicly
percent of which are submitted to the
manage their dealer networks. Smaller
but seeks a direct dialogue with the
watchdog. Around two percent of all
dealerships will become increasingly
companies concerned in order to have
cases are referred to manufacturers or
willing to invest. The number of car
the questionable advertising modified
importers. Over the part five years, the
dealerships will fall; consolidation within
or withdrawn. The four members of the
institute has scrutinised approximately
the retail sector will increase, leading to
watchdog are independent experts in
10,000 advertisements and TV commer-
reducing competition, and ultimately, to
automotive advertising, communications
cials.
higher prices for new cars.
and road safety.
The institute checks approximately
You can find out more about the
The VDA feels, therefore, that the
The watchdog is required to con-
wisest course of action would be
sider the entire print and TV advertising
to cancel the impending removal of
output of the automotive, tyre and min-
the location clause. The aims of the
eral oil industries. The associations have
Commission can also be achieved by
appointed the market research institute
means of the location clause and the
Sinus Lebensweltforschung GmbH in
other provisions of the MVBER.
Heidelberg to examine a representative
pool of newspapers and magazines and
As a result of consumer pressure,
to highlight any advertisements that
the market is currently more price com-
contravene the watchdog’s criteria even
petitive than it has been for a long time.
slightly. These are published together
Manufacturers are also actively pursuing
with a brief critique on a password-
a policy of price harmonisation within
protected section of the institute’s
the EU. However, complete Europe-wide
website. The watchdog’s members rate
price harmonisation is being hindered by
the advertisements on a scale of 1 to 4.
the consistently high taxes on vehicles
watchdog on the Internet at:
www.beobachterkreis.de
64
GLOBAL MARKETS
and on luxury products in certain coun-
own agenda on the structure of the
independent workshops are usually able
tries – some of which can be as high as
automotive service sector by making it
to provide lower prices, particularly for
200 percent – and by a lack of harmoni-
difficult for manufacturers to maintain
labour. However, they overlook or trivial-
sation of value added tax. So far, there
good geographical service coverage in
ise the fact that independent workshops
has been no legislative initiative on tax
the interests of their customers. In rural
often do not fit original spare parts,
from the EU to address these problems.
areas, this could well lead to a reduction
which means that the customer mak-
in the density of service facilities and an
ing a claim on his insurance policy may
increase in the number of multi-brand
not always receive the compensation
workshops. In heavily populated areas
he is entitled to. The automobile clubs
Service and the future of
technical services
The automobile was the first techni-
it could lead to cut-throat competition
are aware of the situation and regu-
cally complex mass-produced product.
as a result of an over-supply of services,
larly point this out to their members.
Automobile manufacturers invented the
which would not serve the interests of
Drivers should have the right to choose
concept of after-sales service by setting
the customer.
where their cars are repaired follow-
up workshop networks, providing them
with know-how specific to their vehicles
ing an accident. Mitigating damage or
In the same context, the damage
loss should not mean taking away the
and making spare parts and special tools
management techniques employed by
customer’s right to have repairs carried
available for the benefit of customers.
the insurance sector must be viewed
out at an authorised service centre in
critically. Insurers encourage drivers in-
accordance with the vehicle manufac-
volved in an accident to have their vehi-
turer’s repair guidelines.
The modern car has very little in common with the models produced in the
cles repaired in specific workshops with
early years at the beginning of the 20th
whom they have previously negotiated
century. The car is now a high-tech prod-
favourable rates for labour, collection,
interface and CAN bus system, work-
uct that relies on the support of a highly
delivery and car hire. This form of dam-
shops will be able to diagnose problems
specialised service network equipped
age management can disadvantage the
on cars more effectively in future. How-
with the very latest tools and equipment.
customer under certain circumstances
ever, the service departments of tomor-
It was for this very reason that a large
by limiting his legitimate basic rights.
row will not be radically different from
part of the industry was astonished when
This may manifest itself in a badly ex-
those of today. Less time will be spent
the Competition Directorate of the Euro-
ecuted repair or may mean that the
repairing purely mechanical damage,
pean Commission, via the Block Exemp-
customer is unable obtain an accurate
although the job of replacing worn parts
tion Regulation (BER 1400/2002), prohib-
damage assessment by an independent
such as brakes and exhausts will still
ited automotive manufacturers from con-
expert or the services of a lawyer in the
be an important part of workshop busi-
tractually insisting that their franchised
event of a legal dispute.
ness. Despite a growing vehicle popula-
dealers provide and maintain a factory
authorised workshop. Now, any work-
Thanks to the sixteen-pin diagnostic
tion, the volume of bodywork and paint
Such practice not only affects the
repairs will increase only slightly, since
shop which applies to join an authorised
customer but also restricts competition
there is a recognisable trend for vehicles
service network must be approved by
from franchised workshops. Insurers
not to be repaired in Germany. New
the manufacturer as long as it meets the
aim to award more than 60 percent of
repair procedures will emerge to deal
manufacturer’s quality standards.
their work to independent workshops
with the increased use of aluminium and
and only 25 percent to workshops
other materials and the advanced joint-
franchised by car manufacturers. This
ing and adhesive technologies that are
approach is based on the theory that
finding favour in vehicle construction.
With the Block Exemption Regulation, the Commission is imposing its
Annual Report 2005
Customer satisfaction is a key con-
All of today’s vehicles are equipped
65
proach towards product liability becom-
cern for service. A friendly and knowl-
with highly complex systems to deliver
ing established in Germany or the EU,
edgeable customer advisor or service
reduced consumption and emissions
product safety laws and the ongoing de-
technician in service reception and
and enhance safety.
velopment of the liability laws have been
well trained and motivated personnel
working efficiently and professionally in
responsible for heightening the sensibiliManufacturers frequently undertake
ties of the industry and consumers alike.
the workshop make an indispensable
recall campaigns as a precautionary
contribution to any successful service
measure to exclude malfunctions well
operation.
before they have a chance to occur.
legislation as per the American model
These campaigns frequently address
would not be appropriate for Europe. It
convenience rather than safety issues. It
would have massive repercussions on
is just one of the ways in which industry
costs and would inevitably lead to higher
is responding to customer demand for
prices. Stronger liability laws do not
greater reliability in motor vehicles.
necessarily lead to safer products. Inter-
Recalls:
Car manufacturers acting
responsibly
Product safety and product quality
rate very highly within the automotive
industry. Manufacturers appreciate the
Over-generous product liability
national comparisons have shown quite
Not all recalls are carried out in the
clearly that products from countries with
importance of quality in making their
same way, since manufacturers must
tough product liability laws do not dem-
products successful. The ability to build
take into account the urgency of the
onstrate higher standards of safety.
reliable, high quality vehicles has tradi-
problem and the technical resources
tionally made an important contribution
involved. The procedure is normally
to the image of German manufacturers.
implemented so that all customers af-
vehicles is not only extremely high; it
The approach has been successful:
fected are contacted in good time. The
leads the world in many areas. The in-
nearly every second vehicle registered
manufacturer must first ask the Kraft-
dustry takes its responsibilities for road
in Europe is a German brand, as is
fahrt-Bundesamt (KBA) to provide the
safety very seriously and will continue
every third premium car in the USA.
necessary information from its central
to do so. Manufacturing defects have
vehicle database. If the initial campaign
not been responsible for any significant
fails to reach the necessary number
road safety risk for some time now and
their suppliers continue to develop
of affected vehicles, the manufacturer
are inconsequential as a cause of ac-
their quality management systems for
sends out a second letter in an effort
cidents. Indeed, the opposite is true.
the automotive value chain. The VDA
to get the remaining vehicles into the
The introduction of a host of new safety
Quality Management Center (QMC)
workshop. In the future, vehicle manu-
technologies has considerably reduced
plays its part by drawing up compre-
facturers will carry out recall campaigns
the numbers of deaths on the road in
hensive codes of practice. Thanks to
in partnership with the KBA and in ac-
recent years. Moreover, vehicle reliability
the deployment of highly advanced QM
cordance with the German Equipment
continues to improve. The average serv-
systems, vehicle manufacturers and
and Product Safety Law.
ice life of vehicles in Germany currently
The vehicle manufacturers and
suppliers are able to take action earlier
and more frequently to rectify quality problems with their products. The
industry intends to actively pursue this
The safety standard of German
extends to 14 years, and is still rising.
Product liability law avoids
US approach
Product safety is an important issue
positive development in the interests of
for the law. Although there has never
its customers.
been any danger of the American ap-
Mobility services gaining
ground
Today’s drivers value unrestricted
mobility both at home and abroad and
66
manufacturers are continually improv-
GLOBAL MARKETS
Similar services are also available for
ing their products to meet the needs of
commercial vehicles. Commercial vehicle
these customers. The mobility service
operators need support services that are
substantial contribution to the profits of
automotive groups.
provider, or the car manufacturer’s serv-
both fast and flexible in the event that
ice agent, goes to the assistance of cus-
a breakdown, repair or accident results
a vital role in the automotive sector.
tomers when they break down. Mobility
in long periods of downtime or creates
Despite increased competition, the auto-
service providers are the manufacturers’
transport bottlenecks. There is a wide
motive banks maintained their leader-
service organisations and financial serv-
range of options available, including the
ship position in 2004, providing finance
ice providers, and in the case of certain
immediate supply of a replacement vehi-
and leasing for 1.3 percent more vehi-
makes, are also authorised breakdown
cle and compensation for loss if there is
cles than in the previous year. The banks
organisations, insurance companies, car
no replacement vehicle available.
achieved a 38 percent penetration rate
rental companies or automobile clubs
providing supplementary services such
as international emergency recovery.
The mobility guarantee is a key part
Financial services continue to play
(the percentage of new vehicles sold
When the original warranty runs
subject to finance or lease agreements)
out, manufacturers can provide tai-
– a repeat of their strong 2003 perfor-
lored extended warranty packages with
mance. This equates to a market share
benefits similar to those of the mobility
of 50 percent. Nearly four out of every
of the range of services these compa-
guarantee. These packages, which can
ten new car buyers chose to finance or
nies provide. The mobility guarantee for
be purchased separately, enhance the
lease their vehicles through a manufac-
new cars applies to all production mod-
warranties that trade sellers are legally
turer’s bank.
els purchased from an authorised dealer
obliged to provide and offer the original
or from the manufacturer. As long as the
owner continued peace of mind as the
manufacturer’s service and inspection
vehicle gets older.
banks remain excellent. Approximately
three quarters of car owners in Germany
schedule is adhered to, the guarantee lasts for two years, although some
The prospects for the automotive
More recent forms of mobility service
want to finance or lease their next car
manufacturers extend the guarantee on
include service leasing and fleet man-
rather than paying cash from their sav-
certain models for the life of the car.
agement. Here, the customer can obtain
ings. Based on market research findings,
mobility services at a reasonable fixed
experts expect this figure to increase in
The mobility guarantee covers road-
rate and so eliminate the possibility of
the next few years to 70 percent. Ap-
side repairs where possible, recovery
any unexpected financial surprises. This
proximately 30 percent of future car
to the nearest authorised workshop, a
type of service, which originated in the
buyers who have not yet dealt with an
replacement car if repairs cannot be
commercial sector, is increasingly wel-
automotive bank have said they intend
completed within a given time (e.g. two
comed by private buyers.
to do so by 2006. The best potential new
hours) and other costs and services such
as hotel and travel expenses or the cost
of transporting the car to an authorised dealer near the driver’s home. The
services are normally available to all
persons authorised by the owner to drive
customers are younger drivers between
Good prospects for
automotive banks and
manufacturer’s leasing
companies
The manufacturer’s banks and leas-
18 and 29.
Financial services provide benefits
for customers, manufacturers and, by
encouraging the arrival onto the market
the vehicle and to passengers (generally
ing companies, known as captives, are
of new vehicles that comply with the lat-
up to the maximum allowable number
amongst the automakers’ most profit-
est emission standards, the community
for the vehicle).
able subsidiary companies. They make a
as a whole. An examination of consumer
Annual Report 2005
67
behaviour shows why this is the case.
as businesses. The customer makes a
they can offer an agreement that com-
Owners keep new vehicles for ap-
monthly payment, and avoids unwanted
bines purchase, finance, insurance and
proximately 50 to 60 months when they
financial surprises.
mobile services over the entire period
have not used finance to purchase the
vehicles. When the vehicles have been
of vehicle ownership (or contractual
Because the automotive banks have
period), the automotive banks not only
financed, this period falls to 40 months
different sales structures, they often
have a decisive strategic advantage; they
and even to 30 to 36 months for leased
appeal to different target groups. As a
are also able to build customer loyalty to
vehicles.
result, the various integrated products
the brand.
on offer focus on different areas. What
The automotive banks, which have
they do have in common, however, is
Leasing and finance through the
been active in the market for decades,
that they provide the convenience of
manufacturers’ banks is a solution that
expanded rapidly when they began to
one-stop shopping in the dealer show-
benefits both customer and suppliers.
offer credit and leasing to private cus-
room.
The products on offer, namely three-
tomers. They not only finance the purchase of new or used vehicles by private
way financing, target financing, residual
The manufacturers’ banks also set
value products and insurance, are care-
or business users, they also support
higher standards than those of a tra-
fully tailored to meet the customer’s
the automotive retail trade by providing
ditional commercial bank, since their
needs and budget. The supplier is able
finance for vehicle stocks, demonstra-
primary aim is to build loyalty to their
to maximise sales while at the same time
tion vehicles, and so on. Some of these
brand. The tailor-made financial pack-
creating customer satisfaction for the
banks have developed into full-service
ages on offer provide important benefits
brand.
banks offering, for example, mortgages
to the customer. Research has shown
and current accounts.
that the availability of attractive financing solutions means that 22 percent of
The automotive banks have recently
buyers will eventually decide on a larger
Changes to the EU
consumer credit law
ineffective
Credit plays a particularly important
started offering integrated financial
model, 50 percent of buyers will choose
products to private customers. These are
a higher specification model, 39 percent
role in the purchase of a car and is an
a combination of products from differ-
will buy a new car rather than a used
essential sales tool for the automotive
ent areas of finance/leasing, which may
model and 29 percent will purchase their
retailer. It is estimated that over 50 per-
include insurance and “mobile service”.
car earlier than originally planned.
cent of private car purchases in the EU
involve some form of credit.
In the business sector, “mobile serv-
In view of this, it is not surprising
ice” has been around for some time in
that other leasing companies, com-
the form of “service leasing” in a number
mercial banks and building societies are
These credit agreements are often
not negotiated in the dealer’s showroom
of brand-specific guises. Depending on
trying to gain a share of this market. The
but elsewhere – at the customer’s home,
the particular brand of vehicle and con-
automobile clubs, too, are now moving
for example. In this event, the dealership
tract type, the automotive banks’ inte-
into finance and insurance. However, a
employee acts on behalf of the actual
grated financial services can cover the
comparison of the finance and insur-
lender, his company. The dealership then
cost of servicing and repairs, the cost of
ance products of all of these companies
records and checks the details of the
a replacement vehicle when needed, and
shows clearly that they are unable to
customer’s financial self-assessment.
car insurance. These services are now
compete effectively with the highly spe-
Based on this information, the bank
available to private customers as well
cialised manufacturers’ banks. Because
assesses the customer’s credit stand-
68
GLOBAL MARKETS
ing and provides a speedy decision on
supervision of a board of control and
whether to approve the loan.
accepting other obligations that would
should be aware that its decision not
normally apply only to genuine credit
to regulate leasing agreements lacks
brokers.
consistency. The formula suggested for
Under the banner of consumer
protection, the EU Commission plans to
Furthermore, the EU legislature
calculating interest rates should there-
introduce much stronger controls over
The car dealership performs a
this popular and well-tried process. In
useful service by mediating between
October 2004, it issued an amended
the manufacturer’s bank, or another
draft of the directive on consumer credit
finance company, and the customer.
in response to the first reading posi-
It is certainly right that an independ-
tive on consumer credit is not changed
tion of the European parliament, which
ent body should supervise the finance
considerably, the VDA considers that it
had made substantial amendments to
company, but this supervision should
will seriously affect the use of consumer
the draft directive. As an affected party,
not extend to credit brokers within car
credit in car dealerships.
the automotive industry contributed to
dealerships.
these amendments. However, even the
amended draft called existing practices
Selling and servicing vehicles is the
fore not contain any reference to leasing
agreements.
If the amended proposal for a direc-
Design protection for parts
must be maintained
primary activity of a car retailer. Credit
Until now, it has been possible to
agreements are not the core business
maintain design protection in fifteen
of the automotive sector. Supervising
EU-15 member states not only for a
supports in principle the aims of the
thousands of car dealerships and other
complex product (such as a car) in its
Commission to create a uniform internal
businesses which occasionally act as
entirety but also for individual “must
consumer credit market, the amended
credit brokers would be an enormous
match” parts. The only parts excluded
proposal ignores the realities of the
administrative encumbrance, which is
from this protection are those parts which
credit business in the automotive sec-
not justified by the reality of the situation.
must adhere to a specific design (“must
tor and goes further than is necessary.
Credit brokerage in car dealerships has
fit” parts) in order to perform their func-
As before, the Commission is pushing
not caused an inordinate number of com-
tion. This applies particularly in Germany,
the concept of harmonisation to the hilt
plaints from consumers and therefore
where last year the legislature expressly
instead of maintaining the principle of
requires no special protective legislation.
retained parts protection when it passed
into question.
Although the automotive industry
an amendment to the Design Act.
mutual recognition of national regulations, which is a more effective approach.
A more sensible approach would be
to disregard credit brokerage as defined
Similarly, design protection can
in Art. 2 (d) when it is not a principal ac-
also apply to individual components
tivity, and to define a credit broker as an
of a complex product. The underlying
in Art. 2 of the draft directive, and the
individual or legal entity whose principal
principle of all protection legislation is
conditions imposed on the broker, do
activity is brokerage. Additional obliga-
that every protected part derives from a
not take into account the special cir-
tions should be greatly reduced. The
unique creative act.
cumstances that exist in the automotive
automotive sector cannot, for example,
sector. We consider it excessive that
support a situation where a salesman is
the Commission should insist on car
responsible for assessing how the credit
proposed that a repair clause be in-
dealers and/or their employees register-
instrument he has proposed relates to
cluded in the EU Design Directive 98/71.
ing as credit brokers, submitting to the
the customer’s financial situation.
This would remove design protection for
The definition of a credit broker
In spring 2004, the EU Commission
Annual Report 2005
parts of complex products (such as car
parts).
The repair clause distorts
competition
69
companies, it is blind to the practical
impact of liberalisation. The Commission
Products such as headlamps are
assumes that the expected job losses in
The automotive industry feels that
among the vehicle parts that occasional-
the automotive industry will be offset by
the Commission made a wrong decision
ly require replacement. The consumer is
an increase in the number of jobs with
– one that will disadvantage the con-
therefore interested in obtaining the very
parts manufacturers. However, these
sumer and affect the competitiveness
best prices for such parts. The price that
new jobs will not be based in the EU.
of the automotive industry. Moreover,
the automotive industry sets for spare
The flood of cheap products from out-
an exception rule for spare parts would
parts in the after-sales market takes into
side Europe into the European market
represent a serious precedent in restrict-
account not only the cost of manufac-
will be very difficult to stem.
ing the commercial protection rights
ture but also the high original develop-
that industry in the EU relies upon to
ment and design costs of that product.
effectively establish its innovations in the
The assumption that design protection
marketplace.
automatically leads to high prices for
Autobody parts in particular contain
spare parts is erroneous. A study has
special safety features designed to pro-
The safety risk of
reproduction parts
shown that the prices for spare parts are
tect the life of vehicle occupants in the
a product enriches our lives and is just
particularly high in those countries (such
event of an accident. These parts are
as worthy of protection as a technical
as the UK and Hungary) which do not
regularly tested by the vehicle manu-
invention. Technical inventions are pro-
provide design protection for parts.
facturers and their suppliers. The EU
A creative act such as the design of
has introduced legislation that compels
tected by patents; industrial designs are
protected by registered designs.
Spare parts manufacturers are
the automotive industry to design cars
currently lobbying hard on the repair
which protect pedestrians. Non-original,
clause. This provision will remove design
safety-sensitive parts, which the author-
protection from all visible “must match”
ities cannot reasonably be expected to
parts and will allow parts manufacturers
monitor in the field, constitute an ad-
cannot be protected against imitation
to freely copy products originally de-
ditional and unnecessary safety risk for
and piracy. Maintaining the protection of
signed by the automotive industry. This
vehicle occupants as well as other road
intellectual property in the EU is impor-
proposal undermines the very basis of
users.
tant, because such protection provides
commercial design protection. Creative
a creative stimulus for industry, which in
achievement will no longer be rewarded;
turn sustains its ability to innovate.
instead, third parties will be able to
small to medium-sized subcontractors
make profits from copying products that
are frequently responsible for the ulti-
have been developed elsewhere at great
mate appearance of individual compo-
as a car – requires a high degree of
expense. This would distort competition
nent parts, especially when the materials
creativity. Creative design can transform
and unfairly penalise industrial innova-
used are integral to the design. Depend-
the appearance of a vehicle through the
tion.
ing on their contractual arrangements,
Design protection against
piracy
Without design protection, innovation
Creating a complex product – such
use of special headlamps, the shape of
the fenders or the styling of the bump-
It should also be remembered that
these companies frequently enjoy the
When the Commission’s study on the
legal protection of a registered design.
ers. Unless they are not new or have no
effects of liberalisation (SEC (2004)1097)
unique character, these traditional parts
concerns itself, however marginally, with
Maintaining the correct balance
enjoy copyright protection.
the demands of small and medium-sized
between the protection of industrial
70
GLOBAL MARKETS
The Increasing Importance of the Automotive
Aftermarket
Car manufacturers and their suppli-
vehicles – from the engine and exhaust
the VDA, this committee comprises an
ers not only build high quality vehicles
management systems through the
equal number of representatives from
but also, by way of producing spare
safety technology to comfort features
the supply industry and car manufac-
parts and providing repair information
– also presents new challenges to serv-
turers, who examine current issues re-
and a dense service network, ensure
ice. This begins with the car and parts
lating to this specific market segment.
extensive customer support after ve-
manufacturers, who, in addition to the
For instance, the committee looks at
hicles are sold. The service and spare
actual spare parts, must offer further
areas such as optimisation of the sup-
parts business within the automotive
services such as technical information,
ply chain across the entire value crea-
industry is known as the “aftermarket”.
diagnostic systems and training and
tion chain and the important question
customer services (for example techni-
of the availability of parts after a series
The volume of this parts market
cal hotlines) to their network of work-
has been discontinued. This area in
in Germany continues to experience
shops and to the open market. Similar
particular will be increasingly defined
slight growth. This can be attributed
demands are made of the spare parts
in the future by the ever greater use of
essentially to the increasing average
trade. Workshops too are affected by
electronic components. Computers and
age of vehicles, not least a result of
this change. State-of-the-art diagnostic
mobile phones are two examples of the
the stagnating passenger car market
tools are replacing the straightforward
short-lived nature of this technology.
in Germany and ongoing accumulated
repair and maintenance tasks of the
In the automotive industry, however,
demand for new cars. The average age
past. In their customers’ interests,
the lifecycle of series and after-series
of a car in 1960 was 3.7 years. By 1995,
workshops are investing in the latest
supply is more than 15 years. Thus,
this figure had risen to 6.8 years and
plant and in comprehensive training
after the discontinuation of a series, the
in January 2005 it stood at 7.8 years.
measures for their service employees.
costs for electronic components rise
These figures reflect the ever better
quality of vehicles, which are now tak-
sharply. Reasons for this include the
Through its committee work, the
comparatively small quantities of the
en off the road after an average of 11.9
VDA is responding to the growing
after-series and discontinuation an-
years. One reason for the value-based
significance of the aftermarket and
nouncements from components sup-
growth of the spare parts business is
its increasing complexity. For several
pliers, that is, unilateral terminations of
the increasing complexity of the com-
years, representatives from the supply
supply agreements by suppliers.
ponents.
industry have been discussing issues
concerning the aftermarket in the
According to a study by Mercer, the
It is here that manufacturers and
Retail Market working group of Manu-
suppliers are discussing possible solu-
role of electronics in the added value
facturing Group III. The Aftermarket
tions to meet customers’ needs. The
of cars will rise from around 20 per-
committee was formed at the end of
common goal is to ensure that spare
cent in 2000 to some 35 percent in the
2003 in response to the realisation that
parts are available at reasonable prices
year 2010. The increasing complexity
many issues can no longer be exam-
to car drivers and workshops after the
of the electronic systems employed in
ined in isolation. Under the umbrella of
end of series production.
Annual Report 2005
71
property rights and competition law will
the electronic systems and components
falls between that of industry and that of
always be a difficult task. However, the
fitted to vehicles. The VDA therefore
the open-source movement. The latter
ultimate purpose of industrial property
supports the protection of software de-
is attempting to seriously curtail patent
rights, which the proposed legislation
velopment throughout the EU.
protection. The European Parliament
seeks to restrict, must be carefully considered when deciding whether such
voted in favour of a massive restriction
The current legal position on pa-
on patent protection in the first reading
rights should be restricted for the sake
tents for computer-implemented inven-
prior to the last European elections. The
of competition.
tions, according to the European Patent
legal committee in charge then decided
Convention and the German patent law,
not to deal with the matter in a second
Exceptions to industrial property
is that they may be issued if the inven-
reading without renewed consultation
laws may be justified if they are in the
tion contains a technical contribution, if
on the first reading. On February 17,
interests of the community at large, but
it is new, can be exploited commercially,
2005, the Conference of Presidents of
they cannot be justified as a means to
and is founded on a creative activity.
the European Parliament voted to ask
legalise copying for the benefit of large
As with other inventions, the technicity
the Commission to withdraw the draft
commercial enterprises. This view is in
criteria must be met.
and resubmit it to Parliament.
line with the legal precedent set by the
IMS Health decision (C-418/01) in the
The European Patent Office, the Ger-
In May 2004, after the adoption of
European Court, which extended the
man Patent and Trade Mark Office and
a common policy had already been de-
obligations of intellectual property own-
other national patent offices have for
ferred several times, the Council reached
ers to license their rights to third parties.
many years granted patents on this basis
a political agreement that is acceptable
A restriction based solely on the law of
for computer-implemented inventions
to the VDA. The Commission is now
competition may be acceptable in iso-
(anti-blocking systems, washing ma-
considering Parliament’s request that the
lated, carefully scrutinised cases.
chine control systems, mobile phones,
proposal be withdrawn. It is not known
etc.). The current approach of the Euro-
whether it will resubmit it at some time
pean Patent Office and the national
in the future.
These arguments lead to the conclusion that design protection for replace-
offices, especially in Germany, England
ment parts must remain in place. Indus-
and France, is fundamentally well
trial property rights should be restricted
proven, although not all the EU member
view that the status quo must be harmo-
only when they act as a restraint on
states share a common approach.
nised throughout Europe. Preservation
competition. The competition law already
has the means to prevent this. From the
The automotive industry takes the
and harmonisation of the patent regulaIn February 2002, the Commission
tions for computer-implemented inven-
automotive industry’s standpoint, there
published a draft directive on the pa-
tions is critical to the motor vehicle manu-
is no need for a change in the law.
tentability of computer-implemented
facturing sector, because inventions
inventions. Industry had used its influ-
can simply be copied unless there are
EU software patents:
VDA supports software
protection
ence to obtain legal security from the
patents to protect them. Jobs are at risk
directive. The purpose of the draft was to
if the results of research and develop-
harmonise the present legal approaches
ment work in this field of technology are
The automotive industry has invested
within member states.
not protected. A number of important
large sums in software development.
Manufacturers and suppliers are increasingly turning to software to manage
automotive technologies such as ABS,
The German government adopted
a position acceptable to the VDA that
ESP and airbags depend on specialised
control software.
72
Legally secure patent protection for
computer-implemented inventions is
also important for small and mediumsized companies, who are often only
able to secure equity capital or pay-
GLOBAL MARKETS
Reform of the law on
public procurement:
A new attempt to reduce
bureaucracy
Cross-border purchasing by buy-
principles of the country’s cartel law
(GWB, Part 4, Section 97 ff.). The cascade
system was retained at this time.
A third reform is now pending, al-
ments from licensing agreements when
ing departments within Europe has not
though this time as part of the national
their software is legally protected. In
developed as quickly as the Commission
plan to reduce bureaucracy rather than
addition, the success of small and me-
in Brussels planned when the internal
as a result of the implementation of the
dium-sized companies is based to a
market was finalised in 1993. At that
2004 EU legislation package. It appears
large degree on their ability to innovate,
time, there was a strong desire to en-
that political moves are being made to
which must be safeguarded.
courage the deregulation of competi-
clear the way for abandoning the estab-
tion. Mercantilistic buying behaviour
lished cascade system. Business has for
Without legal protection for their
would become a thing of the past in all
many years demonstrated a constructive
inventions, European automotive compa-
domestic markets. The present law on
and open attitude towards the issue of
nies would be at a disadvantage against
public procurement for building, deliv-
reducing bureaucracy and has frequently
their competition in Japan and the USA,
ery and service contracts is based on
contributed to the debate. Several years
because a strong, secure position in the
the directives devised in the EU in the
ago, a simplification of the procurement
home market is a necessary requirement
mid-1980s, which formed the basis for
regulations was suggested, based largely
for the success of any business.
the single European market. Important
on streamlining the official contracting
parts of the new law are the Revision of
terms whilst at the same time retaining
the Public Procurement Remedies, the
the cascade system. From a business
New developments in
public procurement
Regulation on Protection of Tenderers
point of view, the cascade system (i.e.
The term “public procurement”
and the Utilities Directive, which intro-
the progression through statute, ordi-
covers procurement by the Federal
duced certain controls over areas such
nance and official contracting terms)
Government, regional and local author-
as the basic provision of water, energy
has the huge advantage that the specific
ities, and other bodies. Despite eco-
and transportation services.
provisions of the official contracting
nomic growth of just 1.6 percent and
the near-empty coffers of local author-
terms, such as committees’ general liaGermany initially used budgetary
bility and liability for material defects, are
ities, state and Federal governments,
measures to implement the EU law in
developed with equal input from repre-
public contracts remain an important
1993, via the 2nd Act on Budgetary
sentatives from authorities and the world
source of business for the automotive
Principles for the Federal Government
of business. The involvement of the busi-
sector. Public contracts were worth ap-
and Federal States, the Public
ness community ensures that the pro-
proximately 250 billion euros in 2004
Procurement Ordinance and the German
curement procedures do not represent
and accounted for about 12 percent of
“cascade” system of regulations govern-
the sole view of the procurement officer.
Germany’s gross domestic product. With
ing the awarding of public contracts.
Thanks to the committees, basic guaran-
an average share of this business, the
Because there was some disagreement
tee conditions that conform to standard
automotive industry is awarded an esti-
as to whether this approach provided the
industry terms may also be applied to
mated 7 percent of these contracts (car,
degree of protection for tenderers envis-
public contracts.
trailer and components manufacturers,
aged by EU law, Germany carried out a
commercial and financial service provid-
second reform of its procurement law
ers).
in 1977 and embodied this in the basic
The third reform in a decade represents an undertaking to formulate
Annual Report 2005
73
the regulations governing procurement
agencies are 154,000 euros and 236,000
of public-private partnerships), it must
in order to provide long-term security
euros for other agencies. The values are
be possible for the customer and poten-
for procurement agencies and sup-
adjusted at two-year intervals to account
tial suppliers to have an opportunity to
pliers. The “Bureaucracy Reduction
for movement between the euro and
find out more about the technical and
Masterplan” offers an opportunity to
special drawing rights in compliance
economic aspects of bidding, without
simplify German procurement legisla-
with the WTO procurement agreement.
fear of being excluded from competition
tion, but should not provide a sympto-
The figures for 2006 and 2007 have not
for the contract.
matic cure by replacing procurement
yet been determined.
legislation with a procurement legislation code.
The fragmentation of procurement
Another key feature is support of
The legislative package will bring
electronic procurement. The legislative
radical change. In future, customers
package contains options for dynamic
will be able to insist on social and envi-
procurement – electronic framework
legislation as a result of the tendency to
ronmental conditions. Social conditions
agreements – and reverse auctions. The
pass procurement legislation at federal
might include: providing jobs for the
present multiplicity of systems on the
state level still has significant practical
long-term unemployed, providing train-
electronic procurement market and the
relevance nationally. It is not effective
ing for workers and young people, ob-
lack of transparency within this market
for particularism at federal state level
serving the terms of International Labour
are considered restrictive both by com-
to counteract the increased opportun-
Organisation (ILO) agreements that have
panies and by parties issuing invitations
ities to frame procurement legislation in
not yet entered German law, or hiring
to bid. When implementing this legisla-
European terms.
more disabled persons than is required
tive package in national law, it must be
by national legislation. Technical speci-
remembered that public authorities and
fications might include environmental
business are surprisingly unanimous in
performance standards and production
this view.
Aspects of EU legislative
package procurementunfriendly
methods and processes.
New threshold values will be
amongst the measures introduced as
The automotive industry considers
The legislation package envisages an
this is an innovative legislative package,
part of the legislative package, which
opportunity for “competitive dialogue”
although it does not make a positive
will not be transported into German law
as a new award procedure for use when
contribution to the European Union’s
before 2006. These threshold values de-
the subject of the contract is particularly
Lisbon Strategy. The industry sees po-
termine whether tenders are invited on a
complex. The reason for this option lies
tential problems with the introduction of
pan-European basis. The figures for sup-
in the view that, when complex contracts
those aspects that are procurement-
plier and service procurement by federal
are involved (such as those in the case
unfriendly.
Auto T RANSPORT
Auto
76
TRANSPORT
The Car: The Undisputed Number
One Means of Transport
Globalisation as the driving
force behind prosperity
needs transport
Prosperity and growth are based on
muter allowance is to be seen as an
important instrument for creating jobs.
To curtail it in the current economic
situation would run counter to the effort
the spatial distribution of labour. It is no
to improve the competitiveness of Ger-
accident that the more countries par-
many and its jobs.
ticipate in international trade the richer
they become. The annual report of the
The social function of mobility is to
Canadian Fraser Institute demonstrates
improve and increase people’s pros-
in its examination of 110 countries that
pects of meeting their basic social
the more national economies are open
needs. Without mobility these prospects
to international trade, the higher the per
remain unevenly distributed. People
capita income and the growth in per
remain dependent on local monopolies
capita income of such countries are.
and must pay excessively high prices or
work for a single local employer for low
Only transport enables the exchange
wages. A large part of inequality and
of goods and hence the distribution of
social poverty in developing nations can
labour. Hence it is clear that transport
be traced to a lack of mobility. More-
policy is the best policy for growth and
over, mobility contributes to maintaining
employment. A country that adopts a
the cohesion of families and to looking
poorly planned and inefficient transport
after the elderly and those who need
system cannot offer its citizens lasting
care. Without mobility social contact
prosperity.
would frequently be hindered.
Mobility for growth,
prosperity and social
emancipation
People in emergent
countries also back the
mobility of the car
Mobility is indispensable for eco-
In emergent countries in particular
nomic welfare and social cohesion. It
people are increasingly demanding
improves the life chances of us all to
their right to greater mobility. Impor-
an unimagined degree. The greater our
tant mobility figures are provided by
range of action, the more options we
the study “Mobility 2030” of the World
have for work, education, purchase and
Business Council for Sustainable
leisure opportunities. For example, it is
Development, an association of 170
against this background that the com-
international companies, including the
Annual Report 2005
77
car manufacturing industry and the oil
nations if absolute growth is taken into
total absolute growth in traffic world-
industry, which feel compelled to make
account. Naturally the population size
wide by 2030.
sustained development on the basis of
of a country is crucial here. In particu-
economic growth, ecological equilibrium
lar, China as by far the most populous
and social progress. According to this
nation on Earth with 1.3 billion inhabit-
study a sharp rise in per capita mobility
ants is also the country with the high-
(kilometres/year) is anticipated in China,
est growth in mobility (3 percent p.a.).
Latin America, in the area of the former
Accordingly, a large part of the absolute
the countries of Central and Eastern
Soviet Union and in the rest of Eastern
growth in the number of passenger kilo-
Europe and their conversion to market
Europe. By 2030, per capita mobility
metres travelled worldwide by 2030 will
economies, their transport systems have
in these areas will have approximately
be in this country.
become increasingly aligned with those
Since the Velvet Revolution in
of West European nations. However, the
doubled from between about 2,500 kilometres/year and 7,500 kilometres/year
Europe – the car is already
the most important means
of transport today
Private motoring will represent the
transport systems of the old and new
today to between 5,000 kilometres/year
largest share of the worldwide growth
EU countries still differ significantly from
and 14,000 kilometres/year. This rise will
in mobility. By 2030 it will grow between
each other.
be due to a rapid increase in the level
1.7 and 2.1 percent more strongly than
of private motoring. The number of cars
the average of all forms of transport. By
and motorcycles will grow per 1,000
then nearly 80 percent of the worldwide
in the EU-15 states with 491 cars/1000
persons from between 25 and 200 today
total of 52 billion passenger kilometres
inhabitants is already comparatively
to between 50 and 450.
will be provided by road transport (cars,
high (2002), rather low rates of growth
motorcycles, buses). Hence, it will be
are anticipated here. According to the
responsible for more than half of the
forecast of the EU Commission, the
The development of per capita
number of passenger kilometres trav-
mobility is also reflected in the change
of passenger kilometres travelled. It will
grow worldwide by an average of 1.6
percent p.a. up to 2030. However, this
growth will occur almost exclusively in
emergent countries. Whereas for the
Growth in passengers
services according to
regions worldwide
Average annual growth rates in percent
OECD states growth of only 0.7 percent
to 1.2 percent is anticipated, in emergent countries such as China, India or
in Latin America the forecast speed
of development will be significantly
higher with rates of up to 3 percent.
The growth in mobility will be concentrated mainly in the urban regions and
mega-cities in which 70 percent of the
world’s population will be living by 2025
– as opposed to 50 percent today. The
dynamics of transport development are
becoming even clearer in emergent
As the current level of car ownership
Total
Africa
Latin America
Middle East
India
Rest of Asia
China
Eastern Europe
Former Soviet Union
OECD Pacific
OECD Europe
OECD North America
Source: Mobility 2030
2000
-2030
1.6
1.9
2.6
1.9
2.1
1.7
3.0
1.6
2.2
0.7
1.0
1.2
elled in the EU-15 states between 2000
and 2030 will grow by only about 1.1
percent p.a. from 4,800 to 6,960 billion
passenger kilometres. Today the car
is responsible for 78.4 percent of the
number of kilometres travelled. Given its
pre-eminent position in the European
transport system nothing will change
in future. For all regions a typical timebased saturation curve can be demonstrated for car ownership.
The development of road traffic in
the new EU states is currently showing an impressive dynamic. Whereas
the degree of car ownership in Poland,
the Czech Republic, Hungary, Slovenia
and Estonia was only an average of
78
TRANSPORT
Cars per thousand inhabitants: Growth potential and saturation
550
Cars/1000 inhabitants
500
Belgium
400
Czech Republic
350 Lithuania
250
200
150
100
50
India
Switzerland
Spain
USA
Netherlands
tax and other price increases, for Germans the car is and remains by far the
Portugal
most important and popular means of
Saturation
transport. The car is as popular as ever
Poland
here because it meets people’s mobil-
Slovakia
Russia
Brazil
Mexico
South Africa
Turkey
China
Notwithstanding the environmental
Japan
Great Britain
Slovenia
450
300
Germany
Italy
France
Cars in Germany on the
move – an indispensable
part of life
ity requirements better than any other
South Korea
forms of transport. It is viewed as being
Growth
potential
significantly more independent, flexible
and convenient than public transport. It
6,000 10,000 14,000 18,000 22,000 26,000 30,000 34,000 38,000
GDP/inhabitants in US $
Source: Sonnenschein/ZF Sachs
is also preferred to public transport on
account of its image and identity-building effect (“more thrilling”, “more active”,
“more convivial”, “suits me better”, etc.).
Moreover, the study “Mobility as Quality
190 cars/1,000 inhabitants in 1991, by
such as China, India, the rest of Asia
of Life” published in March 2005 by the
2002 there were already 300 cars/1,000
or Latin America, as here not only the
BAT Leisure Research Institute demon-
inhabitants. It is estimated that by 2015
density of car ownership but also the
strates that young drivers increasingly
the level of car ownership with 425
population will grow.
see the car as a “second home” and
cars/1,000 inhabitants will be almost at
the present level of the EU-15 states.
This will allow people to develop their
opportunities for mobility in the way that
we in Western Europe are already used
mobils
Characteristics of cars
and public transport as
assessed by population
1.0 = positive, 5.0 = negative
to. If the area of the ten new EU states
1.0
and the future EU members Romania,
Bulgaria and Turkey are taken into
consideration, it is clear, according to
EU Transport and Energy Outlook 2030,
that per capita mobility will more than
double from 4,924 kilometres/year in the
year 2000 to 12,447 kilometres/year in
2030.
However, by far the largest proportion of the global growth in passenger
transport in the coming decades will
occur in populous emergent nations
Independent
Flexible
Active
Thrilling
Pleasant
Convenient
Cheap
Suits me
Convivial
Rapid
Reliable
Trouble-free
Modern
Source: IW Cologne
1.5
2.0
2.5
3.0
3.5
4.0
Car
PT
4.5
Annual Report 2005
79
attach great importance to a high level
tal tax – has been incorrectly estimated.
lic transport by means of drastic price
of comfort.
It emerged that overall fuel consump-
increases has not led to any such shift.
tion from which the German Institute for
This is also confirmed by the results of
In the homeland of the car private
Economic Research (DIW) traditionally
the BMVBW research project “Analy-
motoring has been responsible for an
calculates road use has hitherto been
sis of changes in mobility behaviour
overwhelming proportion (82 percent) of
incorrectly estimated, because the phe-
– especially car road use – as a reac-
the number of kilometres travelled on all
nomenon of “tank tourism” triggered
tion to altered fuel prices”. This states
forms of transport (private motoring, air
by the environmental tax had not been
verbatim that: “The demand of private
travel, railways, public road transport)
taken into consideration. Moreover,
households for car transport is, in the
for the past fifteen years. Despite the
average fuel use per vehicle kilometre
language of micro-economics, relatively
efforts of the red-green federal govern-
was chronically overestimated, as the
inelastic (unreactive), which is charac-
ment to make private motoring much
consequences of fuel savings achieved
teristic of items that have no substitute”.
more expensive relative to public trans-
by the vehicle industry were systemati-
The fact that public transport is no
port (PT) by means of the environmental
cally underestimated.
replacement for the car is evident even
tax, no reduction has been manifested:
after a slight decline in 2003 there was
in conurbations where the availability of
As it turned out, the distance trav-
public transport is greater than in the
another clear rise in private motoring
elled by all vehicles (including com-
in 2004 from 815.3 billion passenger
mercial vehicles) has grown since 1999
kilometres to 818.4 billion passenger
by 2.6 percent from 668.6 billion vehicle
It has also emerged that neither do
kilometres. Hence it grew to the same
kilometres to 686 billion vehicle kilome-
rises in fuel prices lead to ways of driv-
extent as the number of passenger
tres. This shows again that the attempt
ing that save fuel. There was no switch
kilometres travelled in all branches of
to effect a “massive shift” of transport
to smaller, more economical vehicles.
terrestrial transport which rose from
demand from private motoring to pub-
Hence there are only two effects of an
country.
962.4 billion to 966.7 billion passenger
kilometres. It is estimated for the current
Cars: Number one mode of transport travel;
three quarters of all distances
year that private motoring - similarly to
the number of kilometres travelled in all
branches of terrestrial transport - will
In percent
Buses
4.0
grow by 0.5 percent to 822.1 billion passenger kilometres. A similar, moderate
Other
6.2
Air
5.2
rate of growth is anticipated for future
years up to 2008.
Rail
9.6
It is to be emphasized in this connection that vehicle kilometres travelled,
transport performance and the modal
Cars
75
split of road traffic have hitherto been
significantly underestimated in the
official statistics and, in particular, the
rise in vehicle kilometres travelled since
1999 – the first year of the environmen-
Source: Mobility in Germany 2002
80
TRANSPORT
Transport is not growing
uncontrollably – still only
moderate growth in
Germany
increase in the price of fuel: firstly there
birthday as a provisional driving licence.
is a switch to diesel vehicles; secondly,
Hence they may sit at the wheel and
consumers compensate for their higher
gain a year’s practical driving experience
fuel costs by delaying purchases of new
under the supervision of an older and
fuel-efficient, low-emission vehicles.
more experienced car driver. On their
Thus the average age of the car has
18th birthday the provisional licence can
suggest that the car will be by far the
risen since 1997 from 6.8 to 7.8 years.
be exchanged for a full licence. Using
most important means of transporting
Hence the strategy of reducing emis-
similar models, Austria and Sweden
people in the future as well. However,
sions by increasing the price of fuel has
have increased the safety of young car
what applies to all other highly indus-
been shown to be absurd.
drivers who are especially at risk of
trialised countries applies to Germany
accidents and achieved a reduction in
too. As the level of car ownership is
accidents of between 18 and 40 percent
already very high today, only a small
in this group. For this reason VDA has
further increase in private motoring
expressed its active support for “Accom-
may be anticipated in the future.
panied Driving at 17”.
The Federal Transport Plan (FTP) is
Possession of driving
licences grows
In Germany 84 percent of adults
possess a driving licence and so significantly more than ever before. In par-
Long-term structural conditions
assuming an increase in the use of
ticular, since the 1970s the proportion of
The experiment in Lower Saxony has
private vehicles from 818.4 billion pas-
female driving licence holders has grown
met with great interest. 30 percent of all
senger kilometres (2004) to 873 billion
sharply to 76 percent today. Moreover
young applicants for a driving licence
passenger kilometres in 2015. The
the elderly no longer expect a static
in the state have taken up the offer.
number of passenger kilometres overall
retirement but wish to remain mobile
Despite the high level of response there
(all forms of transport) will grow by
with a car. More than two thirds of the
were only three minor accidents and not
over 11 percent to 1,130 billion passen-
over-65s have a driving licence today.
a single personal injury in the first year.
ger kilometres. Hence growth potential
is recognised not only in private motor-
For young people possessing a
Until now the government of the
ing but also in all forms of transport.
driving licence is now as natural as
state of Lower Saxony has had to base
Consequently the distance travelled on
having a mobile phone. Membership of
its experiment on special authorisa-
the railways will increase by almost one
the active group of car drivers is felt by
tion, as the highway traffic law does not
third to around 100 billion passenger
them to be a natural part of growing up.
envisage general authorisation in this
kilometres. But even then its market
Today 57 percent of 16-17 year-olds are
respect. The attempt of the opposition
share will be limited to 9 percent.
planning to get a driving licence.
to pass a corresponding amendment
Greater safety with
Accompanied Driving at 17
Here we look at “Accompanied Driv-
to the highway traffic law in the Bun-
According to ADAC estimates the
destag was defeated in January 2005
use of private vehicles will even level
by resistance in the governing coalition.
off from 2010 despite growing new
However, it should be clear that any
vehicle registrations and decline from
ing at 17”, the policy adopted by the
hesitation here would be at the expense
2015, as many cars are purchased
state of Lower Saxony since April 2004.
of transport safety. Hence it is to be
today as second and third vehicles
According to this young people aged
welcomed that the Federal Transport
and are not driven as much as the
16 may take their theory and practi-
Minister announced in March 2005 that
main car and also because older peo-
cal examinations with a driving school
he wished to create the legal precondi-
ple generally drive less than younger
and get a test certificate on their 17th
tions for this model.
people.
Annual Report 2005
Furthermore, for 120 million pas-
Passenger transport in Germany up to 2015
sengers per year the tourist coach is
In billions of passenger kilometres
1,200
1,000
600
400
200
the comfortable, eco-friendly and safe
Air
Railways
Public road transport
Cars
800
6.6
39.2
58.4
379.5
11.0
41.0
74.1
81
73.0
35.9
73.9
82.6
18.4
44.6
65.0
42.7
77.3
75.1
45.9
72.3
76.0
55.0
74.2
75.5
98.0
86.0
“large-capacity limousine” for weekend
excursions, club or association outings
or for vacations. By choosing the bus
the passenger is assured of a high-tech
vehicle, full service, comprehensive
comfort, qualified and well trained drivers and a relaxed journey.
The bus is the backbone of
local public transport
477.4
601.8
749.7
731.2
818.4
831.0
873.0
The bus is the backbone of local
public transport (LPT). Compared to the
fleet of 82,600 LPT buses in Germany
0
1970
1980
1990
1997
2000
2004
2008*
2015*
*Forecast
Source: DIW, BMVBW, PROGNOS
there are 9,083 suburban railway and
tram vehicles. The bus provides seating for 6.58 million people against only
1.17 million seats in the rest of public
transport. Whereas trams and subur-
of large numbers of people, necessary for
ban railways cover 620 million vehicle
that a falling population tends to reduce
public transport. This can result in lower
kilometres per year, the bus covers 3.18
the efficiency of public transport. With a
capacity use. The result of lower capacity
billion – more than five times as many.
declining population density it becomes
use for rail transport with its fixed costs is
Of all transport volume in LPT the bus
more difficult to concentrate the itineraries
an increase in the cost of travel per head.
provides nearly half (47 percent). In
It should also be taken into account
contrast the metro/trams and suburban/
regional railways generate only about
The Bus: All-Rounder for all
Mobility Requirements
31 percent and 22 percent of transport
volume in LPT.
The bus is particularly indispensable
in rural areas. This is indicated by the
Germans use the bus for more
the outskirts of cities, in inner cities
fact that 601,000 of the 737,000 route
than five billion journeys annually.
and especially in the countryside. As a
kilometres covered by the bus in Ger-
Hence after the car the bus is the
public service it ensures safe, reliable
many are on rural services. In the me-
second most important means of pas-
travel to work, school, shopping or for
dium to long term the significance of the
senger transport. In public transport
leisure. Whether in the city or in the
bus will increase even further owing to
it is number one with somewhat more
countryside: without the bus, people
demographic changes. For example, by
than half of all journeys. The bus is the
would lose a considerable portion of
2015 the number of school children will
backbone of local public transport on
their mobility.
fall by 430,000 or 17 percent. Hence LPT
82
TRANSPORT
loadings will be reduced and this will
further diminish the economic viability
of rail transport with its higher proportion of fixed costs.
The “Pro-Bus Alliance”
equipped than ever to play a central role
The “Pro-Bus Alliance”, an amal-
in managing the multifarious mobility
gamation of German bus manufacturers
needs of our society on the strength
and the bus industry, has assembled
of its systemic advantages and positive
the most important facts about the
characteristics. Structuring the future
policy makers should reconsider the
bus in the brochure “Busse verbinden”.
– with the bus in local and long-distance
support they give to LPT from region-
The “Pro-Bus Alliance” counts among
transport.
alisation funds and provide these in
its members not only the German bus
support of the bus as well. Today a full
manufacturers EvoBus GmbH with its
90 percent of the 7 billion euros from
Mercedes-Benz and Setra divisions, but
regionalisation funds flow into rail-
also NEOMAN Bus GmbH with its NEO-
based LPT.
PLAN and MAN brands as well as the
Against this background transport
German Association of the Automotive
Good prospects for coach
tourism
Whoever thinks of coaches thinks of
Industry (VDA), the Federal Association of German Bus Companies (bdo),
the RDA – International Coach Tourism
luxurious journeys in the most modern
Federation, the Association of German
vehicles meeting both a high stand-
Transport Companies (VDV) and the
ard of safety and the most stringent
Bus Comfort Organisation (gbk).
demands for relaxation and comfort.
Coach journeys are comfortable tours in
The Alliance considers its main task
high-tech vehicles. Generous amounts
to be increasing public and political
of space and extensive luxury allow trav-
awareness of the significance of the bus
ellers to arrive relaxed at their destina-
in local public transport (LPT) and in
tion. Whether for city tours, study trips
tourism.
or club outings, coach travel is always a
good choice.
The outstanding advantages and the
promising future of the bus transport
For example, a comfortable journey
system are based on quality, eco-friend-
is ensured by air conditioning, adjust-
liness and safety plus unique flexibility
able seat-backs and foot-rests, and
and profitability. Today, at the start of
folding tables, video screens, a kitchen
the third millennium, the bus is better
and a WC also belong to the modern
facilities on board. A new EU guideline
to be converted into national law in
2005 provides for even greater seat-
Despite the continuing weak state
tive, coach journeys belong to the
ing comfort that is standardised and
of the economy and meagre holiday
types of holiday travel that are in the
Europe-wide, for example a distance
takings the outlook for coach tourism
ascendant. On the one hand, experts in
between seats of at least 68 centime-
is extremely promising. Especially when
tourism claim that “travel and tourism”
tres.
viewed from the longer term perspec-
continue to enjoy an excellent status in
Annual Report 2005
83
the scale of values of German people.
each year by occasional coach travel
the coach is a crucial economic factor
On the other hand, Travel Analysis 2004
alone. On trips of more than four nights
that makes an active contribution to
confirms that more than 23 percent
away coach passengers bring in a fur-
development, capacity utilisation and job
of people polled would “certainly” or
ther 4 billion euros year on year. For
security. Around half a million people
“probably” like to make a coach journey
the hotel, catering and foreign transport
in restaurants, hotels and theatres owe
in the next three years.
economy and many other tour operators
their job to coach tourism.
Even today the market share of the
coach in all holiday journeys of at least
five nights away and longer is consistently at 10 percent – in contrast to rail
travel which continues to lose its mar-
Truck Transport:
Indispensable for our Economy
ket share. By 2015 the market share
of coach travel should rise to between
12 and 15 percent. Futurologists base
this cheerful prognosis mainly on the
frequency of travel of the over-60s who
are swelling the numbers of coach
customers. In particular, the number
The growth of the world’s
national economies is due
to the truck
Compared to other means of trans-
mined by variable costs. The consequence of this is that the strengths of
rail transport lie in mass commodities
such as ores, steel or building materials
of second and third trips should also
port the truck offers crucial systemic
that can be transported in large loads
increase.
advantages. It is quick, flexible and goes
and over long distances. Conversely,
everywhere – from factory to factory,
the dispatch of small loads and short
directly into the inner cities and to the
distances is relatively expensive by rail.
journeys there are the so-called short
doors of supermarkets. Transport speed
The same conditions also apply to the
holiday trips of between two and four
is also higher on the roads than by rail.
barge. Hence, both trains and barges
days’ duration, enjoyed by about 15 mil-
According to research done by the Cen-
are suitable transporters of single mass
lion passengers in 2004, and these may
tre for Transport of the Braunschweig
commodities. In contrast, the truck
also show positive prospects for growth.
Institute of Technology the average
exploits its strengths in transporting
The significance of coach tourism is also
speed of a truck load at a maximum
high-value mixed goods.
emphasized by the 100 million plus peo-
permitted speed of 80 km/hr is today
ple who annually take occasional coach
about 50 km/hr in Germany, whereas
trips – on short journeys, day outings
even according to optimistic estimates
by rail and water but supplements it.
or excursions. All in all, the market for
freight transport by rail achieves only an
Owing to the quantity of new high-value
coach journeys in Germany embraces
average speed of 10 km/hr.
mixed goods the transport performance
In addition to classical holiday
a good 120 million journeys and trips
– and continues to grow with significant
economic potential.
The truck does not replace transport
of the truck is growing faster than that
A quite important influence on the
of other forms of transport. However,
characteristics of the various forms
this is not “at the expense” of trains and
of transport is also exerted by their
barges. Growth of a national economy
The coach is hence an indispensable
cost structures. While rail transport is
and supplying a population with high-
partner in the tourist economy. Well over
very much subject to fixed costs (rail
value consumer goods are impossible
2 billion euros in turnover are generated
routes), road traffic tends to be deter-
without the truck.
84
Hence the truck is the natural partner for the world’s aspiring national
economies about to take the leap from
emergent to industrialised nation. For
this reason a real impetus in the growth
TRANSPORT
Worldwide growth in
freight transport according
to means of transport
worldwide in the coming years and
decades. It is estimated that by 2030 the
demand for freight transport will rise
annually by 2.5 percent and double from
the current 15 billion tonne kilometres
(as at 2000) to about 30 billion tonne
Total
Medium duty trucks
Freight rail
Heavy duty trucks
percent. This is not the result of political pressure but of a quite natural load
distribution among the various forms of
Average annual growth
rates in percent
of truck transport is to be expected
hugely up to 2030 – to more than 80
transport.
2000
-2030
2.5
3.0
2.3
2.7
In the EU-25 states the freight contribution from all forms of transport will
grow from 2,004 billion tonne kilometres
today by well over 2 percent p.a. to
about 3,800 billion tonne kilometres in
the period 2001 to 2030. Road traffic in
the EU-25 states will increase its share
kilometres. The largest contribution to
this growth will come from China, India,
lion tonne kilometres. Up to 2030 this
from about 70 percent today to 77.4
the rest of Asia and from the region of
will grow on average at 2.7 percent
percent owing to its growing use in the
the former Soviet Union.
– 3.0 percent p.a., faster than rail freight
new EU states.
transport at 2.3 percent. Hence, of the
The main carrier of this rapidly
30 billion tonne kilometres covered in
growing freight transport will be the
2030 more than 18 billion tonne kilome-
truck. Of the 15 billion tonne kilometres
tres will be shouldered by the truck.
currently covered worldwide the truck
accounts for more than half with 8 bil-
Growth in freight traffic
according to region
Average annual growth
rates in percent
Total
Africa
Latin America
Middle East
India
Rest of Asia
China
Eastern Europe
Former Soviet Union
OECD Pacific
OECD Europe
OECD North America
2000
-2030
2.5
3.4
3.1
2.8
4.2
4.1
3.7
2.7
2.3
1.8
1.9
1.9
Despite all attempts at
shifting emphasis in
Germany: Road traffic
remains the backbone of
freight transport
Road traffic in Europe –
the most important means
of transport
tem of all industrialised nations natu-
For highly developed national eco-
rally applies to Germany too. Here too
nomies with a large proportion of GDP
road transport remains the backbone
due to high-value consumer goods it is
of freight delivery. This is shown by
even more the case that the truck must
a glance at the transport market in
shoulder the main burden of transpor-
2004. In that year a total of 3,565 bil-
tation. Of a total of 1,722 billion tonne
lion tonnes of goods were transported
kilometres in the EU-15 states in the
by road, rail and inland waterways; 1.2
year 2000 more than 78 percent were
percent more than in the previous year.
covered by truck. In the fast develop-
Transport rose by 5.4 percent compared
ing national economies of the new EU
with the previous year.
What applies to the transport sys-
states and of the future EU states Bulgaria, Romania and Turkey as well the
The fact that freight transport is
truck is already responsible for nearly
growing significantly faster than its rev-
two thirds of transport today. According
enue is due to the increase in transport
to a prediction of the EU Commission
distances as a consequence of rapidly
(Energy and Transport Outlook 2030)
growing cross-border transport with the
this proportion will continue to grow
accession of the new EU member states.
Annual Report 2005
With 380.4 billion tonne kilometres road
freight transport accounts for about 72
percent of all transport. Rail contributed
just one sixth of this with 86.4 billion
Freight transport in Germany up to 2015
In billions of tonne kilometres
700
tonne kilometres. In the medium term
the forecast of the Federal Government
anticipates that freight transport will
90.0
Inland waterways
Railways
Road freight
tonne kilometres, and the barge somewhat more than a tenth with 62.0 billion
600
65.4
500
62.0
66.5
400
62.2
300
and inland waterways at 3.2 percent this
year and 2.7 percent next year, by 2008
200
its market share will again have grown
slightly to 73 percent.
100
51.4
48.8
71.5
64.9
54.8
72.8
61.9
235.6
115.0
93.9
485.0
86.4
76.0
further extend its market share. As it will
be growing significantly faster than rail
85
424.8
380.4
346.3
169.9
125.4
78.0
This development is especially the
0
1970
1980
1990
1997
2000
2004
2008*
2015*
consequence of the increasing importance of cross-border transport which is
*Forecast
Sources: DIW, BMVBW, PROGNOS
growing significantly faster than domestic transport. Its freight transport revenue today has a share of 17.7 percent
Denmark in 1973 and of the so-called
this, road freight transport with 485 bil-
across all forms of transport. This will
southern (1981/86) and northern (1995)
lion tonne kilometres would still make
grow to 18.4 percent by the year 2008.
enlargements. The induced growth in
a contribution of 70.3 percent to overall
Road can exploit its advantages over rail
transport had to be borne time and
transport of 690 billion tonne kilometres.
not only locally but also in a Europe-
again by the truck, since cross-border
Rail transport would take 16.7 percent
wide context. Whereas with the aban-
rail transport for the most part found-
(115 billion tonne kilometres) and inland
donment of customs controls at border
ered as a consequence of national rail-
waterways 13 percent (90 billion tonne
crossings with the new EU states on
way policy.
kilometres). In the meantime the Greens
May 1, 2004 cross-border truck transports are subject to few hold-ups, inter-
have recognised that all actual developEastwards enlargement demon-
ment contradicts these plans and they
national rail transports are still hindered
strates once again that it is road and
have abandoned their illusion of trans-
by the fact that the former national state
not rail that is the bearer of European
ferring transport, as their paper “From
railways thwart competition on their
integration. Hence, the intention of the
the transport watershed to sustainable
respective networks.
Federal Government to shift freight
mobility” attests.
transport from the roads onto rail has in
It was already clear in the early
the end turned out to be illusory.
stages of EU expansion that the truck
was the main engine of integration. This
This intention is reflected in its
was the case at the time of the first
forecast on which the Federal Transport
expansion into Great Britain, Ireland and
Plan is based. But, even according to
Economy and transport
grow – expenditure on
resources falls
Economic and transport performance enjoy a reciprocal relationship. On
86
TRANSPORT
the one hand economic growth presupposes a high level of mobility and on the
Road freight transport: Increasingly efficient, safe and clean
1994 = 1.0
Forecast
other it generates a demand for mobility
as increasing quantities of goods have
to be transported. There is also the fact
that transport distances increase as a
1.8
GDP
1.6
result of the continual broadening of
load distribution. A consequence of this
is that transport performance not only
1.4
Traffic performance
Vehicle performance
1.2
rises “in step” with economic performance but even grows disproportionately
– the so-called increasing transport
1.0
0.8
intensity of the domestic product. In the
years 1990–2000 this intensity totalled
1.10 in Germany, that is, for each one
0.6
0.4
percent of growth in GDP a 1.1 percent
ance was necessary. Even though GDP
between 1994 and 2004 increased by
only 14 percent from 1,730.1 billion
0.2
0
19
9
19 4
9
19 5
96
19
9
19 7
98
19
9
20 9
0
20 0
0
20 1
02
20
0
20 3
04
20
0
20 5
0
20 6
0
20 7
08
20
0
20 9
1
20 0
1
20 1
1
20 2
1
20 3
14
20
15
growth in freight transport perform-
Number of fatal accidents
involving goods vehicles
NOx emissions
Particulate emissions
euros to 2,022 billion euros, over the
same period the performance of road
Source: DIW, progtrans, BVWP, IRTAD-accident database, IFEU/TREMOD
freight transport grew by nearly 40 percent from 272.5 billion tonne kilometres
to 380.4 billion tonne kilometres.
expenditure reveals that, despite the
from 59.9 billion kilometres to 73.2 bil-
growth in transport performance, the
lion kilometres over the same period.
often portrayed scare scenarios are
Hence for each tonne kilometre in
expenditure of road traffic there are
inappropriate and result from con-
1994 0.22 kilometres per vehicle were
occasionally demands to put the brakes
fused cheap propaganda rather than
needed but only 0.19 kilometres in
on the growth in transport performance.
from an objective discussion of the
2004. This is due to the consistent
However, this is unreasonable from
facts.
reduction in rationalisation margins in
With an eye on the resources
several perspectives. For one, this would
also damage economic growth. Each
road freight transport business. It led
On the one hand, the continual
to a drastic reduction in the number
of us would complain of a fall in pros-
improvement in transport planning
of empty loads and to higher capacity
perity. But this demand is particularly
and logistics separates vehicle per-
utilisation. In the eight years between
unreasonable given that expenditure on
formance in road freight transport
1994 and 2003 empty loads alone fell
resources is ultimately only regulated by
from the number of kilometres trav-
from 28.6 percent to 21.9 percent.
how efficient transport performance is.
elled. Whereas distance travelled rose
According to the traffic forecasts of
by 40 percent between 1994 and 2004,
the Federal Government for transport
the number of kilometres travelled per
planning this development is set to
vehicle increased by only 22 percent
continue.
A glance at the development of
kilometre performance and resources
Annual Report 2005
On the other hand, there has been
a rapid decoupling of harmful emissions
from kilometre performance. This effect
is so strong that emissions are not only
New commercial vehicle
concepts – ecological
quantum leaps possible
By consistently identifying and
87
committees and working groups and at
the same time worked out the requirements and basic conditions for alternative vehicle concepts. The objective is
growing below the rate of kilometre
reducing rationalisation margins the
for these vehicles to meet at least the
performance but are even declining in
transport sector is managing increasing-
status quo of current vehicle configura-
absolute terms.
ly to decouple vehicle performance from
tions in terms of road load and traffic
transport performance. In addition the
safety (e.g. construction techniques that
■ NOx emissions from road freight
traffic alone fell by over 20 percent
commercial vehicle industry is achiev-
reduce road damage, active and passive
ing a permanent improvement in the
vehicle safety) and, at the same time,
(from 512.2 kt to 406.4 kt) between
environmental efficiency of its vehicles
raise the efficiency and capacity of the
1994 and 2004.
and is further separating environmental
transport system.
costs from vehicle performance.
■ Critical particle emissions associ-
Vehicle designs other than the
18.75 metre long 40 tonne truck and
ated with the EU clean air direc-
In his task of ensuring prosperity
tive fell over the same period by
and growth in an ecologically desirable
trailer permitted in Germany have been
nearly 60 percent (from 33.4 kt to
way the legislator also bears respon-
deployed in Europe for many years. In
13.8 kt).
sibilities. This particularly applies to
Scandinavia in particular positive results
the area of “new commercial vehicle
have been achieved for many years
According to the forecast of the
concepts” that offers the possibility of
with the so-called “modular concept”
Institute for Energy and Environmental
a further quantum leap in ecological
– a 60 tonne truck with a total length
Research NOx emissions will fall by
terms. Hitherto the legislator has shown
of 25.25 metres. This vehicle combina-
2015 to 179.9 kt and hence by 65 per-
little or no readiness even to test the
tion enables a significant rationalisation
cent with respect to 1994 and particu-
possibilities inherent in these concepts.
of freight transport whereby the same
late emissions to 3.65 kt and hence by
Other countries have been bolder in
transport performance can be achieved
91.5 percent. In addition, road transport
this respect and have not only made
with many fewer vehicles and fewer
is becoming safer and safer: the number
ecological progress with efficiency sav-
vehicle kilometres travelled. Less traf-
of fatal accidents involving goods vehi-
ings in road freight transport from new
fic, lower fuel consumption and lower
cles on the German road network fell by
commercial vehicle concepts but also
CO2 emissions are the result. In the
nearly 25 percent.
provided their industry with locational
Netherlands too field trials started in
advantages by means of savings in
March 2004 in which the use of innova-
transport costs.
tive vehicle combinations (25.25 m; 60
The multiplicity of innovations of
tonnes) is being researched. Positive
the commercial vehicle industry for
higher safety standards and drastic
reductions in emissions can certainly
be shown to be bearing fruit. Commercial vehicles produced in Germany
are already meeting the Euro 5 limit
Improving transport
efficiency by means of
new commercial vehicle
concepts
A key approach to improved effi-
valid with effect from 2008, with NOx
emissions falling further by more than
ciency is to increase the dimensions and
40 percent.
tackled this issue early on in various
weight of commercial vehicles. The VDA
results were achieved in the first test
phase in 2000 and these are now being
analysed in detail. It is possible that
other countries will also make comparable large-scale tests.
Germany will no longer be able to
avoid consideration of an increase in the
88
TRANSPORT
dimensions and weight of commercial
consequences: numerous branches of
use of volume vehicles would no longer
vehicles if freight traffic on the road is
industry use containers such as, for
be possible in Germany. Technical
to be optimised in economic and eco-
example, crate-pallets and reusable
measures to solve the problem are ruled
logical terms in the future. For manufac-
containers for which a height of 1 metre
out on various grounds:
turers of commercial vehicles and trail-
and 1.5 metres have been set respec-
ers represented in the VDA an increase
tively. Hence, stacking these containers
in load volume has priority, as only
requires the height of the inner load-
unit cannot be reduced any further
about 5 percent of present transports
ing space of the transport vehicle to
as a smaller tyre diameter is not
are regarded as weight-critical. Hence
be 3 metres throughout. Such vehicles
possible in the foreseeable future.
fears previously expressed by politicians
are called “volume vehicles”. These are
are also becoming groundless; hitherto
either trailers that can be combined with
they had spoken against an increase
any tractor unit and driven as articu-
metres can only provide a height
in vehicle size and weight, especially
lated vehicles or are truck-trailers, that
of 3.0 metres for the inner loading
owing to the demand on roads and the
is, trucks with trailers. If the height of
space in its rear portion, i.e. in the
weight-bearing capacity of bridges in
the loading space is the same through-
part of the trailer that is not resting
Germany.
out they are called “mega-trailers” or
on the articulation, by lowering the
“jumbo trucks”. They adhere to the total
trailer floor (so-called double-decker
permissible weight of 40 tonnes and the
and swan-neck trailer). Hence in
maximum overall length of 18.75 metres
the front portion the loading space
that are legally prescribed in Germany.
height is less than 3.0 metres, so
Rigid vehicle height
restrictions hinder optimal
use of load space
Leeway when establishing the
dimensions and weights of commercial
■ The articulation height of the tractor
■ A trailer with a total height of 4.0
that loading volume is lost. The step
However, a loading space height
in the loading surface also makes
vehicles is regulated by EU guideline
of 3 metres throughout is not possible
rear loading with a fork-lift truck
96/53/EC of July 25, 1996. For cross-
for vehicles with a maximum height of
difficult. Furthermore, the additional
border transport the guideline sets a
4 metres, as the articulation height of
cavity space leads to a great deal of
maximum vehicle height of 4 metres.
the tractor is 0.95 metres and the floor,
additional expense when securing
For domestic transports no restrictions
transverse shaft and displacement take
the load.
are imposed, and so member states
up a further 0.15 metres, so that the
can control vehicle heights for this traf-
total height of the vehicle comes to 4.10
fic according to their own estimation.
metres and hence the height limits valid
restriction only two, not three, 1 metre
Whereas, for example, France, Great
in Germany are exceeded.
high containers can be stacked on top
Britain and Sweden have renounced all
restrictions and Ireland and Finland limit
Without raising the vehicle height
of each other. Hence 33 percent of the
Until now the use of volume vehi-
transport volume of the trailer is unused.
height to 4.25 metres and 4.20 metres
cles has been tolerated in Germany
1.50 metre high containers cannot be
respectively, in Germany a maximum
with special authorisation or has been
stacked at all, so that 50 percent of
height of 4 metres prevails.
punished by only minimal, exemplary
the transport volume remains unused.
fines. However, the government has
Poor utilisation of the vehicles’ capacity
If account is taken of the logistical
announced the abolition of this toler-
entails a greater distance travelled per
demands that industry places nowa-
ance and in future will ensure compli-
vehicle – with all the negative conse-
days on forms of transportation, seem-
ance with the vehicle height restriction
quences for the environment and com-
ingly so small a difference has serious
by means of drastic fines. Hence the
petitiveness.
Annual Report 2005
89
tage compared with car plants in EU
is not officially accorded this aim in the
used, distance travelled for procure-
countries that allow volume vehicles. In
White Paper.
ment transports of the car industry for
addition there would be ecological con-
example will rise by 15 percent or about
sequences from the increased number
217 million vehicle kilometres per year
of transports in other sectors of the
on transport declarations set out in the
according to a current study of the
economy.
coalition agreements of the Federal
If no more volume vehicles are
Fraunhofer Institute. CO2 emissions will
correspondingly rise by 7 percent or
National transport policy is based
Government of 1998 and 2002. AccordHence government and policy
ing to these a “transfer of as a large
by over 91,000 tonnes per year. For the
should test the use of such widespread
a proportion of road and air transport
German car industry additional costs
volume vehicles, at least for a transition
as possible to rail and waterways” is
due to greater distances travelled would
period of 6 to 10 years during which
recommended. In connection with this
total more than 161 million euros/year
new technical solutions can be devel-
objective the Federal Transport Plan
– an obvious competitive disadvan-
oped.
issued shortly before was to be revised.
Here too the targeted performances of
individual forms of transport and their
market shares for 2015 were set out in
Further Pressure on Road Transport –
Production Sites at Risk
concrete terms (so-called integration
scenario). They were contrasted with
how transport was expected to develop
by 2015 without transfer measures.
Misguided transport policy
Whereas aspiring, emergent nations
lished in concrete terms and contrasted
According to this, in freight trans-
with foreseeable development without
port alone about 28 billion tonne
have grasped that road transport is a
transfer measures. According to this,
kilometres should be transferred from
key instrument in the creation of growth
in 2010 146 billion tonne kilometres of
road to rail by 2015. Consequently, the
and prosperity and consistently apply it
the 1,882 billion tonne kilometres by
market share for rail in long-distance
to this purpose, in Europe after decades
road should be transferred to rail (61
freight transport should total 19.0 per-
of similar experiences this correlation
billion tonne kilometres), inland water-
cent instead of 14.4 percent without
appears to have been suppressed. Here
ways (29 billion tonne kilometres) and
transfer measures in 2015. The market
road traffic is often viewed as an avoid-
short-distance sea transport (56 billion
share of road freight transport should
able evil and even as a brake on growth.
tonne kilometres). To assist this, the
fall from seven tenths to two thirds. As
commission will introduce Europe-wide
a means of achieving this transfer, the
deregulation and improvement of rail
Federal Government essentially settled
ing road traffic in the EU, the EU Com-
transport and the modernisation of sea
on the introduction of distance-related
mission in its White Paper of 2001
and inland waterway navigation sys-
truck tolls and an infrastructure policy
supports pegging the market shares of
tems. The revision of the guidelines for
that – irrespective of the importance of
all forms of transport at the 1998 level
the trans-European transport network
the various forms of transport for the
on ecological grounds – referring to the
from 2001 favouring greater emphasis in
transport systems and irrespective of
EU-15 states. Thus the performances
Germany on rail transport than on road
the profitability of the means deployed
and market shares of the various forms
transport projects may be viewed as a
– would provide road and rail with the
of transport targeted for 2010 are estab-
transfer instrument, even if this measure
same level of investment.
Against the background of increas-
90
Transport transfer is a
fallacy
A transfer policy assumes that the
various forms of transport are mutually
TRANSPORT
transport is generated over distances
The only effect that transfer attempts
of up to 100 kilometres – 90 percent
have had in Germany is the drastic
up to 200 kilometres – and hence
increase in the cost of road transport
completely rules out transfer to rail.
owing to the environmental tax and – as
exchangeable. However this is not the
a result of increasing tail-backs – rising
case. Different forms of transport have
No wonder then that the transfer
costs in terms of time and higher fuel
different advantages and disadvantages
attempts of the Federal Government
consumption. Hence, in the end, the
conditioned by the system.
must be regarded today as having
exchange of goods, the source of growth
failed. Despite a massive increase in
and prosperity, is being obstructed.
An excellent advantage of the
the cost of road transport owing to the
truck is its ability to create networks.
environmental tax and, since Janu-
The fact that the traffic watershed
It transports goods “door to door”,
ary 2005, the truck toll and a deflec-
often propagated by the Federal Govern-
whereas the railway as a track-bound
tion of investment funds from road
ment has failed to materialise and that
transport system only rarely benefits
to rail construction, no transfer to rail
road transport has obvious advantages
from the sender and recipient hav-
has occurred. Since 1997, road freight
for the individual that are greater than
ing their own rail link. Rail transports
transport has even been able to extend
their raised cost burden was confirmed
are only economical over larger dis-
its market share from 68.9 percent to
by Alliance 90/The Greens in April 2004
tances. Transport experts consider the
72 percent today. Experience must have
in the paper “From the traffic watershed
economic threshold of rail transport
been similar in Switzerland, which is
to sustainable mobility”. Unfortunately,
versus road transport to be at least
keenly cited as having a supposedly
awareness of the extent of the burden
300 kilometres between sender and
successful transfer policy, as a conse-
on road transport due to oil taxation and
recipient. However, almost 80 percent
quence of the performance-dependent
truck tolls and on the investment plan
of transport revenue in road freight
heavy goods tax (LSVA).
has not yet had any fallout.
Infrastructure Policy
Misguided EU
infrastructure policy
projects that are also of European inter-
In addition, the TENs are directly
est but that do not belong to the TENs,
subsidised to a maximum of 10 percent
or projects with regional significance.
of the investment sum. These subsidies
is focused on supporting infrastructure
They are financed by EU structure funds
constitute by far the largest part of
projects of particular European interest.
and the European Investment Bank,
their financing. Following an agreement
This mostly concerns closing domestic
which is currently offering strong sup-
between Parliament and the Council
or cross-border loopholes that lead to
port to PPP projects (e.g. motorway
of Ministers last year the EU grant
continuous Europe-wide connections.
building in Portugal, Spain, Ireland and
for cross-border sections and for the
The aim is to create so-called trans-
the Netherlands, as well as the con-
Galileo satellite navigation system was
European transport networks (TENs).
struction of a metro in Seville and the
raised to the present 20 percent of the
Beside these there are infrastructure
truck toll system in Austria).
investment sum. The remainder is to
The infrastructure policy of the EU
Annual Report 2005
be provided by the individual member
states.
The infrastructure policy is based
The choice of projects clearly reveals
91
out again in the Federal Transport Plan
the intention of the EU Commission for
(FTP) of 2003. This is an outline invest-
transport policy in the White Paper from
ment plan that by means of a forecast
2001 to transfer transport from road to
of transport performance assesses
on the joint guidelines for the con-
rail and ships. Of the 30 new priority
project alternatives for selection on
struction of trans-European trans-
projects cited in the list 17 are purely
the basis of cost-benefit analyses and
port networks passed on July 23,
rail projects, 5 are combined rail/road
allocates scarce investment resources
1996 by the European Parliament
projects, 3 projects concern waterways,
to the economically most valuable
and the Council. On the basis of the
one concerns air transport, one the
projects.
results of the Christophersen Group,
Galileo satellite navigation system and
these guidelines establish 15 prior-
only 3 projects are purely road projects.
ity projects with a timeframe to 2010
These are:
projects strong emphasis was placed
■ the Danzig – Brno/Bratislava – Vienna road link
pure road projects.
■ ensuring mobility that is permanently compatible with the environ-
on rail transport and combined transport. Only three of the projects were
2003 may be fully shared by the car
industry:
and a total investment volume of 400
billion euros. In the selection of these
The key objectives of the FTP of
■ the Igomenitsa/Patras – Athens
ment
– Sofia – Budapest motorway and
■ strengthening Germany’s economic
In view of the delay in the completion of these projects and in view of
■ the Ireland – United Kingdom – Ben-
■ securing jobs
the expected development in transport
following the accession of the new
position
elux road link.
Given the fact that roads in the
■ supporting sustainable areal and
member states, in 2001 the Com-
EU-25 states already bear about 70 per-
mission and the European Council
cent of transportation today and a grow-
proposed a revision of the guidelines
ing trend is to be expected here owing to
for the trans-European networks with
increasing use in the new member states,
■ creation of fair and comparable con-
forecasts up to 2020. In June 2003 the
it must be stated that in its infrastructure
ditions of competition for all forms
group presented the results of its work
policy the EU is neglecting road in favour
of transport
in the report of the former Transport
of rail transport.
■ improvement of transport safety
Commissioner van Miert. The priority projects defined within it are the
still to be completed projects of the
1996 joint guidelines (so-called “Essen
projects”) and 22 new priority projects.
On this basis, the Commission issued
settlement structures
Federal Transport Plan
of 2003 – directed
infrastructure policy at a
national level
■ reduction in the demands placed
on nature, the landscape and nonrenewable resources
Since the middle of the 1970s the
■ reduction of noise, harmful sub-
a list of the new priority projects in
Federal Transport Plan has formed the
which it accepted the 22 proposed
framework for long-term infrastructure
stances and greenhouse gas emis-
projects and 8 others. All 30 projects
planning in Germany. Construction
sions (especially CO2)
will receive a total investment of 225
work scheduled by the Federal Govern-
billion euros.
ment for the period to 2015 was set
■ promoting European integration
92
Distortion due to political
restrictions
The task arising from the Federal
TRANSPORT
■ transferring the largest possible pro-
forecast of Progtrans. In contrast, for
portions of growth in road and air
road freight transport actual perform-
transport to rail and waterways
ance has been consistently above the
Transport Plan of building infrastructure
in accordance with demands is, however, being seriously distorted by politi-
forecast since the first year of the peri■ gradually aligning investment in rail
and roads
cal restrictions. The financial reserve is
to be seen as extremely critical in this
od. This will also be the case in 2008.
The targeted mark of 413.6 billion tonne
kilometres will be clearly surpassed with
Given these requirements, the origi-
424.8 billion tonne kilometres.
respect: it was suggested from an eco-
nally cost-benefit oriented approach of
nomic point of view that each undertak-
federal transport planning is being sig-
ing whose economic advantageousness
nificantly modified and turned into the
in passenger transport. When the offi-
was demonstrated (benefit-cost ratio
instrument of transport transfer strategy.
cial transport statistics were revised in
> 1) is also realised. However, this is not
Hence the FTP of 2003 is based on the
2004 it was revealed that the number of
the case in the Federal Transport Plan.
assumed forecasts of the investment
kilometres travelled by private vehicles
Instead, the limit for realisation and for
scenario and not on the status quo of
has been drastically underestimated
the allocation of available funds has
transport demands signalled by the
since the start of the 1990s. Hence, the
been restricted.
market. This is rather a target forecast
transport forecast of the FTP for private
that already presupposes fiscal, statu-
vehicles was 797.5 billion passenger
tory and investment measures aimed at
kilometres for the year 2004. In fact this
based on needs an infrastructure policy
altering the modal split at the expense
totals 818.4 billion passenger kilome-
“according to cash situation” is being
of road transport.
tres. On the other hand, on the railways
In place of an infrastructure policy
operated. In the sequence of the best
evaluated projects so many are sched-
Still more glaring is the difference
too there has been an ever-widening
As transport forecasts form the
gap between targeted and actual
uled for definite planning that the
basis for estimating the economic
values since the first year of the fore-
funding framework implemented has
use of the investment measures to be
cast horizon, 1997. Instead of the 83.3
been exhausted. These projects are
selected, an overestimation of actual
billion passenger kilometres envisaged,
assembled in the so-called “priority
future rail transport performance would
only 72.3 billion passenger kilometres
needs” category. Less efficient - but still
mean that rail infrastructure projects
were registered in 2004.
economically advantageous - projects
are made to appear more beneficial.
are assigned to the so-called “additional
At the same time this implicitly means
needs” category. These are only allo-
that road infrastructure projects are
cated for project planning in exceptional
made to appear less beneficial. The fact
cases.
that road transport is underestimated
is already apparent today – eight years
In their coalition agreement for the
Amount required for the
modernisation of longdistance roads:
212 billion euros
As a result of the assessment pro-
after the start of the 18-year forecast
cedure a total investment requirement
15th legislation period of October 16,
period of 1997–2015. Since the first year
of about 212 billion euros is designated
2002 the coalition parties established
of the forecast period the actual freight
for the Federal Transport Plan 2003 up
further political restrictions which,
transport performance of the railways
to the year 2015. This consists of:
however, make an impartial selection of
has fallen below what was forecast. By
projects covering all forms of transport
2008 this discrepancy will grow still fur-
more difficult. They include:
ther according to the flexible mid-term
■ federal long-distance roads 119.9
billion euros
Annual Report 2005
■ railways 80.2 billion euros
■ federal waterways 11.7 billion euros
on modernisation and upkeep are
are left over for the so-called new
increasing. Yet transport finance policy
projects.
93
has not drawn the necessary conclusions. Instead of building up budget-
Together with the non-negotiable
ary resources for federal investments
needs the new projects make up the
this requirement will be financed and
in long-distance highways with toll
so-called priority needs – which should
implemented. Only that requirement
resources, budgetary resources have
also be implemented. However, the
which is authorised by a much too mea-
been decreased by toll revenue and
new projects do not cover anything
gre funding framework set by finance
replaced by toll resources. Hence, the
like all projects that were shown to be
policy to the year 2015 will be met. This
partial conversion of budgetary financ-
worthy of implementation in the profit-
finance framework was determined by
ing to user-based financing has no
ability appraisal of the FTP.
the Federal Government, whereby the
effect on the overall level of federal
budgets for 2001 to 2003 and mid-term
investment in long-distance highways.
finance planning from 2003–2006 to
As construction and maintenance are
projects worthy of construction are
2015 were established. The result is an
not equivalent but are indirectly con-
much greater than the budget pro-
extremely tight funding framework of
nected, the failure in the past to invest
vided, a selection from these projects
only 150 billion euros to 2015. This falls
is now having its revenge.
must also be made. To this end so
However, this does not mean that
below the actually established requirement of 212 billion euros by 62 billion
As the financial requirements for
many of the best evaluated projects
Only 66.2 billion euros of the avail-
have been placed on the list of new
euros or nearly 30 percent. Hence the
able budget can be used for extend-
undertakings that the budget allo-
FTP of 2003 is clearly to be regarded as
ing capacity. But this sum is not only
cated for them has been exhausted.
underfinanced.
provided for new projects. About 56
All further projects are assigned to the
percent of it is intended for so-called
“additional needs” planning category
non-negotiable needs. These include
and have practically no prospect of
projects that were planned as early
realisation. Furthermore, the remain-
Larger share for
maintenance investments
From the investment budget of
as the FTP of 1992 but could not be
ing budget in the FTP of 2003 for new
150 billion euros to 2015 the mainte-
implemented on time, and projects
projects is so small that only projects
nance of the existing federal transport
with political priority. As these projects
with a benefit-cost ratio of over 5
network must be financed first. In the
have already been submitted to an
percent can be allocated to the new
FTP of 2003 more than half of this, 56
efficiency appraisal in the context of
projects to receive financing. In other
percent or 82.7 billion euros, are allo-
the preceding FTP, they are not reap-
words, projects are assigned to “fur-
cated to maintenance activities. Hence,
praised for the current FTP. Neverthe-
ther needs” and hence not actually
for the first time in a Federal Transport
less, this would be advisable as the
realised, even if their benefit-cost ratio
Plan more resources are being pro-
results anticipated in the FTP of 92,
is much higher than 1.
vided for purely structural maintenance
especially for numerous rail infrastruc-
than for extending capacity.
ture projects, have not been achieved
It should certainly not be over-
The resources currently earmarked
by a long chalk. Indeed, cost-intensive
by the transport policy for mainte-
high-speed transport by rail has turned
nance and construction to 2015 are
looked that our transport networks
out to be economically less profitable.
not only inadequate – their distribution
are significantly degraded and, with
The remaining 44 percent of the 66.2
to the various forms of transport is not
increasing wear and tear, expenditure
billion euros, i.e. about 29 billion euros,
in line with market requirements either.
94
TRANSPORT
The 148.9 billion euros are to be dis-
transportation but the railways only 16
tributed as follows:
percent. In terms of passenger transport roads bear a share of nearly 87
■ 77.5 billion euros to federal autobahns and trunk roads
■ 63.9 billion euros to federal railways
■ and 7.5 billion euros to federal
percent but rail only a share of less
Owing to distribution that is out of
than 9 percent. Even the Federal Gov-
line with market needs the resources
ernment itself admits that its invest-
earmarked for autobahns and trunk
ment per kilometre travelled is 4 times
roads in the FTP passed in May 2003
higher for rail than it is for federal
are completely inadequate. A total
long-distance highways.
of 22.8 billion euros are allocated for
waterways.
new projects. By this approach the
The preference given to railways
There is also the fact that the rail-
Funding for autobahns and
trunk roads is out of line
with needs
infrastructure policy is freezing the
when providing finance is also revealed
estimates for long-distance highway
ways are entitled to more investment
in the aging nature of the road infra-
maintenance from 2003, i.e. 5.5 bil-
resources under the Regionalisation
structure, compared to the more modern
lion euros per year, for the foresee-
Law and the Local Authority Financing
rail infrastructure, year on year – thanks
able future. However, at least 7 billion
Law for investment in federal railways of
to the generous redistribution of tax
euros are needed to further develop
local and regional transport networks.
revenues obtained from motor traffic.
the long-distance highway network in
These total about 14 billion euros to
Thus the proportion of railway installa-
accordance with the precept of sus-
2015. Hence, together with the 63.9 bil-
tions with an average age of less than
tainability.
lion euros from the Federal Transport
10 years rose between 1987 and 2002
Plan the railways will be entitled to
from 29 percent to nearly 35 percent.
more than 78 billion euros in investment
Roads have fallen behind in this respect.
agreement with its partners in the
resources by 2015, that is, about the
Although in 1987 about two thirds of
Pro-Mobility infrastructure initiative
same amount as the planned invest-
roads were less than 20 years old, this
(www.promobilitaet.de) – motor
ments in road infrastructure (77.5 billion
proportion had fallen by 2002 to only 46
vehicle trade, automobile clubs, build-
euros).
percent.
ing industry and freight transport
Hence, the car industry is in full
– that in Germany there is a shortfall
Expensive railways given
preference for investments
Investment per unit
kilometre travelled
This distribution of investment is
not however reflected in transport
by customers and citizens but is based
construction and extension of routes
for the number one capacity car-
Percentage per unit kilometre travelled
(tonne kilometre/passenger kilometre)
requirements which are expressed in
the form of a free choice of transport
of at least 17.5 billion euros for the
rier, the road, throughout the period
of the Federal Transport Plan up to
2015. Federal transport planning even
3.0
testifies to a requirement of 30.7 bil-
on the illusion that transport can be
lion euros that cannot be financed
diverted from road and air onto rail
(“additional needs” for federal long-
by investment. Given the daily shares
distance highways). To the decision
of the various forms of transport here
in Germany but in the other industrial
nations too, in freight transport roads
are required to bear 72 percent of
0.7
Rail
Source: German Bundestag
Road
on new construction and extensions
is also added the repair deficit. The
currently existing shortfall in investment resources of 2.5 billion euros per
Annual Report 2005
Investment provision in
the Federal Transport Plan
already slashed
The 5.2 billion euros a year pro-
95
The global budget reduction to fund
pensions means cuts across the entire
budget in order to fill the gaps in the
pension system. The Federal Govern-
vided for in the Federal Transport Plan
ment happily overlooks the fact that the
is already far below the 7 billion euros
introduction of the “environmental tax”
of investment that are needed. But that
in 1999 was accompanied by the claim
year is extrapolated almost unchanged
is not all. Even this insufficient sum is
of wanting to consolidate the pension
over the longer term. Many people
– because the Federal Transport Plan is
system. The global budget reduction
will therefore be justified in fearing
merely an investment framework – only
finally proved that this action was insuf-
that with the current Federal Transport
a non-binding statement of intention
ficient. Now road transport is being
Plan hold-ups on the roads are pre-
on the part of the Federal Government.
asked to pay up a second time in order
ordained unless the expenditure and
Even within the insufficient investment
to finance the pension system. The five
investment policy changes.
framework of the Federal Transport
stages of the environmental tax mean
Plan, the final outcome is decided by
that transport is already bearing annual
It would be all the more significant
the current financial situation and the
costs amounting to 8 billion euros a
if the revenue due from the distance-
final sum available for investment has
year for pensions and the budget reduc-
based truck toll payable since the start
been slashed once again. As a result,
tion.
of 2005 were deployed not instead of
the Federal Transport Ministry’s original
resources allocated hitherto from the
medium-term (2004 to 2008) financial
general federal budget to the trans-
plan of August 2003 – which was still
subsidies are to be reduced in all areas
port budget but in additional to them
very much oriented towards the invest-
of the federal budget. The Federal Gov-
as resources specifically intended
ment provisions in the Federal Transport
ernment is now making use of this con-
for the extension of long-distance
Plan – also suffered another massive cut
cept as a welcome excuse for limiting
highways. Unfortunately, the Federal
with the financial plan of June 2004 for
investment in roads by suddenly declar-
Government has decided to cut the
the years 2005 to 2008.
ing them to be subsidies. Yet the con-
investment expenditure on roads
funded out of the budget by the same
Under the Koch-Steinbrück concept,
cept expressly relates to the definition of
The Federal Government puts for-
subsidies set out by the Kiel Institute for
amount as the projected toll revenues.
ward three excuses for once again
World Economics and, according to that,
This ensures that the planned toll rev-
cutting major road investment. Firstly
investments in trunk roads in Germany
enues do not flow back only into the
a global budget reduction would be
are not to be considered as subsidies.
roads although the roads alone gener-
needed in order to fund pensions, sec-
ate them. Almost half will be used for
ondly spending cuts were necessary
other purposes and go to cross-subsi-
as a result of the Koch-Steinbrück
ment’s planned toll revenues for 2004
dising rail and waterways, although it
concept and the dismantling of sub-
amounting to 3.4 billion euros was offset
is stated in the compromise package
sidies, and thirdly it was necessary to
by budgetary funds in 2004. The Federal
of the Bundestag and the Bundesrat
make up the shortfall caused by the
Government is also enforcing repay-
for the introduction of the toll that
fact that toll revenues would not start
ment of the investment reductions in
the overwhelming majority of the re-
coming in until the end of 2004. How-
2005 to 2008, as it did with the budget-
sources should be invested in long-
ever, none of these three arguments
ary compensation paid in 2004. Yet the
distance roads.
holds water.
increase in budgetary funding in 2004
The loss of the Federal Govern-
96
TRANSPORT
to compensate for the loss of toll rev-
building, for the years 2006 to 2008 it
sion for a further 5 years) to 10 years
enues would not have been necessary
was only 4.2 billion euros, 4.3 billion
(with the option of a 5 year extension).
if the Federal Government had planned
euros and 4.4 billion euros respectively.
This initiative on the part of the Länder
the toll revenues as an addition to the
However, in his statement of March
is very welcome. However, the fact that
budgetary funds instead of reducing
17, 2005, the Chancellor nevertheless
it was necessary is a sign of the poverty
budgetary funding by the amount of the
announced a 2 billion euro comprehen-
affecting Germany, which is putting off
expected toll revenues.
sive transport investment programme
dealing with ever-increasing delays in
for the years 2005 to 2008 to stimulate
investment.
In its investment planning of March
economic activity. Under this pro-
2004, in accordance with the limitations
gramme, roads are to receive an addi-
One of the core problems of the
under the global budget reduction for
tional annual investment of 390 million
infrastructure policy is the totally insuf-
pensions and using the Koch-Stein-
euros in 2005, and 170 million euros per
ficient amount of investment. Another
brück proposals for roads, the Federal
year in 2006 to 2008. This means that, at
problem is the lack of planning security.
Transport Ministry reckoned on an
least for 2005, investment would be just
The deficits arising in state income
investment volume of only about 4.5 bil-
below the level contained in the Federal
and the growing expenditure on social
lion euros for the year 2004. A dramatic
Transport Plan.
welfare are increasingly endangering
collapse of major road investment was
only prevented by an unexpected piece
investment decisions that have already
The Chancellor’s decision to
been affected. This is clearly illustrated
of good fortune. It turned out that the
increase investment in transport is
by the many different financial and
railways were not in a position to make
very welcome in respect of growth and
investment plans and decisions made in
use of the funding they were offered, so
employment. In the meantime we must
the last two years. Yet predictability and
that 0.26 billion euros could be given to
bear in mind that this increase is start-
continuity are badly needed in public
roads. Thus, in the end, investment in
ing from a very low level in relation
investment policy.
roads in 2004 almost reached the level
to what is needed, so that we are still
contained in the Federal Transport Plan.
about 2.5 billion euros per year short of
the necessary financial investment.
For the first time, the advantage of
the new transport infrastructure financ-
Yet another burden on planning security is caused by the extremely long planning times for infrastructure on the inter-
The investment deficits have even
national scale. The Federal Government
ing company (VIFG), founded in 2004,
led to construction projects being
reacted to these in April 2005 with draft
was able to take effect. This makes it
delayed for so long that the five-year
legislation for speeding up infrastructure
possible to redistribute the funding it
period for the project approval runs
planning that would reduce the planning
receives from the Federal Government
out and construction can no longer
phase by up to 30 percent. However, this
from rail to road and from year to year.
be started. 25 different construction
can only be the first step. We must also
projects at a total cost of 670 million
take care that improvement is not under-
euros were threatened by the loss of
mined by the excessive temporary envi-
plan, the collapse in funding from 2005
the right to build, if construction could
ronmental legislation also contained in
through to 2008 was likely to be even
not begin by 2007. So in February 2005,
the draft. This would include the introduc-
more dramatic. Although the Federal
the Bundesrat introduced an initia-
tion of the opportunity for group action
Government budget plan of July 2004
tive to extend the period of validity of
against infrastructure projects, which
for the year 2005 still provided for 4.61
project approval from the current 5
could lead to drastic delays in manage-
billion euros for investment in road-
years (with the option of a single exten-
ment and legal processes.
Under the medium-term financial
Annual Report 2005
Budgetary consolidation at
the expense of quality of
location
97
an average advantage to the national
age of 13.8 million units of capacity. By
economy of 5.2 billion euros. The same
contrast, the railways take only 3.9 mil-
amount of investment in the railways
lion units of capacity per kilometre. That
only yields 3.1 billion euros of economic
means the performance of long-dis-
investment under the Federal Gov-
advantage. This means that every euro
tance road transport exceeds that of the
ernment’s financial plan of July 2004
invested in the railways instead of trunk
railways by a factor of 3.5. We get the
compared with the estimate in the
roads leaves economic benefits to soci-
same result if we compare the capac-
Federal Transport Plan were quantified
ety unutilised.
ity of rail and road in terms of their
The effects of the reduction in
economic value, that is their respective
in the report “Haushaltskonsolidierung
auf Kosten der Standortqualität” by
the Institute of Transport Studies at the
University of Münster, the results of
which were presented in October 2004.
Autobahns – the main
arteries of transport in
Germany
Because of Germany’s central
(current) net fixed assets.
The core of the trunk road network
is the autobahn network. Its capacity
According to this report, the investment
location in Europe, trunk roads are
per kilometre and per euro is even high-
reductions contained in the medium-
of extreme and continually increas-
er that that of the trunk road network
term financial plan would have resulted
ing importance for the development of
as a whole. Although the length of this
in losses due to reductions in growth
transport. The Federal Government’s
network is only 5 percent of the total
amounting to 105 billion euros.
2004 road construction report empha-
national network, it carries more than
sises the high degree of importance for
one third (34 percent) of HGV journeys.
According to the study, the reduc-
transport of these national roads, which
tions in investment also led to job
at almost 52 percent account for more
losses in the construction industry and
than half of the total annual journeys
Autobahns are the safest
roads
associated areas. This would account
made by heavy goods vehicles. If we
Autobahns are both the safest
for 18,374 jobs in 2005 alone, 31,236 in
consider capacity rather than number of
roads in Germany and among the saf-
2006 and 2007 respectively and as many
journeys, the importance of trunk roads
est anywhere in the world. For every
as 47,772 per annum in the years after
is even greater, as they can be used for
1 million kilometres driven, only 0.011
2008. This would not even include the
freight transport by vehicles with par-
accidents involving personal injury are
job losses arising in the economy as
ticularly high payloads. This gives them
recorded. On all other road categories
a whole from the fact that investment
a share of around 72 percent of total
the risk of accident is higher. Moreover,
reductions lead to time, energy, accident
road freight capacity.
the accident rate for all roads, including motorways, is continually improving.
and environmental costs because the
transport situation deteriorates. These
The fact that German trunk roads
The numbers of deaths in motorway
greatly exceed the current job losses in
not only deal with a high demand for
accidents fell again in 2004 to a new
the construction industry and its sup-
transport but do so very efficiently
historic low of 630. Compared with the
pliers.
can be seen by relating demand for
previous year, this is a reduction of over
transport to its potential supply, i.e. the
20 percent. In relation to the actual
distances or their fixed assets. Despite
number of kilometres driven on German
another way in which resources are
their high capacity, German trunk roads
motorways, the reduction was as great
being squandered. Transport experts
do not even make up a quarter of the
as 86 percent compared with 1970. This
have calculated that 1 billion euros
whole network of out-of-town roads, i.e.
puts Germany in the leading group in
of investment in trunk roads yields
every kilometre carries an annual aver-
international comparisons, clearly ahead
However, the study shows up yet
98
TRANSPORT
Development in fatality rates on motorways in Western Europe and the USA
Fatalities per billion vehicle kilometres
France
-89%
United Kingdom
-90%
Belgium1
-82%
Austria
-66%
1970
Switzerland
-74%
2003
USA2
-81%
Italy3
-59%
Germany*
-86%
0
5
10
15
20
25
30
35
40
45
1
2002/1973, 2 2001/1970, 3 1997/1970, *West Germany (1970)
Source: IRTAD
of such countries as Austria and France,
motorway ring road). According to a
are showing their age. There are places
where there is a general speed limit. In
survey by the Cologne University Insti-
where the quality of the autobahns
the USA, twice as many people die on
tute for Transport Studies, the stretches
leaves something to be desired. Cur-
motorways, despite the strict speed limit
of motorway that can be categorised as
rently less than 80 percent of motorways
in force there.
heavily used, as a proportion of the total
are fully usable, i.e. over 20 percent of
length of the motorway network, have
motorways have warning signs for clear-
risen from 5.2 percent in 1980 to over a
ly or severely perceptible unevenness,
quarter. To put it plainly:
discernible rutting with a risk of aqua-
Overload increasing
The result of the “scissor movement” between rising numbers of
journeys and stagnating investments
planing in wet conditions and places
A quarter of the motorway network
where there is poor or insufficient tyre
is an increasing burden on the existing
must already be considered as bottle-
adhesion. This entails risks, not least for
motorway network. Whereas the average
necks. 209 kilometres are so heavily
the maintenance of road safety.
amount of traffic on German autobahns
used that there are big traffic jams every
in 1990 was still only 41,800 vehicles per
day.
day, it had risen by 17 percent to 48,900
The Cologne University bottlenecks
study predicts that the proportion of
vehicles per day by 2002. And on many
Germany’s autobahns are con-
heavily used sections will double, if not
sections of this network, this average is
sidered by many to be the best in the
treble, by 2015. The new Federal Trans-
greatly exceeded. Some of them show
world. Even today, the construction
port Plan, adopted in 2003, assumes a
a traffic density of over 100,000 vehi-
standard is used as a model in many
growth in road freight traffic of as much
cles per day (for example, the Cologne
countries. But many parts of the network
as 34 percent.
Annual Report 2005
We must bear in mind that in future
99
German autobahn network 2020 – ADAC demands
both extension and new construction
work will be carried out on the German
autobahn network. However, the increases
in capacity provided for in the Federal
Transport Plan will be nowhere near sufficient to offset the foreseeable increase in
traffic, particularly in cross-border freight
transport. This was shown by ADAC (the
German Automobile Club) in a study on
the “long-term prognosis for the quality
of traffic on selected German autobahns”
in 2003. In this study, the HGV traffic in
2020 established on the basis of the trafsee for
details
fic predictions for the Federal Transport
Plan was mapped onto the autobahn
network planned in the Federal Transport
Plan. Despite the intended modernisation
measures, according to the prognosis,
over 44 percent of motorway sections
will be overloaded, i.e. there will be jams.
About a quarter of these sections (10 percent of all sections) are even threatened
with constant traffic overload. On these
sections, the motorways show more than
15,000 vehicles per lane per day (overload), or more than 20,000 vehicles per
day (severe overload). The increases in
The ADAC calls for:
A “minimum requirement”
Indispensable new streches
Indispensable expansion
of the autobahns from
4 to 6 lanes
Other requirements
from ADAC perspective
New priority stretches
Expansion due to signs
of overloading in 2020
capacity provided for in the current planning are therefore far from being a suf-
Source: ADAC
ficient extension.
Based on these calculations, ADAC
has designed a motorway network that
would meet the need forecast for 2020.
High cost of traffic jams
This kind of expansion programme
the burden on citizens and make cost
savings to the national economy that
According to this plan, a total of 3,300
may appear ambitious at first glance.
would be much greater than the invest-
kilometres must be expanded to six or
However, the necessary investments
ment costs. If you include stop-and-go
more lane standard and 2,400 kilome-
would definitely be worthwhile, when it
traffic in towns in the sums, according
tres of new road needed to fill the gaps
is considered that about half the daily
to a calculation made by BMW AG, the
and open up areas must be undertaken
traffic jams that threaten our motorway
cost of traffic jams in Germany already
in the next 15 years.
network can be avoided. It would relieve
adds up to 100 billion euros a year.
100
TRANSPORT
Every second driver is now caught
This shows that active investment in
Further framework conditions pro-
in a traffic jam at least once a week.
infrastructure must also be a funda-
vided for in the draft directive for levying
Despite staggered holidays in the
mental pillar of national climate protec-
HGV charges on motorways are firstly
German Länder, at holiday periods
tion policy in the sense of an integrated
the limiting of financing through charges
the tailbacks on peak days can reach
attempt at various measures.
to new or recently completed infra-
1,000 km in length. On average every
structure projects. This should prevent
motorist spends 65 hours a year in
infrastructure users from being asked to
traffic jams. That corresponds to over
Every day traffic jams are
pay a second time for using roads that
one and a half working weeks.
responsible for:
have already been fully paid for. Secondly, the amendment should meet the
It is estimated that around 12 billion litres of fuel are wasted annually
■ Overall costs of 250 million
euros
in Germany in jams and stop-and-go
traffic – about 18 percent of total road
consideration of neutral tax burden, i.e.
the infrastructure users should be given
relief through a corresponding reduc-
■ 30 million litres of extra fuel
tion in the annual vehicle tax. From the
traffic consumption. The long-term
consumption resulting in
automobile industry’s point of view,
potential for avoiding loss is high. If we
additional emissions
these elements would have represented
real political progress compared with
could drive without jams and stop-andgo, up to 18 percent of the CO2 emis-
■ Millions of lost leisure hours
sions from road traffic could be saved.
the existing road costs directive and
current infrastructure financing practice
in Germany.
Transport Costs – A Factor in
Globalisation and Location
However, the original new draft
directive foundered in the Council of
Transport Ministers in March 2004.
The main reason for rejection was that
Amendment of the EU Road
Costs Directive the wrong
course of action
The EU Commission has been work-
some member states were insistent on
ing on an amendment to this directive
wishing to prevent any earmarking of
since 2003. The original draft, which was
toll income in order to be able to use
introduced by the Transport Commis-
the income from charges for other pur-
ing of charges for road use by heavy
sioner of the previous Commission, Loy-
poses. In addition, the member states
goods vehicles has been in force since
ola de Palacio, would in many respects
have so far been unable to agree on
June 1999. It gives the member states
have represented political progress
new common bases of calculation for
the freedom to levy charges on the use
compared to the existing directive.
setting the amount of tolls.
of their motorways by HGVs. However
Among other things, it provides for ear-
national room for manoeuvre is very
marking income from charges for trans-
much restricted. At any rate, the direc-
port infrastructure projects. It should
agreement at the EU Transport Minis-
tive provides that the charges must be
put a stop to the practice of member
ters’ Council session on April 21, 2005,
directed towards the costs of building,
states allowing the HGV charges to flow
because the new Transport Commis-
extending and operating the transport
into the general state budget instead in
sioner made concessions to the mem-
network and an upper limit laid down by
order to plug the gaps in other areas of
ber states on many points – and in
the EU must not be exceeded.
expenditure.
particular abandoned the requirement
The current EU directive on the levy-
It was only possible to reach
Annual Report 2005
101
Road haulage costs
ratcheted up too far
for purpose-linking of toll income. This
they had already fully paid for through
now means that the toll income cer-
their mineral oil taxes. However, in the
tainly should be spent on infrastruc-
amended directive, Germany succeeded
ture financing, but does not have to
in having this period extended to 30
is seriously under-funded is not that road-
be. This covers a change of purpose
years. Otherwise a reduction of the toll
users pay too little in tax – quite the con-
of toll income by the EU member
rates applicable in Germany would have
trary. Freight traffic contributes far more
states.
been required. In addition, while the
money to the national budget through
previous directive restricted the tolls to
mineral oil tax, vehicle tax and VAT on fuel
motorways and “roads similar to motor-
than would be required by an infrastruc-
the German Federal Government, the
ways”, the new directive also allows
ture policy appropriate to what is needed.
agreement also offers plenty of room for
tolls to be levied on other categories of
Motorists today pay almost four times as
manoeuvre for the highest possible toll
road (e.g. normal main roads), but does
much in taxes as they receive in public
rate. The original Commission proposal
not lay anything down with regard to
payments for the road system. The surplus
still laid down that, when establishing
content. After the directive has been
is used by the public authorities to finance
the level of tolls, the toll costs should
formally agreed in Council, it will be
state payments outside the transport
only be considered for infrastructure
forwarded to the European Parliament
budget or to subsidise the rail transport
that was not more than 15 years old.
for its second reading. This may lead
deficit within the transport budget.
This was intended to prevent “double
to renewed discussions on further toll-
charging” of motorists – that is, motor-
raising factors, such as consideration of
ists financing through tolls a road that
environmental costs.
Partly because of pressure from
The reason road building in Germany
The tax burden of 49.4 billion euros
is more than three times as high as
Allocation of revenues from specific taxes on road haulage
In millions of euros
60,000
50,000
Surplus
Taxes for the road system
40,000
30,000
20,000
10,000
0
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
102
TRANSPORT
Federal government, state, and local
which mean that, the steep rise in crude
buying power has already acted as a
authority spending on the upkeep and
oil prices notwithstanding, over 75 per-
psychological brake on motorists and
extension of the road system, which
cent of the price of fuel is entirely made
considerably slowed down the buying
is currently around 14.6 billion euros
up of taxes. With petrol priced at 109
of new cars and with it the domestic
per annum. The Federal Government
cents per litre, 80 cents flow into the
economy. It appears that motorists try
has just ratcheted up its income from
pockets of the treasury. Environmental
to balance out the increasing taxes on
mineral oil tax on motor vehicles again
tax alone has a share of just under 14
running their vehicles by delaying the
to almost double what it was in 1990.
percent in the price of petrol.
purchase of a new vehicle for as long as
possible.
While the cost of living index has risen
by 32 percent since then, the index for
From this it can already be seen that
the cost of running a car has shot up by
there can be no question of a further
50 percent.
turn of the environmental tax screw, as
Environmental tax: Poison
to the production and
logistics base
otherwise there would be considerable
This rise has been accelerated by
the five steps of the environmental tax,
economic consequences to reckon with.
Most importantly, the environmen-
The continual skimming off of additional
tal tax has also led to German fuel tax
12,117
11,871
11,780
11,685
11,333
10,758
13,488
11,812
11,606
11,300
11,265
11,246
10,970
10,242
Spain 380
Poland 947
Luxembourg 511
Lithuania 571
Estonia 515
Greece 439
Malta 363
Latvia 516
12,759
14,511
13,995
Belgium 516
13,868
15,078
14,506
15,265
14,151
Portugal 1,114
Czech Republic 572
15,299
14,158
14,660
Finland 1,924
Slovenia 1,141
16,584
13,862
Austria 2,815
15,777
16,677
15,774
Hungary 1,218
15,309
16,992
16,518
Netherlands 720
EURO II with air suspension in German traffic as in August 2004
Source: BGL
Denmark 468
17,238
16,560
Sweden 928
17,488
16,560
Slovakia 1,423
17,983
17,442
France 549
17,991
17,120
Italy 917
18,037
16,893
Ireland 1,346
18,239
Motor vehicle tax
18,790
19,664
Mineral oil tax
Norway 874
23,112
21,591
Germany 1,521
24,814
22,837
Switzerland 1,977
United Kingdom 647
32,376
33,023
Annual tax burden on a 40-tonne truck with trailer
Annual Report 2005
now having become one of the highest
in comparison with the rest of Europe.
This places a burden on Germany as
Rail continues to live off
the roads
103
exempted from half of the environmental tax component of the mineral oil tax.
One important reason for the
In addition the railways only have to pay
an economic base in competition with
increasing surplus being built up by
electricity tax at half rate. In addition to
Europe. High fuel prices hit the Ger-
the public authorities from the taxes
all this, VAT is only applied at half rate
man freight transport industry particu-
on road transport is the fact that the
to local passenger transport.
larly hard. In respect of the total tax
majority of the money is used to sup-
burden on a 40-tonne truck, Germany
port rail transport in Germany, which
leads the EU – with the exception of
runs at a big loss. It is still – even 10
the United Kingdom. Germany is only
years after the railway reform – far
outdone here because the British
from being financially self-supporting.
postponed, stock exchange flotation of
government is not under threat from
If we compare today’s costs to tax-
Deutsche Bahn AG will finally take place
“tank tourism”, that is, people going
payers for Deutsche Bahn AG with
as an integrated company with or with-
to buy fuel in cheaper neighbouring
those of 1994, we can see that at 18.3
out the network, is as yet undecided. In
states.
billion euros (2002) they are almost
order to prevent a future flotation of the
as high as in the year of the railway
transport components of DB AG without
reform (19.0 billion euros). Of these
the network, DB AG is currently using
It therefore comes as no surprise
Railway reform must
continue
Whether the planned, and recently
that German HGVs’ share of cross-
18.3 billion euros, 8 billion euros are
its restructuring plans to gather facts
border traffic with the neighbouring
allotted to the federal railways to pay
and to secure its continuing existence
states of Poland and the Czech Republic
off bad debts and 10 billion euros for
as a group through recentralisation.
only amounts to 10 percent. Attempts
investment in the railways, subsidies
are now being made to “flag out” to
and customer compensation, which
Cyprus, from where cabotage traffic
those responsible for public local
services, the automotive industry has
in Germany using drivers from East
passenger traffic use to finance loss-
a vital interest in efficient rail trans-
European states would make it pos-
making transport services.
port and – like the other sectors of the
sible to avoid the high burden of costs
in Germany.
As a major customer of rail freight
industry, many experts in the Bundestag
This customer compensation alone
and many transport experts – is there-
(so-called “Regionalisation funding”)
fore very determined that DB AG should
amounting to 4.4 billion euros (2002) will,
be floated without the network. This is
tax has missed its fiscal targets. In
under the Federal Regionalisation Act of
the only way in which the railway reform
November 2004, the German Institute
1.1.1994, be financed exclusively from
begun in 1994 can be brought to a sen-
for Economic Research calculated that
mineral oil tax revenue. For this alone,
sible conclusion. However, as long as
a considerable portion of the domestic
every motorist now pays 12 cents for
DB AG controls both the network and
fuel consumption was bought more
every litre of fuel bought at the pump.
transport operations, it will be involved
cheaply abroad via “tank tourism”. Even
Investments in the rail network are also
in decisions concerning competitors’
the Federal Government states in its
largely financed by the taxpayer.
access to the network, creating the
In this case, the environmental
assessment of the environmental tax
potential for discriminatory treatment.
reform of October 2004 that the envi-
Besides the money transferred
ronmental tax encourages tank tour-
from other sectors, rail transport is also
ism, causing a shortfall in mineral oil
subsidised through tax concessions.
reform of access to the rail network will
tax revenue for the German treasury.
Unlike road transport, the railways are
be taken with the 3rd amendment to the
An important step towards the
104
TRANSPORT
General Railway Law (AEG) as part of
complete separation of the network and
dations are therefore compatible with a
the implementation of the 1st EU railway
operations. The disciplinary power of the
market economy oriented transport poli-
package. As with the liberalisation of
market is superior in the long term to
cy, as they assure the infrastructural eco-
road transport in the 1980s and 1990s,
any regulatory regime, however cleverly
nomic viability of the individual means of
the main impetus for the deregulation of
worked out.
transport and thus constitute a basis for
national railways comes from the European Union. The core of the amendment
is to strengthen the functional breakup (not related to ownership) of the
network and operations of DB AG and
fair and efficient intermodal competition.
Pällmann
recommendations are a
benchmark
The recommendations of the Com-
Prerequisites for
use-related tolls
The automotive industry basically
make access to the network easier by
mission on transport infrastructure
welcomed the Pällmann Commission’s
tightening the regulations. For this pur-
financing, which almost five years ago
proposed reform and is open to the idea
pose, as well as ex post control by the
in September 2000 presented the Fed-
of a transition from tax-based to toll-
Federal Railway Office (EBA), a preven-
eral Government with a practicable
based infrastructure financing. It views
tive control authority will be brought in.
proposition for a phased transition of
this reform as a means of strengthening
infrastructure policy from financing
Germany’s competitiveness as a manu-
through taxation to financing through
facturing base. This is why, when formu-
legislature deserves support from the
charges dependent on use, must serve
lating its core demands to the Federal
point of view of competition policy, as
as a political benchmark for setting
Government for the 15th parliamentary
the slow progress of introducing com-
up user financing of the major road
term, which were submitted to the coali-
petition in rail transport shows that the
network. Basically, this body, set up by
tion parties during the coalition negotia-
present system of control by the EBA is
former Transport Minister Müntefering
tions, the industry pushed hard for the
in need of improvement. The draft legis-
and named the “Pällmann Commission”
full implementation of this proposed
lation for the 3rd AEG amendment was
after its chairman, proposed to set up
reform. However, two conditions must
approved by the Bundestag on Decem-
independent infrastructure companies
be fulfilled:
ber 3, 2004. On December 17, the Bun-
for trunk roads, railways and waterways.
desrat appealed to the mediation com-
They were to be private companies,
mittee because it felt that the powers of
financed from the income from charges
for investment in the roads on which
the preventive controller did not go far
to be borne by the users of the vari-
they are levied, and not used as
enough. Instead of the rail agency origi-
ous means of transport, supplemented
cross-subsidies,
nally provided for in the draft legislation,
by investment grants from the state.
the mediation committee agreed that
The Commission’s idea was that these
the regulatory authority responsible for
companies should be given interest-free
must be offset by reductions else-
posts and telecommunications (RegTP)
loans or government grants from taxes
where.
should take over the additional task of
specific to transport for extensions and
regulating the rail network.
new construction. The road network was
This amendment initiated by the EU
■ Toll revenues must be earmarked
■ and any additional fiscal charges
To guarantee fair fiscal charges, the
to be maintained from charges for the
burden of mineral oil and motor vehicle
However, all this cannot blind us
use of the respective parts of the infra-
tax, for example, should be relieved by
to the fact that, from the political point
structure, which would be given to the
an amount equivalent to the additional
of view, the best prerequisite for com-
companies and earmarked for a specific
charges being imposed on drivers for
petition on the railways would be the
purpose. The Commission’s recommen-
infrastructure use. This would be the
Annual Report 2005
logical consequence of changing from
undertake extension work on severely
tax-based to user-based financing, as the
congested stretches of motorway. The
state would return to the citizen the same
income from the tolls levied on these
amount of tax revenue levied for expand-
stretches will be passed on by a state
ing the infrastructure in accordance
transport infrastructure financing com-
with the equivalents fixed in the Road
pany to private operators, who will use
Construction Financing Act as it pays for
this money to finance the develop-
infrastructure out of the general budget.
ment measures. The operators will also
105
■ A1/A4 in North Rhine-Westphalia
(Düren – Cologne North),
■ A5 in Baden-Württemberg (BadenBaden – Offenburg) and the
■ A1 in Lower Saxony (Buchholz
– Bremer Kreuz)
receive additional funding from the road
User financing in Germany –
a betrayal of motorists’ trust
The 2003 Federal Transport Plan is
construction budget (a maximum of 50
The completion of these five projects
percent of normal construction costs)
undoubtedly represents an important
to cover the infrastructure costs arising
step towards the implementation of a
the first to include projects for trunk
from use by vehicles not liable to tolls
PPP. Money from motorway tolls was
roads that are to be funded not by
(cars and light trucks).
immediately reinvested in motorway
taxes but by road use charges. Nine
development.
sections of road with a total length
The additional funding is freely
of over 50 kilometres are currently
negotiable between the state and the
involved; these are to be privately fund-
operator. However it makes up a maxi-
ed or operated under what is known
mum 50 percent of normal construction
Early experiences with HGV
tolls
From the technical point of view, the
as the “F” model. However, this model
costs. As with the F model, financ-
start of the HGV toll system on January 1,
is restricted to bridges, tunnels and
ing under the A model also concerns
2005 was a success. The long tailbacks
mountain passes.
a public-private-partnership (PPP),
at the toll barriers, which many people
in which the private operator has to
expressed their fears about at the end
bear the entrepreneurial risk (possible
of last year, did not materialise – partly
rently preparing a legal initiative that
income deficits on account of lower
because at almost 80 percent, a much
will also allow the F model to be used
income than expected from vehicles
higher proportion of payments was
for the construction of normal stretches
liable to tolls). Originally it was intend-
made via On Board Units (OBU) than
of autobahn. This will enable early com-
ed that there should be 12 projects
via toll barriers. Many other countries
pletion of the building of the A22 along
of a total length of 525 kilometres for
such as the United Kingdom, China and
the North Sea Coast – for which Federal
construction and operation under the A
the Czech Republic are now interested
funding would not have been expected
model. Five of these projects have now
in the technology behind the system.
until long after 2015 – as an operator
been completed as a matter of priority.
model, an initiative local people and
These concern development measures
companies are very keen on.
for the
The state of Lower Saxony is cur-
In order to investigate the movement of traffic from motorways to major
roads resulting from the imposition of
A much more significant means
of financing is that known as the “A”
■ A8 in Bavaria (Augsburg West –
Munich Allach),
ried out. According to Transport Ministry
estimates, the early results show that,
model, which uses money from the
satellite-assisted toll on heavy goods
tolls, official traffic counts will be car-
■ A4 in Thuringia (Waltershausen –
over the whole network, scarcely more
vehicles. Under this plan, parts of the
Herleshausen, the “Hörselberge
than 3 percent of journeys were moved.
toll income should make it possible to
Bypass”),
However, movements seem to be con-
106
TRANSPORT
centrated on a few favourably situated
competition and have therefore very lit-
subsidies, 11 percent, i.e. 0.3 billion
major roads. With this in mind, the Trans-
tle chance of passing this cost on to the
euros, to the inland waterways.
port Minister announced in April 2005
end user. The prospects are different
that these roads would also be subject to
for those sectors of the economy where
tolls from 2006. Under the old EU Road
there is less international competition.
additional to the previously estimated
Pricing directive (1999/62/EC), this would
For example, the German Retail Trade
budgetary funding for investments in
only have been possible to a limited
Association reckons that the average
trunk roads; they replace it. The esti-
extent, as the directive restricts the levy-
retail prices of consumer goods will
mated funding in the road budget was
ing of tolls to motorways and motorway-
have to rise by one to two percent. So in
reduced by the exact amount of the
type roads. However, the new directive,
the end, as with VAT, the consumer will
expected toll revenues. This “refinanc-
agreed by EU Transport Ministers on
also foot the bill for the tolls.
ing” is barely acceptable in the light of
April 21, 2005, allows tolls to be levied
on other road categories, even though it
does not contain any more detail.
A prerequisite for this extension is
Moreover, the toll revenues are not
the drastic underfunding of the Federal
Earmarking insufficient
It would be desirable and logical if
Transport Plan. On the contrary, the aim
of the tolls should be to provide addi-
all the income from motorway tolls were
tional funding. It was possible to redirect
to go towards the modernisation of the
the money that was freed up from the
the introduction of the On Board Unit II,
German autobahn network. However,
transport sector to other areas. Because
as the current software (known as OBU
the German Motorway Toll Act is still far
no income from toll revenues was
I) does not support automatic updat-
from meeting this basic condition.
received in 2004, there was a funding
ing of toll rates. The intention is that,
during the course of 2005, in all HGVs
gap of over 2 billion euros in transport
Depending on which of the two axle
investment, which in the end could only
fitted with an OBU, the software will be
and three emissions classes the HGV
be closed with great difficulty by redis-
updated when the HGVs make routine
belongs to, the toll rate per kilometre
tributing money from other budgets.
stops at their OBU servicing workshops.
driven amounts to between 9 and 14
From 2006, tolls will be collected using
cents/vehicle kilometre. This gives an
12.4 cents/vehicle kilometre is a
the OBU II. This supports – as it by air
average toll rate of 12.4 cents/vehicle
provisional toll rate. The plan is to raise
interface – automatic updating of rates,
kilometre. This brought in toll income
the average rate to 15 cents/vehicle
i.e. changes to the amount of the toll,
of 3.0 billion euros in 2004. Of this, 0.6
kilometre with a band width between
inclusion of other types of road and – as
billion euros went to systems costs
10 and 17 cents/vehicle kilometre. How-
the Federal Transport Ministry plans
(operation and control of toll levying).
ever, the prerequisite for this is that the
– differentiation in time and space of
According to the Motorway Toll Act,
EU authorises the Federal Government’s
the toll rate depending on the traffic
the remaining toll income should be
proposal to offer some relief to the Ger-
situation.
used “predominantly” for major road
man haulage industry through a partial
construction. The Federal Government is
refund of its mineral oil tax payments.
now interpreting this compromise for-
This harmonisation measure, which
liable for tolls. However, in many cases
mula reached by the funding committee
the industry was promised when tolls
– such as the automotive industry – the
in a very unconventional way, by paying
were approved, would offer the German
shippers have declared themselves pre-
out 51 percent, i.e. 1.2 billion euros, for
haulage industry relief of 600 million
pared to take over the costs for which
road projects. 38 percent of the road
euros and reduce the competitive dis-
they are responsible. However, they
use charges levied on HGVs, i.e. 0.9 bil-
advantages it suffers in comparison with
are hard pressed by international price
lion euros, go to the railways as cross-
foreign transport companies. This relief
Of course haulage companies are
Annual Report 2005
107
would be funded from the additional
which comprise almost half the total road
government in the form of revenues from
600 million euros of toll revenues.
costs calculated. In total, the German
the toll on heavy-goods vehicles.
autobahns cost 7.51 billion euros in 2003,
Toll impacts on an
economy in a difficult
position
As an additional tax burden, the toll
and will cost over 8.03 billion euros in
2005 and 9.3 billion euros by 2010.
The average 15 percent per kilometre road costs that emerge from this
calculation should not, however, lead
The toll rates for individual vehicle
us to suppose that a 15-cent toll rate is
is hitting the German economy badly
categories by distance, vehicle design
justified. For this to be true, two condi-
as it steers a course through a difficult
and cost type are calculated by means of
tions have to be fulfilled:
economic situation in conditions of pro-
a cost allocation model using equivalence
nounced slow growth and high unem-
figures. This imputes 3.4 billion euros
Firstly, the fictive operator model
ployment. The extra tax burden stands
to the heavy-goods vehicles using the
would have to be implemented and the
as a blatant violation of the basic pre-
autobahns in 2003 – 45.3 percent of the
autobahn network run by an operating
cept of “burden neutrality”. The earlier
overall costs for the autobahn network.
company. Since this is not the case, and
“Eurovignette” “only” cost freight traffic
This is the amount that will be paid to the
funding will continue to come out of the
just under 500 million euros per year.
The current toll thus represents a sixfold
rise on the previous toll.
A 15-cent toll is in fact
too high
Costs structure comparison: Roads significantly
ahead of railways
Calculating the costs structure of
On the other hand, the specific road
road and rail traffic is not easy. A study
costs (road costs with reference to net-
The level of the current toll was
by the Forschungsvereinigung Auto-
work length) are substantially lower than
justified by a road costs calculation for
mobiltechnik (FAT) (Association for
those for railways. Furthermore, in terms
the autobahn and trunk road network
Research in Automotive Technology) has
of external costs (e.g. with respect to
conducted under the auspices of Prog-
now enabled a comprehensive overview
noise, emissions and safety), road freight
nos AG and submitted in spring 2002.
of the costs structures. The spreads
traffic also is continuously improving its
This report is extremely important, as
resulting from different cost calculation
position through innovative solutions.
EU Directive 1999/62/EC states that
methods were made transparent in order
road-use tolls have to be strictly geared
to enable discussion of the matter in
to road costs and allows for a scaling of
concrete terms.
toll rates according to vehicle class and
the EU emission categories.
that the use of funds to extend the road
network is significantly more efficient
It is evident that road freight traffic
covers its costs, and even yields a size-
It is important to examine in detail
The study therefore clearly shows
in terms of removing bottlenecks than
investment in the rail network.
able surplus on autobahns. What is more,
this method of calculating the toll. It
the toll on trucks leads to a further sur-
applies a fictive operator model accord-
plus of up to 185 percent and is thus an
gleich Kostenstruktur der Bodenverkehrs-
ing to which the network is maintained
absurdly high charge as far as the costs
mittel” (A systematic comparison of the
and financed by a company, similarly to
incurred by this traffic are concerned.
costs structure of overland means of
the situation in the telecommunications
In contrast, goods traffic by rail is highly
transportation) dated 2004 can be pur-
industry. This fictive scenario is also used
subsidised.
chased from broschueren_fat@vda.de
to justify the inclusion of interest costs,
FAT Publication No. 185 “Systemver-
108
TRANSPORT
public purse, the toll should not take
According to the act of June 28, 2003
market. Only an autobahn financing
the cost of capital into account. With
that led to the founding of the company,
company with this level of independ-
the nominal long-term interest rate at 4
the said company may only use the toll
ence would live up to its name.
percent, the cost of capital (equivalent
revenues that the German government
to 40 per cent of the overall road costs!)
makes available to it via the budget – it
is so high that deducting it would nearly
has no title to the revenues itself. In its
halve the toll rate.
current form, the transport infrastructure
ised to industry in conjunction with the
financing company is no more than a
toll has still not become reality. For the
sub-department of the German Trans-
purposes of harmonisation, it was ini-
costs should be paid for solely through
port Ministry and it was not actually
tially planned that companies paying the
the toll. This would be a complete turna-
necessary to set it up. Gauged against
toll would be compensated by a partial
round from the former view that mineral
the Commission’s recommendations, the
refund of the mineral oil tax paid by
oil tax, motor vehicle tax and the Euro-
company is no more than a façade. This
them. The costs of this tax relief meas-
vignette are special taxes on traffic
is because, in accordance with the act,
ure would total some 600 million euros
aimed at covering infrastructure costs.
the company has the legal structure of a
per year. The refund would be counter-
limited liability company and is thus not
financed from a proportion of the toll
capable of participating in the capital
revenue (a so-called “harmonisation
tion methods clearly shows that the
market. During the act’s consultation
contribution” totalling 600 million euros).
15-cent toll on trucks in Germany, on
phase, the automotive, construction and
However, the old EU Commission raised
top of all the other fiscal charges, has
haulage industries repeatedly voiced
misgivings about the legality of a direct
by no means been set too low. After an
their concerns about participation in the
refund of the mineral oil tax as a harmo-
increase in the toll rate, payments due
capital market.
nisation instrument. Despite months of
Secondly, it is assumed that road
This debate on road cost calcula-
in conjunction with the introduction of
the toll are thus wholly unjustified.
Still no harmonisation
The harmonisation that was prom-
examination, the old Commission, disThe Federal Chancellor’s announce-
solved in November 2004, was unable to
ment in his government policy state-
come to a final decision on the matter.
ment on March 17, 2005 was therefore
Neither has the new EU Commission
warmly received. He announced that
succeeded as yet in giving a conclu-
Austrian experiences of using an auto-
sive judgement on this harmonisation
bahn and trunk road company inde-
approach. While the EU Transport Com-
orientated infrastructure financing, an
pendent of the budget would now be at
missioner supports the approach, the
infrastructure company organises infra-
least examined in the context of traffic
General Directorate responsible for the
structure funding independently. Firstly,
infrastructure financing. In Austria, the
single European market has voiced its
this scenario assumes that the company
ASFINAG (Autobahnen- und Schnell-
reservations, questioning whether this
has the right to the toll income intended
straßen-Finanzierungs AG) has, from
measure stands in contravention of the
for maintaining the existing infrastruc-
the very beginning, been granted those
single market.
ture. Secondly, the company must be
powers that render an autobahn financ-
able to obtain funds on the capital
ing company independent of the general
market for upgrading and extending
budget: the toll revenue is directly avail-
the EU Commission, the reduced toll
the infrastructure. These two factors do
able and is purposely earmarked for the
of an average of 12.4 cents per vehicle
not apply to the existing German trans-
construction of autobahns. The company
kilometre applies on German autobahns
port infrastructure financing company.
is also able to participate in the capital
in accordance with the act introducing
Transport infrastructure
financing company no
more than a façade
According to the ideal of a user-
Until an agreement is reached with
Annual Report 2005
109
the toll in Germany dated May 22–23,
perfectly obvious that this means that
by the VDA. The survey also illustrates
2003. However, this reduction is not to
the vehicles normally used by trades-
how German citizens actually evaluate
be confused with a cost harmonisation.
men and small business proprietors
Germany’s current funding policies and
In contrast to the planned harmonisa-
would also be subject to the toll, and
taxation matters. For instance, seven out
tion measure, the toll cost reduction will
that these groups would have no other
of ten respondents do not believe that
“relieve” all users of German autobahns
choice but to increase the charges they
there would be any compensation were
in equal measure, that is, German and
make for their products and services.
a toll on cars to be introduced. Voters
foreign trucks alike (as opposed to the
toll cost of 15 cents per vehicle kilo-
are therefore wary when it comes to
The counterview is that, as long as
taxation, even when appealing terms
metre). As a result, there is no change
the huge conceptional flaws of the toll
such as “user financing” are employed.
to the burden on the German haulage
on trucks remain, there is no reason
The demand for a toll on cars, regard-
industry against that on the foreign
to believe that a toll on cars would not
less of the accompanying promises, will
haulage industry. It is thus hoped that
also be misused with taxation-related
certainly not win any votes.
the Federal Government will succeed in
motives to again increase the burden on
pushing the EU Commission to make
car drivers without any concrete return.
a decision on the single market con-
Hence all significant research reports
the current toll on trucks to passenger
formity of the mineral oil tax refund as
that the introduction of a tax on cars is
cars also raises the following issues:
quickly as possible.
rejected by the vast majority of the population. Even with the abolition of vehicle
On further consideration, extending
■ If every car has an OBU with a
A flawed regulatory “toll on
trucks” bars any thought of
a toll on cars
tax, almost half of the German popula-
locating system, a “big brother” sce-
tion does not consider a toll on cars to
nario becomes reality. The Federal
be a good idea. This was the outcome
Data Protection Commissioner thus
The considerable conceptional flaws
of a survey by the Allensbach Institute
considers a “one-to-one transfer of
for Opinion Research commissioned
the system to cars” as “untenable”.
of the toll on trucks, with no earmarking for specific purposes, an absence
of cross-subsidies, lack of harmonisa-
Rejection of a toll on cars:
The public is not counting on compensation
tion and a rise in costs without a return
in the form of additional funds, have
severely shaken the belief of both the
transport industry and citizens in the
credibility of policies concerned with
In percent
No
70
Yes
22
“user financing”. Regardless of this, now
that the technicalities of levying the toll
on commercial vehicles are functioning smoothly, high-ranking politicians
across the spectrum are demanding that
the toll be extended to further vehicle
categories. One demand is for the toll
to also apply to vehicles with a permissible maximum weight (PMW) of less
than 12 t down to a PMW of 3.5 t. It is
No
information
8
“If the toll on cars comes, will there be any compensation?” (Allenbach survey, 2005)
Source: Allensbach Institute for Opinion Research/VDA
110
■ As in the truck segment, it is not
possible to make an OBU statutorily
compulsory in cars, as this would
TRANSPORT
City Traffic – Anti-Car Policies are
Doomed to Fail
contravene EU law. The majority of
car drivers would probably not have
their vehicle fitted with an OBU and
New limit values for the 22nd Fed-
driving could also result in urban areas
would instead be forced to make
eral Immission Control Ordinance came
encroaching yet further into the country-
payments at some inconvenience
into force in Germany on January 1,
side. The trend for building branch
via the Internet or at petrol station
2005. The ordinance is the Federal Gov-
offices and shopping centres on green-
terminals. Car drivers would be
ernment’s instrument to transpose the
field sites would increase even further.
extremely unlikely to accept this.
EU’s air quality framework directive and
This would, not least, contradict many
its daughter directives into national law.
town councils’ objectives of making
In the course of discussions on particu-
town centres more attractive again. The
network of autobahns and trunk
late matter, various cities, having already
retail trade bemoans the high number of
roads in Germany, which has ascer-
prepared plans of action, envisage
empty retail units in town and city cen-
tained an average toll payment of
drastic traffic restriction measures such
tres. The movement of activities into the
12 cents per vehicle kilometre for
as driving bans, traffic-free areas or the
surrounding areas would lead to longer
trucks above 12 t, cites an amount
collection of a city toll, whether just for
journeys and to correspondingly higher
of 2 cents per vehicle kilometre as
trucks or for all diesel vehicles without a
emissions of pollutants elsewhere and
a possible car toll. With an average
particulate filter.
would thus obstruct the original inten-
■ The road costs calculation for the
annual mileage of 13,000 kilometres,
the toll revenue from a single car
– albeit with the unrealistic assumption that all road travel was on
autobahns or federal roads (where
tion of the EU directive.
Driving bans and trafficfree zones affect the
lifeblood of city centres
Driving bans would detract from
It is no more than purely wishful thinking on the part of municipal
authorities that restrictions on motorised
the toll would also be introduced)
the proper functioning of cities and
private transport could be absorbed
– would amount to around 260
municipalities and would contradict a
by increased use of public transport.
euros per year. Even assuming that
future-orientated, sustainable mobil-
All experience shows that a municipal
the manufacturing costs for OBUs
ity concept. Accessing workplaces and
traffic policy orientated single-sidedly
fall with increasing production
training facilities would be significantly
against private mobility is doomed to
quantities, a significant proportion of
more difficult, in individual cases even
fail. This was the experience made by
the toll revenue would be used simp-
impossible, and it would be much
towns and cities that charged over-
ly to cover the collection costs, with
harder for trade and industry to function
inflated prices when setting parking
the result that electronic detection
as it should.
fees in the early years. Here, public
would be wholly uneconomical.
transport was obviously not considered
The implementation of driving bans
■ Finally, it is also doubtful whether
an equally valid alternative.
and traffic-free zones in particularly
the electronic collection system
congested areas would also incur the
would have sufficient capacities to
risk of increased – and unwanted
road users as to their means of trans-
be transferred to 45 million passen-
– traffic in residential areas and longer
portation, it is to be questioned whether
ger cars.
cross-city trips. Restrictions and bans on
public transport is at all capable of
Notwithstanding the preferences of
Annual Report 2005
111
absorbing a significant move away from
level of emissions but who are willing
environmental outcomes and which
motorised private transport. If only one
to pay are still allowed to enter the toll
are misunderstood by transport users,
tenth of car journeys (that is, six percent
zone, while drivers of vehicles with less
it would be preferable to give greater
of all journeys) were made using public
emissions but who are not prepared to
thought to the potential of improving
transport instead, this would mean that
pay the toll cannot enter the city centre.
the air quality of a municipal road infra-
public transport would be used for 15
A solution using a sticker which identi-
structure tailored to meet users’ needs.
percent of all journeys. With reference
fies vehicles with low particle emissions
to its starting level (9 percent), public
and thus excludes them from restric-
transport would thus be used for almost
tive traffic measures, as suggested by
improving the road infrastructure itself.
70 percent more journeys. In the light
the Conference of Transport Ministers
The unwillingness of public authorities
of the already exhausted capacities
and the Senators of the Bundesländer
to invest in maintenance work has in
of public transport at peak times, this
at their meeting in April 2005, would at
many locations led to an appalling road
belief is an illusion.
least make it possible to differentiate
surface quality. The resulting potholes
vehicles on the basis of their particle
and patched areas of road increase dust
emissions.
in the air and thus led to deterioration
A city toll is not a solution
The collection of a city toll would
ultimately have a similar impact on
On the one hand, this means
of the air quality in towns and cities. The
In any case it is unjustified to focus
necessary construction of bypasses is
traffic as driving bans and traffic-free
discussion primarily on road traffic
also suffering from a lack of investment,
zones. It would reduce the attractive-
when talking of air quality in the future
with the result that non-local traffic
ness of town and city centres and
in towns and cities. All signs point to a
must pass through urban areas where it
would lead to activities being moved to
stagnation in annual mileages. Mileages
is not wanted. The Deutsches Institut für
the surrounding area with the result of
are increasing only in out-of-town areas.
Urbanistik (German Institute of Urban
longer journeys and more emissions.
It is therefore welcome that the Deut-
Affairs) recently calculated that capital
The congestion charge in London is a
scher Städtetag (German Association of
expenditure requirements for the mu-
good example: the retail trade has ex-
Cities) rejects the concept, noting that
nicipal road infrastructure total 6.4 billion
perienced the negative effects of making
no-one wants to build new city gates.
euros per year. In truth, expenditure
a charge for entering the city centre. 75
The Association also believes that the
amounts to approximately 5 billion euros
percent of shop owners in the toll zone
toll is incapable of alleviating the finan-
only. As a result, municipal authorities
complain of lost turnover. Small retail
cial difficulties of city authorities. Despite
are faced with an investment deficit that
businesses are the hardest hit. 25 per-
this, the introduction of city toll in cities
increases year by year.
cent of the retailers are even planning
such as Munich, Augsburg, Frankfurt
to move out of the toll zone.
am Main, Darmstadt and Berlin is being
discussed by local politicians.
Regardless of the negative impact
on traffic, the city toll is also environmentally counterproductive. It places all
cars in the same category and does not
On the other hand is the telematics infrastructure, that is, the technical
devices and systems that collect and
Intelligent transport
concepts point the way
to the future
process information concerning the
current traffic conditions and, based on
this, then ease congestion on the roads
regulate access to the city centre based
Instead of discussing restrictions to
on their specific emissions of toxic sub-
motorised private transport, which have
ing for a parking space. It is in this
stances, but on the drivers’ willingness
counterproductive effects in terms of
area in particular that there is still huge
to pay. Drivers of vehicles with a high
traffic, which do not have any concrete
potential for preventing the emission
and prevent unnecessary traffic search-
112
TRANSPORT
of contaminants caused by vehicles,
ance systems, which display the number
radio networks will shortly be technically
as the number of drivers hunting for
of parking spaces available at any one
incapable of supporting the volume of
parking spaces is much higher in town
time via electronic information boards,
information. The automotive industry is
and city centre areas than anywhere
drastically reduce the number of driv-
thus working to develop an innovative,
else. Depending on the day of the week
ers searching for a parking space (in
powerful transmission standard. DAB
and the time of day, it is estimated that
Cologne, for example, by some 30 per-
(Digital Audio Broadcasting), already in
these vehicles comprise between seven
cent). Despite this, however, two thirds
operation in some parts of Germany, is
and 22 percent of all motorised private
of German cities and large towns still do
the medium most suited to this. It will
traffic in town and city centres. Experi-
not have a dynamic car park guidance
cover the whole of Germany (cover-
ence shows that dynamic car park guid-
system.
age is currently 90 percent) in the near
future, and offers sufficient transmission
capacity, continuous broadcasting even
Telematics – For Sustainable Mobility
at high speeds on long-distance journeys, options for integrating RDS/TMC
and for Internet connections via GSM/
UMTS. It has furthermore already been
The future is DAB
Municipal traffic information services
in parallel with the current ultra short-
introduced and put to the test in many
wave radio programme. This informa-
countries around the world.
such as electronic displays can make a
tion is picked up by RDS/TMC-enabled
significant contribution to easing con-
terminal devices (car radios, navigation
gestion. For reasons of cost, however,
systems). It can be retrieved if required
in the quality of the supply of traffic
their use is restricted to individual peak
by the driver via the car radio – in the
information to car drivers. Because the
traffic conditions in conurbations and
correct language and filtered according
transmission capacity of DAB is around
they thus only reach a certain percent-
to the roads the driver uses. RDS/TMC-
one hundred times greater than that of
age of road users. Furthermore, because
enabled navigation systems process the
TMC, information can be transmitted
drivers must absorb the information
collected information themselves – with
firstly to more roads and secondly with
as they are driving past, only the most
reference to the roads programmed by
greater accuracy. For instance, it en-
important details are provided.
the driver – and thus take into account
ables much-improved georeferencing,
the current traffic situation when navi-
that is, the provision of traffic informa-
DAB signifies a huge advance
gating. This transmission standard has
tion with reference to specific areas
more exact and effective information
been available since 1996, and some
(the spatial extent of traffic jams and
if the information is transmitted to the
three million cars throughout Germany
accidents). In conjunction with a GPS
driver via individual terminal devices
already have a navigation system with
navigation system, which determines
such as car radios or navigation
TMC reception.
the driver’s position every second and
It is possible to provide significantly
to the nearest metre, it will, for exam-
systems. The standard transmission
channel, RDS/TMC (Radio Data Sys-
Owing to the large amounts of data
ple, be possible to provide the driver
tem/Traffic Message Channel), can be
that are normally required for traffic
with precise information about potential
used to good effect for this purpose.
information in dense, crowded road
hazards on the road a short distance
This is a radio channel for transmitting
networks in conurbations, however, this
in front (obstacles on the roadway, the
digital traffic information inaudibly and
transmission standard will soon reach
tail ends of invisible traffic jams, uneven
whereby the information is broadcast
its capacitive limits. Today’s short-wave
road surfaces, etc.).
Annual Report 2005
113
intelligent transmission management
that the driver receives reliable, up-
transmitted at exactly the right time, it is
in terms of data broadcasting. This will
to-date information on the road traffic
also ensured that the required informa-
ensure that the information services are
conditions. To date, this information has
tion is reduced to a minimum and that
scalable, that is, that both simple car
been collected by devices forming part
the driver is not overwhelmed by an
radios with limited resources and com-
of the road infrastructure, for instance
unnecessary flood of data. It will also
plex navigation systems and PDAs can
infra-red detectors and induction loops,
be possible to take account of fore-
receive and decode the traffic informa-
which can thus only detect the traffic
cast data relating to traffic conditions,
tion and present it according to their
conditions at defined locations within
to integrate information on transfer
capabilities. It is for this reason that, in
the road network. Providing almost
points to other means of transport (car
October 2004, the automotive industry
full-coverage monitoring of traffic flows
parks, public transport) or information
pooled its activities into the “mobile
would only be possible if the data was
of general interest (e.g. weather, petrol
info” project. The industry’s objective in
collected not by the infrastructure alone
stations, emergency services), and to
this project is, alongside the activities of
but also by the vehicles themselves.
provide relevant services to the general
the DAB platform for securing transmis-
public or to closed user groups as well
sion capacities set up by the VDA on
as brand-specific information (customer
April 14, 2005 and in collaboration with
method, vehicles with a GPS-based
information or brand-specific param-
the manufacturers of terminal devices,
positioning system provide, incidentally
eters). As a result, there will be virtually
data suppliers and providers of commu-
as it were, a permanent supply of up-
no limitations to the possibilities for
nications services, to control the opera-
to-date information about the traffic
providing information targeted directly
tion of DAB-based traffic information
flow (e.g. its speed) to a data control
to each individual driver.
services by the end of 2007.
centre. Here the incoming data is com-
Because precise information is
Using the “floating car data” (FCD)
bined with additional information from
A number of radio stations are
A traffic information system of this
the infrastructure’s data sources and
already broadcasting their radio pro-
kind could prove helpful in managing
mobility information is generated. This
grammes via DAB, some in parallel
urban traffic in the increasingly motor-
information is available in real-time and
with transmissions via conventional
ised metropoles of China. The German
is geographically extremely precise. The
short-wave radio. The precondition for
components industry is collaborat-
FCD method has been technically fea-
enabling car drivers to use DAB for
ing actively with manufacturing firms
sible for some time now; it is no longer
traffic and travel information is that the
and with the support of the European
a distant dream. However, complete
media institutions provide the neces-
telematics association ERTICO to posi-
coverage of the data collected using this
sary capacities. The automotive industry
tion digital traffic broadcasting systems
method is still limited by the low number
is in intensive dialogue on this matter
“made in Germany” as opposed to the
of FCD-enabled vehicles, that is, vehi-
with the Bundesländer, as it is they who
Japanese system VICS in the Chinese
cles with GPS positioning and automatic
are responsible for the allocation of fre-
market.
data recording and transmission.
The car is becoming a data
carrier
are already supplying traffic informa-
quencies in Germany.
A further precondition for using
DAB to transmit traffic information is the
When providing comprehensive
However, some car manufacturers
tion services with traffic data collected
development of a standardised trans-
information to car drivers, what is
using the FCD method. The DIANA pilot
mission protocol for all travel informa-
critical is not only the way in which the
project being launched by the Hessian
tion broadcast throughout Germany and
information reaches the driver, but also
State Government in the context of its
114
TRANSPORT
“Congestion-free Hesse 2015” initiative
motive industry and numerous research
systems were developed that enable
also wants to make its mark in this area.
bodies joined forces in this research
cars to gather and interpret information
One of the measures planned is, from
initiative in 2001. Sponsored by the Fed-
about their environment, optimise safety
2005 onwards, to systematically build up
eral Research Ministry, the project led to
distances and continuously share infor-
a fleet of vehicles with FCD systems that
the development of cutting-edge driver
mation about the state of the road and
will collect traffic information about the
assistance systems by combining trans-
traffic conditions with other vehicles.
road network in Hesse and neighbour-
port engineering, information and com-
ing Rhineland-Palatinate.
munications technology. Research costs
Telematics promotes
sustainable mobility
is the CARTALK research project. Here
results were presented in Munich on
again, in 2001, the automotive and tele-
April 28, 2005.
communications industry and research
bodies have joined together to develop
Enabling cars to function as data
carriers is also an objective of the
The European equivalent of INVENT
totalled 32 million euros and the project
One of the goals of these new
systems that will enable vehicles to
INVENT initiative (INVENT being the
applications is to continue lowering
share information. The objective is to
German acronym for intelligent traffic
the accident rate and to prevent traf-
help traffic to organise itself more effi-
and user-friendly technology). The auto-
fic jams from forming. For example,
ciently across the entire network.
Auto ENVIRONMENT
AND
Auto
TECHNOLOGY
116
Environmental Protection: A Key Goal
for the Automotive Industry
Thanks to its technical innova-
compared with Euro 0 are of the order
tion the German automotive industry
of 98 percent for CO, 91 percent for
has succeeded in optimising safety,
particulates and 95 percent for HC and
economy, comfort and convenience and
environmental protection in its vehicles,
NOx. Fuel consumption has also been
lowered in parallel with the reduced
to the optimum benefit of the customer.
exhaust emissions: by nearly 23 percent
Consumers associate German cars with
since 1990.
an outstandingly comprehensive, environmentally positive product concept
that focuses on:
also focuses on protection of the environment in its production operations. In
■ reducing vehicle emissions
the last fifteen years in particular, production facilities in Germany – the world
■ reducing fuel consumption
leaders in production-related environmental protection – have increased that
■ safeguarding resources
■ vehicle recycling
lead even more.
Nowhere, for instance, is the water
cycle principle utilised more frequently
■ environmentally-friendly production
and for longer. Gaseous emissions
from production processes have been
The automotive industry’s envi-
reduced to a minimum, and the volume
ronmental protection measures focus
of waste material has also been cut
not only on the product itself but also
down. Even though legal requirements
on product development. Some years
are already very stringent, plants are
ago, the Federal German Environment
opting to participate in the European
Agency was already able to confirm the
Union’s eco-audit system or the equiva-
environmental compatibility of modern
lent ISO standard. Nowhere do more
four-stroke petrol engines. CO emis-
companies undergo eco-audits than
sions from spark-ignition engines have
in Germany. This large-scale commit-
been reduced by more than two-thirds,
ment to environmental protection in the
emissions of NOx and HC by more than
production process is reflected in the
four-fifths. The reductions achieved on
environmental “league tables” drawn up
diesel engines are even more striking:
by the motoring press, in which environ-
development work has resulted in the
mentally-friendly production, along with
“Clean Diesel”. In this case emissions
the vehicle’s service life, is an important
Annual Report 2005
117
factor in assessing its overall environ-
individual segment of this loop has
strategy is a broad one that makes it
mental impact.
involved a great deal of effort and inno-
possible to survive in a fiercely competi-
vation. The closed-loop environmental
tive global market.
As part of a holistic approach, the
end of a new model’s life is taken into
consideration as early as the product
development stage. Most of the modern
Climate Protection
car can be recycled. The German motor
industry is the world leader in designing for recycling – even with regard to
CO2 emissions
reductions. Japan intends to reduce its
The Kyoto Protocol came into force
The automotive
industry’s closed-loop
environmental strategy
greenhouse gas emissions by 6 percent,
in February 2005. The binding limits
the European Union by as much as 8
in industrialised countries for green-
percent. Germany has agreed to a 21
house gases such as carbon dioxide
percent reduction.
and halogenated fluorohydrocarbons
Op
Pro
tion
uc
in
g
n
n
sig
De
The automotive
industry’s
closed-loop
environmental
strategy
atio
er
d
(CO2), fluorinated hydrocarbons (HFCs)
c
Re
l
yc
By contrast, the USA have made it
(H-HFCs), which were laid down by
very clear that they will not ratify the
the 1997 World Climate Conference
Kyoto Protocol. Other industrialised
in Kyoto are now binding under inter-
countries, Australia for example, have
national law. Thirty-five industrialised
adopted a similar position. In addition
nations have undertaken to reduce their
to the countries that have rejected the
greenhouse gas emissions by at least 5
Kyoto Protocol there are also the devel-
percent compared with the 1990 levels.
oping and emerging countries that are
Some countries or groups of countries
expressly exempt from emission reduc-
have undertaken to make even larger
tions. As a result, the Kyoto Protocol’s
commitment to emission reduction only
Trends in the
Kyoto Protocol
details of seemingly secondary importance. It was for example the first to
introduce the marking of plastic parts to
facilitate recycling. And on the initiative
of the VDA, dismantling information for
recycling companies was standardised
In percent
Other
industrialised
countries
+0.5
extends to a small proportion of the
world’s CO2 emissions. But even the
states which are participating in “Kyoto”
are so far missing their targets by a long
Developing
countries
+34
way. Denmark, for example, is 20, Italy
15, Japan around 13, Canada 26, Austria
21, Portugal 13 and Spain 24 percentage
throughout the world.
points away from the respective Kyoto
targets.
The automotive industry’s
environmental strategy
The USA plans to concentrate on its
The environmental strategy of the
automotive industry is a closed-loop
structure encompassing production,
vehicle operation and recycling. Each
USA/Australia
+34
EU-15
-6.5
“Clear Sky and Global Climate Change
Initiative”, as recently announced by the
chairman of the Congress Environment
Committee. The aim of the initiative is
118
bon dioxide emissions by 25 percent in
Kyoto target: Debits and credits
relation to 1990 levels by 2005; it was
As percentages
one of the first countries to make such
Kyoto requirement
Prescribed trends in emissions up to 2012,
in percent (baseline:1990)
Australia*
Denmark
Germany
France
Greece
United Kingdom
Italy
Japan
Canada
Norway
Austria
Portugal
Russia-36.4
Spain
USA*
CO2 emissions trends
1990 to 2002, in percent
will not be achieved. It is likely, how+8.0
-21.0
-21.0
-18.9
a commitment. This self-imposed target
ever, that the binding Kyoto target of a
+22.0
21 percent reduction in greenhouse
-0.8
gases will be met, since a reduction of
-1.9
0
-12.5
-14.9
-6.5
-6.0
-6.0
The German government is cur-
+9.0
+7.6
rently preparing a revised national
climate change policy. It is due to be
+20.1
+1.0
+6.1
+8.5
-13.0
19 percent has already been recorded.
+25.0
+23.4
approved by the Cabinet before the
+27.0
summer recess. The policy is based on
+40.4
0
+15.0
-7.0
+39.4
+13.1
*The USA and Australia do not feel bound by the obligations stipulated in the Kyoto Protocol.
Source: DIW emission report
three targets. Firstly, in accordance with
the Kyoto Protocol, annual greenhouse
gas emissions will be reduced in actual
terms by 21 percent in the period from
2008 to 2012 compared with the base
year level. 298 million tonnes of CO2 per
year have been allocated to transport
to drastically reduce emissions from old
cooperate with developing nations in
and households for the period from
plant in a cost-effective way and to cut
order to include them in “multilateral
2005 to 2007; this will fall to 291 million
emissions from new installations by 70
technology partnerships”. Industrialised
tonnes of CO2 per year in the allocation
percent in two stages. The other pro-
nations are to continue their energy
period from 2008 to 2012. Total emis-
gramme topic deals with the reduction
efficiency activities. In this connection,
sions in Germany are set to fall from
of greenhouse gases. The emission of
innovative future technologies such as
859 million tonnes to 844 million tonnes.
these gases is to be cut, but the reduc-
the fuel cell will be addressed and pur-
Taking the other greenhouse gases
tion will be formulated in relation to
sued as joint programmes. This coop-
referred to in the Kyoto Protocol into
economic performance, instead of being
eration between the American and Ger-
account, a total of 982 million tonnes
an absolute reduction as envisaged by
man governments is to be welcomed.
of CO2 equivalents have been stipu-
the Kyoto Protocol. This creates more
It could well represent the USA’s first
lated for the first period and 962 million
scope for further economic growth.
cautious step toward greater active par-
tonnes for the second. In addition, the
ticipation in climate protection.
German government will continue to
play a leading role in international cli-
When the American President visited Germany in spring 2005, he signed
a US/German joint action programme
for cleaner and more efficient energy,
development and climate change. The
agreement emphasises the need to
Germany:
National climate change
strategy in preparation
mate protection, as agreed in the coalition agreement. Provided that the EU,
within the framework of international
As long ago as 1995, Germany
climate change negotiations, undertakes
announced that it intended to cut car-
to reduce greenhouse gases by 30 percent
Annual Report 2005
119
over 1990 levels for the second Kyoto
options, though they will not bear fruit
underlines the fact that it is not possible
Protocol commitment period, the
until the second decade of this century.
to have a standard reduction guideline
German government will pledge a
There are plans, for example, to switch
for all sectors and that overall economic
40 percent reduction for Germany.
from vehicle air conditioning systems
avoidance costs must be considered
Thirdly, the German government calls
that use refrigerant R134a (Global
when selecting reduction measures.
upon industrial nations to reduce green-
Warning Potential 1,300) to alternative
house gas emissions by 80 percent in
systems, particularly CO2 air condition-
relation to 1990 levels by 2050.
ing systems (Global Warming Potential
of this preliminary work, the Commis-
1). In addition, efforts to replace con-
sion published its implementation plan.
ventional fuels with biofuels will be
In the meantime, the directives on emis-
stepped up.
sions trading and on promotion of the
These goals fail to take into consideration whether the German economy
use of biofuels for transport have been
is able to bear this burden. A study carried out for the Ministry of Commerce a
few years ago has already examined the
economic implications of the 40 percent
In the autumn of 2001, on the basis
European climate change
programme
About five years ago, the European
adopted, and directives on improving
combined heat and power systems and
on vehicle taxation are being drafted. EU
target. The study put the costs of such a
Commission launched the European
working groups are also continuing to
policy at 500 billion euros – a bridge too
Climate Change Programme (ECCP).
examine additional tools: CO2 sinks, for
far for the German economy. Further-
The aim was to develop an EU policy
example, are being subjected to inten-
more, even if these emission limits for
in order to fulfil the EU’s Kyoto com-
sive investigations.
greenhouse gases were to be achieved
mitments. The first phase set up work
and bring the German economy to the
groups to investigate possible reduc-
Following the entry into force of
verge of collapse in the process, they
tion measures. 42 possible measures,
the Kyoto Protocol, the Commission
would still only succeed in reducing
offering potential savings of between
published a Communication on Climate
worldwide CO2 emissions by a marginal
664 and 765 million tonnes of CO2 at a
Change Policy at the beginning of the
amount.
maximum avoidance cost of 20 euros
year, in which its medium and long-
per tonne of CO2 equivalent, were
term climate change strategies are put
identified. For the transport sector, the
forward. The basic goal is to limit the
is being given, within the framework of
potential reduction was calculated as
rise in average global temperature. The
the climate change policy, to achieving
being between 107 and 127 tonnes of
aim is for a maximum rise of 2°C. The
further savings through fiscal measures,
CO2 equivalents.
Commission believes that the benefits
In the transport sector consideration
for example by re-introducing tax incen-
of limiting the rise far outweigh the
tives for fuel-efficient vehicles and by
The automotive industry believes
costs of the political measures required
means of technical measures such as
that cost-efficiency must be a key con-
to achieve it. However, the Commission
the use of synthetic fuels, the installa-
sideration when assessing the different
quite rightly recognises that even if the
tion of fuel consumption displays and
measures, particularly in the transport
EU succeeds in reducing its emissions
the use of low-friction oils and tyres.
sector. A study commissioned by the
by 50 percent by 2050, this will have
Driver training has been identified as
European Commission some time ago
no noteworthy effect on the concen-
another important fuel consumption
concluded that the best way to minimise
tration of CO2 in the atmosphere. The
parameter. In the motor industry’s opin-
the overall economic costs of meeting
reason for this is that the proportion of
ion, there are further potential savings
the Kyoto target would be to allow CO2
EU emissions in global greenhouse gas
to be had in addition to these saving
emissions from transport to rise. This
emissions is set to fall below 10 percent
120
in the next few years. The Commission
found that a draft regulation spanning
vative technology. As early as the begin-
should heed these findings whenever
the entire industry would not deal fairly
ning of the 1990s, the industry pledged
taking decisions on CO2 reduction tar-
with the special conditions regarding
to phase out the use of ozone-depleting
gets. This should not be seen as a plea
vehicle air conditioning systems. As a
chlorofluorocarbons (CFCs) in vehicle
to move away from climate protection
result, the Council working group has
air conditioning systems, well before
in Europe, but rather as a reminder that
removed all clauses in the draft regula-
the deadlines required by law. Likewise
climate change policy can only succeed
tion that refer to vehicle air condition-
the industry switched from using fully
within an international context and that
ing systems and submitted a draft for
halogenated CFCs in the foam insulating
the effects on the population and the
a separate directive. This directive has
panels for refrigerated trailers and
economy should always be borne in
its legal basis in Article 95 of the EU
bodies, and replaced them with alterna-
mind.
Treaty, the article covering single market
tives which do not deplete the ozone
provisions, which guarantees regulatory
layer. At the time, this too was a leap
uniformity within the European Union
forward in technology.
The Commission has also
announced that it is evaluating the
thus avoiding the risk of individual
progress made so far in the European
member nations contravening the prin-
Climate Change Programme and that
ciples of the single market by imposing
well positioned, but in order to bring the
it will propose new measures with the
requirements on vehicle air condition-
new technology to market maturity, the
focus on energy efficiency, renewable
ing systems which differ from the EU
peripheral conditions have to be suit-
energies, the transport sector – includ-
guidelines. The European Parliament is
able as well: the isolated introduction
ing air and sea transport – and carbon
expected to uphold this splitting of the
of new vehicle air conditioning systems
sinks (carbon bonding and storage).
regulations. Furthermore, in its stipula-
in Europe alone would undermine com-
tions for future air conditioning systems,
petitiveness. The goal must therefore be
the Parliament, in agreement with the
to introduce the new technology on a
European Council of Ministers, is also
global level.
Draft EU regulation on
fluorinated gases
The German motor industry is thus
Around two years ago, the Euro-
expected to dispense with any calls to
pean Commission, as part of the ECCP,
make modifications to current model
submitted a proposal for limiting the
series. Based on current information, it
emissions of other greenhouse gases
is likely that all new model series intro-
covered by the Kyoto Protocol. The main
duced to the market from 2011 onwards
Another aspect of the European
focal point of the draft regulation is the
will only be permitted to use refrigerant
Climate Change Programme (ECCP) is
reduction in the use of fluorinated gases
with a GWP (Global Warming Potential)
emissions trading. Through this the EU,
(F-gases). Even though the proportion of
of less than 50. This will mean the intro-
like the German government, is hoping
vehicles with air conditioning in Europe
duction of CO2 air conditioning systems
for a further reduction in CO2 emissions.
continues to rise, the Commission is
in all cases.
The European Emissions Trading
hoping that this new regulation will
achieve a reduction of 23 million tonnes
of CO2 equivalent.
Implementation of the
European Emissions
Trading directive
As the fourth “VDA Alternate Refrig-
directive covers all incineration and
erant Winter Meeting – Automotive Air
heating plants rated at more than 20
Conditioning and Heat Pump Systems”
megawatts. These plants receive a
recently confirmed, the German automo-
specific allocation of CO2 emissions. If
sions in the European Parliament and
tive industry is one of the world’s lead-
more emissions rights are required for a
the Council of Ministers, however, it was
ers when it comes to introducing inno-
specific plant, they must be purchased,
In the course of consultative discus-
Annual Report 2005
while those that are not required can
be sold.
When the European Emissions
Trading directive came into force and
The German automotive
industry’s CO2 reduction
pledge reaches the target
corridor
121
the time. This physical law becomes clear
if the reductions made during the last
few years are examined. Nevertheless, a
reduction of just under 23 percent has
Following an initial pledge in the
already been achieved by the automo-
began being implemented on a national
1970s, the German automotive industry
tive industry, which means that it is now
level, a number of plants within the
made a commitment to the German gov-
within the target corridor.
German automotive industry – belong-
ernment in 1995 to reduce the average
ing to both vehicle manufacturers and
fuel consumption of newly registered
When it comes to lowering fuel
their suppliers – fell under the CO2
saloons and estates by 25 percent over
consumption, the German automotive
trading system. At the same time, above
1990 levels by 2005. This represents an
industry leads the way. The world’s first
and beyond the plant allocation system
average annual reduction of around 2
series-production car to cover 100 km
provisions, political targets for CO2
percent – a decidedly ambitious target,
on three litres of fuel (the “three-litre
emissions in Germany were defined
made all the more so by the fact that,
car”) is a German product, and German
for the periods 2005 to 2008 and 2008
as considerable reductions have already
engineers have also developed a two-
to 2012 within the framework of the
been achieved in the past, the potential
seater “one-litre car” which complies
so-called national allocation plan, and
for further reductions is decreasing all
with all safety requirements. The crucial
these were subsequently incorporated
into the corresponding implementation
legislation.
After some difficult discussions, a
compromise was reached whereby an
appropriate budget was stipulated for the
Market-weighted fuel consumption (NEDC) of cars
manufactured in Germany
Fuel consumption in litres/100 km
11
industry and power generating sectors
participating in emissions trading and at
the same time a political target for the
10
CO2 emissions from the transport and
private household sectors was formulated. Unlike some political groups the
9
VDA has not favoured an isolated national
climate change target for the transport
8
sector alone. Instead the national allocation plan ensures that there is room for
political negotiation within the sphere of
7
operation of the German Federal Transport Ministry. It can none the less be
sectors, greater political pressure will be
exerted on the other sectors.
4
8
19
6
19
88
9
19
0
19
92
9
19
4
9
19
6
19
98
04
8
19
20
82
02
19
20
80
00
19
20
emissions in the industrial and energy
6
19
78
assumed that by imposing a limit on CO2
122
factor for reducing fleet consumption,
CO2 emissions:
Pledge made by the European automotive industry
however, is to improve the economy of
the whole fleet. It has been possible to
achieve this. Today, the customer has
more opportunities than ever to buy
fuel-efficient vehicles.
g CO2/km
190
180
A vital part of the fuel-consumption
170
reduction strategy is the exceedingly
fuel-efficient diesel engine. The diesel
160
will also be indispensable for further
150
reductions in CO2 emissions. As a rule
ACEA 2003
Target corridor
140
ACEA pledge
of thumb, an increase of around 10
percent in the proportion of diesel vehi-
130
cles will bring about a reduction in CO2
120
emissions of 2 to 3 percent.
European automotive
industry on course to fulfil
its CO2 reduction pledge
1994
1996
1998
2000
2002
2004
2006
2008
Source: ACEA
In the latest Commission progress
grams per kilometre, which means that
report for 2003 presented recently, the
the intermediate goal for 2003 was clearly
the German automotive industry for
European Commission registered the fact
achieved. According to the EU report, CO2
its fuel consumption pledge has been
that there has been a further reduction
emissions from diesel-engined vehicles
adopted by the European Automobile
in CO2 emissions. For the entire new-
amounted to 154 grams per kilometre in
Manufacturers’ Association (ACEA)
vehicle fleet, CO2 emissions totalled 163
2003, those from petrol-driven vehicles to
The successful model employed by
as a blueprint for similar voluntary
undertakings at EU level. The ACEA
Trends in CO2 emissions
agreement pledges that the average
CO2 emissions of all newly registered
passenger cars (M1) in Europe will be
reduced by 25 percent compared with
1995 levels by 2008, that is to say CO2
emissions will be cut from 186 grams
per kilometre to 140 grams by 2008.
In addition to this general pledge for
the fleet as a whole, the European
automotive industry also promised to
introduce the “three-litre car” (emitting
120 grams of CO2 per kilometre). This
pledge has been fulfilled – by German
vehicle manufacturers.
Source: EU Commission
Annual Report 2005
123
171 grams per kilometre and those from
facturers than on non-European ones.
manufacturers that only diesel vehicles
vehicles using alternative fuels to 162
Japanese manufacturers have achieved
with particulate filters will be introduced
grams per kilometre. The reduction in CO2
average CO2 emissions of 172 g/km, with
from 2008/2009 onwards, or the fact
emissions has been encouraged specifi-
the Koreans still averaging 179 g/km.
that this target will in fact be met con-
cally by new technical developments.
Both are therefore lagging well behind the
siderably earlier – possibly to a large
European automotive industry.
extent in 2005 – it is probable that the
The progress report of the European
reduction will be even greater.
Commission made it clear that the ACEA
In view of future climate control
pledge is decidedly ambitious and will
policy, it is unlikely that the focus on
require considerable ongoing effort to
specific vehicle emissions alone will be
industry has successfully carried out
achieve the target in 2008. In this respect
enough. Instead, an integrated approach
the tasks it was set. A more rapid on-
it remains unsatisfactory that Japanese
is required and a strategy must be devel-
going reduction in emissions would only
and Korean manufacturers do not have
oped which incorporates all factors to the
be likely if the entire vehicle popula-
to reach the target until 2009, a year later.
same extent, i.e. vehicle, driver, infrastruc-
tion were to be replaced with the latest
The European Union is imposing stricter
ture and fuels, and which everyone must
models, since even today half of the
requirements on its own vehicle manu-
implement.
passenger cars in use on our roads still
Without doubt, the automotive
comply only with Euro 2 or less stringent
exhaust emission limits.
Emission Reduction
Ozone and summer smog
In environmental policy, ozone plays
a role in two areas. There can be sur-
Success in emission
reduction
achieved in the period from 1990 to
plus ozone in the atmosphere close to
2005, though emissions will continue to
ground level (so-called “summer smog”),
By systematically reducing emissions
fall over the next 15 years. Model calcu-
and also a deficit of ozone in the strato-
from both petrol and diesel engines, the
lations indicate that compared with 1990
sphere. However, there is no connection
automotive industry has succeeded in
the emission reductions by 2020 will be:
between the two phenomena.
bringing the increase in exhaust emissions under control and initiating a
reversal of this the trend, while at the
■ 93 percent for volatile hydrocarbons
(HC)
same time increasing vehicle performance on the road. Modern passenger
cars and trucks impose only a marginal
sphere is attributed to chlorine. This
depletion has resulted from the use of
■ 87 percent for carbon monoxide
(CO)
burden on the environment. These
successes are substantiated by the
The depletion of ozone in the strato-
“greenhouse gases” such as fluorinated
hydrocarbons. International agreements
have now banned the use of ozone-
■ 78 percent for oxides of nitrogen.
TREMOD computer model developed by
depleting gases, with the result that
the reduction has slowed considerably
the Ifeu Institute in Heidelberg (Institute
The model also indicates that emis-
for Energy and Environmental Research)
sions of particulates will fall by 78 per-
in association with the Federal Envi-
cent. Since the TREMOD model does
ronmental Agency and the VDA. The
not yet take into consideration either
lion’s share of emission reductions was
the pledge made by the German vehicle
and there are hopes that the protective
ozone layer will recover.
With regard to the summer smog
arising in our latitudes, the EU Air
124
CO emissions from road transport in Germany 1990–2020
Values in Kt/y
7,000
Conventional spark-ignition-engined cars
Cars with closed-loop catalytic converter
Diesel-engined cars
Other spark-ignition-engined vehicles
Other diesel-engined vehicles
6,000
5,000
4,000
- 87 %
3,000
2,000
1,000
0
1990
1995
2000
2005
2010
2015
2020
Source: Ifeu, November 2003
HC emissions from road transport in Germany 1990–2020
Values in Kt/y
7,000
Diesel-engined cars
6,000
5,000
4,000
- 93 %
3,000
2,000
1,000
0
1990
1995
2000
2005
2010
2015
2020
Annual Report 2005
125
NOx emissions from road transport in Germany 1990–2020
Values in Kt/y
1,800
Diesel-engined cars
1,500
1,200
- 78 %
900
600
300
0
1990
1995
2000
2005
2010
2015
2020
Source Ifeu, November 2003
Particulate emissions from road transport in Germany 1990–2020
Values in Kt/y
50
Diesel-engined cars
40
- 78 %
30
20
10
0
1990
1995
2000
2005
2010
2015
2020
126
Quality Framework Directive and associ-
sources have a significant influence on
monoxide, whereas natural emissions
ated Daughter Directive on Ozone, which
ozone formation.
remained almost immune to outside
have been incorporated into national
influences, has led to a slight increase
law by way of the 33rd Federal German
In contrast to the very hot summer
in annual mean ozone values, which are,
Immission Protection Ordinance, have
of 2003, last summer was a typical Cen-
however, far below those that would be
introduced an air quality standard of
tral European one. This is also evident
relevant for either human beings or the
120 micrograms per cubic metre of air
from the number of days on which
environment.
as a long-term aim within the EU. This
ozone values exceeded 240 micrograms
standard is the one recommended by
per cubic metre. The peak ozone con-
the World Health Organisation. Summer
centrations in Germany have also fallen
In the summer of last year, the
smog occurs in the atmosphere close to
drastically. This is evidence that a long-
European Commission put forward
ground level as a result of intense solar
term air quality improvement strategy is
the “Environment and Health, 2004
radiation acting on hydrocarbons and/or
superior to short-term activities under-
to 2010” action plan. In it the Com-
oxides of nitrogen. Over the past few
taken for their own sake.
mission explains that on the basis of
EU environmental policy
years, emissions of VOCs and oxides
available information it assumes that
of nitrogen have been substantially
there is a relationship between the
The mean annual ozone concentra-
reduced, and this trend is continuing. By
tion values have increased slightly in
state of the environment and the state
contrast, the amount of hydrocarbons
recent years. According to the Federal
of people’s health. At the same time,
emitted naturally by our forests remains
Environmental Agency, this is due to
the Commission states that the impact
the same. As a result, the relative pro-
the reduction in nitrogen monoxide
of environmental risks on health can
portion of naturally occurring hydrocar-
emissions from road transport. After
be the result of complex interactions
bon emissions is increasing substan-
dark, nitrogen monoxide reduces ozone.
that have not yet been sufficiently
tially, and today emissions from these
The virtual absence of this nitrogen
investigated.
Ozone levels: Number of hours of exceedances in Germany have fallen sharply
Exceedances of the 240 µg/m3 level, in percent 1990 = 100 %
100
100
80
60
40
30
20
Source: UBA
04
20
3
0
20
0
20
02
01
0
20
00
0
20
9
19
97
19
9
6
0
8
0
19
9
0
19
9
5
19
9
4
10
19
9
3
19
9
2
19
9
1
19
9
19
9
0
10
Annual Report 2005
A total of three stages are envisaged: improving the flow of information
be accompanied by an upper limit for
of 10 micrometers (= one hundredth of
even finer particulates (PM2.5).
a millimetre). The new mean daily value
for a better understanding of the relationships between sources of pollution
and the effects on health, filling knowl-
immission limit for particulates (PM10)
In this connection the automotive
industry calls for
edge gaps by stepping up research and
dealing with new issues in the field of
127
is 50 micrograms per cubic metre of air.
According to the EU directive, this value
may be exceeded 35 times in a calendar
■ attainable targets to be defined
the environment and health, and exam-
year. In addition to the mean daily value
there is also a mean annual value of
■ emission and immission regulations
not more than 40 micrograms per cubic
ments in communication. The EU action
to be viewed together in context,
metre of air. As well as the strict limits
plan will be embedded in international
and
for PM10, there is also a target for NO2,
ining political concepts and improve-
agreements such as the WHO ministerial conference on environment and
health in Budapest and the Children’s
namely 50 micrograms per cubic metre
■ estimates to be made of the consequences of this legislation.
Environment and Health Action Plan for
Europe (CEHAPE).
Also connected with this is the 6th
from January 1, 2005 onwards.
These values have already exceeded
22nd BImSchV in force
since January 2005
The Framework Directive for the
in several conurbations and town centres. As a result, the authorities responsible are required to devise suitable
EU environmental action programme.
assessment and inspection of air qual-
measures. If levels of fine particulates
This has established a target of
ity was adopted by the European Union
in a town exceed the limit on more than
achieving an air quality that will have
some time ago, during the 5th EU Envi-
the permitted 35 days, an action plan
no substantially negative effects on
ronment Action Programme (1992 to
must be drawn up.
human health and the environment.
1999). It was fleshed out by so-called
One aspect of the programme is the
Daughter Directives. This year will see
“thematic strategy” concept, which
the publication of the fourth and last of
ticulates have also been exceeded in
should be placed before the European
these.
a number of conurbations and regions
Parliament and the Council of Ministers
by the end of 2005 at the latest. It is
The mean daily values for fine par-
throughout Europe, particularly in
The directives require member
Northern Italy, Poland, Belgium and the
expected that the Commission will sub-
nations to comply with air pollution
mit the first draft of a thematic strat-
limits and to supply the Commission
egy on clean air in the summer; this
with detailed information on air qual-
will lead to a general revision of the
ity trends. In Germany, the “Air Quality”
the EU Commission to submit a report
previous directives. In the future it is
framework directive and most of the
to the European Parliament and the
intended that there should be a focus
daughter directives have been incor-
Council of Ministers by December 31,
on immission limits. One major focal
porated into national law by way of the
2003 on its experience of applying the
point of the thematic strategy will be
22nd Federal Immission Control Ordi-
directive and, if appropriate, to make
the regulation of particulate immissions
nance. On January 1, 2005, the new lim-
proposals for its amendment. Verifica-
in Europe. It cannot therefore be ruled
its for particulates, or more precisely for
tion of the PM10 limits was expressly
out that the more stringent regulatory
fine particulates (PM10), came into force
mentioned. As yet, however, the report
stage for fine particulates (PM10) which
with the 22nd BImSchV. These fine
has not been submitted, which implies
was originally scheduled for 2010 will
particulates have a maximum diameter
that data from member nations have not
Netherlands.
The European directive called for
128
Exceedances of the mean daily value for PM10
particulate matter) has established, the
mean daily limit corresponds approxi-
Number of days on which the mean daily value of 50µg/m3 was exceeded
mately to a mean annual limit of 30
Vienna
Warsaw
Stockholm
Salzburg
Rotterdam
Riga
Rhine/Ruhr region
Munich
Milan
Mannheim
Madrid
Lyon
London
Lisbon
Leipzig
Frankfurt
Dresden
Brussels
Berlin
2003
2002
2001
micrograms per cubic metre. As a result,
the permitted mean annual value of 40
micrograms has, in effect, been reduced
by a quarter. At the very least, the mean
daily value must therefore be adjusted
to match the mean annual value, this
latter figure being the decisive one for
health protection.
In addition to the shortcomings
in methodology, it should be pointed
out that the specifications regarding
measuring point locations, such as the
0
35
50
100
150
200
Source: Linz City Council
height at which the air is collected,
the distance from the edge of the road
etc., must be representative of how the
yet been supplied to the Commission to
Against this background, and in
population is exposed to the pollution.
the light of findings obtained from new
Measuring points that are decisive for
emissions measurements, the EU Com-
any subsequent action must only be
mission is again called upon to review
installed in areas in which people live
annual fine particulate pollution limit
the limit values and exceedance thresh-
permanently.
can be complied with in most cases.
olds and to adapt these to requirements
Compliance with the stringent daily
for health protection and economic vi-
PM10 limit, however, will be impossible
ability. In the USA, for example, the limit
in many regions of Europe, and indeed
values are much higher, the mean daily
in many towns in Germany. In June 2004
value being three times higher than that
the Bundesrat (Länder chamber of Ger-
required by the EU.
the necessary extent.
According to experts, the average
As immission measurements carried
out in Berlin show, only 7 percent of the
fine particulate burden are attributable
man Parliament) stated that the technological potential for reducing emissions
Automotive industry
already very successful in
diesel particulate reduction
The mean daily value for particu-
to emissions from passenger-car diesel
of fine particulates was not sufficient to
lates of 50 micrograms has neither an
engines. One is inclined to suspect that
enable the whole of Germany to com-
adequate scientific basis, nor is there
these emissions are largely caused by
ply with the European daily immissions
any evident justification for the deci-
older vehicles, since those complying with
limit. The Bundesrat therefore called
sion to permit the levels to be exceeded
Euro 4 only cause 7 percent of the par-
on the German government to urge
on 35 days per year. Furthermore, the
ticle emissions that were recorded from
the European Commission to revise the
relationship between the mean daily
the equivalent vehicles in the early 1990s.
values and postpone the deadlines for
and mean annual values is not correct.
compliance. So far, this call has gone
As the European Commission’s expert
unheeded.
group (EU-CAFE Working Group on
began to deliver vehicles complying with
Annual Report 2005
Fine particulate
emissions in Germany
Proportions as percentages
Road
traffic
20
Bulk
materials
5
European exhaust emission limits for passenger cars
As percentages, EURO 1 = 100
EURO 1 (1992/93)
Other
traffic
11
Households
18
129
EURO 2 (1996/97)
EURO 3* (2000)
EURO 4* (2005)
100
75
50
Industry
35
Power stations
11
25
Source: Federal German Environment Ministry
0
Petrol
the latest European emission standards
long before these came into force. In
some cases, vehicle emissions levels
Diesel
NOx + HC
NOx + HC
Petrol
Diesel
were well below the specified limits. In
Petrol
Diesel
CO
CO
Petrol
Diesel
Diesel
Particulates
Particulates
Diesel
2002, for example, 56 percent of newly
EURO 1
1.13
1.13
3.16
3.16
0,18
registered passenger cars in German
EURO 2
0.5
0.7
2.2
1.0
0,08
already complied with the Euro 4 stand-
EURO 3 NOx
0.15
HC
0.20
0.56
2.3*
0.64
0,05
EURO 4 NOx
0.08
HC
0.10
0.30
1.0
0.50
0,025
ard which did not actually come into
force until January 2005. By 2004, the
proportion had increased to 70 percent.
By contrast, the proportion of Euro 4
vehicles in the vehicle population as a
Exhaust emission limits in g/km.
* From EURO 3 onwards, more stringent measuring methods were used than for EURO 1 and EURO 2.
Source: EU, Federal German Environment Ministry, Baden-Württemberg State Institute for Environment Protection
whole is currently just 15 percent. The
more rapidly older cars, which can only
comply with lower emission standards,
are replaced on the roads by new ones,
(2005/06) and Euro 5 (2008/09) exhaust
pared with Euro 3, this is a reduction of
the better it will be for the environment.
emission standards, German manufac-
80 percent.
turers already offered a wide range of
Commercial vehicles
are becoming steadily
“cleaner” too
Emission reduction has made very
commercial vehicles for sale that comply
Commercial vehicle manufacturers’
with these stringent limits. Compared
efforts have for a long time also been
with 1990 levels, commercial vehicles
focused on developing retrofit solutions
now emit only 3 percent of particulates
for commercial vehicles currently on
considerable progress in the case of
– another quantum leap in environmen-
the road – from the delivery van right
both passenger cars and trucks. Even
tal policy and a further contribution to
through to the heavy-duty truck. As a
before the introduction of the Euro 4
lower fine particulate pollution. Com-
result, the German supplier industry – a
130
the road tax for trucks incurring toll lia-
Road transport accounts
for only a small proportion
of the fine particulate
burden
To promote the adoption of this
bility and registered as complying with
Even if the automotive industry
environmentally friendly technology, the
Euro 4 or Euro 5 should be lowered to
continues to lower fine particulate
VDA is calling for the emission-linked
the minimum level applicable in Europe.
emissions, road traffic in fact accounts
vehicle tax rating for commercial vehi-
This would also be an important step
for only a small proportion of the fine
cles, which so far only takes the Euro 1
towards harmonisation of the competi-
particulate burden. A survey which was
and Euro 2 exhaust emission limits into
tion situation.
carried out in Berlin but which is also a
leader in this field – will be supplying an
account, to be updated and matched to
increasing number of retrofit systems for
the situation as represented by current
commercial vehicles as well.
exhaust emission legislation. In addition,
good predictor for other traffic measur-
European emission limits for trucks and buses
ing points has indicated that only about
a quarter of the measured immissions is
caused by local traffic. On closer exami-
As percentages, EURO 1 = 100
nation, only 9 percent of this quarter is
attributable to exhaust emissions from
passenger cars. Even a complete ban on
passenger car traffic, which would have
a dramatic impact on the lives of the
population, would therefore only achieve
a minimal reduction in overall PM10
concentration. Similarly, individual road
closures, although keeping the levels
on the actual road within the set limits,
would cause them to rise significantly in
the neighbouring areas. This displacement effect can be just as undesirable
as the likely depopulation of towns if
traffic restrictions or even bans were to
Particulates
EURO 0
NOx
15.5
HC
CO
Particulates
2.6
12.3
-
be imposed by decree for town centres.
Equally unsuitable would be the
introduction of city tolls. Their impact
EURO 1
9.0
1.23
4.9
0.4
EURO 2
7.0
1.1
4.0
0.15
on actual traffic movements and air pol-
EURO 3
5.0
0.66
2.1
0.1
lution cannot be clearly predicted and
EURO 4
3.5
0.46
1.5
0.02
could depend heavily on regional factors
EURO 5
2.0
0.46
1.5
0.02
such as the structure of residential set-
In the case of particulates, limits for which were not introduced until EURO 1 (1992/93), the EURO 1 limit
provides the baseline (=100).
Table: Emission limits are quoted in g/kWh. Measuring method for EURO 0, EURO 1 and EURO 2:
ECE R49 13-mode test cycle. For EURO 3 onwards, the more stringent ESC cycle was used.
Source: EU, Federal German Environment Ministry, Baden-Württemberg State Institute for Environment Protection
tlements, the provision of public transport and average incomes. It is probable
that tolls would have only a slight effect
on air quality but would be of considera-
Annual Report 2005
131
Origins of fine particulate pollution in a Berlin street
As percentages
Emissions from
commercialvehicles engines
33
Abrasion and
turbulance from
passenger cars
30
Local
traffic
26
Engine emissions
included in above
11
Regional
background
47
Turbulance,
abrasion included
in above
15
Emissions from
passenger-car
engines
9
Abrasion and
turbulance from
commercial vehicles
28
Urban
background
27
Domestic heating,
use of solvents
included in above
9
Source: iuta, Institute for Energy and Environmental Technology/Senat Office, Berlin
ble disadvantage to the citizens and very
25 percent of the retailers planned to
is determined to a considerable extent
costly to levy. This can be seen from the
leave the charging zone. Because of
by the movement of air masses. As the
experience gained with the London con-
these findings, the German Association
Bundesrat in its resolution of June 11,
gestion charge introduced some eight-
of Cities has come out against city tolls,
2004 correctly pointed out, up to
een months ago (see the “Transport”
because they would merely divert traffic
70 percent of immissions may be caused
chapter). Although traffic density has
to the surrounding areas and displace
by this long-range movement and result
fallen and average speed has increased
the problems.
in the limit being exceeded. Weather
in the zone concerned, there are other
aspects which call this measure into
question. The effects on the environment in the charging zone are estimated
to be only slight. In London, the daily
situations to the east and south-east
Long-range movements
of particulates are the
decisive factor
In practice, the long-range move-
of the country in particular can lead to
an increase in PM10 concentrations. An
example from Berlin demonstrates this.
Though the wind predominantly blows
limit value has already been exceeded
ment of particulates, something that
from the south-west, PM10 is primarily
more than 35 times this year. Fears that
cannot be controlled by implementing
brought in by the east winds. This is due
traffic restrictions could harm business
local measures, is a crucial factor when
to higher emissions in the neighbouring
have also been confirmed by the Lon-
considering the content of fine particu-
eastern countries.
don congestion charge. In one survey,
lates in the air. Even on the Kleiner Feld-
75 percent of retailers in the charging
berg, a hill in Germany’s Taunus region,
zone reported downturns in turnover; of
it is possible to find traces of sea salt in
those, 40 percent attributed the losses
the air. In recent years, investigations
Not just the long-range transport
to the congestion charge. A total of
have shown that PM10 concentration
of particulates in the atmosphere but
Meteorological influences
are important
132
Meteorological influences have a severe effect on PM10 levels
lated and industrialised south-west
Ludwigshafen, Mainz, Neuwied, traffic stations
Green marks: Sundays, Red: New Year
Ludwigshafen-Heinigsstraße
But it is not just in the densely popuregions of the country that meteoro-
Mainz-Parcusstraße
Neuwied-Heddesdorfer Straße
logical influences can be clearly felt,
but also in Germany’s most sparsely
populated state, which also happens to
70
have a low traffic density. On the first
weekend in February and the following
60
days, all measuring stations in Mecklenburg-Western Pomerania reported
50
that limits had been exceeded. The
cause of this cannot be traffic move-
40
ments here either, nor can traffic be
the cause of problems on the North
30
Sea island of Nordeney, the quintessential clean air region, which nev-
20
ertheless in the first 4 months of this
year alone reported 8 days on which
10
03
05 07 09 11
13 15 17 19 21
January 2005
23 25
27 29
31
the daily limit was exceeded.
What was tantamount to a large-
Source: State Environmental Office, Rheinland-Palatinate
scale trial took place in the middle of
The graph shows that exceeding PM10 levels is not dependent on traffic. For example, the highest values in
January 2005 were in every case recorded at weekends.
February in the western Rhine/Main
area, during the visit of US President
George W. Bush. On this day, the cen-
other meteorological effects as well are
third week of January, when several
tre of Mainz and the southern suburbs
significant for PM10 concentrations. In
measuring stations in the south-east of
of Wiesbaden were practically traffic-
dry or still periods, the concentration
Germany reported that limits had been
free as a result of several road clo-
of PM10 increases significantly, so that
exceeded. On the following Monday,
sures. In addition, the light traffic still
fine particulate limits may sometimes
however, particulate values fell again
existing in the remaining areas of the
be exceeded. This is convincingly dem-
to a very low level. The German Federal
Rhine/Main region was at times inter-
onstrated by the immissions curve for
Government, in its reply to a brief ques-
rupted for long periods.
the first week of January 2005. All the
tion, has also stated that 70 percent
measuring stations between Stuttgart,
of exceedances were recorded in still
the Rhine/Main area and the Palati-
weather conditions.
nate recorded the highest immissions
between January 13 and 17. On the
Though the particulate levels in
the towns visited by the president on
February 23, namely Mainz, Wiesbaden
The fact that road-traffic stations
and Frankfurt, were slightly lower than
Tuesday, immissions fell dramatically,
reported minimum values on the Mon-
those recorded on the previous day
only to rise considerably again on the
day, traditionally the busiest day of the
and the following day, this was due to
following Sunday. Similar meteorologi-
week traffic-wise, points very clearly to
the general weather situation, since
cal phenomena were observed in the
the influence of the weather situation.
a similar reduction was reported in
Annual Report 2005
Diesel-engined
passenger cars with a
diesel
particulate filter
Anteile in Prozent
sold in Germany
133
tenance and almost no additional fuel
ers. Any plans for imposing new penal
consumption.
taxes on owners of old vehicles as a
means of financing these incentives
With their “Stuttgart Declaration”
must therefore be abandoned.
of July 13, 2004, German car manufac-
January – April 2005,
proportions as percentages
turers issued a clear signal in favour
Other
brands
19
of installation of the diesel filter. They
have even gone a step further than their
unique pledge to equip all their diesel-
Improving air quality is a
challenge to be tackled
jointly
The automotive industry is therefore
engined vehicles sold in Germany with
making an active contribution to the
particulate filters by 2008/09, and have
reduction in emissions. All other groups
announced that they are speeding up
responsible for emissions are called
the programme, with many models to be
upon to follow the example of the auto-
equipped in this way as early as 2005.
motive industry and reduce their emis-
In addition, specific retrofit programmes
sions to technically and economically
will also be implemented as quickly as
feasible levels. It is worth mentioning
possible. The extensive technical con-
in this connection that wood burned by
the whole of the southern Rhineland-
version work for this, which necessitates
households emits a quantity of fine par-
Palatinate region, in South Hesse and
engine and vehicle modifications, is cur-
ticulates similar to road traffic.
in the western areas of Baden-Würt-
rently in full swing.
German
brands
81
temberg as far as Baden-Baden – in
other words in regions not affected by
Local authorities can also make a
In 2004, German manufacturers had
significant contribution to air quality (see
the traffic restrictions. From this it can
already sold 170,000 diesel passenger
the “Transport” chapter). It is consider-
be seen that even substantial local and
cars with particulate filters in Germany.
ably more important to optimise traffic
regional traffic restrictions have no
Eight out of ten diesel vehicles with
management and maintain a constant
noteworthy effect on fine particulate
particulate filters sold in Germany are
flow of traffic. Infrastructural measures,
pollution.
thus German brands. In just six months,
such as the construction of bypasses
German manufacturers have more than
and closing the gaps in the trunk road
doubled (from 33 to 80) the number of
network, should be implemented in
models they offer for sale with diesel
cooperation with the road building fund-
particulate filters. With its pledge to
ing authorities. Soot emissions in areas
German automotive
industry points the way in
particulate filter technology
With the introduction of Euro 4, soot
install particulate filters, the German
subjected to high levels of air pollution
emissions from new diesel passenger
automotive industry is making an exem-
can be noticeably reduced by replacing
cars have fallen by around 93 percent
plary contribution to emission reduction.
the fleets of local authority vehicles with
compared with 1990 levels. With the
It is now up to the politicians to imple-
state-of-the-art vehicles. As was recently
aid of the diesel particulate filter, the
ment the promised tax concession for
stated at a meeting of the “Commis-
already very low engine soot emissions
the installation of particulate filters on
sion on Air Pollution Prevention”, further
will be almost completely absorbed.
new and used diesel cars. Customers
significant reductions in immissions can
Furthermore, the second-generation
have a right to a clear perspective in
be achieved by having good roads with
filters have the added attractions of long
this respect, but the concession must
undamaged surfaces free from potholes
service life, freedom from routine main-
not be at the expense of other car driv-
and patched-up sections.
134
DieselsHave
a Future
Dear motorists,
The public discussion of air quality and particulate matter has generated some unfair perceptions of diesel.
Air quality in Germany has improved considerably since the early 1990s. That applies in particular to particulate emissions, which
have been reduced by around 90 percent in this period. The diesel engine has made a major contribution to this achievement.
So it is no surprise that today every second car buyer in Germany now chooses a diesel passenger car. German automakers are
the market leaders and technological pacesetters — not just in Germany but in all of Europe.
Diesels have unbeatable qualities:
We would like our customers to know that:
■
With its outstanding consumption performance,
diesels are an essential factor in climate protection.
They play a key role in the reduction of fuel con
sumption and CO2 emissions.
■
German automakers are far ahead of their competitors in offering diesel cars equipped with filters.
We offer a broad range of models in all vehicle
classes.
■
Automakers have invested billions in order to make
diesel engines clean and environmentally friendly,
reducing particulate emissions by 93 percent since
1990.
■
■
What’s more, we have launched an ambitious program for retrofitting filters into diesel-powered cars.
This will ensure that the vehicles retain their value
at a high level. To date, no competitor of the German
automakers has announced a similar initiative.
Diesel-powered passenger cars account for less
than seven percent of total particulate emissions
today.
■
■
But we are still not satisfied with those statistics.
The German automotive industry decided a year ago
to install filters in all new diesel passenger cars in
Germany. In the interests of its customers, it has
now decided to speed up this process, with some
manufacturers implementing it already in 2005.
The government intends to support this initiative
with tax incentives. We welcome this support, particularly because one-fifth of the diesel-powered
vehicles on the road today are more than 12 years
old. Replacing these vehicles with new ones would
be the best way to boost the economy while protecting the environment.
■
The German automotive industry is the market
leader when it comes to diesel particulate filters:
Eight out of ten diesel engines equipped with filters
are produced by German automakers.
Reject the myths and get back to the facts!
Don’t let diesel’s critics win the debate! Diesel has a bright future —
let’s continue to trust in it.
The German manufacturers of diesel passenger cars within
the German Association of the Automotive Industry (VDA)
Annual Report 2005
135
Facts about Fine Particulates
The discussion about fine particulates
(“fine dust” to the person in the street) is
highly charged with emotion and is likely
to arouse anxiety among those who are
not correctly informed about the true situation. The VDA has therefore collected
together and published the latest conclusions and most important facts on fine
particulates in the atmosphere and the
part played by diesel-engined vehicles.
A full-page advertisement (shown on
the previous page) in the major German
regional and national daily newspapers,
with the headline “Diesels Have a Future”,
supplies readers with the principal facts
relating to the diesel engine.
In addition, the “Clean Diesel” leaflet
describes the successes so far achieved
in the reduction of exhaust emissions, the
Diesels and the Debate
on Particulate Matter
Answers to the 20 most
important questions
dominant part currently played by the
diesel in new-car registrations and the
progress already made in the particulate
filter area by German manufacturers. This
leaflet states quite clearly that modern
commercial vehicles are also extremely
“clean”.
With its paper “Diesels and the Debate
on Particulate Matter - Answers to the 20
most important questions”, the VDA has
additionally made all the most important
discussion points available in questionand-answer form. This publication tackles
the most important aspects of the subject
and supplies brief, easily understood and
well-founded answers. It is included at the
end of this year’s Report.
The “Clean Diesel” leaflet and the
Q & A paper “Diesels and the Debate on
Particulate Matter” can also be ordered free
of charge by e-mail at presse@vda.de.
136
Diesel exhaust emissions: New scientific findings on the effects on health
connection is an epidemiological study
reduced particulate mass but also the
engine combustion technology has
The enormous progress made in
which caused a stir with speculative
proportion of fine and ultra-fine particu-
prompted the scientific community to
claims regarding adverse health effects.
lates – by as much as 80 percent. With
re-assess the toxicological effect of
However, a quantitative risk assessment
the adoption of particulate filter technol-
diesel soot from modern engines. Two
of the effect of diesel soot emissions
ogy on more and more vehicles, even
independent research projects at the
from cars such as would be necessary
ultra-fine particulates will no longer be a
Essen University Medical School and the
to calculate the environmental risk is
matter for discussion.
University of Copenhagen have inves-
not possible from epidemiological data.
tigated diesel soot at both cellular and
Epidemiological studies in the environ-
Particulate size is dropping in
molecular levels.
ment always assess a very complex mix
emissions from modern engines
of substances under many different
Experiments on animals using dos-
Number of particles 10-13/km
environmental effects, so that even with
ages far higher than the typical con-
the most differentiated of calculation
centrations found in the environment
methods, it is not possible to draw con-
showed that diesel soot particulates do
clusions about individual substances.
not have any potential to cause inflammation or genetic damage. Both these
Recent discussions have focussed in
new investigations conclude that there
particular on the quantity and the health
appears to be a threshold to the effects
effects of ultra-fine diesel particulates
of diesel soot in the environment, below
(smaller than 100 nm). Since the quan-
which no effects are to be expected
tity of particulates has undoubtedly
even in the case of prolonged exposure.
been drastically reduced, it is now being
However, individual groups are still
campaigning against the diesel engine
Particulate diameter in mm
Source: Schindler, VDA Congress, Frankfurt, 2000
In a recently completed report from
claimed on occasions that new direct
the University of Rochester, N.Y., USA,
injection diesel engines emit a higher
no impairment of health was found in
proportion of ultra-fine particles.
either healthy or asthmatic volunteers
in the public domain. Some of the state-
who were exposed for several hours to
ments made in these attacks cannot
In actual fact the rapid develop-
be substantiated. Often quoted in this
ment of the diesel engine has not only
than would occur in nature.
Noise emissions are being
reduced even further
This new procedure will better reflect
■
quieter tyres
■
quieter road surfaces (in addition
One aspect of minimising overall
“real world” noise emissions from road
traffic.
emissions from road traffic is the reduction of noise from vehicles. A new pro-
a higher level of ultra-fine particulates
to the use of low-noise asphalt,
Even more effective and efficient noise
improvements in the quality of the
cedure for determining the noise emis-
reductions can be expected in the future.
road network and the application
sions of vehicles is nearing completion.
These can be achieved by means of:
of modern road toppings are also
Annual Report 2005
137
required. Quiet vehicles cannot com-
goes hand in hand with a low-noise
number of measures. They include, for
pensate for potholes)
driving style, for example, upward
example, improving engine enclosures
gear changes at the correct times
and reducing wind noise even further.
■ intelligent traffic management (in
or the avoidance of sudden, rapid
acceleration.)
towns, most noise comes from con-
promising even quieter tyres in the
gested and stationary traffic. Intelligent traffic concepts which keep the
■
reducing vehicle noise levels.
In order to make its contribution to
economical driving style normally
future. In this respect, a logical overall concept, taking into account other
traffic flowing are therefore required.)
■ changes to driver behaviour (an
In addition, the tyre industry is
important parameters such as roll resist-
quieter traffic, the automotive industry
ance and long operating life, must be
is addressing this last point with a large
developed.
Innovative Engine and Exhaust-System Technology:
Steps towards Sustainable Mobility
Ongoing emission
reductions
■
Following the considerable success
achieved in emission reductions – the
A further ongoing increase in the
CO2 balance than the conventional min-
efficiency of conventional drivetrains,
eral-oil based fuels used until now, in
with a simultaneous reduction in
particular regenerative fuels.
emissions,
strict Euro 4 standard for passenger
cars, which halves the already low limits
■
The inclusion of alternative energy
of its predecessor Euro 3, came into
sources for the production of fuel,
force in January 2005 – developers have
and
Included in this concept is a strategy to
■
The development of CO2-neutral
road transport. It is more efficient and
paths for vehicle operation.
therefore uses fuel around 30 percent
more efficiently than a comparable pet-
lead us “away from oil”. The focus in the
medium to long term is on hydrogen,
The diesel engine plays a crucial role
in the reduction of CO2 emissions from
set their sights on a new challenge,
namely the issue of sustainable mobility.
The diesel engine –
a leading role in
CO2 reduction
There are currently two approaches
rol engine. The higher initial purchase
the energy source of the future. The
which can be adopted for CO2 reduc-
cost and the higher tax burden can
German automotive industry has already
tion. The first is to further increase the
be compensated for by the lower fuel
assumed a leading role in hydrogen
efficiency of drive systems. This pri-
consumption. Alongside the low fuel
technology. However, the route to sus-
marily involves further optimisation of
consumption and emissions, though,
tainable mobility cannot be covered in a
conventional drivelines but also includes
the diesel is also a convincing choice
single step, but rather in several smaller
new, for example hybrid, drive systems.
because of its high-mileage capability
and refinement. In 2004, more than four
intermediate steps which the German
automotive industry is addressing in a
systematic way, including:
The second approach is the introduction of alternative fuels with a better
out of ten new car buyers in Germany
opted for a diesel-engined model.
138
Future limits for passenger
cars will be even lower
Further reductions in CO2 through new drive
system technologies and new fuels
Even before the Euro 4 standard
came into force at the beginning of
New fuels (CNG/LPG, GTL, BTL, hydrogen)
2005, the German government had
called on the European Commission
Natural gas
Mineral oil
Biomass
Reg. H2
to devise proposed limits for a future
Euro 5 standard. The German governtax incentives for vehicles that comply
with the Euro 5 standard ahead of the
enforcement date.
CO2 emissions
ment announced its intention to offer
Synthetic gas (H2, CO, CO2)
Pet
Diesrol
el
Syn
Die Fuel
Petr sel
ol
FS I,
opt. TDI
and S I
Dies
el
At the end of 2004, the European
Mild
FS I, hybrid
En
TDI
CCS gine w
i
tion combuth
proc sess
Commission presented a paper which
set a limit for low-soot vehicles for the
purposes of tax incentives. This limit
synt Specia
h
l
tran etic fue
sitio
l
Sun n to –
Fue
l
Hyd
rog
fuel en
Hyd
r
fuel ogen
cell
New drive systems (advanced diesel, hybrid, fuel cell)
was set at 5 mg/km. The limit stipulated
by the Commission for low-soot vehicles
2000
for the purposes of tax incentives has in
the meantime been adopted in several
2010
2020
2030
Source: Volkswagen/VDA
European countries.
The Commission has expressly
pointed out that this value will not
Diesel share of new passenger car registrations in Germany
As percentages
form part of any future Euro 5 stand-
15
(Clean Air for Europe) programme. The
10
tax incentive limit of 5 mg/km for soot
5
emissions can be achieved with a par-
0
can be adhered to reliably and continu-
19
9
ticulate filter. To ensure that this value
ally, an engineering goal of less than
2.5 mg/km is used as a baseline. This
6
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
will also reflect the results of the CAFE
5
20
19
9
lates and oxides of nitrogen. The limits
19
9
25
1
stricter limits for emissions of particu-
4
30
3
standard is expected to impose even
35
19
9
initial investigative period. The Euro 5
40
2
until the middle of 2005, following an
45
19
9
Euro 5 standard will not be published
19
9
ard. The first proposals for limits for a
Annual Report 2005
139
goal has been accepted as a target by
German manufacturers.
AdBlue® reducing agent now a registered trademark
technology, service materials and ser-
In the autumn of 2004, the VDA
The Euro 5 standard is also likely
became the owner of the
AdBlue®
vices sectors. It is to be assumed that all
to include stricter NOx limits, although
trademark throughout the world. It has
competent European commercial vehicle
these have already been lowered by
registered the trademark as follows:
manufacturers, SCR system suppliers,
substantially more than 90 percent
■ German registered trademark
manufacturers of urea and their distribu-
Euro 4 limit of 250 mg/km by means
tion partners will apply for a trademark
303 49 826
since 1990. It was possible to meet the
■ Benelux registered trademark
licence from the VDA, which will authorise them to use the name AdBlue® in
730 342
of internal engine modifications. At
present, passenger car exhaust gas
■ US registered trademark 76,537,485
after-treatment systems capable of
■ International trademark 811 899
the marketplace.
The main element of the VDA
reducing NOx emissions even further
with protection in Denmark, Ger-
have not yet been developed to com-
many, Finland, France, Italy, Norway,
licence contract for the AdBlue®
mercial standards. For this reason,
Austria, Poland, Portugal, Sweden,
brand is the link with the quality
internal engine modification seems
Switzerland, Spain, UK and a further
standards according to DIN 70070 and
the practicable route to take and is
65 IR countries (applied for in
its related international standards. The
also cost-effective and CO2-efficient. A
September 2004) such as Australia,
licence contract will oblige the licence
reduction to 200 mg/km is conceivable
People’s Republic of China, Japan,
holder to observe the quality require-
with this method.
Republic of Korea, Russia, Turkey,
ments specified in DIN standard 70070
Hungary, Ukraine, Belarus etc.
(see the section on “Standardisa-
The AdBlue® trademark is intended
proceedings against any trademark
Stricter Euro 4/Euro 5 limit
values for trucks
The European Union has decided on
tion”). The VDA undertakes to initiate
for use in the vehicle and emissions
infringements.
new Euro 4 and Euro 5 emissions limits
for heavy commercial vehicles for the
Estimated AdBlue® demand trends in Europe
periods 2005/6 and 2007/8 respectively.
This means that, by the time Euro 5 is
AdBlue® demand (t/year)
introduced, pollutants in the exhaust
4.5
from commercial vehicle diesel engines
4.0
will have fallen by between 86 and 98
3.5
percent since the first standard, Euro 0,
3.0
came into force in 1990.
The short time interval between
the two standards imposing these limits makes it necessary to think about
compliance with Euro 5 limits while still
developing the technology for Euro 4.
2.5
2.0
1.5
1.0
0.5
0
2005
This is demonstrated by the new engineering approaches being adopted such
Total AdBlue® demand (EU-25)
Total AdBlue® demand (EU-15)
Total AdBlue® demand (10 new EU states)
Source: ACEA
2006
2007
2008
2009
2010
2011
2012
140
as exhaust gas recirculation and NOx
Alternatively, a function check can
reduction using the new reducing agent
be performed. On systems using
AdBlue®.
reducing agents (such as AdBlue®),
The route to
regenerative fuels is
a progressive one
this means monitoring the qualIn a preliminary reaction stage in an
ity, consumption and metering of
NOx catalytic converter using SCR (Selective Catalytic Reduction) technology,
the reducing agent as well as the
the aqueous urea solution (AdBlue®)
quantity.
BTL (Biomass
to Liquid)
obligatory check on the agent fill
Natural
gas-based
is injected into the exhaust system and
converted into ammonia. In the subse-
Hydrogen
Regenerative
■ As soon as the NOx values exceed
quent catalytic reduction phase, the NOx
the permissible limits (2005: 3.5
is largely broken down into nitrogen and
g/kWh, 2008: 2.0 g/kWh) by 1.5
water with the aid of the ammonia. Install-
g/kWh, the driver is informed by
ing an oxidising catalyst upstream can
means of a warning light.
Crude
oil-based
GTL (Gas
to Liquid)
Diesel/Petrol
Source: VDA
improve the efficiency of the conversion
process with this system even further, as
this oxidises NO into NO2. The SCR proAdBlue®
■ Vehicles must also be fitted with
not least for reasons of CO2 emissions.
a torque limiter which is activated
Nevertheless, it remains the aim of the
when either the NOx level exceeds
German automotive industry to have
market launch stage since the begin-
the OBD threshold value (7.0 g/
8 percent of the energy consumed by
ning of 2005.
kWh) or when an interruption in the
road transport coming from alternative
reducing agent supply is detected,
fuels in 10 years’ time, rising to 20 per-
for example because of an empty
cent in the next 20 years.
cedure using
has been in the
Onboard diagnosis to be
stepped up
As well as the emission limits for
tank or because the quality of the
reducing agent is inadequate.
commercial vehicles becoming stricter in
the future, the systems will be monitored
For many years, the German automotive industry has been active in the
Alternative fuels
research and development of alterna-
The long-term goal of the German
tive concepts and has become a world
are being complied with. As a result, the
automotive industry in terms of drive-
leader in this area. German companies
requirements for self-monitoring sys-
train technology is to change over suc-
are playing major roles in European
tems (OBD), in terms of durability and
cessively to hydrogen, the energy source
initiatives such as the “Alternative Fuels
field checks, have been considerably
of the future. However, the long-term
Contact Group” (AFCG) and the “Hydro-
extended. For this purpose, the Commit-
energy and drive system strategy of the
gen Technology Platform”.
tee for Adaptation to Technical Progress
German automotive industry does not
(CATP-MV) met in mid-February 2005
involve moving from one dependency to
in Brussels and passed new rules which
another. Instead, the chosen option is
– allowing for certain revision deadlines
to focus on both fossil and regenerative
ate vehicles on natural gas. German
– will take effect from October 1, 2006.
raw materials and the potential diversity
manufacturers are therefore offering
They include the following:
of use which they offer.
an increasing number of gas-fuelled
even more closely to see if those limits
Natural gas and GTL
One route to take is to oper-
vehicles in their model ranges. Natural
■ An NOx sensor will be required
for monitoring NOx emissions.
“Clean diesel” will soon have a 50
to 60 percent market share in Germany,
gas is an alternative fuel which not
only produces very few combustion
Annual Report 2005
emissions but also results in up to 25
percent less CO2 than petrol in com-
141
Proportion of alternative fuels in Europe
EU target/as percentages
parable conditions. The natural gas
refuelling network has in the meantime
become sufficiently dense, particularly in urban conurbations. The motor
industry predicts that the population of
natural gas vehicles could triple over
the next five years, compared with the
current level.
In the meantime, methods of liquefying natural gas (gas-to-liquid, GTL, or
“syn fuel”) will be pursued.
Biofuels and BTL
technology
In many countries, the use of regen-
Biofuels
Natural gas
LPG
H2
Total
5.75
2.00
7.00
5.00
8.00
10.00
7.75
2.00
14.00
5.00
23.00
15.00
10.00
5.00
a few
>30.00
Increasing EU support for renewable energies
In the medium term: Addition of biofuels and “gas to liquids” to conventional fuels;
natural gas partly supported by the EU and energy industry
In the long term:
Priority given by goverments and industry to hydrogen as a
sustainable energy source
Source: Volkswagen/VDA
Another way of using alternative
fuels is to mix them with conventional
supports the mixing of biofuels with
erative fuels, for example bio-ethanol
fossil fuels. This could reduce the CO2
fossil fuels. In accordance with the EU
in Brazil, has already advanced a long
emissions of the entire vehicle popula-
Fuels directive, the addition of up to
way. However, the air quality standards
tion, not just those from selected new
5 percent of biofuel is both permitted
of these countries cannot be compared
vehicles which have been modified for
and technically feasible.
with those of the European Union. In
the new fuels. Furthermore, if alterna-
Germany, the German automotive indus-
tive fuels were mixed with fossil fuels in
try has been a major contributor to the
this way, the existing refuelling network
creation of the German government’s
could be used, thus eliminating the
conventional drive system technology,
fuel strategy. The result is an estimate
need for a costly new supply network.
the development of alternative drive
of the potential fuel market for the years
The mixing of biofuels is the first, sim-
systems is gaining in importance. The
2010 and 2020.
plest and most effective step towards
most notable of these is the hybrid
alternative fuels.
drive, as a potential bridging technol-
Outstanding potential for regenerative fuels is represented by BTL (Bio-
Hybrid drives
In addition to the optimisation of
ogy to the fuel cell. Hybrid vehicles are
It is of course imperative for fuel
driven by a combustion engine which
mass to Liquid) – a synthetic fuel based
quality to be maintained when mixing
is assisted by an electric motor. Hybrid
on biomass. Its development is being
biofuels with fossil fuels. It is important
technology is noted for its excellent fuel
supported actively by the German auto-
that all new fuels comply with the Euro-
consumption and low CO2 emission
motive industry. BTL promises potential
pean fuel standards DIN EN 228 for pet-
values, particularly in city traffic. Unlike
CO2 savings of over 90 percent and,
rol and DIN EN 590 for diesel. Only by
other fuel-saving concepts, it has the
because of its synthetic manufactur-
maintaining this level of fuel quality can
advantage of braking energy recupera-
ing process, is an extremely clean fuel
operational reliability, service life and
tion which alone returns fuel savings of
which could reduce emissions by more
compliance with low emissions limits be
approx. 10 percent. Another advantage
than 20 percent.
guaranteed.
is the stop/start facility which enables
142
the vehicle’s internal combustion engine
active vehicle propulsion assistance, for
ment goal, therefore, is to determine the
to be switched off automatically when
example by making additional torque
optimum level of hybridisation.
not required – a particular advantage in
available when accelerating or driving
stop and go traffic.
off. In this case it is not absolutely necessary to install an additional electric
Nowadays, a distinction is made
motor. Other components, the starter
Hydrogen engine and
fuel cell
After many years of intensive
between various levels of hybrid vehicle
motor for example, can be used to
research, another alternative drive sys-
technology. Well-known to the public is
transfer the torque to the transmission.
tem is about to emerge from the testing
the so-called “full hybrid”, the internal
These hybrid variants are already ca-
phase. Work is proceeding urgently on
combustion engine of which can be
pable of returning fuel savings of between
the adoption of hydrogen as a vehi-
shut down completely in certain condi-
5 and 15 percent, depending on how
cle fuel. Hydrogen can be used either
tions. Power to drive the vehicle is then
they are used. There is also a corre-
directly, as a replacement for conven-
obtained exclusively from the additional
sponding drop in pollutant emissions.
tional fuels in suitably modified internal
electric motor.
combustion engines, or to operate fuel
The German automotive industry is
cells which then supply power to the
actively embracing this bridging tech-
vehicle. Field trials with fleets of vehicles
or “mild hybrids” require less techni-
nology and developing suitable vehicles.
operated either directly with hydrogen
cal and economic investment. “Micro
Of crucial importance for later use is
or obtaining their power from fuel cells
hybrids” do not obtain a great deal of
the correct degree of hybridisation, i.e.
are already under way. The research
drive assistance from the electric motor.
the proportion of electrical power in the
focus is now on further development of
The main purpose of these vehicles is
overall power of the vehicle. The higher
the drive systems to production readi-
to reduce fuel consumption by partial
the degree of hybridisation, the higher
ness and the drawing up of concepts
regeneration of the braking energy
the potential CO2 savings will be. On the
and strategies to make hydrogen avail-
and by providing drive-off assistance.
downside, however, weight and addi-
able as an energy source virtually every-
By contrast, the “mild hybrid” provides
tional costs will be higher. The develop-
where in certain regions.
The so-called “micro hybrids” and/
End-of-Life Vehicles
The EU End-of-Life Vehicles Direc-
recycling and 10 percent re-use in other
hand, vehicles should be as lightweight
tive establishes various environmen-
ways) by 2015. Provision is already
as possible, in order to save fuel and
tal policy goals. One of these is the
made in the End-of-Life Vehicles Direc-
hence reduce CO2 emissions.
achievement of a general recovery
tive for a revision of the quotas for 2015.
quota and within this a defined recy-
This must take place by the end of the
cling quota. For 2006, the re-use/recov-
year.
On the other, a material recycling
quota makes it necessary to build
heavier vehicles in order to meet the
ery quotas are set at 85 percent (80
quota. It is absurd that by the unco-
percent material recycling, 5 percent re-
The material recycling quotas in
use in other ways) and will rise substan-
particular have given rise to a conflict of
ordinated drafting of legislation the
tially to 95 percent (85 percent material
objectives in vehicle design. On the one
EU Commission is itself putting at risk
Annual Report 2005
and hindering the achievement of its
own important CO2 emission reduction
targets.
Recycling quota makes
weight-saving design difficult
posites, or even the renewable raw
Other
materials, is frequently either difficult
or impossible. The automotive industry
is therefore calling for the fixed quotas
to be replaced by flexible and certified
recovery and disposal management.
The aim of the automotive industry
is to reduce the amount of materials
that have to be deposed at landfill
sites to a minimum, i.e. 5 percent, and
at the same time to build lightweight
Plastics
recycling
Metals
recycling
Plastics
1000
900
800
700
600
500
400
300
200
100
0
revision of the footnotes. One vital issue
that requires examination is whether
the Commission’s chosen definition of
In kg
Material recycling of lightweight
materials such as polymers and com-
143
“freedom from heavy metals” is in fact a
meaningful one. As every metal naturally contains traces of other metals, a
limit at which the material is considered
50 kg
80%
1000 kg
Recycling included
in above
800 kg
to be free from heavy metals needs to
70 kg
be defined. The directive sets the limit
at 0.1 percent for chromium VI, lead and
mercury and at 0.01 percent for cadmium. These limits, which can be checked
by laboratory tests, are sensible, and in
fact identical with the automotive com-
900 kg
Recycling included
in above
720 kg
panies’ strict in-house standards. But
alongside these comprehensible and
verifiable limits, the Commission has
vehicles. Only an integrated approach,
introduced another condition, namely
which takes recycling goals into
The graph shows that, in the case of a car of
weight-saving design, the fixed recycling quota
means that more plastics have to be recycled. This
results in higher costs.
that the impurities should not have been
account and helps with fuel consumption reduction, is acceptable. The EU
intentionally added. This additional condition is neither verifiable nor sensible.
Commission is called upon to resolve
A comparable provision in the electrical
this conflict in their requirements.
and electronic equipment waste direc-
Prohibition of materials
ago. In the summer of this year, many of
tive has since been amended by the
these exemptions will expire.
Commission. There is accordingly some
The EU End-of-Life Vehicles Directive not only regulates the recovery of
prospect of this nonsensical additional
Whereas some materials have been
condition being removed from the end-
end-of-life vehicles; it also considerably
replaced, thanks to intensive efforts by
influences the design of new vehicles.
the automotive industry to find substi-
For supposedly environmental reasons,
tutes, it will not be possible for technical
the End-of-Life Vehicles Directive also
reasons to dispense with all the mate-
arranged by the Commission last year
bans the use of lead, chromium VI, cad-
rials subject to exemptions that are due
for the purposes of revising the list of
mium and mercury. Since such a gen-
to expire. The Commission is aware of
exemptions revealed the necessary
eral ban is not technically achievable,
the technical problems – particularly
actions convincingly and clearly, so that
the directive permits the continued use
because some two years ago now the
the Commission now has no choice but
of parts containing heavy metals in cer-
automotive industry submitted a propo-
to compile the amendment proposals
tain applications. Some of these permit-
sal containing suggestions for a revision
and consult with the member nations’
ted cases are subject to a time limit. The
of the list.
technical working group. There is some
Commission undertakes to revise the list
of exemptions on a regular basis. The
list was last amended about three years
of-life vehicles legislation as well.
The Internet consultation meeting
doubt as to how far the negotiations
The automotive industry’s proposal
included suggestions for the necessary
have progressed. It is therefore still
unclear how to deal with exemptions
144
that have actually expired but which the
rial bans came into force, nor specific
EU Commission plans to extend. The
replacement parts for these vehicles, are
Commission will regard the revisions
automotive industry fears that this will
subject to the ban on heavy metals.
made to the German end-of-life vehicle
have a negative effect on spare parts
supply in Europe from the middle of
2005 onwards.
Until now, another contentious
It is now possible that the European
ordinance as sufficient. If so, this could
German implementation
of the ELV directive –
infringement proceedings
Germany was one of the first
put an end to the infringement proceedings against Germany.
Production-related
environmental protection
issue was whether spare parts for
European Union member nations to
vehicles which were already on the
incorporate the End-of-Life Vehicles
market before the material bans came
Directive into national law, virtually
is exerting an ever greater influence on
into force should also be free of heavy
on time, in July 2002. In that same
national environmental law. Following
metals in the future. Against the views
year, the EU Commission initiated
the initial introduction, on a European
of leading MEPs, the automotive indus-
infringement proceedings against the
level, of targets for the protection of
try and the University of Cologne, the
German government, alleging that the
most of the environment media and the
Commission is determined that every
directive had not been implemented
subsequent supplementing of these
replacement part put on the market
correctly. After several exchanges of
goals by unifying, all-embracing EU leg-
after July 1, 2003 must comply with the
correspondence, the EU Commission
islation, the EU system evolved into the
material bans. A consequence of the
decided in spring 2005 to take the
well-rounded system it is today. How-
European environmental legislation
Commission’s view on this matter, which
complaint against the German govern-
ever, it is not always compatible with the
the VDA regards as erroneous, would
ment to the European Court. In the
mature German system which has to be
be that it would no longer be possible to
light of this, the German government
amended to suit the higher-ranking EU
repair any vehicle more than two years
decided to revise the end-of-life vehi-
law.
old, since replacement parts for vehicle
cles ordinance. As a result, several
models that are no longer produced
exclusion conditions relating to use
would not normally be modified to meet
of the free take-back provision for
gramme, the European Union is now
the new requirements of the End-of-Life
end-of-life vehicles were dispensed
stepping up its efforts to devise themat-
Vehicles Directive. Replacement parts
with. However, the vehicle registration
ic strategies for larger sub-areas. This
for vehicles no longer in production are
document or a comparable document
will harmonise the individual items of
often only manufactured subsequently
will still have to accompany the end-
legislation with the whole, which in itself
on demand. The technical requirements
of-life vehicle in the future.
is a welcome move. There are fears,
for the replacement parts only need
to be met if the defined materials are
As part of its Environment Pro-
however, that companies will then face
The other change requested by the
even greater demands.
being used in the part. The Commission
Commission, namely that the scope of
has now become aware that such an
the ban on materials should also extend
interpretation would result in millions of
to vehicles offered for sale before July 1,
vehicles in the European Union being
2003, has always been rejected by the
is the first attempt by the EU Commis-
forcibly scrapped at one fell swoop. In
German government, and with justifica-
sion to adopt a strategic approach to
the spring of 2005 it therefore published
tion. In the light of the decision mean-
the analysis of a product’s impact on the
a Communication stating that neither
while taken by the Commission, this
environment during its entire life-cycle.
vehicles produced before the mate-
issue at least is now invalid.
The Commission is pursuing the notion,
Integrated Product Policy
The Integrated Product Policy (IPP)
Annual Report 2005
worthy in itself, that the environmental
effects of a product over its entire life
cycle, from production through use,
IPP introduction timetable
July 13, 2005
recovery and recycling must be examined and actions taken at precisely the
point where they will be most effective.
For several years, European committees
have been working on a proposal for
an Integrated Product Policy. In 2001, a
Green Paper was submitted, containing
December 2005
Final report for the “Internet Site on Life-Cycle Assessment Tools
and Services and Life-Cycle Inventory Data in support of European
Integrated Product Policy” tender
December 2005
Completion of the IPP Pilot Projects
discussed today. Instead of publishing
the Commission issued a Communication in 2003.
2006
December 2006
Member states, industry sectors and consumer organisations to
submit reports to the Commission on the measures taken and
progress made in implementing the IPP approach
December 2006
Member states draw up action plans for greening their public
procurement, the Commission will also draw up an action
programme for its own procurement
In order to develop the IPP further
into a Directive or Regulation, the Commission is utilising various instruments.
Firstly, regular meetings with member
nations will be held. Within this framework, the Commission has started two
Stakeholder meeting on the draft final report on the identification
of the products and the product groups that have the greatest
environmental impact from the life-cycle perspective - in the
framework of “Identifying the products with the greatest potential
of environmental improvement”
September 2005 Workshop in the framework of the study: “Internet Site on LifeCycle Assessment Tools and Services and Life-Cycle Inventory
Data in support of European Integrated Product Policy”
all the main approaches that are being
the anticipated White Paper, however,
145
2007
pilot projects, one on mobile phones
2007
Commission reports on the progress of IPP to the EP and Council
and the other on teak garden chairs.
2007
Commission identifies the products with the greatest potential of
environmental improvement
The aim of the projects is to illustrate, as
examples, the environmental impact of
Source: EU Commission
the product.
Secondly, the Commission has com-
in terms of correct scientific conduct,
list of products that have the greatest
missioned the Institute for Prospective
transparency and the involvement of all
impact on the environment. Initiatives
Technologies Studies (IPTS), part of
the relevant experts and stakeholders.
relevant to IPP (“green” public authority
the Directorate General for Research,
On the basis of the Draft Report, it is
procurement, environmental declara-
to investigate the products which have
already clear that the progress of the
tions for products, design regulations)
the greatest impact on the environ-
study so far in no way satisfies these
will be promoted by the Commission
ment. The results of the investigation
requirements.
independently of this timetable.
will be of particular importance for any
subsequent action, but are not expected
The Commission has drawn up a
The automotive industry welcomes
before 2006. Because of the extremely
timetable for the period up to 2007. By
this holistic approach to the examina-
challenging aim of this study, combined
this date, the Commission must have
tion of environmental impact in prin-
with its strong political relevance, the
reported to the European Parliament
ciple. Companies within the automo-
highest of demands must be imposed
and the Council and published the
tive industry have in the past already
146
participated intensively in IPP projects.
There is a fear, however, that the IPP
The Seville Process
The European directive on Inte-
Leading the way in
production-related
environmental protection
approach, though in itself is a positive
grated Pollution Prevention and Con-
one, will change and become merely
trol (IPPC) was introduced in 1996. It
another “add-on” to environmental
sets minimum standards for licensing
the way where water consumption is
legislation. This is unnecessary and
industrial plants. It has been supple-
concerned. Water cycles and the use
must be rejected, because road vehi-
mented by the EU Solvents directive.
of other water-saving techniques have
cles are already the most intensively
The directives call for the “best avail-
resulted in potable water consumption
regulated products within the European
able techniques” to be defined for
actually being halved. Considerable sav-
Union. A complete regulatory network
certain plants by 2007. The European
ings have also been made in industrial
encompasses all stages from produc-
Commission has handed this task over
water consumption, e.g. river water. This
tion through use and recycling. In this
to the “European Integrated Pollution
is in accordance with the corresponding
regard too, the Commission must be
and Prevention Control Bureau (EIP-
reduction in waste water volume.
asked to keep cost efficiency in mind
PCB)” in Seville. Under the leadership
in the course of its activities. In the
of this “Seville Office”, the “best avail-
opinion of the automotive industry, an
able techniques” will be defined with
integrated product policy should involve
the assistance of experts from industry
the following:
and the authorities.
■ Re-examining and optimising exist-
ing and planned legislation from
is involved in the work on “surface
a life-cycle point of view and har-
treatment using solvents”. The aim is
monising it coherently and for the
to devise an environmental standard
whole of Europe (this alone would
for the whole of Europe in order to
be of considerable benefit to the
remove the competitive anomalies
environment and reduce costs),
which currently exist. In Germany,
for instance, no plant exceeds the
■ Considering the capabilities of all
solvent emissions value of 35 grams
those involved in the product life
per square metre of painted surface.
cycle who can help to achieve the
Some plants in Germany have even
sustainable development goal – in
achieved levels well below this. Older
the case of the motor vehicle, these
painting facilities in Europe, however,
are the manufacturers (technology
particularly those in southern and
development), fuel suppliers (alter-
western countries, frequently emit
native fuels), customers (economical
three times this amount. The German
driving) and dismantlers, and
automotive industry therefore believes
that the standards achieved in Ger-
■ Aiming to achieve a balance
The automotive industry has led
Water consumption by
vehicle manufacturing plants
In million cu. m
80
Total
Industrial water
Potable water
70
60
50
40
30
20
10
19
91
19
93
19
95
19
97
19
99
01
20
03
20
Though vehicle production has
many should be a role model for the
been rising since 1990 and the vehi-
between ecological, social and eco-
European Union and should a guide-
cles produced over the last fifteen
nomic aspects within the framework
line when defining the “best available
years have become much more com-
of a competitive Europe.
techniques” for Europe.
plex, the amount of waste generated
Annual Report 2005
Waste water
discharged from vehicle
manufacturing plants
by the vehicle manufacturers has
proportion of waste to be disposed of
hardly changed. This alone is a major
would be marginal.
success, surpassed only by the incredibly high recycling rate achieved in the
In million cu. m
55
147
Total
Cooling water
Waste water
45
35
25
The automotive industry not only
last few years. Whereas fifteen years
leads the way in recovery and recycling,
ago, three quarters of the waste had
but in air pollution control as well. In
to be disposed of, today three quar-
the solvent emissions area, new tech-
ters of it is recycled. These figures do
niques are attracting considerable inter-
not include scrap metal, which is an
est. The German automotive industry
extremely valuable high-quality raw
was the first in the world to introduce
material for metal production. By
water-based paints for its vehicles;
restricting the figures to waste which
today, even powder-based paints are in
is not in itself of great value, the suc-
use in many areas. Solvent emissions
cesses achieved with recycling become
have been halved over the last fifteen
even clearer. If the scrap metal quan-
years, even though production rose sig-
tities are taken into account, the actual
nificantly during this period.
15
19
91
19
93
19
95
19
97
9
19
9
01
20
03
20
Energy
Total waste generated by
vehicle manufacturing plants
In thousands of tonnes
500
400
Though the automotive industry is
and power. They impose a net burden
not one of the classic “energy inten-
of around 12 billion euros per year on
sive” industries such as steel or metal,
electricity consumers in Germany. Of
energy prices have had a direct impact
this, around 2.6 billion euros are borne
on Germany as a location for vehicle
by industry. The burden is now so high
production. Over the past few years,
as to undermine the competitiveness of
energy prices, which were previously
Germany as a production location.
close to the average for Europe, have
300
200
Total
Of which recycled
100
9
19
1
3
9
19
5
9
19
99 001 003
97
19 19
2
2
risen steeply – particularly for electricity
Cost increases have not only been
and gas, the automotive industry’s main
caused by the authorities, however. They
energy sources. Today, industrial elec-
are also the result of an insufficient and
tricity and natural gas prices in Germany
sometimes even deteriorating level of
are among the highest in Europe.
competition. This has also come to the
attention of the German Monopo-
Some of the causes of the high cost
lies Commission, which has criticised
of electricity are due to state-imposed
in particular the high level of network
charges such as environmental tax,
usage charges – partly a consequence
concession charges and levies for
impractical energy industry legislation.
renewable energies and combined heat
The EU Commission has also warned
148
EU industrial electricity prices compared
11.4
In eurocents/kWh, excl. VAT, as at 1.7.04
9.0
9.2
ay
d
N
or
w
an
nl
Fi
n
ai
Sp
ed
Sw
do
ng
Ki
en
m
e
nc
Un
ite
d
Gr
ee
ar
nm
Fr
a
ce
k
l
De
ria
ga
tu
Po
r
em
Lu
x
Au
bo
lg
st
ur
g
m
iu
nd
Be
la
Ire
G
er
m
Ita
an
ly
y
4.2
5.6
6.1
5.7
5.3
6.1
5.1
4.9
5.8
6.2
6.7
6.9
6.3
7.3
7.1
4.9
6.1
8.0
6.5
7.5
7.8
2,500 kW x 4,000 h/a = 10,000,000 kWh/a
7.4
6.8
9.6
500 kW x 2,500 h/a = 1,250,000 kWh/a
8.4
9.7
9.8
Consumption:
Source: Eurostat
Burden of state-imposed charges on the price of electricity
In billion euros
Germany that directives relating to the
internal electricity market have not been
Renewable energy law levies
adequately implemented as national
Combined heat and power levies
Electricity tax
Concession charges
1.6
1.2
0.9
0.6
0.3
3.4
1.9
2.3
0.8
0.7
law. In addition to creating a regulatory authority for the electricity and gas
markets, a network access model that
takes note of and promotes competition
0.7
is also required, particularly for the gas
1.0
market.
6.5
4.3
6.6
5.1
The German government’s plans for
electricity deregulation currently under
1.8
discussion give an unbalanced prefer-
0.3
2,0
2.0
2.1
2.0
2.1
2.2
2.2
1998
1999
2000
2001
2002
2003
2004
ence to the electricity network operators
at the expense of competition and cus-
Source: VDEW, own estimate for 2004
tomers. The DIHK (German Chamber of
Commerce and Industry) has calculated
Annual Report 2005
that regulating network operators in
reduce or even to abolish the so-called
this way would create excessive operat-
peak equalisation for electricity tax. It
ing margins. The German government
is feared that this is precisely what is
should therefore consider allowing the
planned when the European energy tax
regulatory authorities to enforce the use
directive, the rates of which are sub-
of cost models based on efficient net-
stantially below the German energy tax,
works and operating management (prin-
is implemented. The German govern-
ciple of incentive regulation instead of
ment must be fully aware that energy
net conservation of reserves). Likewise,
prices are a factor influencing the coun-
the German government is asked to
try’s competitiveness.
149
Index of notifiable
industrial accidents in the
German automotive industry
Notifiable accidents (4 or more working
days lost) per million hours worked
30
25
20
15
Occupational Safety
10
The automotive industry is continual-
a technical regulation is drawn up. As
5
ly improving occupational safety. Thanks
a result only 15 new technical rules are
to in-house management systems and
to be created. One key approach is the
optimised processes, it has been pos-
insertion of references to hazards into
sible to reduce accidents per 1 million
the technical regulations. Care is also
hours worked by three quarters in the
being taken to ensure that sensible links
last decade. This success is also con-
are created to existing standards, e.g.
the one hand and ensures on the other
nected with the fact that occupational
those of the VDI.
that the level of occupational safety
Last year saw the new committee
1995
2000
2004
It has been possible to establish a
milestone with an initial technical rule.
Occupational safety
ordinance
1990
already achieved is maintained.
safety is part of the corporate philosophy at automotive-industry plants.
0
Occupational safety in the automo-
The new technical rules will have the
tive industry will, on the whole, emerge
required low level of detail. For small
strengthened from this revision process,
and medium-sized enterprises, today’s
because
for occupational safety at the Federal
complex labour law and occupational
Ministry of the Economy and Labour
safety requirements are difficult to
commence its work. The committee is
grasp and implement fully. Occupational
standards that are relevant to the
chaired by a representative from the
safety will therefore be made more
companies
automotive industry. Its aim is to develop
comprehensible for this sector as well.
a streamlined, up-to-date and user-
Since it is likely that small companies
friendly set of regulations for the use of
will require a detailed description, it has
advisory services will move to a
working equipment.
been agreed that the trade associations
higher level
■ It will be possible to formulate
■ The occupational safety experts’
will provide sector-specific support with
In order to establish a sensible,
the aim of creating a relevant overall
■ The interplay between national law
streamlined regulatory structure, a
occupational safety concept. This guar-
and other sources of knowledge will
requirement check is carried out before
antees the required level of flexibility on
be put in order at the appropriate time.
150
The automotive industry will con-
alleged damage to employees’ health.
(SCALE)”, from which it is deriving its
sequently move closer to its goal of
The industry concerned, however,
“European Environment and Health
making Germany more attractive as a
believes that the proposals of the Direc-
Action Plan 2004 to 2010”.
production location by breaking down
torate-General have no scientific basis
bureaucracy and adding flexibility.
and cannot be justified from an industrial-medicine standpoint. In addition,
REACH
According to the Commission’s pro-
Planned workplace limit for
nitrogen monoxide
a workplace limit such as this cannot
posal published in October 2003 for a
be validly measured and is not capable
revision of the chemicals law, all chemi-
The European Commission is estab-
of implementation. The reasons given
cal substances, regardless of whether
lishing limits for chemical substances
by the scientific advisory committee of
they are currently on the market or are
at the workplace. At present, there is a
the European Union relate exclusively to
new, will be subject to a monitoring sys-
guideline limit of 25 ppm for nitrogen
animal and in-vitro experiments which
tem. It is envisaged that all substances
monoxide (NO), but the European Com-
cannot be extrapolated to human
produced in quantities of more than
mission plans to revise this and reduce
beings.
one tonne per year will at the very least
the guideline limit to 1 ppm, a reduction
of the order of 96 percent.
Nitrogen monoxide is produced in
have to be registered. The registration
The technical limit for measuring air
and testing requirements for the cor-
concentrations in mobile workplaces is
responding chemicals will increase with
10 ppm. This means that a limit of
the production volume.
all high-temperature combustion pro-
1 ppm is not measurable. The industry is
cesses and also in oxy-acetylene joining,
therefore asking as a matter of urgency
cutting, coating and plasma processes,
for the planned nitrogen monoxide limit
discussed in the Council of Europe’s
i.e. in all welding processes. Despite all
to be removed from the second direc-
working groups and in parliament.
the success achieved with other joining
tive on limit values. Before imposing
Because of the considerable impact
methods, welding is still a fundamental
guideline values that have considerable
which this complex topic is likely to
part of vehicle production.
implications, it is essential for proper
have, several Council presidencies have
discussions to be held and all the avail-
already worked on REACH and revised
able knowledge on the matter to be
the proposed REACH rules. However,
taken into consideration.
the Council of Ministers still considers
The EU Commission states that the
reason for the planned reduction as
The Commission’s proposal is being
the processes to be too complicated
and is calling for simplified administra-
Hazardous Substances and Chemicals
Legislation
tive procedures. The European Parliament also considers the European Commission proposal to be in need of considerable improvement and has asked
the European Commission to submit
The European Commission is investi-
(REACH), which was adopted by the
an improved proposal. For its part, the
gating several sectors with regard to the
EU Commission at the end of October
Commission points out that tests inves-
undesirable impact of hazardous sub-
2003, will already be familiar to many.
tigating the impact of the proposal on
stances and chemicals. The proposal for
In addition, the Commission put forward
industry (impact assessment) are still
a regulation on the registration, evalu-
in June 2003 a draft of the “European
ongoing. It is already clear from several
ation and authorisation of chemicals
Strategy for Environment and Health
studies, however, that many companies,
Annual Report 2005
particularly smaller ones, will not be
prospect for either the manufacturer or
able to comply with the currently very
the trader. Though these small-volume
complex requirements of the proposed
chemicals may appear insignificant at
REACH regulations. It is also to be
first sight, they are often vital in achiev-
expected that the procedures, which are
ing the desired engineering properties
151
■ Awareness raising: for problems
■ Legal instruments: for the protection
of health
■ Evaluation: of results
being assessed as part of the “Strategic
of a product, for example, additives
Partnership on REACH Testing (SPORT)”
in oils. It is precisely the use of these
by the EU Commission together with the
many different chemicals in production
The Commission has summarised
national authorities and the companies
that creates innovation and a competi-
these findings in a “base line report”
concerned, will be neither functional nor
tive edge.
and now intends to start pilot exposure
efficient.
monitoring projects. These projects will,
By contrast, imported finished prod-
The automotive industry is consid-
in particular, look at people with respira-
ucts such as machines and cars will
tory diseases, disorders of the nervous
erably affected by REACH, as it is a
not for the most part be subject to the
system or hormone system and cancer.
major user of chemical products. The
REACH regulations. If REACH is intro-
SCALE is new insofar as it will link up
chemicals law ruling will hit small and
duced in its currently envisaged form,
environmental and health data, thus
medium-sized companies in particular.
this is bound to result in production
enabling factors causing health prob-
It is clear that the competitiveness of
operations being moved out of the Euro-
lems to be identified. The automotive
European industry will be sustainably
pean Union.
industry is calling for the data collected
damaged, for several different reasons:
in the course of these projects to be
The automotive industry welcomes
It is expected that, due to REACH,
handled accurately in scientifically safe-
the disclosure of the composition of
guarded conditions. Under no circum-
the cost of chemicals to the user will
and risks associated with chemicals.
stances should spurious correlations
rise. Users may also incur additional
The approach being adopted by the
between environmental pollution and
costs. The “exposure scenarios” envis-
Commission, however, goes far beyond
health effects be made. The results must
aged by REACH can only be implement-
this without any measurable benefit to
be scientifically valid.
ed by the user at a considerable cost;
the environment and health, and at the
a risk-based approach would serve the
same time weakens competitiveness.
purpose better than simple “exposure
categories”. The crucial factor is not the
SCALE
Amendment of the
hazardous substances
ordinance
hazardous character of a chemical but
The draft “European Strategy for
At the beginning of the year, the
the risk that exists for humans and the
Environment and Health (SCALE)”, sub-
long-discussed amendment to the haz-
environment.
mitted in June 2003, is defined by five
ardous substances ordinance came into
concepts:
force. This ordinance implements three
EC directives on occupational safety as
In addition to the increased costs,
it is feared that chemicals that are only
■ Science: scientific investigations of
national law and adopts provisions from
produced in small quantities or which
the impact of environmental factors
agreements of the International Labour
are imported will, in the future, no
on health
Organisation (ILO).
longer be available in Europe. Producing or importing small quantities will
no longer be an economically viable
■ Children: the target group of the
investigation
The automotive industry has played
a very active role in discussions and
152
The aim of hazard assessment is
hearings and has issued constant
stance in the air at the workplace which
reminders regarding practicality and
is not expected to have any damaging
to determine what safety measures
implementability. One major aim was to
effects on health.
need to be taken. The ordinance makes
provision in this respect for a graded
implement European law, as far as was
possible, without having any “add-ons
As is usual in modern occupational
model. Occupations involving hazardous
and special conditions for Germany”
safety law, the instrument of hazard
substances are to be graded into four
and at the same time maintaining
assessment is adopted. Concrete require-
categories, depending on the hazard.
Germany’s existing high occupational
ments for assessing the hazards associ-
Each grade is assigned appropriate
safety standards. It has been possible to
ated with occupations involving hazard-
protection measures and documentation
achieve this.
ous substances are laid down and the
obligations.
employer’s task in assessing hazards is
One major change in the new
described. Hazard assessment may thus
Anyone who has performed hazard
ordinance is in the introduction of the
only be carried out by experts in this
assessments using the occupational
so-called Occupational Exposure Limit
field, such as safety specialists, occupa-
safety law will, in practice, not notice
(OEL). In terms of content, the OEL cor-
tional physicians or occupational hygiene
any changes. Only time will tell, how-
responds to the definition of the MAC
experts. Sensibly, there is no longer any
ever, how the still undefined legal
(Maximum Allowable Concentration)
mention of a “hazardous substances
concepts will be interpreted in concrete
value, i.e. the concentration of a sub-
officer” as was required earlier.
terms.
Auto SAFETY AND
TECHNOLOGY
Auto
154
SAFETY AND TECHNOLOGY
German Manufacturers:
Focus on Quality
tory of the People’s Republic of China. The
standard documentation on the automotive
industry is being translated into Chinese for
use in training and advisory work. This will
permit the transfer of German quality know-
interfaces between the various phases
how effectively, safely and in an uncompli-
safety and environmental protection stan-
Comfort and convenience, optimum
in the vehicle’s life from development to
cated manner. The first training and further
dards and premium quality are among the
the start of production and throughout
education measures were scheduled to take
prominent themes that lie at the heart of
the production period until the “end-of-
place without delay, early in 2005.
the German automotive industry. German
life”, has proved to be a success.
manufacturers’ success in their quality
offensive is evident from their perfor-
Information on the VDA Quality
A special position in quality assurance,
mance in recent quality rankings such
in view of the high proportion of added
as the ADAC breakdown statistics, Auto-
value that their work represents, is held
marxX or the J.D. Power Report.
by the companies that form a reliable,
Management Center is available on the
Internet at www.vda-qmc.de.
networked partnership with the manuThe current J.D. Power survey in the
facturers, from the first-tier to the tier-n-
QM systems and
certification
USA, for example, has three German
suppliers. The VDA Quality Summit, held
brands among the top ten for new-car
annually since 2003, brings manufacturers
quality. This year’s ADAC breakdown
and suppliers together to discuss topics
statistics tell an even clearer story, with
with mutual relevance to quality enhance-
16949:2002 was a dominant factor
German models heading five of the
ment in an open, direct manner, and to
throughout 2004. As one of the five IATF
seven categories, and when it comes
define the appropriate solutions.
(International Automotive Task Force)
offices, the VDA-QMC commissioned 19
to brand strength, as measured by the
ADAC-AutomarxX, the first four places
go to German companies.
The new QM standard ISO/TS
Worldwide commitment to
quality
The availability of a quality manage-
certification companies for work in connection with this standard. These companies, operating globally, together issued
ment (QM) system is a major criterion
3,612 certificates in accordance with the
turers have thus reaped the benefit
for the ability of an organisation to
automotive industry’s standards in 2004,
of their intensive work on continuous
achieve acceptable standards of qual-
so that the total number of certificates
quality improvement and their willing-
ity. The certificate that rounds off the
issued from 2002 to 2004 rose to 5,365.
ness to make responsibility for quality
acceptance of a QM system is an impor-
a top management issue. The vehicles
tant information and communication tool
currently being manufactured have an
between manufacturers and the indi-
16949:2002 certificates were issued on
exceptionally high quality standard.
vidual levels of the delivery chain in the
behalf of the IATF. The figures clearly
Breakdown frequency has for example
worldwide customer/supplier structure.
indicate that the companies authorised
Germany’s automobile manufac-
by the VDA-QMC to issue IATF certifica-
been lowered by more than 80 percent
in the past 25 years, and this task is
Altogether, 12,261 ISO/TS
The VDA Quality Management Center
tions are making a worthwhile contribu-
still being pursued systematically. The
(VDA-QMC) is currently opening a branch
tion in terms of the qualification and
strategy of concentrating on the quality
in Beijing, from where qualification meas-
further development of supplier compa-
situation as a whole, spanning all the
ures will be organised for the entire terri-
nies in this business area.
Annual Report 2005
Quality summit
The great success of the VDA-Qual-
155
The Road Safety Success Story
ity Summit held in 2003 in Sindelfingen
encouraged the Quality Management
Center to hold another such meeting this
year. At these events, which are not open
to the public, the VDA brings automobile
Innovations that mean
greater safety on the roads
For the automobile industry and its
first recorded in 1953, and has been
achieved despite the fact that Germany
is one of the countries with the high-
manufacturers and parts and accessories
suppliers, vehicle safety is a central ele-
est density of motor vehicles in Europe.
supply companies together with a view
ment in product quality and a decisive
More than 45 million passenger cars,
to discussing the challenge represented
factor for success in the face of global
over three and a half million commercial
by quality openly and constructively and
competition. German companies lead the
vehicles and a large number of motor-
establishing a joint approach.
world in safety technology. A road map
cycles currently use the country’s roads.
shows that a large number of innovaThe emphasis at 2004’s meeting was
tions in vehicle safety has reached series
Not that the German automotive
the pressure on German manufacturers
production at relatively short intervals,
industry is satisfied with what has been
to develop and make intensive use of
and this process will certainly continue.
achieved: on the contrary, it applies
considerable research and development
the potential afforded by electronics. In
addition, the production process was
These efforts have yielded measur-
effort and expense to bringing new
discussed and rules for “robust produc-
able success: the number of fatalities on
high-tech systems to series-produc-
tion processes” were presented.
the roads of the Federal Republic of Ger-
tion maturity so that vehicle safety can
many dropped from approximately 21,000
be raised to an even higher level. The
in 1970 to 5,844 in 2004. This is the low-
aim in future will be more than ever to
est figure since official statistics were
reduce the driver’s workload and provide
The 3rd quality summit in Stuttgart
in November 2005 will focus on the supply chain.
VDA-QMC training
organisation
Safety innovations from 1978 until today
1978 Anti-lock brake system (ABS)
The Quality Management Center’s
training organisation has continued its
successful work. During 2004, almost
a hundred qualification measures were
held, attended by some 2,500 participants. Of these, 70 training sessions
were held at the Center’s own training
premises in Oberursel and 26 as inhouse QMC events both at home and
abroad.
Ten additional qualification measures
(mainly certification training) were held on
five continents by cooperation partners.
1980 Airbag, seatbelt tensioner
1987 Traction control (ASR)
1989 Automatic rollover bar
1995 Rain sensor
1995 Electronic stability programme (ESP)
1996 Brake assistant
1998 Speech recognition
1998 Distance monitoring
1999 Tyre pressure control system
1999 Active suspension
2002 Pre-crash systems
2003 Bend lighting
2005 Adaptive front lighting
Source: DaimlerChrysler/VDA
156
in an accident. Assistance systems
Accident statistics*
Total motor vehicles in thousands
Fatalities
20,000
60,000
have been developed for this purpose,
and other innovations continue to be
introduced with vehicle safety in mind.
Restraint systems for adults and children and pedestrian protection have
50,000
been subject to further development.
Safety systems, however, should not
40,000
be considered in isolation. On the contrary, it is becoming increasingly impor10,000
30,000
tant for all safety systems to be linked
together in an intelligent manner in
order to obtain an integrated approach
to safety.
20,000
There are four phases to the integrated
approach to safety:
10,000
■ driving with active safety reserves in
0
0
1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2004
hand
■ avoiding risks with the aid of assistance systems
*Including the new Federal States from 1994 onwards
Source: Federal Office of Statistics
■ passive safety if an accident proves
unavoidable
him or her with the necessary support in
hazardous situations. It is nevertheless
The prime target is to reduce from
the outset the risk of being involved
■ providing help without delay following an accident
obvious that such systems cannot relieve
drivers of their personal responsibility.
Integrated approach to safety
Assistance systems help to
avoid accidents
Human error proves to be the most
frequent cause when various types of
accident are investigated. This is where
driver assistance systems can play their
part, by taking specific action to optimise the vehicle’s technical features and
by monitoring the driver’s reactions and
Driving with
reserves
Prevention
Passive safety
Rescue
services
Drive safely:
prevent hazards,
warn in good time
and assist
In the event of risk:
take precautionary
measures
In the event of an
accident:
provide appropriate
protection
After the accident:
prevent a more
serious accident and
provide assistance
quickly
providing support for those that help to
identify and avoid risks.
Source: DaimlerChrysler/VDA
Annual Report 2005
Integration of Active and Passive
Safety
157
due to legal stipulations but to a voluntary agreement concluded by passenger-car manufacturers. On commercial
vehicles with a gross weight above
3.5 tonnes, ABS has in fact been compulsory for some time now.
Reducing the
consequences of
accidents by means of
passive safety systems
with active support
Passive safety as a means of reduc-
found that some 25 percent of serious
accidents can be attributed to tiredness,
(ESP) uses ABS as a starting point,
ness on the part of the driver. These fig-
but with yaw rate and steering angle
ures confirm the exceptional importance
sensors also installed on the vehicle to
of active safety systems.
detect any deviations from the desired
ing the consequences of accidents has
been steadily perfected for some years
The electronic stability programme
and a further 14 percent to inattentive-
path in addition to the purely stabilising
A unified, integrated approach to
effect of the brakes.
now, and will benefit even more strongly
vehicle safety is therefore desirable. The
in the future from electronics and sen-
target of a vision of accident-free driv-
sor technology. Occupant restraint
ing can only be brought closer to reality
“brake assistant” uses leading-edge
systems will become more effective and
by an intelligent combination of all the
technology to reduce stopping dis-
provide the occupants of smaller vehi-
available vehicle safety measures.
tances. It identifies a risk situation by
cles with an even higher level of protection. Sensors are already being used to
A system usually referred to as a
analysing the driver’s reaction and
In addition to active safety, that is
builds up full braking pressure in a frac-
move the vehicle’s occupant restraint
to say brake-system and running-gear
tion of a second - something that many
systems to the correct position for trig-
measures, sensors capable of look-
drivers would be unable to achieve in
gering off before a collision actually
ing ahead in the pre-crash phase and
such a situation. The brake assistant
occurs. The seat back can for example
passive safety features, emergency
uses electronic sensors that identify the
be reset to a position that offers opti-
call systems complete the picture. It is
need for a full brake application from
mum crash protection. Such systems
therefore important for the complete
the speed with which the brake pedal is
can also close the sliding sunroof before
system rather than part-systems only to
depressed. Investigations using a driving
an impending crash, in order to prevent
be examined in greater detail.
simulator have shown that 45 percent
intrusions through the open roof panel.
All these are systems that take preventive action in the “pre-crash phase”, that
is to say when an accident is identified
as unavoidable.
of all accidents to pedestrians during
Driving with reserves in
hand – active safety is
accident avoidance
which the driver applied the brakes
could have been avoided if this device
had been installed.
Not much more than twenty years
ago, an anti-lock brake system (ABS)
The automotive industry is devot-
was still an option for which an extra
ing considerable effort and expense to
gate the consequences of accidents,
charge was made. This system has
the search for further means of avoid-
they cannot prevent them from occur-
meanwhile become standard equipment
ing accidents. As the vehicle’s central
ring, for example if the driver is tired or
on almost every new vehicle. This year it
control element, the steering system is
inattentive, or reacts incorrectly when a
is fitted for the first time to all new cars
also under investigation. To an increas-
hazardous situation arises. Insurers have
reaching the road in Europe. This is not
ing extent, electronically aided systems
Although passive systems can miti-
158
are being used, since they enable func-
forces and lower roll resistance. The tyre
driver with more complex information,
tions such as steering force and angle
is now regarded as part of a complete
the average number of in-car sensors
to be influenced as a means of assisting
system comprising car, running gear
can be expected to increase.
the driver. Pure “steer-by-wire systems”
and brake, and its characteristics as a
with no mechanical back-up cannot be
high-tech product will be utilised as a
expected to reach high-volume series
source of information for future suspen-
area alone, numerous sensors are used
production in the short term, but legal
sion control and brake systems. This
to collect information on the vehicle’s
regulations have now been adapted in
will include sensor systems that detect
dynamic behaviour, and ABS, the basis
such a way that these modern steering
stress values in the tyre sidewalls as an
for many active-safety regulating sys-
systems can be granted an operating
indication of wheel contact forces.
tems, is inconceivable without sensor
technology and electronics.
permit. UN ECE Regulation 79 (steering systems) envisages the granting
of permits to electrical and electronic
steering systems if they satisfy certain
In the overall chassis management
Cars learn to see – sensors
as a key to vehicle safety
Sensors of a large number of different patterns are used according to
Much of the progress that has
safety-philosophy requirements, in
been made in vehicle technology would
the tasks they are intended to perform.
other words if they are “fail-safe” in the
have been unthinkable without sen-
Dynamic vehicle control, for example,
sense of permitting the steering still to
sors. They are indispensable for modern
calls for wheel speed, lateral accelera-
be operated. This can only be achieved
vehicles’ driveline, safety and ride-
tion and yaw-rate sensors; these gener-
by means of redundancies, which must
comfort systems, and the number in
ate electrical signals that are evaluated
even include the systems’ power supply.
use is increasing all the time. Bearing
electronically and supplied as signals to
in mind increasingly stringent demands
the relevant computer.
The tyres too are far more than
in the future in the emission reduction,
merely a link between the vehicle’s run-
road safety and crash protection areas,
ning gear and the road. As high-tech
together with the wish to supply the
Radar sensors have also been developed as a means of registering condi-
components, their properties determine
the character of the vehicle. They influ-
Sensors to detect ambient conditions
ence ride comfort, road behaviour,
steering response and indeed road
safety; in addition, the tyres have an
LRR radar
(77 GHz)
IR sensor
Ultrasonic, side
effect on the vehicle’s economy. Roll
resistance is an important factor in
the search for lower fuel consumption. If it can be reduced by 30 percent,
for instance, fuel consumption will be
almost five percent lower.
Recent demands made of tyre development engineers go beyond current
development objectives such as reduced
Video camera
noise, improved traction and dynamic
stability, absorption of higher lateral
Source: Audi/VDA
Ultrasonic, front/rear
UMRR radar
(24 GHz)
Annual Report 2005
tions in the area farther away from the
159
Vehicle-to-vehicle communication
vehicle, and there are also video and
infra-red sensors. The radar sensors
employ two frequencies: 24 Gigahertz at
the moment, but from 2013 onwards the
changeover to 77-Gigahertz technology
will have been completed.
Together with ultrasonic sensors
and local-area radar – used for example
when the vehicle has to be reversed
– the result is something of a “sensor
landscape” which enables the vehicle
to “see” in a manner not too far different from a human being’s sensory
organs. This development is based on
Source: Audi/VDA
Vehicle-to-vehicle:
Simple sensors:
:
Better than the driver
Worse than the driver
Complex sensors:
“As good” as the driver
electronic components that will acquire
even greater significance in the cars of
the future.
Ongoing technological development
This new sensor system has been
car’s local-area sensors, to evaluate
conceived as a complement to local-
them and to make the information avail-
area sensors. It is intended to identify
able to the driver.
events occurring some distance away
is in no way aiming to replace the driver
from the vehicle and therefore not vis-
with an “automatic driving” situation. On
ible to the driver or detectable by the
If for instance a car equipped with
vehicle-to-vehicle communication
the contrary, its purpose is to reduce the
driver’s task burden – which is growing more and more complex as a result
of increasing traffic density – without
depriving him of his authority.
Vehicle-to-vehicle
communication
VDA Research Conference:
Focus on Future
Technologies
representatives of politics, the automotive industry and research.
With a view to promoting the climate
The two fundamental tenets of
of innovation in Germany and supporting
future individual mobility are active
automobile manufacturers’ and suppli-
safety and integrated, environmentally
Vehicle-to-vehicle, or alternatively
ers’ research activities, the VDA held a
friendly improvement in transport qual-
vehicle-to-infrastructure communica-
Research Conference for the first time
ity. The Research Conference gave the
tion is a specific indirect-vision system.
on July 13, 2004 in Stuttgart. Its motto
public a good impression of the current
Its primary purpose is to improve active
was “The Automotive Industry – Motor
state of, and future developments in,
safety, in other words contribute to acci-
of Innovation”. The event was attended
automotive research.
dent avoidance. However, this system
by Federal German Chancellor Gerhard
is unlikely to reach the market in the
Schröder and Baden-Württemberg’s
near future: widespread introduction will
Prime Minister Erwin Teufel as guests
probably only be possible in the course
of honour and by many other leading
of the next decade.
The next VDA Research Conference
will be held in mid-2006.
160
identifies an obstruction, traffic conges-
the braking pressure to prevent this,
announced that by 2006 at the latest
tion or an accident, this information is
ESP uses additional sensors that enable
most of their sport utility vehicles (SUVs)
transmitted to other similarly equipped
the electronic control unit to compare
will be equipped as standard with this
vehicles and their drivers thus warned in
the driving condition called for by
safety system.
good time – sooner than would be pos-
the driver (operation of the steering,
sible today.
brakes or accelerator) with the vehicle’s
According to the latest accident
actual dynamic condition. The individual
investigation reports, vehicles with ESP
One can justifiably speak of “extend-
wheels’ speeds of rotation are detected
are far less often involved in dynamic
ing the driver’s horizon”. He or she could
as with ABS, but also the steering angle,
accidents (those in which the driver
for instance be warned, when climb-
momentary lateral acceleration, the driv-
loses control of the vehicle, which skids
ing a gradient, of an accident that has
er’s call for acceleration or deceleration
and leaves the road) than vehicles with-
occurred over the top of the hill and
and the vehicle’s yaw rate (its speed of
out this system. According to data from
could therefore never be seen in time.
rotation around its vertical axis).
one manufacturer, the proportion of
Similarly, an oil slick at a motorway exit
point could be notified to approaching
traffic.
These are only a few examples.
such accidents went down by more than
ESP comes into action if there is a
42 percent in 2002/2003 thanks to ESP.
risk of the driver losing control of the
Other manufacturers have achieved simi-
vehicle and of it skidding. Individual
lar results with their own models, and
wheel brakes are applied to a controlled
in 2003 the American National Highway
Conceivably the driver could not only
extent as a means of turning the vehicle
Traffic Safety Agency (NHTSA) estab-
be warned but in the event of a sudden
in the desired direction and thus pre-
lished that ESP, which is referred to as
severe hazard the car’s assistance sys-
venting it from skidding or leaving the
ESC (Electronic Stability Control) in the
tems could be activated and an emer-
road, though of course such corrective
USA, reduced dynamic road accidents
gency brake application made.
action is subject to the limits imposed
by 35 percent. The drop in accidents of
by the laws of physics.
this kind in which only one vehicle is
ESP has reduced the
number of accidents
In view of the ability to brake
involved was particularly significant in
ESP was introduced in 1995 and
has since been installed on almost
the case of sport utility vehicles (SUVs),
at 67 percent.
individual wheels that is available on
all passenger cars and also on heavy
vehicles equipped with ABS, engineers
commercial vehicles. In 2004, some 64
at vehicle and brake system manufac-
percent of all new passenger cars in
accident researchers have reached the
turers have devoted much thought to
Germany had ESP; the figure for France
conclusion that ESP is now a live-saving
means of improving the dynamic road
was approximately 39 percent and the
measure second only in significance to
behaviour of cars and commercial
average for Europe as a whole about
the seat belt. This impressively confirms
vehicles still further. The electronic vehi-
36 percent. The ESP installation lev-
the overwhelming importance of ESP for
cle stabilising systems that they have
els in Japan and North America were
road safety, a circumstance that gains in
developed are known by the general
distinctly lower: just over 10 percent
importance in view of the EU Commis-
abbreviation “ESP” (Electronic Stability
in the USA and lower still in Japan.
sion’s intention to reduce road fatalities
Programme).
Most of the cars with ESP in the USA
by half in EU nations between 2000 and
are currently imports, but a change is
2010. Achieving the most rapid possible
taking place: the three large automo-
spread of ESP will be a decisive factor
bile manufacturers in the USA have
in this respect.
Whereas ABS identifies any tendency of a wheel to lock and regulates
After evaluating 600 accidents,
Annual Report 2005
It is particularly important for the
161
Most of the member nations have
is played by all concerned. The automo-
safety benefits of ESP to take effect as
not yet seen their way to undertaking
tive industry has emphasised on several
soon as possible with regard to buses
this commitment. It is also essential to
occasions its willingness to cooperate,
and coaches and to vehicles for the car-
ensure the participation of other active
but has always drawn attention to the
riage of hazardous materials. For the lat-
participants such as telecommunication
fact that it cannot bear the main burden
ter, the German government has already
companies or insurers. A workable busi-
of this process but can only support it,
submitted suitable proposals to the UN
ness model for the introduction of e-call
since the provision of rescue services is
ECE, the body responsible for vehicle
can only be developed if an active part
primarily a public obligation.
safety at the UN in Geneva. German
manufacturers are offering ESP in all
cases on their latest large coach models,
and in Denmark ESP will be compulsory
Pedestrian Protection
on coaches weighing more than
12 tonnes from July 1, 2005 onwards.
e-safety for an even more
effective rescue system
In the spring of 2003 the EU Com-
Automotive industry
concentrates on accident
avoidance
Intensive discussions took place in
weight limit of 2,500 kg and also to light
commercial vehicles derived from them.
Although Phase 1 of the directive
mission, in cooperation with the
the spring of 2005 between the automo-
makes allowance for problems of tech-
automotive industry, established the
tive industry and politicians with a view
nical feasibility in the development of
“e-safety Forum”, the task of which is
to ensuring better protection for pedes-
vehicle bodies, its implementation none
to promote the introduction of modern
trians and other road users.
the less calls for extensive modifications
assistance systems and information and
communication applications in road
in this area. Reshaping of the nose end
The background to this activity
of the vehicle may also involve changes
transport as a means of achieving fur-
was EU Directive 2003/102/EC on the
to load-bearing body elements and a
ther improvements in road safety.
subject of pedestrian protection. The
straightforward “face-lift” may not be
requirements set out in this directive
sufficient to achieve the desired result.
One of the priorities of this initiative
are intended to minimise as far as pos-
concerns the introduction of e-call sys-
sible the consequences for pedestrians
tems. These will make emergency calls
of being involved in an accident with
onwards, the limit values and the
on the Europe-wide number 112 direct
a passenger car. This aim is to be
general testing requirements will be
from the vehicle, with automatic loca-
achieved by shaping the front end of the
more severe. In view of the implemen-
tion of the affected vehicle as a means
cars in a manner less likely to injure the
tation problems already referred to,
of minimising loss of time between the
pedestrian if he or she is struck by the
it was agreed when the EU directive
accident and the arrival of rescue-
vehicle. For this purpose standardised
was promulgated that the feasibility of
service vehicles. However, before e-call
tests have been developed with the aim
Phase 2 should be re-examined in 2004.
can be introduced on a widespread
of reducing the loads imposed on the
However, a precondition for a possible
basis, the member nations in particular
legs, hips or head. Directive 2003/102/
revision of the contents of the directive
must first build up the necessary infra-
EC is to be introduced from the autumn
is that changes to the requirements
structure and equip the rescue control
of 2005 onwards in two phases, and will
should not have any adverse effects on
centres accordingly.
apply to all passenger cars up to a gross
pedestrian protection. For this reason,
For Phase 2, applicable from 2010
162
evidence has to be produced to the
Stopping distances with and without brake assistant
effect that the modified requirements
achieve the equivalent results.
Stopping distances from 100 km/h
Inadequate driver reaction
Various studies undertaken by the
automotive industry and by a testing
institute commissioned by the European
with BA
Hesitant driver reaction
measures currently planned for Phase
have been raised, such as the unavoid-
73
without BA
Commission have established that the
2 are not feasible. Various objections
40
with BA
40
46
without BA
able conflict of objectives with statutory
crash requirements and the possible
Source: VDA
impracticability of certain essential solutions. For example, reducing the rigidity
of an engine-compartment bonnet panel
the driver’s wish to make an emergen-
investigated, no accident would have
could prevent it from being attached
cy brake application and activates the
occurred at all: a figure that makes it
firmly to the body and transmitting the
vehicle’s brake servo. In this way the
clear why the automotive industry would
necessary forces.
vehicle is decelerated at the maximum
prefer to concentrate more on active
available rate even if the driver has not
safety measures.
The automotive industry has submitted a proposal for the reformulation of
applied the brakes in the most appropriate manner.
the Phase 2 requirements. This combines passive requirements modified to
On the basis of the activities
described above, the European Com-
In this way the speed at which, for
mission will, by the summer of 2005,
allow for practical conditions with active
instance, a pedestrian is struck can
publish an official proposal for the
safety measures aimed at avoiding
be greatly reduced or in ideal circum-
amendment of Phase 2 of the EU direc-
accidents from the outset or at the very
stances the impact avoided altogether.
tive on pedestrian protection, which
least reducing their severity. The key
element in this respect is for vehicles to
be equipped with a brake assistant.
will then require the approval of the
Studies devoted to the equivalence
of the industry’s proposal indicate that
Council of Europe and the European
Parliament.
the probability of a collision having
The brake assistant as the
key to further improved
pedestrian safety
fatal consequences or resulting in very
Above and beyond these develop-
severe injuries, if the overall conditions
ments in the European Union, a group
proposed by the industry including the
of experts from the UN ECE Passive
“Brake assistants” are systems
adoption of the brake assistant apply,
Safety working group is looking into the
that help to slow the vehicle down at
can be reduced by more than 10 per-
question of pedestrian protection. The
the optimum rate if a risk situation is
cent below the original figure. This com-
aim of these discussions is to draw up
encountered. By detecting the bra-
plies in full with the EU directive.
a worldwide harmonised international
king force actually generated or the
speed with which the brake pedal is
depressed, the brake assistant detects
pedestrian protection regulation known
This disregards the fact that in
almost eight percent of the events
as the Global Technical Regulation
(GTR).
Annual Report 2005
163
for unified international regulations to
be taken by Phase 2 of the EU directive
by Japan, reached a decisive phase
be available by 2005 at the latest. The
represents a particular challenge for
at the end of 2004, since the aim is
parallel discussion of the final form to
both politics and industry.
The discussions, which are chaired
Safety in road traffic: Efficiency through partnership
The behaviour of road users is a
two different methods: by interview and
Furthermore, the study finds that
decisive factor in traffic flow and safety.
by experimental studies on the driving
in addition to its effect on traffic effi-
A new study by the Association for
simulator. The optimisation potential
ciency, behaviour in traffic greatly
Research in Automotive Technology
represented by partnership in road traf-
influences “well-being in traffic” (the
(FAT) has drawn up measures and rec-
fic was then quantified by means of a
“traffic climate”). This term is marked
ommendations capable of influencing
traffic flow simulation.
by the emotional state of those involved
road users in such a way as to permit
optimum operation of the road traffic
system.
and the individual burden imposed on
The results show that partnership
them. The results are being incorporated
and professional behaviour among road
into traffic education measures, traffic
users is not a constant factor, but that
management and the design of in-car
such behaviour is only optimal if it lies
telematic systems. All in all, the results
sive relationship between overall traffic
between the extremes “egoistic” and
of the study could lead to an improve-
objectives and the individual intentions
“cooperative”, depending on traffic
ment in traffic efficiency.
of road users, that is to say the state of
density and the actual traffic situation.
competition existing between them, and
In heavy traffic, for example, allowing
FAT Study Vol. 181 “Increasing
the manner in which the latter react.
vehicles from side roads to enter the
Efficiency by means of Professional
Cooperative behaviour motives in road
traffic flow despite one’s own prior-
Behaviour and Partnership in Road
traffic and the emotional state of indi-
ity reduces the efficiency of the entire
Traffic” can be purchased for a charge
vidual road users were investigated by
system.
from broschueren_fat@vda.de.
This involved determining the deci-
Light and Visibility
A vehicle’s lighting is of great
and variable light intensity according to
light beams around corners. More and
importance for active road safety. It not
requirements are currently under devel-
more models are being offered with this
only enables the driver to see better,
opment.
“bend lighting”. Another active current
but also to be seen by others. Progress
in lighting technology has been
extremely rapid in recent years, and
development is the Advanced Front
Bend lighting and AFS
Today’s cars no longer obstinately
Lighting System (AFS). In this case,
manufacturers are adopting active bi-
these developments are by no means
illuminate the road straight ahead, but
xenon bend lighting units with an addi-
complete. Adaptive lighting systems
are now capable of directing their head-
tional cornering light.
164
Innovative headlamp technology AFL (Advanced Forward Lighting)
angle. The system is switched off again
after a predetermined time has elapsed:
the cornering light is dimmed in order
to avoid distracting the driver from the
traffic situation. The delayed switchoff also means that when parking the
car or driving it away from a parked
position, an activity that calls for the
steering to be turned from one lock to
another, the road is ideally illuminated
without the system switching between
the left- and right-hand cornering lights.
Combination of the curve and cornering light systems is a logical step for
Source: Opel
the future. The active bend light takes
effect at long range, when the car is
being driven on twisting roads at mod-
Fields of view when taking a left-hand corner
by day and by night
erate to high speeds, and is capable
of extending the illuminated area by
up to 90 percent. The cornering light,
on the other hand, is mainly needed at
close range, when negotiating bends
in the road or turning corners slowly,
and helps for example to detect the
presence of pedestrians or obstructions
Driving by day, 38 m
much more rapidly.
Driving by night with
XENON curve light, 36 m
Driving by night with
halogen headlamps, 24 m
Daytime running lights
(DRL)
As part of the agreement on pedesSource: Study by TU Darmstadt
Measurement of eye movements
when driving
trian protection concluded between
the ACEA (Europe), JAMA (Japan) and
KAMA (Korea) automobile manufactur-
Source: Opel
ers’ associations and the EU Commission, the automobile manufacturers
turns a corner at slow speed, depend-
undertook to introduce daytime driving
area to one side of the front of the vehi-
ing on the steering angle, the actual
lights on all new vehicles, starting in
cle at an angle up to 65 degrees and for
road speed and whether the flashing
2002. However, the Commission deleted
a distance of approximately 30 metres. It
turn indicators were operated. The latter
the daytime running lights from the
comes into operation when the vehicle
function takes priority over the steering
agreement until such time as the mem-
The cornering light illuminates the
Annual Report 2005
ber nations could agree on their intro-
increased fuel consumption caused by
duction. In view of the different ambient
operation of the lights.
light conditions prevailing in Europe,
certain southern European nations in
165
■ the illuminated area used for the
signal function, which can be varied
in order to attract greater attention
Whereas the periods allowed for
■ the frequency, which is currently
particular declared their opposition to
the first two stages and the transition
the introduction of daytime driving lights.
times can be chosen relatively freely, the
only utilised for the turn indicators
third stage needs as much lead time as
and hazard warning flashers, as an
possible, though voluntary introduction
additional warning signal function
The European Union has commissioned a study to clarify the situation
at an earlier juncture would of course
regarding the use of daytime running
still be possible. It is important for the
lights. This assumes that such lights will
industry to operate on the basis of reli-
that could be indicated adaptively by
have a positive effect on road safety.
able overall legal conditions.
the three methods listed above can be
On the basis of the study and in view of
the economic aspects of an introduction
strategy, the automotive industry considers introduction in several stages to be
desirable, namely
■ recommended DRL usage,
The changes in the driving situation
grouped under four headings:
Adaptive rear light
concepts
The basic rules concerning rear
■ Hazard situations: these are situations requiring braking to an un-
lights date back to 1950. There have
usual extent or indeed an emergency
been many successive amendments and
brake application or when ABS or
additions to them, but in principle vehi-
ESP are activated
cles are still equipped with rear lights
■ mandatory use of DRL for all motor
vehicles and finally
■ technical dedicated DRL option.
The first stage, which could for
operating at a single intensity despite
■ Ambient light level: this must take
the very wide variety of ambient condi-
differences in the eye’s adaptation
tions that they encounter. Introduction
to light levels into consideration
of the rear fog light in 1975 made it
clear for the first time that an improved
■ Weather conditions: depending on
signal image is essential when visibility
the degree to which they exert an
example last for a year, is primarily
conditions are critical. This was also
influence on light transmission, rain,
aimed at increasing public acceptance.
achieved in respect of the braking sig-
snow and fog will call for the light
The second stage, possibly of four
nal when the third, raised brake light
intensity of the signal to be varied
years’ duration, could achieve a greater
was introduced.
■ Contamination with dirt also affects
depth of acceptance and at the same
time provide automobile manufactur-
The latest development work is
the visibility of the lights and can be
ers with sufficient time to incorporate
aimed at creating an adaptive signal
compensated for either by cleaning
specific daytime running lights as part
system. The parameters available for
them or by increasing their bright-
of the model renewal cycle, thus avoid-
this are:
ness
ing cost-intensive modifications during
series production. In the third and last
■ the brightness and light intensity of
Dynamic hazard brake
signal
stage, the aim would be to optimise the
the signal function, which can for
only major disadvantage of daytime run-
example be used to adapt it to vis-
ning lights on all new models, namely
ibility conditions and the ambient
attention to the desirability of not
higher CO2 emissions as a result of the
light level
merely indicating to following traffic in
Many publications have drawn
166
The braking signal is displayed at a
Dynamic hazard brake signal
considerably higher frequency than any
other light signals, for example the turn
indicators. The use of light-emitting
diodes (LEDs) opens up quite new possibilities in this respect. A frequency of
some seven cycles per second or above
has been found to be particularly satisfactory, but cannot be obtained from
incandescent bulbs on account of their
inertia.
Switching on the hazard warning flashers in addition to the brake
light signal in the event of a panic brake
application has also been discussed.
Source: Hella
This is the current state of the art on
some vehicles; the driver can also
switch the hazard warning flashers on
principle that a vehicle is being slowed
kind. By increasing the illuminated
by braking but also of communicating
area or using a flashing signal, follow-
the strength of the brake application.
ing traffic can be warned that an emer-
A modification proposal initiated by
gency brake application has been made.
Adaptive lighting
management
The aim of adaptive lighting man-
the German automotive industry calls
for flashing brake lights to be permit-
manually if necessary.
The effective warning character of
agement is to ensure the same levels
ted above a given level of retardation.
a flashing signal is being currently
of perception and identification of sig-
A hazard braking signal can also be
being investigated at international level.
nals in varying ambient brightness and
indicated by increasing the illuminated
signal area.
Adaptive lighting management
An emergency brake signal should
therefore be limited to a situation in
which a genuinely high rate of retardation occurs. Experts consider a value
of six metres/sec² to be appropriate.
Since uncontrolled driving situations
are regarded as particularly critical, any
lengthy intervention by active driver
assistance systems such as ABS or ESP
should, basically speaking, also trigger
an emergency braking signal of this
Source: Hella
Annual Report 2005
167
Fields of view currently required
weather conditions. The basic concept
in this case is for the intensity of the
brake lights, flashing turn indicators and
rear lights to be regulated if visibility is
hampered by rain, snow or fog, or if the
eye adapts differently to the brightness
level. This could also take contamination
Blind spot
Old ramp
mirror V
of the rear lights with road dirt in poor
Primary mirror II
Truck
weather into account. Light intensity
would be regulated by brightness sensors, with which vehicles are already
equipped in some cases. The degree of
contamination can also be detected by
suitable sensors.
Source: VDA
Experts are of the opinion that
adaptive systems would provide the
Despite the positive general trend in
posal as early as 1999 for improvements
best possible signal image for following
accident statistics, there is still a need
to the European directive on mirrors
traffic.
for action, at cross-roads and junctions
(71/127/EEC). In addition to the optimisa-
where visibility is poor and in particular
tion of truck mirror systems with a view to
when large commercial vehicles and
eliminating the “blind spot”, the industry
pedestrians or cyclists meet. The German
also proposed that in future electroni-
automotive industry identified this prob-
cally aided driver assistance systems for
lem at an early stage and drew up a pro-
improving visibility should be permitted.
Better rear vision for truck
drivers
“Seeing and being seen” remains
a fundamental necessity for safe road
traffic. In addition to the latest lighting
technology, this presupposes that the
Fields of view required in the future
driver has the largest possible direct
field of view, but the indirect field of
view (that is to say the view provided by
auxiliary devices such as mirrors, cam-
New wide-angle mirror IV
(incl. truck requirement)
era systems and infra-red or radar sen-
Ramp
mirror V
sors) must also be capable of supplying
Primary mirror II
the driver with the most complete information possible about the surrounding
Truck
area when manoeuvring or turning
a corner. Here too, an all-embracing
safety approach must be adopted, since
the mirrors that are needed to enhance
indirect vision must not interfere more
than absolutely necessary with the
direct view to the front or sides.
Source: VDA
168
The VDA’s proposal was submitted
been advocated as a ideal solution, but
In this connection the German com-
to the EU in Brussels by way of the Ger-
also avoid any obstruction to the driv-
mercial vehicle industry gave an under-
man Federal Transport Ministry. After
er’s direct forward view and can also
taking to the German Federal Minister
detailed discussions, the new mirror
easily be adjusted by the driver.
of Transport to fit these ramp and wide-
directive was published early in 2004.
Since the automotive industry was
angle mirrors to new commercial vehicles
Any attempt to comply with regula-
from September 2004 onwards, the date
closely involved in the preparation of
tions calling for the elimination of the
of the German Commercial Vehicle Show
these regulations, it has proved possible
blind spot by means of a single front
in Hanover, and by the end of March 2005
to introduce new mirror systems that
mirror would result in two severe disad-
to equip all new commercial vehicles
minimise the blind spot at an early stage
vantages: the mirrors would reduce the
from 7.5 tonnes upwards with this mirror
for trucks above 7.5 tonnes, despite the
driver’s direct forward field of view and
system. It has also undertaken to make it
fact that the regulations only come into
cause additional, and above all avoid-
possible for the system to be retrofitted to
force fully in 2007.
able obstructions capable of almost
commercial vehicles already in use.
completely concealing a person 1.75
German commercial
vehicle industry introduces
the latest mirror systems at
a very early stage
On June 16, 2004 the VDA displayed
metres tall. Furthermore, adjustment of
this type of mirror is extremely difficult
industry has kept its promise: VDA
for the driver, particularly since there is
members that manufacture heavy com-
no direct reference position in relation
mercial vehicles are now fitting all of
to the vehicle.
them with the new ramp and wide-
the new ramp and wide-angle mirrors to representatives of the German
The German commercial vehicle
angle mirrors, and conversion systems
The German commercial vehicle
for vehicles already in use are on sale.
Federal Transport Ministry, the media
industry has demonstrated that there
The German Federal Transport Ministry’s
and other interested groups. It was
is a better solution, by introducing new
rapid approval of these measures under
demonstrated at the same time that the
ramp and wide-angle mirrors at an early
vehicle operating law has contributed
mirror systems on display are not only
stage, namely two years and six months
greatly towards achieving the necessary
far superior to the front mirrors (known
before the new EU directive is sched-
degree of acceptance for retrofitting
as “Dobli” mirrors) that have frequently
uled to come into force.
among truck operators.
Safety of Vans, Trucks and Buses
Convincing arguments
against a speed limit for
vans
More and more goods have to be
ited flexibility, variability and adaptability.
for vehicles in this category weigh-
It is therefore not surprising that the
ing between 2.8 and 3.5 tonnes to be
number of vans licensed for the road
subject to an autobahn speed limit. It is
has gone up rapidly in recent years.
certainly true that the number of vans
moved from door to door quickly, safely
and flexibly in small quantities. Vans
involved in autobahn accidents has
Accidents involving vans have been
been rising for some time now. How-
are particularly suitable for this task – a
the subject of discussion in Germany
ever, this is largely due to the steep rise
class of vehicle offering almost unlim-
for some time, together with the call
in the vehicle population. If this factor is
Annual Report 2005
taken into account, the relative accident
■ The detailed analyses show that the
169
road, the transport ministers have voted
frequency drops significantly. It is also
accident risk for vans on autobahns,
to adopt a comprehensive package of
evident that the number of vans in use
related to the distance covered, is
statutory and administrative measures
has risen much more rapidly than the
about the same as for passenger cars.
aimed at the causes of these accidents.
number of accidents in which these
vehicles were involved.
It is also felt that the measures initiated
■ More than half of the fatal accidents
on autobahns occur in speed-limited
In order to obtain reliable informa-
by commercial vehicle manufacturers for the ongoing optimisation of the
areas where road works are taking
vehicles’ safety equipment, together
tion on accidents in Germany involving
place or speed-reduced areas with-
with improved training of the drivers, are
vans, the German Federal Ministry of
out road works, in other words sec-
more likely to achieve success.
Transport has commissioned the Fed-
tions of road on which speed limits
eral Highway Research Institute (BASt)
already apply.
to investigate the accident situation
throughout Germany, taking the dis-
In its concluding report, the BASt
Manufacturers of vans
concentrate on safety
Manufacturers that are members of
tances covered by these vehicles into
points out explicitly that the detailed
the VDA have fulfilled their responsibil-
consideration. The investigation relates
analyses have not revealed any reli-
ity to enhance the level of protection
specifically to vans with a gross weight
able evidence that imposing a statutory
afforded to the driver and other road
limit between 2.8 and 3.5 tonnes, since
speed limit of 120 or 130 km/h on vans
users by adopting more and more effec-
this segment is suspected of represent-
in the weight category between 2.8 and
tive safety technologies. There have
ing a particularly high accident risk, and
3.5 tonnes would significantly reduce
been quantum leaps forward in the
in addition the proposals made by the
the frequency or severity of accidents
active and passive safety of vans in
Transport Ministers of the various Feder-
on German autobahns.
recent years; modern vans are noted for
excellent roadholding and stability when
al States envisage a speed limit for this
vehicle category and weight segment.
These conclusions strongly support
cornering, and have highly efficient disc
the decision taken by the majority of the
brakes. Their road behaviour and stop-
The results stated in the conclud-
Federal States’ Ministers of Transport in
ping distances have also been signifi-
ing report from the BASt clearly show
March 2004, when they declared them-
cantly improved.
that a speed limit for vans would not be
selves opposed to the introduction of
justified:
a speed limit for vans on the autobahn
Electronic safety systems have also
because they did not anticipate such a
improved these vehicles’ level of safety:
limit to have any positive effects. The
many vans feature power steering, an
an accident with injury to persons,
same opinion was voiced in January
anti-lock brake system (ABS), trac-
related to the distance covered, is
2004 by experts at the 42nd German
tion control (ASR) or a brake assistant
about twice as high in built-up areas
traffic courts’ conference, who also
as standard equipment. The electronic
as on country roads. On German
rejected the notion of a speed limit on
stability programme (ESP) has also
motorways, the risk of accidents
autobahns for vans weighing between
made its appearance on a number of
involving vans is in fact only one
2.8 and 3.5 tonnes.
vans. In addition, there have been dis-
■ The risk of vans being involved in
tinct improvements to the load securing
eighth as high, in other words the
lowest overall accident risk levels
In order to reduce the risk of acci-
devices in the form of load-area parti-
apply when vans are driven on the
dents involving vans not only on auto-
tions, lashing eyes in the load-area floor,
autobahn.
bahns but also on all other categories of
load securing rails in the side panels and
170
Our politicians must also take on
anti-slip load-area flooring materials. The
of loads were satisfied, subject of course
new edition of German Industrial Stand-
to the drivers and loading personnel
a share of this responsibility: many
ard DIN 74510-3, which appeared in
undertaking this task correctly. Even the
public tender invitations pay little heed
2004, took a further step in this direction
best safety systems cannot relieve driv-
to the vehicles’ safety equipment, yet
by laying down minimum requirements
ers of responsibility for their personal
public authorities in particular are ideal-
for load securing devices in vans.
safety and that of other road users. With
ly placed to set a good example in the
this in mind, many manufacturers offer
safety area.
In this way, all the necessary preconditions for the professional securing
driving safety training courses for van
drivers.
Improved load securing on
heavy commercial vehicles
In order to improve the securing of
Higher standards for the
securing of loads in vans
VDA members that manufacture
head between the driver’s cab and the
loads on heavy commercial vehicles as
load area, the following two tests were
well, the Advisory Committee of VDA
decided on:
Manufacturers’ Group II (“Trailers and
Bodies”) has recommended the revi-
vans and bodies and those that supply
components for these vehicles, as well
■ Test 1: use of a testing die of small
sion of European Standard EN 12642
as representatives from the industrial
surface area (50 x 50 mm) to deter-
(“Load lashing points on commercial
accident insurers, the Federal German
mine the resistance of the bulkhead
vehicles carrying freight”), with the aim
Freight Haulage Logistics and Disposal
to penetration by small, heavy loads
of having more stringent requirements
Association (BGL), the DEKRA, the
(e.g. rods, tubes or pressurised cylin-
included. A working group from the
Institute for Motor Vehicle Safety (IFM)
ders; test force: 0.3 x payload.
Motor Vehicle Standards Committee
(FAKRA), together with experts from
in the German Insurance Companies’
Federation (GDV) and the Association
■ Test 2: use of a testing die of large
the vehicle and body manufacturers, the
of Motor Vehicle Importers (VDIK), have
surface area (1000 x1000 mm) to
supply industry, the industrial accident
all contributed actively to the new edi-
determine whether the bulkhead is
insurers, the TÜV and DEKRA vehicle
tion of German Industrial Standard DIN
firmly anchored in the structure of
inspection organisations, the police and
75410-3 “Securing loads in box vans and
the vehicle’s body. In this case the
representatives of the BGL, BVM, VDA,
delivery vans”.
test force is to be higher, namely
VDIK, VDHH and ZKF trade associa-
0.5 x payload.
tions, has drawn up proposals for the
extension of the requirement profile and
The central factor was above all an
increase in the minimum demands that
With regard to the revised version
the adoption of higher standards. The
load securing devices in vans had to sat-
of the standard it should be noted that
resulting position paper envisages a
isfy. The maximum permissible distances
more stringent requirements (effective
two-stage concept:
between load lashing points inside the
regulations) have been defined, but that
vehicle in a longitudinal direction were
manufacturers have also been allowed
reduced, so that more lashing points will
as much design freedom as possible.
standard bodies (equivalent to the
be normally available in the future.
The standard’s more stringent require-
current EN standard)
■ Requirements to be satisfied by
ments are being incorporated into new
With regard to the more stringent
demands to be satisfied by the bulk-
vehicles.
■ More stringent requirements for
strengthened vehicle bodies
(optional)
Annual Report 2005
171
It is gratifying to note that wide-
ern coaches have distinctly more rigid
the people who drive these vehicles.
spread support for this concept was
body structures and greater resistance
The law imposes high standards on
expressed within a relatively short time
to damage in the event of their rolling
those who wish to drive a bus or coach
by the European standardisation bodies.
over. Their standard specifications today
professionally, including the need to
The German amendment proposal was
include numerous electronic safety com-
acquire a special driver’s licence for
published as European draft standard
ponents such as an anti-lock braking
passenger vehicles and a health check
prEN 12642 in December 2004. The
system (ABS), traction control (ASR)
to ensure suitability for the job in this
period set aside for objections ends
and, to an increasing extent, electronic
important respect too. Every five years,
midway through 2005 and the new issue
control of vehicle dynamics. Since mid-
this driving licence has to be renewed
of the European standard is expected to
2004, for instance, all the German bus
and this procedure is accompanied by
appear in the second half of 2005.
and coach manufacturers that are mem-
a further health check and an eye test
bers of the VDA have equipped all their
conducted by an ophthalmologist. On
Buses and coaches remain
the safest form of transport
new coach models with dynamic driving
reaching the age of 50, bus and coach
systems (FDR, ESP). In this way the
drivers have to undergo a thorough
The bus or coach remains uncon-
German manufacturers have once again
examination including orientation, ability
testedly the safest form of transport. This
demonstrated the leading role they play
to concentrate and to withstand stress
is borne out very clearly by the official
in the safety area. Further innovative
and reaction times. Furthermore, bus
statistics issued by the German Federal
driver assistance and warning systems
and coach drivers are forbidden to drink
Statistics Office. Buses or coaches are
such as lane maintenance assistance,
any alcohol whatsoever.
involved in only 1.6 percent of all road
cruise control with distance monitoring
accidents in which injury to persons
and night-vision devices are already
occurs, in other words less often than
available or will be offered soon.
any other form of road transport. The
risk of suffering fatal injury in an acci-
German bus and coach manufacturers, associations and operating companies, however, are not even satisfied
Trust is good, control is better. For
with these stringent requirements, but
dent is 44 times lower in a bus or coach
this reason, buses and coaches, unlike
also offer additional training to as many
than as an individual road user, 15 times
passenger cars, have to undergo a
drivers of their vehicles as possible. This
lower than in an aircraft and four times
major inspection every year, with fur-
includes participation in safety training
lower than when travelling by train.
ther technical inspections every three
and driving proficiency programmes and
months, depending on the vehicle’s
other further training seminars. These
This situation derives from the
age. Germany leads the way in Europe
measures have proved remarkably suc-
comprehensive safety packages fitted
in terms of the number of checks made
cessful: in 2003 alone well over 15,000
to buses and coaches. These include
on buses, coaches and drivers and their
drivers of scheduled-service and school
ultra-modern, well-proven vehicle safety
frequency. None the less, accidents can
buses and coaches took part in the
technology and extensive driver training
never be entirely ruled out; with this in
appropriate training programmes, and
programmes, but also intensive official
mind the manufacturers, associations
the figure was even higher in 2004.
inspection measures applicable to the
and vehicle operators are aware of their
vehicles, the operating companies and
special responsibilities.
their drivers.
buses and coaches will continue to do
As well as a highly demanding tech-
Bus and coach manufacturers are
aware of their responsibilities. Mod-
The manufacturers and operators of
everything within their power to ensure
nical component, bus and coach safety
that these vehicles remain the safest of
also involves a decisive human element:
all forms of transport.
172
New EU control device:
The digital tachograph
vehicle system: further approvals appli-
force. Since the Council of Ministers
cable to specific vehicles are necessary
continues to uphold the August 2005
for the complex links with the engine
deadline, it is expected that negotiations
vehicles used for business purposes and
management system and the interoper-
in the mediation committee will take
their drivers are monitored to ensure
ability test. Drivers’ cards also have to
place, a procedure that could drag on
that the legal speed limits and the times
be applied for so that the vehicle can
into the second half of 2005.
spent at the wheel and resting are not
be driven, and workshop cards for the
exceeded. To achieve this, all vehicles
installation of the digital control devices;
for freight transport with a gross weight
these applications have to be submit-
concerning the compulsory statutory
exceeding 3.5 tonnes and all buses or
ted to the official approval offices on
installation date, vehicle manufacturers
coaches with more than eight seats
behalf of individual persons. Issue of the
and authorised workshops can install
have to be equipped with a tachograph,
workshop cards is in turn subject to the
digital tachographs on a voluntary
the “EG control device”.
recipient having attended the officially
basis. However, this presupposes that
prescribed training sessions.
the necessary card issue and calibra-
Since the early 1970s, commercial
Since there has been misuse of
existing systems, the EU Commission
Regardless of the discussion
tion infrastructure will be available
The practical implementation
in the countries in which vehicles
resolved to introduce a new genera-
requirements are thus extremely com-
equipped with digital tachographs are
tion of “digital tachographs” (DTCO) to
plex, with the result that the introduction
registered.
ensure more reliable monitoring of the
date for the whole of Europe has already
drivers and their vehicles.
been postponed several times and is
Since the prevention of misuse is
In Germany, the national order and
still under discussion. The full European
the issue of workshop cards are sched-
Parliament approved the deadlines in
uled for June 2005. This means that the
of particular importance, introduction
April 2005, when the second reading of
first vehicle models equipped with a
of the digital tachographs is based on
the Order took place. This calls for all
digital tachograph could go on sale in
a complex overall system that provides
vehicles produced from August 5, 2006
Germany in August 2005. A practicable
a level of security against manipula-
onwards and all those registered for the
transition period, however, is necessary
tion and a safety standard comparable
first time from August 5, 2007 onwards
for conversion of the entire vehicle fleet,
with the systems operated by banks.
to be equipped with a DTCO. Driver
in order to ensure that systems for all
In addition, the control devices must
cards are to be issued not later than
vehicle versions can go into operation
be integrated in depth into the overall
two months after the Order comes into
safely and reliably.
The automotive industry is therefore
The digital control system
in favour of the relevant orders calling
for the introduction of DTCOs being
passed as quickly as possible at both
national and European level, so that the
necessary legal framework is available
to manufacturers for the purposes of
production logistics and also to customers for their strategic purchase deci-
Source: Siemens VDO
sions.
Annual Report 2005
Increasing Importance of Electronics
and Software
173
of the cost of developing a control unit
relate to the software, we can appreciate the strategic importance of electronics and software for the automobile
sector.
Reliability of electronic
systems
Electronics have permitted develop-
tronics are more prone to breakdown
than older models. The opposite is true:
according to statistics kept by the Ger-
New priorities in joint
automotive research:
Electronics and software
ments to take place without which mod-
man ADAC automobile club, the break-
ern vehicles would be unthinkable. For
down rate of newly registered vehicles,
example, compliance with strict exhaust
in other words the relative number of
regulating systems in a motor vehicle
emission limits would not be possible
failures they incur, has gone down by at
and the increasing complexity of in-car
without the part played by electronics,
least 80 percent in the past 25 years.
electronics call for increased effort to be
devoted to basic development work, in
nor would the extensive active and passive safety equipment of the modern
The networking of the various
The automobile manufacturing and
particular the networking of electronic
vehicle be capable of functioning with-
automotive supply industries will con-
software processes and the vehicle’s
out them. The proportion of electronics
tinue to do their very best to improve
electronic architecture. The Association
in an automobile already accounts for
freedom from breakdowns still further.
for Research in Automotive Technol-
approximately 25 percent of its value,
Their integrated approach extends well
ogy (FAT) has therefore chosen these
rising as high as 30 percent in the case
beyond the electronics area and also
topics as a new priority research area.
of large up-market models. By 2010,
involves the examination of mechanical
In order to do justice to its complexity,
it is estimated that the figure will be
components jointly with the electronics
research will be carried out jointly by
between 35 and 40 percent.
throughout the product development
manufacturers and supplier companies
process. This integrated approach is
on the FAT platform.
The automotive industry therefore
referred to as “mechatronics”.
Electronically controlled active steer-
allocates high priority to the reliability
of electrical and electronic components,
As the importance of electronic
ing is an example of successful research
and takes steps to avoid possible elec-
components increases, the automotive
effort undertaken by manufacturers and
tronic failures and faults even during
sector has become one of the electron-
suppliers. It varies the steering charac-
the development stage. The aim is to
ics industry’s most important customers.
teristic according to the driving situa-
prevent both random and system faults
About 20 percent of all electronic chips
tion: the steering responds more firmly
and thus to ensure reliable operation
in Germany are used in the automotive
and directly at low speeds or when
of the vehicle throughout its lifetime.
industry.
parking the vehicle, but less directly at
higher road speeds in order to enhance
With this in view the electronic systems
are designed with a fall-back operating
The VDA assumes that some 90
the vehicle’s stability. The electronics
level that comes into action if a fault is
percent of all innovations introduced
used in these active steering systems
detected. This is described as the “fail-
on the automobile of the future will be
decisively reduce the effort needed and
safe” condition.
based on electronics. The amount of
improve initial response and agility.
software in vehicle control units doubles
Popular opinion errs in maintaining
that modern vehicles incorporating elec-
every two to three years. If we take into
account that between 50 and 70 percent
Joint research work within the FAT is
devoted to improvements to electronics
174
and software, with specific emphasis on
vehicles were stolen and not recovered,
92/53/EEC (commercial vehicles and
diagnostics and reliability. Maintenance
but since the introduction of the elec-
their trailers, M1), 2000/24/EC (two-
technologies and processes and those
tronic immobiliser and other anti-theft
and three-wheeled motor vehicles) and
for the upgrading of software are jointly
measures, the total has fallen steadily.
2003/37/EC (agricultural or forestry
structured and defined. In addition, the
Experts anticipate that there will have
tractors) have created a unified single
availability and integrity of vehicle infor-
been a further drop of 5 percent in
market for all vehicle classes except
mation supplied by sensors and control
2004, to some 25,000 vehicles.
for commercial vehicles, buses and
units with a view to improving reliability
coaches.
are recorded and set down in standards.
In recent years there has been an
Preference is given to technologies that
evident tendency for high-value vehicles
support the car’s “looking ahead” or
to be stolen “to order”. Since the thieves
incorporating commercial vehicles as
“seeing” functions. In this way, driving a
are employing more and more sophisti-
well into a new version of the EC type
car will be even safer in the future.
cated methods, the automotive industry
approval procedure. When this directive
will be obliged to introduce suitable
enters into force (probably on January 1,
measures to counter this trend.
2006), manufacturers will only have
There is a link to the FAT’s website
at www.vda.de.
to apply for a single EU type approval
A further step in this direction
Theft protection:
Electronic immobiliser and
keyless access
The Commission has proposed
instead of the 25 type approvals for the
has been the development of keyless
individual member nations that were
access entitlement systems. These use
needed until now. At a later date, it will
a cheque card instead of a conventional
only be possible to license their vehi-
key. In addition to improved security,
cles for the road if they comply with
an established element in our society.
this is also a more convenient method of
the technical regulations issued by the
Taking steps to prevent the theft of
gaining access to the car, since the driv-
European Union.
Theft of or damage to property are
motor vehicles is therefore one of the
er’s personal preferences such as seat
main tasks that development engineers
and mirror positions can be selected
However, certain aspects specific to
have to perform. The electronic immo-
at the same time. The keyless access
commercial vehicles, such as individual
biliser has proved to be one of the most
principle will in future also appear to a
operating permits, short production runs
effective devices for preventing vehicles
greater extent on cars in the lower price
and model series that are going out
from being stolen. In 1993, 144,000
brackets.
of production still have to be decided
upon. For small manufacturers who
produce their vehicles in small quantities
only, the general operating permit is
Technical Harmonisation
often an unsuitable instrument; in such
cases the individual operating permit
can be more appropriate.
Extending EU type approval
to other vehicle categories
On January 1, 1993, with 70/156/
nations’ own general operating permits.
For organisational and administrative
reasons, this only referred initially to
New European registration
documents
Now that EC directive 1999/37/EC
EEC as its legal basis, EC directive EC
vehicle category M1 (passenger cars).
has been passed, the European Union
type approval replaced the member
In the meantime however, EC directives
has moved towards the unification
Annual Report 2005
175
of vehicle registration documents in
Europe. All EU member nations already
insist on the vehicle’s owner being in
possession of a confirmation of registration before the vehicle can be operated
on their respective territories.
Harmonisation of the form and
content of the new registration documents is being undertaken with a view
to making them more easily understood
and simplifying their examination; this
will help to ensure that all vehicles registered in Europe can be driven without
restriction on the territories of other
member nations, and also sold there. In
addition, the new documents will greatly
simplify the re-registration of vehicles
originating in a different EU country.
The new registration documents are
currently in use. Automotive industry
tive industry has made preparations in
in two parts: Part I is similar to the Ger-
experts have therefore drawn attention
good time for the new procedure, which
man logbook or “Kraftfahrzeugschein”,
to possible problems that could affect
uses documents that cannot be counter-
Part 2 to the full German registration
both the customer and the police forces.
feited and therefore makes a worthwhile
document (“Kraftfahrzeugbrief”). The
There is definitely too little information
contribution to the elimination of fraud
new European registration documents
included about the tyres; furthermore,
and thus to protection against theft.
will be introduced in the Federal Repub-
only a maximum of two vehicle own-
lic of Germany in October 1, 2005 when
ers can be entered, which means that
the 38th Amendment Order to the Road
lengthy documentation of previous own-
Vehicle Registration Order (“StVZO”)
ers is no longer possible in the used
comes into force, with no transitional
vehicle trade.
rulings applicable.
The experts, on the other hand, regard
The first global technical
regulation: A milestone
on the road to worldwide
harmonisation of technical
directives
The first global technical regula-
None the less, certain questions
the need to carry the CoC (Certificate of
tion, passed by the UN ECE in Geneva
have still to be clarified, for example
Conformity) document on the vehicle as
in November 2004, is a milestone in the
those relating to data structure, data
a useful development. The CoC is part of
process of harmonising technical regu-
volume or the inclusion of an entry for
each vehicle’s specification and is intend-
lations throughout the world; the auto-
the tyres. The new registration docu-
ed to simplify its registration. In addition,
mobile companies that are members of
ments in fact provide the vehicle owner
the old registration document should be
the International Organization of Motor
and the supervisory authorities with
kept and handed over to the new owner if
Vehicle Manufacturers (OICA) contrib-
less information than the documents
the vehicle is sold. The German automo-
uted greatly to this process.
176
This international harmonisation
offers major advantages, not only for
manufacturers and consumers but also
Other global regulations
are in preparation
An assessment of driving dynamics
is not possible however with only one
A highly promising development
or a small number of tests, since these
for lawmakers, since it promotes the
that deserves particular emphasis is the
must for example confirm the vehicle’s
cost-efficient development of technolo-
Worldwide Heavy Duty Driving Cycle
dynamic behaviour on every conceivable
gies for the future everywhere in the
(WHDC) for heavy commercial vehicles’
road surface and with various tyres fit-
world. This presupposes that the regu-
engines, which is currently in prepara-
ted: a task that in view of its complexity
lations comprise reliable values in all
tion. In this respect attention should
can only be carried out by the vehicle
countries and are suitable as a basis for
also be drawn to the need for global
manufacturer.
planning. It is essential to avoid conflicts
fuel specifications as an element in the
of objectives between individual regula-
design and construction of environmen-
tions that would make them impossible
tally acceptable powertrain systems.
for the automotive industry to comply
with or would incur disproportionately
A different approach could therefore
be adopted, namely to define ESP. This
approach is favoured by working group
Pedestrian protection is a further
UN WP.29 in Geneva, which is made up
high effort and expense. Furthermore,
example. In this area, definite conflicts
of brake experts from various countries
adequate transition periods must be
of objectives can be identified, par-
throughout the world. This working
laid down in the event of amendments,
ticularly since an increase in vehicle
group has compiled a proposal that
and additional changes to the regula-
weights as a result of improved safety
defines ESP by way of specific input
tions should not be discussed before
equipment is bound to lead to higher
and output signals and thus also defines
the new regulations have actually come
CO2 emissions. Be that as it may, the
the system hardware indirectly; it also
into force.
automotive industry has accepted this
includes a functional test intended to
challenge in view of the improvement in
establish whether ESP is operating in
road safety that is to be expected. It has
the intended manner.
The first global regulation “Door
locks and door retention components”
also expressly welcomed the intention
has, appropriately enough, a door-open-
of harmonising pedestrian protection
ing character for the worldwide harmo-
regulations worldwide (see also the sub-
tage of being relatively easily applicable
nisation procedure, and those involved
chapter entitled “Pedestrian Protection”).
to heavy commercial vehicles as well,
are determined that it will soon be followed by others.
This method would have the advan-
on which priority is given to the use of
Unified definition of an ESP
testing procedure
ESP as means of preventing the vehicle
Various research projects in the USA
ing ESP is clearly necessary in all cases,
from overturning. A method of identify-
and elsewhere have already confirmed
so that it can for example be referred to
that ESP represents a very important
if the spread of ESP is to be speeded up
factor for increasing road safety. The
by means of regulations or tax conces-
current question is what form an objec-
sions.
tive procedure for testing the function of
ESP could take. The intention in the USA
is for the vehicle to perform certain driving manoeuvres, with the driver replaced
by a mechanical device in order to
Source: UNO
achieve objectivity and reproducibility.
Speed governors:
External intervention is
clearly undesirable
In the case of speed governors, it
is evident that they yield no identifi-
Annual Report 2005
177
able road safety benefit. Devices which
ship, since only braking and steering
internationally valid ruling for in-car
enable the driver to preselect a given
would remain available and there would
24-GHz technology. The EU Commission
speed, but which can be overruled at
no longer be autonomous control over
has approved the use of the 24-GHz
any time, for example by pressing the
the road-speed variability factor.
frequency range for short-range vehicle
accelerator down beyond a detent point,
are merely a means of making the driver’s task easier.
radar systems, but only subject to cer-
Europe-wide directive
on electromagnetic
compatibility
tain preconditions being fulfilled. The
Commission has for example imposed
a maximum fleet penetration level of 7
The fact that such devices are being
The EU Commission has revised its
put forward with much determination by
directives on interference suppression
ber nation. The regulations based on
the governments of France and Great
and electromagnetic compatibility. The
this decision remain valid until June 30,
Britain in particular seems to suggest
new interference suppression directive
2013, provided that no technical radio
that other objectives are being pursued.
(EC-RL 72/245/EEC (2002/104/EC))
interference is reported and monitoring
If they were to be installed on a broad
will be applicable from January 1, 2006
of the numbers of vehicles concerned
basis, it could then be possible as a
onwards; the directive on electromag-
functions satisfactorily in each of the
subsequent development to influence
netic compatibility (EC-RL 89/336/EEC
member nations. The Commission’s
the vehicles’ speed externally. However,
(2004/108/EC)) has general validity and
decision is primarily aimed at harmonis-
depriving the driver of his or her author-
must be incorporated into national law
ing use of the 24-GHz frequency band
ity in this way must be opposed most
within the next three years.
for short-range motor-vehicle radar
equipment over a limited period.
determinedly on account of the associated risks and the fact that the alloca-
percent on the territory of each mem-
The new directive simplifies the task
tion of system responsibility is totally
of electrical equipment manufacturers.
The background to this decision is
uncertain. There has been no attempt to
A revised directive on electromagnetic
that the frequency band in question is
clarify who would assume responsibility
compatibility (EMC) will in all probability
already being used for various purposes
for the system or for vehicle intervention
lead to significant simplification of the
in the member nations, for example
– which in itself would amount to inter-
administrative regulations and thus to
radar speed checks or radio and weath-
ference with the driver’s responsibilities.
lower costs for manufacturers, while at
er-forecasting services. For this reason,
It is evident, however, that if the local
the same time improving the availability
certain limitations were imposed in 2005
authorities that operate speed monitor-
of information and documentation on
on the approval of the 24-GHz band for
ing equipment were to intervene in this
the products for the supervisory authori-
the automotive industry’s short-range
manner or arrange for such interven-
ties.
radar technology in order to avoid
interfering with other users of the same
tions to take place, they would themselves have to assume responsibility for
the consequences.
In view of the dangers associ-
Europe-wide authorisation
for 24 GHz short-range
radar
Short-range radar systems are
frequency band.
Among the requirements imposed
is the maintenance of records of the
ated with this form of intervention, it
regarded as an important element
numbers of vehicles equipped with
is important to note that drivers would
in achieving an improvement in road
short-range radar and the propor-
be obliged to abandon one of the three
safety. The SARA (Short Range Automo-
tion of the total vehicle fleet that they
variables at their disposal in the com-
tive Radar Frequency Allocation) indus-
represent. The procedure in Germany
plex driver-vehicle-road interrelation-
trial consortium concerns itself with an
depends on all manufacturers submit-
178
ting the identification numbers of vehi-
supply vehicles equipped with 24-GHz
cles intended for Europe to the Federal
short-range radar for use on the roads
Motor Transport Authority, where they
of the European Union, and specifically
will be compared with the number of
to the German market.
vehicles currently registered for road
use, so that an up-to-date record of
■ the storage of electrical energy for
propulsion purposes
■ the safety of persons who are
exposed to dangers arising from the
24-GHz technology is currently being
the degree of fleet penetration can be
used by two German vehicle manufac-
undertaken every year. The procedure
turers; future development work will be
is applicable to all manufacturers that
based on the 79 GHz frequency band.
use of electric propulsion.
The first international standards
have been published and others have
reached the concluding enquiry stage.
The importance of standardisation in
this area is reflected in the number of
Standardisation
countries that are actively pursuing ISO
standardisation. In addition to Germany,
experts from Japan, Italy and the USA in
Alternative powertrains –
international
standardisation activities
fuelled vehicles on which H2 storage
particular, but also from Brazil, Belgium,
pressures of more than 700 bar are
France, Great Britain, Korea, Portugal,
used.
Spain and Sweden are taking part in the
Hybrid, fuel cell or hydrogen-fuelled
engine – standardisation procedures
preparation of the standards.
The tasks are being undertaken at
Unified quality
requirements for AdBlue®
have already been commenced actively
international level by two standardisa-
with an eye to defining the safe utilisa-
tion committees, for natural-gas vehicles
tion of such alternative powertrain con-
(SC25) and for electrically-propelled
cepts by customers in the future and the
road vehicles (SC21). The areas of ref-
for heavy commercial vehicles’ diesel
applicability of existing legislation and
erence for these standardisation com-
engines makes it necessary to install
regulations. The standardisation experts
mittees have recently been specifically
will draw up unified testing procedures,
extended to include the requirements
Selective Catalytic (NOx) Reduction
(SCR technology) and/or particulate
requirement catalogues and comparable
for hybrid vehicles.
filters in order to comply with the Euro
4 and Euro 5 regulations that enter
measuring processes and harmonise
them on an international level.
Exhaust emission control legislation
The standards being drawn up for
vehicles of this kind relate to
into force in 2005 and 2008 respectively.
For natural-gas vehicles for example,
with tanks in which the gas is stored
■ their operation
mercial vehicles, a start was made early
at pressures of up to 200 bar, technical solutions and proposed standards
are currently being drawn up with a
■ their performance potential and how
to measure it
■ their safety
capable of extension to cover hydrogen-
urea-SCR process. A detailed qualitative
medium is an essential for the widespread introduction of this technology
higher operating pressures (350 bar).
This higher pressure range will also be
in 2005 on the market launch of the
description of the AdBlue® reduction
view to increasing the vehicles’ range
before refuelling, and also to permit
For exhaust gas treatment on com-
■ in the case of hydrogen, how the
primary energy is stored
independently of the individual manufacturers concerned and to ensure the
Annual Report 2005
179
long-term reliability of the exhaust gas
istics and test methods that will super-
incorrect addition of diesel oil to the
treatment equipment.
sede the above-mentioned DIN stand-
AdBlue® reservoir or of the additive to
ards in the long term. Work on the
the main fuel tank.
The DIN 70070 German Industrial Standard has been drawn up by a
following projects is also in progress at
international standardisation level:
working group from the Motor Vehicle
Standards Committee (FAKRA). This
standard describes the qualitative
■ Definition of the AdBlue® refilling
interface
On- and Off-Board
Diagnosis (OBD):
Legislation and
standardisation
features of the AUS 32 NOx reducing
agent, which is needed for the introduction of Selective Catalytic Reduction
OBD (On-Board Diagnosis) is today
■ Determination of a graphic symbol
for the AdBlue® level display
government demands for a system
(SCR) converters.
Standardisation satisfies the require-
an internationally known synonym for
capable of monitoring vehicle data
A solution is being worked out for
relevant to exhaust emissions. In-car
the refilling interface that prevents the
diagnosis is a most challenging task
ment for a neutral, publicly available
quality description that is independent
DIN 70070 – Qualitative Features of AdBlue®
of specific manufacturers.
Specific test procedures for the
Test feature
Unit
Urea content
% by weight
individual quality characteristics in
accordance with DIN 70070 must
Limit
Test procedure
min.
max.
31.8
33.2
DIN V 70071 Appendix C
also be drawn up by the standardisation committee’s working group, since
DIN V 70071 Appendix B
Density at 20 °C
3
g/cm
1.0870
1.0920
DIN EN ISO 3675
or
existing methods, for example for pure
DIN EN ISO 12185
urea, cannot be applied to the specific
–
1,3817
1,3840
DIN V 70071 Appendix C
Alkalinity as NH3
% by weight
–
0.2
DIN V 70071 Appendix D
Biuret
% by weight
–
0.3
DIN V 70071 Appendix E
mg/kg
–
5
DIN V 70071 Appendix F
Insolubles
mg/kg
–
20
DIN V 70071 Appendix G
Phosphate (PO4)
mg/kg
–
0.5
DIN V 70071 Appendix H
Calcium
mg/kg
–
0.5
SCR technology will gradually come
Iron
mg/kg
–
0.5
into use over large areas of Europe, it
Copper
mg/kg
–
0.2
is not sufficient to publish national DIN
Zinc
mg/kg
–
0.2
standards. On the contrary, the inter-
Chromium
mg/kg
–
0.2
est in unified international standards is
Nickel
mg/kg
–
0.2
considerable. A working group from the
Aluminium
mg/kg
–
0.5
International Standards Organisation
Magnesium
mg/kg
–
0.5
(ISO) under German chairmanship is
Sodium
mg/kg
–
0.5
Potassium
mg/kg
–
0.5
aqueous urea solution used for commercial-vehicle SCR technology. For
this purpose the DIN 70071 preliminary
standard has been drawn up.
Since commercial vehicles using
therefore currently drawing up international standards for quality character-
Refractive index at 20 °C
Aldehyde
Identity
Source: DIN
…
Identical with . . .
DIN V 70071 Appendix I
DIN V 70071 Appendix J
180
for the automobile engineer, compris-
ISO 15031-7 – Data transmission security requirements
ing the application of the very latest
is currently subject to the international
coordination process.
measuring techniques and innovative
data transmission methods (by wire, via
Similarly, the communication proto-
At the request of UN/ECE WP.29, the
the Internet or by radio), through the
col to be used has been laid down on
international standards organisation will
use of theoretical approaches derived
the basis of the controller area network
also submit a proposal to the govern-
from artificial intelligence, for example
(CAN) and published recently as an ISO
ments for the cableless transmission of
in the case of model-based diagnostics.
standard:
diagnosis-related data. This will, how-
It is therefore all the more important
to develop worldwide standards that
ever, take place in stages according to
ISO 15765-4 – CAN requirements for ex-
the volumes of data to be transmitted,
will help to avoid disproportionate cost
haust emission-relevant
depending on whether the data trans-
increases in the implementation of OBD
systems
mission takes place during repair work
as hardware and software in all areas of
on-board diagnosis with no competitive
in the workshop, during type approval or
Until now, OBD has not been man-
while the vehicle is being driven.
datory for commercial vehicles. The
relevance.
UN/ECE has commissioned the ISO
The International Standards Organi-
to develop the necessary standards in
European Intermodal
Loading Unit –
over-regulation is feared
sation (ISO) has succeeded in recent
this area as well. New demands have
years in unifying all the data transmis-
been expressed here for the first time,
sion standards referenced for OBD
for example the extension of OBD to
can still see considerable potential in
anywhere in the world. In particular, it
include safety-relevant information or
the transfer of traffic from one mode of
has proved possible to replace the SAE
cableless data transmission between the
transport to another, in particular as far
standards applicable in the USA by
vehicle and external points (workshops,
as European coastal and inland-water-
technically identical international ISO
type approval officials, periodical techni-
way shipping is concerned, it envisages
standards, at least as far as passenger
cal inspection etc.).
the introduction of a standardised “Euro-
cars are concerned. The following ISO
standards have already been issued
Since the European Commission
pean Intermodal Loading Unit” or “EILU”
An important standard in this
that would combine the respective ad-
and are legally binding by way of OBD
respect has already reached draft sta-
vantages of containers and swap bodies
legislation (Japan, USA, Europe, UN/
tus: it describes basic diagnostic servi-
and thus enable intermodal transport to
ECE):
ces that can be used by any protocols
increase its share of the total transport
(ISO 14229-1 – UDS – Unified Diagnostic
volume considerably. The same objective
Services).
is being pursued by a reduction in the
ISO 15031-3 – Diagnostic plugs on the
vehicle
various forms of available load unit.
Another standard is also in prepa-
ISO 15031-4 – Testing equipment
requirements
ISO 15031-5 – Diagnostic services
ISO 15031-6 – Fault codes with exhaust
emission relevance
ration; its aim is to harmonise the
Transport companies and industry
national SAE and international ISO
have expressed themselves positively to
standards so far used in the com-
this proposal in principle, but the trans-
mercial vehicle area in the USA and
port services providers felt that the draft
Europe, and in particular to unify the
directive went too far in relation to the
necessary data and messages. The
intended objective in several important
relevant application for standardisation
respects. “Top-lifting” with upper corner
Annual Report 2005
181
fittings, for instance, was to be made
tation, the European Standardisation
the EU directive) and can therefore have
compulsory, with this requirement not
Organisation (CEN) was called upon to
an interior width that is optimal for load-
only valid for new EILU but also for all
draw up a programme for the compil-
ing with pallets. Swap bodies in accord-
other loading units used in intermodal
ing of European standards according to
ance with this standard are stackable
transport. This would have excluded
which the EILU can be produced and
and therefore also suitable for coastal or
swap bodies from further use, although
tested. By 2004 the published European
internal waterway ships, but since they
transport companies have so far oper-
standards included the following:
are wider than ISO containers they cannot be loaded into the cells of conven-
ated them in large numbers everywhere
in Europe and not only for intermodal
transport purposes. The directive also
■ EN TS 13853 (2004) – Stackable
swap bodies, Class C
The criticisms of the directive
calls on the one hand for the internal
dimensions of the EILU to ensure optimal
loading with standard pallets (in two
■ EN TS 14993 (2004) – Stackable
swap bodies, Class A
storage in the cells of the container ships
■ EN 13044 (1998) – Identification and
marking of swap bodies.
postponements of its ratification. It is
the existing draft (Kom 361(2004)) will
be needed. Even if the Commission is
given credit for the best of intentions, it
currently being operated. In other words,
the directive effectively lays down both
referred to above have led to several
probable that further amendments to
rows, one alongside the other), but
also for external dimensions that permit
tional container ships.
These standards were compiled with
is none the less clear that the proposed
the internal and external dimensions of
the assistance of experts in vehicle and
directive offers no additional value
the bodies. The remaining wall thickness
body construction, from transport com-
compared with the European Standards
is only 20 millimetres, thus making it
panies, testing institutes and trade asso-
Organisation’s standards and is there-
technically and economically impossible
ciations, and represent the consensus of
fore unnecessary from the point of view
to construct a sufficiently safe body.
agreement that can currently be reached
of trade and industry. It would be best,
in this area. Bodies built according to this
not least in the spirit of the deregulation
standard have a maximum width of 2.55
that is also called for by leading Euro-
soon subjected to criticism from numer-
metres (equivalent to the maximum per-
pean politicians, if the directive were to
ous sources. To ensure its implemen-
missible road vehicle width according to
be withdrawn.
into an optimised, globally active deliv-
and information exchanged through the
ery network adapted to the needs of the
production network in order to permit
market.
the optimal utilisation of production
For these reasons the directive was
Logistics
The change from delivery
chains to networks
Until now, our delivery structures
have been delivery chains, which operate well on more regionally oriented
capacities. In the production networks,
This consequently represents a
modules and parts must be tracked in
markets. The step forward to delivery
major challenge in terms of logistics.
such a way that the planned added-
structures with a global alignment leads
Production facilities have to be sup-
value steps can be carried out in a cost-
to the delivery chain being converted
plied with the relevant production data
optimised manner and in accordance
182
with the requirements of the customer’s
ration for several SCM applications:
tion also lists key data for logisti-
order. This calls for clearly defined,
the Odette recommendation “Supply
cal quality assurance and unified
reproducible flows of information and
Chain Monitoring” (SCMO), which
measuring values for the objective
materials with stable, standardised
was compiled in conjunction with
assessment of logistical quality.
processes - including those needed to
AIAG, the global recommenda-
eliminate malfunctions.
tion “Vendor Managed Inventory”
■ Product identification: The aim of
(VMI) which is in preparation at the
the “Product Identification” project
Logistical processes
moment and the Odette recommen-
group is to define standardised
■ Supply Chain Management: In
dation “Demand Capacity Planning”
processes that permit the forward
the new structures needed for the
(DCP) which has been agreed on at
and reverse tracking and identifica-
future, great importance attaches to
European level.
tion of vehicle parts along the entire
Supply Chain Management (SCM),
or better still, to Supply Network
delivery chain. The work has been
■ Global Logistics Evaluation: A
completed by describing various
Management. Tools such as Demand
logistical evaluation recommenda-
possible applications and suitable
Capacity Planning, Supply Chain
tion has been issued in conjunction
documentation processes and by
Monitoring, Vendor Managed Inven-
with Odette and the AIAG. This
formulating generally valid require-
tory or Customer Managed Inventory
makes a tool available worldwide
ments for the identification of parts.
will continue to develop and estab-
for the standardised evaluation, by
Systematic, widespread application
lish themselves more firmly. This
self-audit if required, of a company’s
of this standard will result in a uni-
intention is also evident in the VDA’s
logistical performance. For this pur-
fied system of identification in the
SCM Manual. The key to this target
pose training concepts have been
automotive industry and will replace
scenario is cooperation between
drawn up in each case at national
cost-intensive individual solutions.
automobile manufacturers and parts
level. The first training sessions have
and accessories suppliers in a spirit
already been held for VDA member
of partnership, using standardised or
companies.
The aim of the CAD/CAM working group is to initiate and promote an
harmonised processes. The manual is
intended to inform companies about
CAD/CAM
■ Logistical quality: The activities of
efficient OEM-supplier network in the
the necessity of taking SCM require-
the Logistical Process Quality project
product development area. Following
ments into account in their business
group, which has almost completed
intensive examination and re-alignment
processes. At the same time, the
its work on a recommendation,
of the aims and activities, the working
initiators of SCM activities are called
harmonise well with this scenario.
groups and projects have yielded the
upon to build up these applications
The recommendation is intended to
following results:
on the basis of existing standards.
simplify communication between the
parties and thus facilitate the rapid,
■ Data Quality working group:
With the cooperation of the VDA
permanent elimination of errors and
The aim of this working group is to
and its member companies and
malfunctions. It defines the term
develop and implement methods of
together with Odette at European
“logistical quality” in a consistent
lowering data exchange costs by
level and Odette and AIAG (the
manner, contains a unified cata-
means of data quality improvements.
Automotive Industry Action Group)
logue of malfunctions and derives
A reduction in the effort required for
at global level, manuals have been
a form of escalation management
the correction and initial production
published or are currently in prepa-
from its content. The recommenda-
of CAD data in the various process
Annual Report 2005
183
chains has been achieved as a result
Recommendation 4951. In addition,
among industrial users. In 2004
of this work. The working group has
provision for the exchange of CAD
the working group consolidated
made worthwhile contributions to
assembly data was added to recom-
its activities and extended them
the production and release of the
mendation package 4951 in 2004.
to include work packages in areas
global SASIG (Strategic Automotive
Product Data Standards Industry
of greater scope such as vehicle
■ Digital Factory working group:
network geometry, electrologics
Group) recommendation “Product
The aim of this working group is to
and wiring harness components.
Data Quality Guideline” Version 2,
create standards for cooperation
Advance notice of results in the
from which VDA Recommenda-
between OEMs and suppliers in the
form of a VDA Recommendation in
tion 4955 “Scope and Quality of
digital factory planning and man-
2005 has been given.
CAD/CAM Data, Version 4” was
agement area. To this end, applica-
derived at the end of 2004. In addi-
tion software was initiated in close
■ Long-term Archiving project: The
tion the working group prepared a
cooperation with software suppliers
aims of the Long-term Archiving
system-neutral “Quality Seal” that
and verified in pilot projects. In this
project (LZA) are the development
will be released internationally at
connection, entry into the 3D world
and implementation of joint long-
SASIG level in 2005 and is intended
was completed in 2004. This was
term archiving methods for 3D CAD
to make quality tests even more
achieved by collecting details of
product data, including compliance
straightforward and establish them
architectural application require-
with official product liability and
permanently.
ments; these are to be published in
retention of proof requirements,
2005 as a VDA Recommendation.
and reproducible archiving, for
■ The Remote Data Transfer (RDT)
In addition, planning software for
use for example in the spare parts
working group: The aims of the
mechanical handling technology,
area. Close cooperation with the
RDT working group (remote data
platform technology and the trans-
ProSTEP iViP association enables
transfer as CAx data exchange) are
portation of materials was initiated
experience gained in other business
the development and implementation
and a crane module prepared.
sectors (in particular the airspace
of methods and recommendations for
the exchange of technical data in a
industry) to be utilised. The project
■ Vehicle Electrics working group:
group has completed its summary
global automotive development com-
This working group has as its aim
of basic requirements (VDA Recom-
bine by the application of interna-
the improvement of development
mendation 4958 Part 1). In view of
tional standards such as ANX/ENX
processes for the actual on-board
the relevance of this topic to prod-
(secure business-sector network for
network and its integration into
uct liability, much value has been
the automotive industry), ENGDAT
adjacent processes and systems
attached to legal examination of the
(electronic delivery note for engi-
(e.g. body). In this connection
recommendation both by member
neering data) and ENGPART (data
the working group has in the past
companies of the working group
format for automated partner data
developed a data model for the wir-
and by the VDA.
management). The working group
ing harness list (KBL) topic area and
played a significant role in drawing
presented it in the neutral product
up the forthcoming globally valid
data format STEP (ISO10303 AP
ENGDAT Version 3 (SASIG XMTD),
212). As a result of this, STEP AP
which was completed at the end of
212 was rendered suitable for prac-
by the Electronic Business Transactions
2004 and served as a basis for VDA
tical use and has established itself
working group in the past year were:
Electronic business
transactions
The principal project tasks tackled
184
■ Extension of e-Forms: The term
process and the latter’s implemen-
the VDA small-load carrying system
“e-Forms” refers to a set of Euro-
tation. An attempt will be made to
in accordance with VDA 4500, but the
pean-standard web solutions for
hold a discussion with representa-
Container Standardisation working party
call-up, delivery and invoicing pro-
tives of the German Federal Finance
has now turned its attention to larger-
cedures in the automotive industry.
Ministry.
volume loading aids (large load carriers
(GLT)). By means of a research project
Member companies asked for this
set to be enlarged to include further
■ International activities – Odette:
concerned with an “Innovative modular
web applications, namely call for
The “Joint Automotive Datamodel”
system for lightweight steel large load
experimental parts, advices of pay-
was created jointly with AIAG,
carriers”, and also with a new “Plastic
ment, notification of financial settle-
JAMA/JAPIA and Odette and sub-
GLT” project group, the VDA intends to
ment and revaluation of a delivery
jected to further development. It will
propose further standards in the area
already invoiced (for reasons such
serve in future as a starting point
of load carrying aids for global goods
as retrospective amendments to an
for all developments in commer-
traffic.
order in the case of supplements or
cial electronic news exchange for
deductions, or in connection with
the globally organised automotive
the unit price). A project group set
industry, regardless of whether they
further element is currently being
up for this purpose is now in the
are based on EDIFACT, XML, BODs
added to the VDA small load carry-
concluding phase of its work.
(Business Object Descriptions) or
ing system, namely the VDA-R-KLT
Core Components. “Syncro” was
(capable of conducting away static
■ Container Management: The
■ VDA small load carriers (KLT): A
developed as the first Odette-XML
electrical charges), which has a
“Empties Processing” project was
message. Work on “Global DEL
defined electrical surface resistance
also commenced in response to a
FOR”, a further message suitable
of 1x104 – 1x1010 Ohm. This work
request from member companies.
for worldwide use, was commenced
will probably be completed by July
Based on an existing solution, the
and had almost been concluded by
2005.
focus was extended to include new
the end of the year. The global mes-
requirements from the VDA “Con-
sages “Global REMADV” (Remit-
tainer Management” project. The
tance Advice), “Global INVOIC, Ver-
container management topic area
project objective is now to re-align
sion 2” and “Global DESADV” (Des-
the Pack Standardisation working
the information concept for planned
patch Advice), on the other hand,
group with its VDA member compa-
and actual container processes on
were completed and approved.
nies set itself the target of establishing a unified basis for the stand-
the basis of standard messages. The
project will be completed by the end
of 2005.
■ Container Management: In the
Container standardisation
ardisation of existing and future
Unified, standardised packs would
container management systems. The
require less load volume for the return
basic process description for a con-
■ Invoicing Process: The effects of
of empties and therefore reduce the
tainer management capable of func-
the EU Directive on German auto-
level of traffic as a whole. Packaging
tioning globally has been available
mobile-industry processes had a
logistics thus exert a direct influence on
since October 2004. Further work is
major effect on the work of the
transport patterns and make a worth-
now to be carried out in close co-
“Invoicing” working group. In this
while contribution to environmental
operation with ITA (Information Tech-
context the following analyses were
protection. In recent years the emphasis
nology for the Automotive industry)
undertaken: legal foundations, IT
was clearly on further development of
with a view to describing the neces-
Annual Report 2005
sary IT infrastructure and developing
suitable messages on the basis of
the standardised Joint Automotive
Data Model (JADM). The planned
completion date is the end of 2005.
ITA – Information
Technology for the
Automotive Industry
Since 2000, ITA (Information Tech-
185
spread attention: “Supply Chain Interoperability” and “Radio Frequency Identification (RFID)”. Midway through 2002
the ITA “ISAR” project was also initiated,
nology for the Automotive industry, a
with the aim of identifying innovative
consortium of IT and software compa-
potential applications for RFID in the
■ RFID technology in the automo-
nies) has cooperated with the VDA in a
automotive industry that are suitable for
tive industry: Most of the VDA
spirit of partnership on the development
standardisation, with the emphasis on
member companies are currently
of new solutions and standards, the
logistics and related areas.
carrying out pilot installations or
more rapid implementation of modern IT
plan to do so in the near future.
technologies and the improvement and
They expect the introduction of
harmonisation of existing procedures.
organised jointly by the VDA and the
radio frequency identification (RFID)
ITA has thus developed into an impor-
ITA and held on February 15 and 16 this
to improve supply chain tracking
tant communication platform between
year in Leipzig, took as its motto “Logis-
and boost the efficiency of local
the automotive industry and IT compa-
tics in Support of Innovation – Mod-
processes, for example in store
nies operating in the automotive sector.
ern Process Configuration and New
management, production or the
management of load carrying units.
The fourth VDA Logistics Congress,
Technologies”. The event emphasised
An additional aim of ITA is to
that logistics, though accepted as an
In conjunction with ITA, the VDA
exchange IT know-how and competence
important success factor in the automo-
has supported practical tests. The
at international level, to respond to
tive industry, can only achieve their full
next step is expected to be towards
national and European demands and to
effect if closely linked to information
the complete process integration of
contribute towards increasing the trans-
technology.
RFID technology. An important pre-
parency and efficacy of IT-aided proc-
condition for this is the necessity for
esses in the automotive industry.
global standardisation, for example
with regard to data structure and
the definition of frequencies.
Information on the ITA can be found
in the Internet at www.ita-int.org.
Two projects were completed successfully last year and attracted wide-
Auto IAA
188
IAA
The IAA
61st IAA Cars 2005:
“Cars – Pure Fascination”
The 61st IAA Cars will be held from
equipment will also be showing their
product ranges. Added to these are
specialist publishers, organisations and
September 15–25, 2005 in Frankfurt/
associations, as well as manufacturers of
Main under the slogan “Cars – Pure
model cars, all of whom will contribute
Fascination”. The VDA, the organiser of
to the “Cars – Pure Fascination” at the
the world’s largest motor show, is once
IAA 2005.
again expecting around 1,000 exhibitors from 40 countries. They will occupy
Many world premieres and fas-
over 200,000 square metres of exhibi-
cinating innovations are expected at
tion space in the halls and in the open
the IAA 2005. The IAA programme will
air.
be complemented by special shows,
specialist events and campaigns, such
As well as presenting cars, motor-
as the road safety campaign and the
cycles, tricycles, special vehicles and
off-road course. Car manufacturers will
light vehicles, the extensive exhibition
once again offer the opportunity to test
programme includes the whole range of
drive current models. Detailed informa-
the vehicle parts and accessories indus-
tion about the IAA can be found on the
try. In addition, the suppliers of custom-
Internet at www.iaa.de.
ised vehicles and accessories, telematics
companies and suppliers of workshop
The 60th IAA Cars 2003 ended with
a record number of visitors: after the
IAA 2001, which was overshadowed by
the terrorist attacks of September 11, in
2003 almost 1 million car fans wanted to
experience the “Cars – Pure Fascination”
at the IAA – nearly 25 percent more than
two years previously.
The special feature of the IAA – presenting car manufacturers and their
suppliers together under one roof – has
been retained, emphasising the IAA
hallmark of being the motor industry’s
leading trade fair. Around 1,000 exhibitors from 42 countries delighted visitors
and the 15,000 journalists with 125 world
premiere presentations.
190
IAA
A Mobile Future:
A successful IAA
Commercial Vehicles 2004
fully integrated trade fair, covering the
entire value creation chain, for mobility, transport and logistics. This has also
The 60th IAA Commercial Vehicles
been borne out by the large number of
took place in Hanover from September
international congresses and specialist
23–30, 2004 and once again confirmed
events, attracting over 3,000 visitors.
its position as the world’s leading
transport trade fair. Under the title “A
The high proportion – 92 percent – of
Mobile Future”, the 60th IAA Commer-
trade visitors and the fact that two thirds
cial Vehicles proved its importance as a
of them had decision-making respon-
driving force for the entire industry with
sibilities were particularly pleasing. Not
a record number of new vehicles and in-
only the visitors, but also the 2,264 jour-
novations. Exhibitors presented a total of
nalists from 51 countries expressed their
194 world premieres – 25 percent more
enthusiasm for the commercial vehicles
than in 2002 – as well as 61 European
and their related products.
and 54 German premieres.
In 2004 bus manufacturers as well as
The total of 1,370 exhibitors from
the manufacturers of transporters and
almost every continent set a new record.
light commercial vehicles gave visitors
The 746 exhibitors representing the
the opportunity to test drive their vehi-
parts and accessories industry – an
cles. Even veteran car fans were catered
increase of about 10 percent on 2002
for: the German veteran commercial
– made the greatest contribution to this
vehicle run started from the fair site, and
new high level. Occupying an area of
8,000 square metres of space were de-
220,000 square metres, the exhibitors
voted to a large display of veteran buses
impressed a total of 254,300 visitors
and lorries.
with the complete range of the industry’s products. The IAA Commercial
The 61st IAA Commercial
Vehicles has finally developed from a
Vehicles will take place from
straightforward product exhibition to a
September 21–28, 2006 in Hanover.
Auto F ACTS
AN D F IG U R ES
Auto
194
FACTS AND FIGURES
Facts and Figures
German automotive
industry achieves record
sales
In 2004, German manufacturers of
cars and commercial vehicles made total
domestic and foreign sales amounting
The German automotive industry can
to 153.7 billion euros, a good 8 percent
look back on 2004 as a satisfactory year.
more than the previous year. Domestic
At 227.7 billion euros, the total sales vol-
sales showed an above average increase
ume was 9 percent higher than in 2003 –
(up 10 percent to 50.7 billion euros).
a record result. Top results were achieved
Although the high euro exchange rate
both at home (up 9 percent to 92.7 billion
restricted the export trade, foreign sales
euros) and abroad (up 9 percent to 135.0
improved by 8 percent to 103.0 billion
billion euros). The German automotive
euros. This meant that domestic sales
industry benefited not only from increased
represented a considerably increased
domestic and foreign sales, but also from
proportion of total sales in 2004 at
a qualitative increase in growth. This
around 33.0 percent.
development has been made possible by
the continuing trend towards diesel cars
The trailer and body manufacturers
and quality vehicles, and the booming
continued their globalisation strategy
commercial vehicle trade.
in 2004, helping them to achieve their
Sales volume of the German automotive
industry by manufacturer group
In billion euros
160
154
142
2003
140
2004
120
100
80
60
66
60
40
20
7
9
0
Manufacturers
of vehicles
Manufacturers of
trailers and bodies
Manufacturers of
parts and
accessories
Annual Report
195
best-ever sales figures. Last year they
figure fell by 2,200 to 407,700 people.
to 18.6 percent in 2004; ten years ago it
made a total of 8.6 billion euros, cor-
In the supply industry there was an
was only 12.1 percent. Even in relation
responding to an increase of 26 percent
increase of around 2,000 to 329,300 and
to employment, this sector has departed
compared with 2003. Foreign sales rose
for manufacturers of trailers, bodies
from the general trend, as in industry
by 44 percent to a record result of
and containers an increase of around
in general (without the automotive
4.6 billion euros. At just under 4.0 billion
100 employees to 36,200.
industry) the number of jobs fell in 2004
by 113,000. Over the last ten years it has
euros, domestic sales were 10 percent
higher than in 2003, but were still lower
fallen by almost 1 million. In the last year
At the same time, an increasing
than for the years from 1998 to 2000. For
number of permanent contracts were
German automotive industry accounted
the first time, in 2004 more than half of
agreed. In 2004, only 1.3 percent
for 13.1 percent of all those employed in
total sales were due to the export trade
of contracts were for a fixed term.
industry, as compared with 9.5 per-
(54.1 percent); five years ago it was not
In 1999 the figure was as high as
cent ten years previously. The German
even one third.
4.5 percent.
automotive industry has thus proved to
be one of the biggest and most secure
The German supply industry also
remained on course for success in 2004.
Thanks to its strong position abroad and
The German automotive
industry – a pillar of the
German economy
employers in Germany.
In terms of sales volume too, the
In the past year, the automotive
German automotive industry has made
with a higher standard of equipment and
industry has given even stronger proof
a significant positive contribution to the
more electronics, sales reached a new
that it is the most important constituent
trade balance surplus of the German
record level of 65.4 billion euros, up by
of the German economy. Its share of the
economy. In 2004, this sector accounted
10 percent on 2003. Both domestic (up
total revenue for German industry rose
for more than 50 percent of the total
the continuing trend towards vehicles
8 percent to 38.1 billion euros) and foreign (up 11 percent to 27.3 billion euros)
Workforce in the German automotive industry
sales showed a considerable increase
on the previous year. In 2004 foreign
sales made up 41.8 percent of total
Employees in thousands
800
sales, the highest ever proportion.
700
German automotive
industry continues to
create jobs
Employment remained stable in
2004. An average of 773,200 people
were employed in the German automotive industry, the same number as in
2003. Over the last ten years, the Ger-
600
500
400
300
Manufacture of parts and accessories
200
Manufacture of trailers and bodies
100
Manufacture of vehicles and engines
man automotive industry has succeeded
in creating more than 130,000 new jobs.
For manufacturers of cars and
commercial vehicles, the employment
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
196
FACTS AND FIGURES
surplus of the German economy. In
Exports of automotive products
(in million euros)*
the last year, the German automotive
industry exported products to a value of
over 146.3 billion euros. Over the same
2004
04/03 in %
Share in %
Belgium
Denmark
Finland
France
Greece
Ireland
Italy
Luxembourg
Netherlands
Austria
Portugal
Sweden
Spain
United Kingdom
EU-15
Malta
Cyprus
Estonia
Latvia
Lithuania
Poland
Slovakia
Slovenia
Czech Republic
Hungary
EU accession states
EU-25
Western Europe
Eastern Europe
Europe together
Africa
USA
Canada
Latin America
America together
Of which: NAFTA
Asia
Of which: Japan
darunter: China
Australia, Pacific
Country not known
8,291
1,271
1,344
12,604
1,198
762
11,741
391
4,771
5,892
1,334
3,171
10,567
16,804
80,141
24
154
122
159
249
3,223
1,660
394
2,593
3,279
11,858
91,999
84,323
19,318
103,641
3,270
20,924
1,200
2,408
24,532
23,345
13,605
3,570
3,116
1,201
45
6.6
9.0
4.2
6.6
21.6
18.0
3.2
0.9
8.2
13.4
13.1
1.1
15.7
2.9
7.1
5.7
110.9
-14.7
-8.0
-26.5
13.0
-5.8
9.5
-8.5
-15.5
-4.7
5.4
7.0
4.9
6.6
13.0
-5.4
-3.4
-6,2
-5.4
-5,9
2.2
2.7
-19.9
-1.9
49.7
5.7
0.9
0.9
8.6
0.8
0.5
8.0
0.3
3.3
4.0
0.9
2.2
7.2
11.5
54.8
0.0
0.1
0.1
0.1
0.2
2.2
1.1
0.3
1.8
2.2
8.1
62.9
57.6
13.2
70.8
2.2
14.3
0.8
1.6
16.8
16.0
9.3
2.4
2.1
0.8
0.0
opment. In 2004 R&D expenditure in this
Total
146,294
4.0
100.0
sector amounted to 15.6 billion euros.
*Preliminary results
period, automotive products to a value
of just under 65.5 billion euros were
imported. The trade balance surplus for
automotive products rose by 4 percent
to just under 81 billion euros. Despite
the strong euro, the most important
trading partners for the German automotive industry in 2004 were still the
USA with a trade volume of 17.1 billion
euros and Great Britain with 12.0 billion
euros.
German automotive
industry continues to invest
strongly in the German
manufacturing base
In the last five years the investments of German car manufacturers
in the German manufacturing base
amounted to a total of 55.3 billion euros.
This accounted for 22.4 percent of total
investments in industry in Germany. In
2004 investments remained at a high
level, even though at 11.9 billion euros
they were slightly down by 1 percent
compared with 2003. In the current year,
the German automotive industry intends
to maintain its high volume of investment.
Over the last ten years, the German
automotive industry has invested
127 billion euros in research and devel-
Country of destination
This sector accounted for one third of
the national economic expenditure on
Annual Report
R&D. As a result of this concentration
Imports of automotive products
(in million euros)*
Country of manufacture
on research, the automotive sector
heads the world patent statistics with
2004
04/03 in %
Share in %
Belgium
Denmark
Finland
France
Greece
Ireland
Italy
Luxembourg
Netherlands
Austria
Portugal
Sweden
Spain
United Kingdom
EU-15
Malta
Cyprus
Estonia
Latvia
Lithuania
Poland
Slovakia
Slovenia
Czech Republic
Hungary
EU accession states
EU-25
Western Europe
Eastern Europe
Europe together
Africa
USA
Canada
Latin America
America together
Of which: NAFTA
Asia
Of which: Japan
darunter: China
Australia, Pacific
Country not known
4,595
430
225
9,545
7
53
4,824
90
1,869
5,106
665
911
5,164
4,756
38,238
2
2
11
3
11
2,870
3,896
302
3,358
4,098
14,553
52,791
38,971
15,852
54,824
399
3,849
49
984
4,881
4,511
5,399
3,961
169
16
1
9.9
1.5
274.1
2.2
-32.3
17.1
2.7
-5.5
11.4
17.2
-32.3
20.3
2.8
-1.6
4.8
881.2
15.4
22.1
7.8
42.2
2.9
-3.4
-20.7
0.6
-1.3
-1.1
3.1
4.7
1.4
3.7
8.2
-0.1
-6.2
-8.3
-1.9
-2.5
18.4
19.3
22.3
65.9
-63.0
7.0
0.7
0.3
14.6
0,0
0.1
7.4
0.1
2.9
7.8
1.0
1.4
7.9
7.3
58.4
0.0
0.0
0.0
0.0
0.0
4.4
5.9
0.5
5.1
6.3
22.2
80.6
59.5
24.2
83.7
0.6
5.9
0.1
1.5
7.5
6.9
8.2
6.0
0.3
0.0
0.0
Total
65,520
4.4
100.0
*Preliminary results
197
over 3,000 patents. This underlines the
role of the German automotive industry as a leader of innovation and a key
sector.
Tax burden on the
automotive sector
continues to increase
In 2004, motorists paid 41.7 billion
euros in petrol tax (including VAT). Over
the last five years this tax burden has
increased by 5.1 billion euros. The “environmental tax” has contributed almost
47 billion euros to the treasury from April
1999 (introduction of the “environmental
tax”) to the end of 2004. Tax makes up
over 70 percent of the price of petrol. In
addition motorists last year paid 7.7 billion euros in motor vehicle tax. Between
1999 and 2004, motor vehicle tax rose
by 34 percent, and at the start of this
year by a further 20 percent. In times of
stagnating real incomes and high unemployment, these burdens on the motorist
are a crucial factor in terms of demand
for cars. If in addition to direct taxation
we also consider the indirect taxes and
charges resulting from the development,
running and use of the car, in 2004 the
state received some 125 billion euros in
taxation. This means that almost every
fourth euro paid in tax is a “car-tax” euro.
Germany: Almost one tenth
of world car production
Thanks to continued investment by
the German automotive industry in the
German manufacturing base, in 2004
198
FACTS AND FIGURES
Share of the German automotive industry in total economic
expenditure on R&D and gross investments
Shares in percent
40
R&D
35
Gross investments
30
25
20
15
10
5
0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
Source: ifo Institute, Stifterverband für die Deutsche Wissenschaft
The ten largest automobile manufacturing countries in 2004
Germany again proved to be the third
biggest producer of cars and com-
In million units
mercial vehicles. At 5.6 million vehicles,
results showed a small increase of
12.0
1 percent on the previous year. Almost
10.5
one in ten of vehicles manufactured in
the world rolled off a production line
in Germany. With just under 12 million
5.6
units, the USA again headed the list of
5.1
3.7
countries with the biggest production
3.5
3.0
2.7
volume last year. Compared with 2003,
2.2
1.9
the volume of production actually went
vehicles (up 2 percent).
ng
do
m
az
il
Br
da
na
Ca
ai
n
Sp
Ko
r
h
ite
d
Ki
ut
Un
ea
e
nc
Fr
a
in
a
Ch
y
an
rm
pa
n
Ja
So
second place in 2004 with 10.5 million
Ge
of all finished vehicles. Japan again took
U
ing base accounted for almost one fifth
SA
down by 1 percent, but this manufactur-
Annual Report
Passenger and freight
traffic up
Freight transport in 2004
Distances travelled, shares in percent
The total demand for passenger
transport increased slightly in 2004 by
0.4 percent and was therefore back in
the black as compared with the decline
Rail
15.9
Inland
waterways
11.4
199
2003, it rose by around 353,000 vehicles
(up 1 percent) to just under 45.4 million
passenger vehicles. In the same period,
Other
2.9
car density increased to 550 cars per
1,000 inhabitants. By contrast, in the
commercial vehicle sector the popula-
in 2003. Despite high fuel prices, private
tion in Germany declined further to
motor transport increased by 0.4 percent
3.54 million vehicles. At 43, the number
and public transport by 0.2 percent.
Railway traffic increased last year by
1.4 percent, with long-distance travel
showing an above average increase (up
Roadforeign
carriers
21.2
Roaddomestic
carriers
48.6
of commercial vehicles per 1,000 inhabitants remained at the same level as the
previous year.
Source: progtrans
1.8 percent).
The car population has continued
to age over the last few years. Between
In the area of freight traffic, dis-
1993 and 2005 alone, the average age of
tances travelled in 2004 were 5.3 per-
the home market resulting from the EU
a private car has risen by a whole year
cent higher than in 2003, an increase
enlargement to the east on May 1, 2004,
from 79 to 93 months. From the middle
almost three times as great as that of the
which obviously led to a sudden deep-
to the end of the 1990s, the average
gross national product. This development
ening of the spatial division of labour
age remained constant at 81 months
has been felt primarily in the increase in
with a correspondingly higher demand
because of the increasing number of
for freight transport. Foreign hauliers
new registrations. However, with the
have gained above average benefit
decline in market development since
from this development; their distance
2000 and the extension to 18 months of
travelled increased by 7 percent in the
the cancellation time for vehicles taken
past year. In the same period, domestic
temporarily off the road, the age of the
hauliers have seen a rise of 3.5 percent.
population has increased year by year.
Rail traffic is also clearly in the black
Privately registered cars were of above
in 2004 (up 8.2 percent) as is domestic
average age at 99 months on January
shipping (up 6.6 percent).
1, 2005. By contrast, the average age
Passenger transport in 2004
Distances travelled, shares in percent
Rail
7.5
Public road
transport
7.9
Car
84.7
of diesel-engine vehicles at the start of
Vehicle population up again
In the past year the vehicle populaSource: progtrans
tion has gone up again. Compared with
the year was only just under 62 months
– but diesel-engine cars only made up
one fifth of the total population.
Auto I N DEX
Auto
202
INDEX
15 EU states 89
Automotive advertising watchdog 63
24 GHz short-range radar 177
Automotive banks 66, 67
25 EU states 84
Automotive retail sector 43
Chemicals 151
Automotive supply industry 51
Chemicals legislation 150
Abolition of customs duty 25
Average age 199
China 12, 14, 15, 25, 26, 27, 32, 33, 35,
Baltic states 36
Chlorofluorocarbons (CFCs) 120
ACEA agreement 122
Ban on materials 144
Chromium VI 143
Action programme 118
Barge 83
Circulation tax 22, 23
Active bend light 164
Basel II 53, 60
City toll 111
Active safety 157
Belgium 39, 41, 50, 178
City tolls 130
Active steering 173
Bend lighting 163
City traffic 110
Adaptive lighting management 166
Best available techniques 146
Climate change strategy 118
Adaptive rear light 165
Bio-ethanol 141
Climate protection 117
AdBlue® 139, 140, 178, 179
Biofuels 141
CO2 air conditioning systems 119
Advanced Front Lighting System (AFS)
Block Exemption Regulation 61 – 64
CO2 based tax 23
Body and trailer industry 50, 51
CO2 emissions 23, 119, 137
Advantages of producing 54
Bonus malus system 23
CO2 reduction 137
After-sales service 64
Brake assistant 162, 169
CO2 reduction pledge 121, 122
Air conditioning 120
Brand networks 63
Coach tourism 82
Air pollution 127
Brazil 32, 178
Commercial vehicles 39, 46, 50
Air pollution control 147
Breakdown rate 173
Commission progress report 122
Air quality 127
BTL (Biomass to Liquid) 141
Commodity markets 50
Air Quality Framework
Building infrastructure 92
Communication on Climate Change
Accident avoidance 157, 159
Accompanied Driving at 17, 80
163
Directive 123
Central and Eastern Europe 13, 15, 30,
37, 38, 55
41, 42, 51, 53, 55, 61, 77, 78, 84
Bulgaria 13, 78, 84
Policy 119
Alliances 58
Bus 39, 47, 81, 82
Commuter allowance 76
Alternative fuels 140
Buses 47, 49, 50
Company taxation 18
Amount of waste generated 146
Bypasses 111
Company tax law 19
Competition for location 53, 54
Ancillary wage costs 17
Anti-lock Braking System (ABS) 157,
158, 160, 169, 171
Congestion-free Hesse 2015 initiative
114
Competition for manufacturing
sites 26
Argentina 32
Cadmium 143
Competitiveness 16, 17, 18, 20
Asia 30, 42, 49
Caravans 51
Congestion charge 131
Assistance systems 156
Carbon dioxide (CO2) 117 – 123
Congresses 190
Association for Research in
Carbon monoxide 123
Consumer climate 43
Automotive Technology (FAT)
CARS 21 21
Container Management 184
107, 163, 173
CARTALK 114
Container standardisation 184
Austria 39, 41
Car dealership 68
Control of vehicle dynamics 171
Autobahns 97, 98
Car density 199
Convertibles 42, 43, 45
Autobahn accidents 97, 168
Car retailer 68
Cornering light 164
Autobahn network 97
CECRA 62
Cost of raw materials 52
Annual Report 2005
203
Council of Ministers 21, 22
Electricity deregulation 148
EU emission categories 107
Crude oil markets 27
Electromagnetic compatibility 177
EU enlargement 36
Cruise control with distance monitoring
Electronics 51, 173, 174
EU Environment Action Programme 127
Electronic business transactions 183
EU member states 71
Electronic immobiliser 174
EU Road Costs 100
Electronic stability program (ESP) 157,
EU software patents 71
171
Customer Relationship Management
(CRM) 62
Customs duties 25
Czech Republic 7, 36, 37, 38, 41
169
Exchange rates 27
ELV directive 144
Exports 16
Emergent countries 76
Export quota 12
DAB (Digital Audio Broadcasting) 112
Emissions trading 119
Export record 42
Damage management 64
Emission reduction 123
Export trade 194
Data Quality working group 182
Employment 18, 195
Extension of e-Forms 184
Daytime running lights (DRL) 164
End-of-life vehicles 142
Delivery chains 181
End-of-life vehicles ordinance 144
Floating car data (FCD) 113
Delivery network 181
Energy 147
Federal Highway Research Institute
Denmark 39
Energy prices 147, 149
Design protection 68, 69, 71
Energy tax 149
DIANA pilot project 113
Environmental protection 116
Diesel campaign 41
Environmental protection measures 116
Finance 67
Diesel cars 39, 41, 43, 44, 45
Environmental strategy 117
Financial services 66
Diesel exhaust emissions 136
Environmental tax 78, 79, 102, 103, 147,
Fine particulates (PM10) 127 – 137
Diesel ownership 39
Digital Factory 183
Dimensions and weight of commercial
197
Environment and Health, 2004 to 2010
action plan 126
(BASt) 169
Federal Transport Plan (BVWP) 80, 89,
91, 94
Flexibility 17
Fluorinated gases 120
Fluorinated hydrocarbons (HFCs) 117
Equity capital 53
Foreign-based production 49
Doha Round 24
ESP 157, 160, 161, 171, 176
Foreign sales 194
Domestic sales 194
Estonia 18, 77
Foreign sites 13
Driver assistance and warning systems
European Climate Change Programme
Former Soviet Union 77, 84
vehicles 87, 88
171
(ECCP) 119
France 48, 177, 178
Driver assistance systems 156
European intermodal loading unit 180
Freedom from heavy metals 143
Driver training 171
European Union 26
Freight contribution 84
Driving bans 110
Eurovignette 107
Freight traffic 199
Duties 36
Euro 4 standard 129, 137, 138
Freight transport 89
Euro 5 standard 138, 139
Fuel-consumption reduction strategy 122
E-call system 161
Euro exchange rate 194
Fuel cell 142, 178
E-safety 161
EU Commission 20, 21, 22, 23, 62, 77,
Fuel consumption 121
Earmarking 106
Eastern Europe 17, 30, 31, 51, 53, 77
84, 91, 100, 108, 109, 128, 144, 147,
Fuel consumption reduction 143
150, 160
Fuel tax 22
ECE regulations 25
EU consumer credit law 67
Eco-audit 116
EU control device 172
Gas-to-liquid, GTL 141
Economic growth 16
EU Council of Ministers 20
GDP 86
204
Germany 51
German manufacturing base 12, 15, 196
INDEX
Integrated Pollution Prevention and
Control (IPPC) 146
Local public transport (LPT) 82
Location Clause 62
German trunk roads 97
Integrated Product Policy (IPP) 144
Logistical quality 182
Globalisation Strategy 12 – 15
International activities 12
Logistics 181
Global Logistics Evaluation 182
International sites 13, 15
Long-distance freight transport 89
Global technical regulation 175
INVENT 114
Long-range movement of particulates
GNP 16
Investments 196
GPS navigation system 112
Investment in the automotive industry
Great Britain 177, 178
15
131
Long-term Archiving 183
Lower mid-range 41
Greece 39
Invoicing Process 184
LPT 81
Greenhouse gas 117
IPP projects 146
Luxembourg 39
Growth in mobility 77
Iran 26, 49
Growth in transport
Italy 39, 48, 178
Major road investment 95
ITA – Information Technology for the
Malaysia 25, 34
performance 86
Automotive Industry 185
Halogenated fluorohydrocarbons
Manufacturers’ banks 67
Material bans 144
(H-HFCs) 117
Japan 25, 32, 35, 42, 178, 117
Mechatronics 173
Harmful emissions 87
Joint automotive research 173
Mega-trailers 88
Hazardous substances
Joint ventures 58
Mercosur 32
ordinance 151
Mercury 143
Hazard assessment 152
Koch-Steinbrück concept 95
Mergers and acquisitions 58
HGV tolls 105
Korea 178
Mid-range 43
Hungary 36, 37, 38, 77
Kraftfahrt-Bundesamt (KBA) 65
Mineral oil tax 101, 108
Hybrid 178
Kuwait 49
Mirror systems 168
Hybrid drive 141
Kyoto Protocol 117, 118, 119
Mobility 81
Hydrocarbons 123
Mobility guarantee 66
Hydrogen-fuelled engine 178
Labour costs 16, 17, 18
Mobility service providers 66
Hydrogen technology 137
Labour law 149
Modular concept 87
Labour market 16
Motor caravans 51
IAA Commercial Vehicles 190
Lane maintenance assistance 171
Motor Vehicle Block Exemption Regula-
IAA Passenger Cars 188
Latin America 42, 77
Impact assessment 22, 150
Latvia 18
Importers 45
Lead 143
Incentives 32
Leasing 67, 68
Motor vehicle tax 197
India 25, 26, 34, 35, 77, 78, 84
Leasing companies 66
MPVs 43
Indonesia 25, 34
Level of car ownership 77, 80
Multi-branding 61, 62
Infrastructure financing 101
Level of tolls 101
Infrastructure policy 90, 91, 92, 94, 96
Light trucks 30, 31
NAFTA 13, 15
Infringement proceedings 144
Light vehicles 31, 32
National budget 16
Innovative business models 57
Load securing devices 169
Natural-gas vehicles 178
Integrated approach to safety 156
Local-area sensors 159
Natural gas 140
tion see Block Exemption Regulation
Motor Vehicle Standards Committee
(FAKRA) 170, 179
Annual Report 2005
Natural hedging 14, 28
PM10 concentration 131
Raw Material Prices 6, 26, 52
Need to raise capital 59
Poland 18, 36, 37, 38, 41, 48, 50, 77
Re-imported vehicles 44
Netherlands 41
Portugal 178
REACH 150, 151
New commercial vehicle concepts 87
Potable water consumption 146
Recalls 65
New registrations 43
Powertrains 178
Recall campaigns 65
New vehicle types 45
Power steering 169
Recycling quota 142
Noise emissions 136
PPP-projects 90
Recycling rate 147
Non-tariff trade barriers 21
Pre-crash phase 157
Reducing the consequences of
NOx catalytic converter 140
Price harmonisation 63
NOx emissions 87
Price of fuel 102
NOx limits 139
Price of petrol 197, 102
accidents 157
Reform of the law on public
procurement 72
Private motoring 77, 79, 80
Refrigerant R134a 119
Occupant restraint systems 157
Private motor transport 199
Regional railways 81
Occupational safety 149
Private vehicles 80, 92
Registration documents 174, 175
Occupational safety ordinance 149
Pro-Bus Alliance 82
Registration taxes 23
Odette 184
Pro-Mobility infrastructure initiative 94
Reliability 173
Oil prices 33
Procurement legislation 73
Remote data transfer 183
On- and Off-Board Diagnosis
Production-related environmental
Renewable energies 147
(OBD) 179
protection 144
Repair clause 69
Onboard diagnosis 140
Production volumes 40
Reproduction parts 69
One-litre car 121
Productivity 54, 16
Restraint systems 156
On Board Units (OBU) 105
Product identification 182
Retail sector 43
Original spare parts 64
Product liability 65
RFID technology 185
Ower mid-range 41
Product liability law 65
Road accidents 171
Oxides of nitrogen 123
Prohibition of materials 143
Road costs 107, 108
Ozone 123, 126
Public-private-partnership (PPP) 105
Road freight transport 85
Public procurement 72
Road Safety 155
Pällmann Commission 104
Public tender invitations 170
Road traffic 84
Parking spaces 112
Public transport (PT) 79, 199
Romania 13, 38, 78, 84
Particulates 123
Purpose-linking 101
Russia 13, 26, 37, 38
Quality Management Center 154
Safety technology 171
Particulate filter 133
Particulate reduction 128
Particulate values 132
Saudi Arabia 49
Parts and Accessories Industry 51
R&D 15
SCALE 150, 151
Passive safety 157
R&D expenditure 15, 196
SCR (Selective Catalytic Reduction)
Patents 71
Railway reform 103
Patent protection 72
Rail travel 83
Securing of loads 170
Patent statistics 15, 197
Ramp and wide-angle mirrors 168
Semi-trailer 50
Pedestrian protection 156, 161, 162, 176
Rates of duty 24
Sensors 158
Petrol tax 197
Raw materials 26
Service network 64
Philippines 25, 34
Raw Materials Committee 27
Seville Office 146
technology 140, 170
205
206
INDEX
Seville Process 146
Theft protection 174
VAT 101
Simplification of legislation 22
Three-litre car 121, 122
VDA 159
Slovakia 36, 37, 38
Three-way financing 67
VDA-QMC training organisation 155
Slovenia 36, 37, 38, 77
Tiger economies 34
VDA-Research Conference 159
Software 173, 174
Tolls 106
VDA Mittelstandskreis 59
Software development 71
Toll on cars 109
VDA Alternate Refrigerant Winter
Solvents 146
Toll on trucks 109
Solvent emissions value 146
Toll rate 106
VDA cooperation portal 59
Soot emissions 133
Traction control (ASR) 171
VDA international trade fair programme
South Korea 34
Trade balance surplus 195
Spain 50, 178
Trade barriers 24
VDA manufacturer database 60
Specialist events 188
Traffic density 98
VDA Mittelstandstag 60
Speed governors 176
Traffic jams 98, 99, 100
VDA Quality Management Center
Speed limit 168, 169
Traffic restrictions 130, 131
Sport utility vehicles (SUV) 160
Trailer, Body and Container Industry 50,
Standardisation 178
194
Steer-by-wire systems 158
Trams 81
Summer smog 123
Trans-European transport networks
Suppliers 58, 59
(TENs) 90, 91
Meeting 120
61
(QMC) 154
VDA rating tool 60, 61
VDA small load carriers (KLT) 184
Vehicle-to-vehicle
communication 159
Vehicle Electrics 183
Supply chains 51
Transfer attempts 90
Vehicle height restriction 88
Supply Chain Management 182
Transport Costs 100
Vehicle population 199
Supply industry 51, 195
Transport infrastructure financing
Vehicle registration taxes 23, 24
Supply sector 53
company 96, 108
Vehicle safety 157
SUVs 45
Transport policy 76
Vehicle tax 101, 109
Sweden 178
TREMOD 123
Vehicle taxation 23
Syn fuel 141
Turkey 8, 26, 31, 35, 37, 42, 84
Vision of accident-free driving 157
Turnover tax 19
Volume vehicles 88, 89
Taiwan 34
Tyres 158
Tank tourism 79, 103
Wage agreement 17
Taxes 16
Ukraine 13, 38
Wage agreement system 18
Taxes on vehicles and on luxury
United Arab Emirates 49
weather situation 132
products 63
United Kingdom 39, 42, 48
Western Europe 13, 15, 38, 39, 54
Tax burden 18, 101, 197
UN ECE standards 25
Working hours 17
Tax dumping 20
Upper range 41
Workplace limit for nitrogen monoxide
Tax reforms 19
USA 12, 15, 16, 25, 27, 30, 31, 42, 117,
Tax systems 18
176, 178, 196
150
Workplace safeguarding agreements 18
Technical Harmonisation 174
User financing 105
World premieres 188, 190
Technology 179
Utility vehicles 43, 45
WTO 24, 25, 55
Telematics 112, 114
Telematics infrastructure 111
Value chain 53, 57, 59
Thailand 25, 26, 34
Vans 168, 169
Annual Report 2005
Diesels and the Debate
on Particulate Matter
Answers to the 20 most
important questions
207
208
DIESELS AND THE DEBATE ON PARTICULATE MATTER
1
Is it true that diesel engines are the biggest
source of particulate matter/ultra-fine particulate
emissions?
No! Particulate emissions are generated by a variety of sources, the
largest of which – in terms of the PM10 segment (particles measuring up to 10
micrometers) – is industry, which produces 35% of such particles. Road traffic
accounts for 20% of particulate emissions in Germany, which puts it only slightly
ahead of private households, which generate 18% of all such emissions. Other
sources of particulate emissions include power plants, other forms of transport,
and dry bulk goods.
Road transport
20 %
Dry bulk goods
5%
Other transport
11 %
Land use
21,8 %
Energy
4,1 %
Road transport
18 ,9 %
Private households
18 %
Industry
35 %
Power plants
11 %
Particulate emissions in Germany (source: BMU)
Industry
17,8 %
Other transports
2,7 %
Housing
34,6 %
Ultra-fine particulate emissions PM2,5 (2002)
(Source: CITEPA / CORALIE format SECTEN - février 2004)
The situation is not much different if we focus on emissions of ultra-fine particulates (those measuring up to 2.5 micrometers). Data from the European Commission
(CAFE Program 2004) shows that ultra-fine particulates are produced primarily
through combustion processes. The main sources here are wood burning and open
fireplaces in households, which account for approximately 25% of all ultra-fine dust
emissions. Diesel engines and industry each account for 20% of emissions, with
passenger cars contributing one-third of the emissions generated by
diesel engines, or slightly less than 7% of total ultra-fine particulate
emissions. The remaining two-thirds of the diesel contribution (13%
of total emissions) is generated by trucks.
There are noticeably high concentrations of ultra-fine particulates throughout
Germany’s coastal waters and the adjoining land areas. These concentrations
are significantly higher than those in the rest of the Federal Republic, and experts
attribute this to the combustion of highly unpurified bunker fuel that is used to
power ships at sea.
Annual Report 2005
2
Is it true that diesel passenger cars are the main
cause of particulates?
No! Diesel passenger cars contribute only one-third of the 20% of total particulate
emissions (PM10) accounted for by road traffic in Germany. Thus diesel passenger cars generate only 7% of total particulate emissions, and most of
these emissions come from old diesel-powered vehicles that conform only to the
Euro 1 and Euro 2 limits, with some of these vehicles even older than the Euro 1
standard. Nevertheless, these old vehicles still account for 42% of all diesel cars on
the road today.
The share of particulate emissions produced by diesel passenger cars is even lower
when we consider their contribution to local particulate concentrations. For example,
measurements conducted on behalf of the Berlin Senate have shown that only 25%
of the particulate concentrations measured in the capital can be attributed to local
road traffic. More than 60%, on the other hand, results from particles being stirred
up or created through abrasion, which has absolutely nothing to do with exhaust
emissions. Passenger car exhaust emissions – in other words, particulates emitted by diesel passenger cars – are responsible for only 9%
of the share of particulate concentrations accounted for by local road
traffic. This corresponds to a share of 3% of the total local particulate
concentrations. It should also be pointed out that modern diesel passenger cars
which conform to the Euro 4 emission standard are nearly free of particulate emissions (residual value of 7%). Unlike older diesel vehicles, they release practically no
pollutant emissions into the atmosphere.
209
210
3
Is it true that, although modern diesel passenger
cars emit a significantly lower amount of particulates than before, this reduction has occurred
primarily in the area of larger particulates, while
the relative share of ultra-fine particulate emissions has actually increased?
No! Measurements have shown that between the introduction of the Euro 1 norm
and the implementation of Euro 4, advances in engine technology led not only to a
reduction of the amount of particulates released into the atmosphere but also to a
decrease in their number across the entire spectrum, from ultra-fine to large particulates. Thus the number of ultra-fine particulates emitted by new diesel
passenger cars has also been reduced by approximately 90%. It is therefore wrong to conclude that the higher share of new diesel passenger-car registrations – a welcome development – has led to an increase in emissions of ultra-fine
particulates.
Is it true that PM10 limits cannot be met without
particulate filters?
There are several reasons for questioning such a conclusion. First of all, exhaust
emissions from diesel passenger cars account for only 3% of local particulate concentrations. We therefore should not be fooled into thinking that particulate filters
which eliminate the remaining 7% of particulate emissions can have any noticeable
influence on local particulate concentrations. That's because stirred-up dust and
dust created through abrasion – along with other sources – have a much greater
impact in this regard. The head of TÜV Süd, Peter Hupfer, has stated that even
if all diesel-powered passenger cars and light trucks were to be
equipped with filters, emissions of particulates would only be reduced
by an average of about 2.5% – and by only approximately 5% if heavy
trucks were added into the equation. However, this does not mean we do not
wish to make a constructive contribution to solving the issue.
Annual Report 2005
4
To the extent that it has any effect, the use of particulate filters can contribute to
keeping particulate emissions below limit values in those locations where it has
been proven that road traffic is responsible for pushing particulate concentrations
above the limits. It goes without saying that road traffic is not responsible when limit
values are exceeded due to fireworks on New Year's Eve or bonfires at Easter and
other holidays. Measurement results available since the beginning of this year clearly
demonstrate that most instances of limit values being exceeded coincide
with unfavorable weather patterns that inhibit air circulation. Many have
posed the question – and rightly so – as to whether cars and trucks will be held
responsible for a weather-related phenomenon, much as they've already been made
the sole scapegoat for all pollutant emissions. In any event, it is interesting to note
that limit values are usually exceeded during a time of unfavorable weather patterns
– whether on weekdays or weekends. Moreover, measurements taken in such situations reach record levels many times higher than the stipulated maximum. It can
thus be concluded that such excess values cannot be limited to locally restricted
areas but they rather occur in wide areas.
When several different measurement stations in Germany begin recording PM10
emissions above the limit value on the morning of New Year's Day, and when no
noticeable impact on particulate concentrations can be registered even when the
entire Rhine-Main region is closed to traffic because of a visit by the U.S. president
(which was the case earlier this year), then one is completely justified in
raising doubts as to whether temporary local measures that restrict
traffic will be effective in maintaining the legal limit values.
Is it true that PM10 limit values have also
been exceeded several times on the island of
Norderney, although there are practically no
cars there?
Correct. It's obvious that cars cannot be held responsible for the seven
instances through mid-April in which limit values were exceeded there. In fact,
they were caused by the salt content in the air, even though this salt is healthy
and enhances the quality of the island.
211
212
5
Is it true that the German automotive industry
“missed the boat” with respect to particulate
filters?
No! This statement has absolutely no basis in fact. The true story is as follows:
German automakers intensively promoted the development of particulate filters –
not least due to their obligation to fulfill the stringent Euro 4 emissions limit. German
automakers were in fact the first in the industry to offer customers diesel
cars with diesel particulate filters that are highly stable over the long
term, lead to no additional fuel consumption or loss of driving performance, and
also guarantee a tax relief of approximately 600 euros. By doing so, they had
already gained a significant edge on their international competitors by last year.
This is clearly demonstrated by the fact that 80% of all diesel passenger cars
equipped with particulate filters that were registered in Germany last
year were produced by German automakers.
Moreover, the German automotive industry announced during a meeting with
German Chancellor Gerhard Schröder in Stuttgart on July 13, 2004, that it will equip
all new diesel passenger cars with particulate filters by 2008. In the interest of its
customers, the industry has meanwhile decided that it will move forward the date
for achieving this goal, in some cases by as early as this year. Such a program is
unparalleled in the international automotive industry.
German automakers are therefore well ahead of their competitors when it comes to
equipping diesel passenger cars with particulate filters. In fact, they already began
offering a variety of filter-equipped models in all vehicle segments this spring. More
than 80 models will have been equipped with particulate filters by the end of the
year, which means that one out of every three diesel models will come
with such a filter.
Annual Report 2005
6
Is it true that some type of agreement was
reached at the VDA to prevent the introduction
of particulate filters?
No! Neither at the VDA nor anywhere else. This accusation is completely
groundless, and anyone who spreads such rumors or uses them in a campaign
against the automotive industry is either completely misinformed or else acting
irresponsibly, or even maliciously. It should also be a cause of concern when filter
manufacturers identified as such (who are not members of the VDA!) pay large
sums of money to those who use such false claims to turn public opinion against
the automotive industry.
Jürgen Resch from Deutsche Umwelthilfe
(German Environmental Aid) has stated that the
German automotive industry is against tax relief
for particulate filters and – even worse – has
attempted to boycott corresponding regulations.
Is this true?
Absolutely not! This is just another baseless accusation. The fact is that the
German automotive industry was, and still is, completely open to the idea of
tax relief for particulate filters. That's because it knows that emission-based
vehicle taxes have repeatedly proved their effectiveness as an instrument for accelerating the introduction of modern emission-control technology.
However, this does not mean we are addicted to subsidies, as some like to accuse
us of being. It was actually Germany's Environmental Minister, Jürgen Trittin, who
publicly called for tax relief for particulate filters, promising 600 euros for new cars
and 300 euros for retrofitted vehicles. It is also a fact that Trittin did not keep his
promise, as the most recent version of the proposed tax relief calls for only around
350 euros for new vehicles and 250 for retrofittings.
213
214
The automotive industry has always stressed that such tax reliefs should not be
granted simply for installing a component. Instead, they should be
made dependent upon a vehicle's compliance with specific emission
limits. During recent discussions of the proposed changes to vehicle tax legislation,
the automotive industry also repeatedly recommended that tax reliefs for particulate
filters should not be combined with a broad tax increase for owners of older diesel
vehicles. Not only would such a measure discriminate against socially disadvantaged
persons; it would also hurt those who opted for environmentally friendly and fuelconserving diesel technology in the past because of their concerns about global
warming.
Is it true that the planned tax relief might not
materialize because of disputes between the
German federal government and the governments
of the individual federal states? Apparently the
latter are not willing to forego a part of the
motor vehicle tax and the federal government
has insufficient funds.
The consequences will be disastrous if an agreement is not reached. In fact,
market confidence has already suffered from the fact that it is still unclear
whether the federal government or the individual states will bear the cost of the
subsidies. In addition, the experience gained with emission-based motor vehicle
taxes over the past 20 years has shown that the states only approve tax measures
aimed at accelerating the introduction of future emissions standards if the new
regulations do not reduce their income. As the development of income from the
motor vehicle tax has shown, the states have repeatedly managed to come up with
new ways of taking money out of car drivers’ pockets.
7
Annual Report 2005
8
Is it true that a sticker will be applied to diesel
passenger cars so that municipalities can ban
them from downtown areas?
It appears that this is the case. However, municipalities can also ban unmarked
vehicles on the basis of their emission levels. Without doubt it would be easier to
control compliance with a ban if the cars were correspondingly marked. The sticker
is therefore a means of checking that the ban is complied with. The federal government has already announced that should the Bundesrat insist on introducing such
a sticker, it would not block the initiative.
A whole range of measures may soon be available for municipalities wishing to
impose driving bans. It has to be ensured, however, that retrofitted diesel
cars will not be subject to any kind of ban.
Is it true that the negative impact of diesel soot
and particulate matter on human health has
already been scientifically demonstrated?
Germany’s Minister of the Environment has repeatedly pointed out that the reduction of particulate matter emissions represents one of the biggest health challenges.
The federal government is convinced of the urgent need to prevent harm and avoid
risks.
Ultrafine particles are considered to be particularly dangerous. However, these
are not only emitted by vehicles with diesel engines, but by combustion processes
in general. For example, private households account for nearly 35% of all ultrafine
particle emissions. Today’s diesel engines are squeaky-clean compared to open
fireplaces and furnaces without particulate filters. As such, epidemiological risk
215
216
assessments that primarily focus on diesel cars and convey the impression that
ultrafine particles are mainly associated with diesel soot are not very helpful. This
is particularly the case when these risk assessments use linear cause-and-effect
relationships derived from epidemiological studies conducted in the U.S., where
diesel cars are rarely encountered in city streets.
It should be mentioned, therefore, that the epidemiological risk assessments
made here are contradicted by the latest toxicological results from the Health
Institute in Rochester, New York. In a recent publication, this institute even
questioned the idea that ultrafine particles posed an increased health
risk. The research team headed by Peter Frampton conducted extensive inhalation
tests of volunteers under controlled conditions, using ultrafine particles containing
carbon. Although the concentration of ultrafine particles was significantly higher in
the test than that encountered in the environment, no appreciable health effects
were noticed among either healthy or asthmatic test subjects. On the basis of these
results, Frampton concluded that the exposure scenarios do not support the hypothesis that ultrafine particles are far more toxic than other airborne particles.
Is it true that a single cigarette emits as much
particulate matter as a diesel car does in an
hour?
When looking for causes of death, researchers worldwide try to find and prioritize
the main risk factors. However, any type of ranking has to take into account aspects
such as age, gender, education, body weight, work stress and diet when evaluating
risk factors. These limitations have to be kept in mind when viewing studies which
show that the risk of dying from smoking is 10 to 15 times higher than
the risk of dying from the effects of particulates (referring to all particulates, not just diesel particulates).
9
Annual Report 2005
10
Is it true that the discussion regarding particulates almost exclusively focuses on automobiles
because lawmakers find it easier to demand
driving bans than to prohibit citizens from
heating, vacuuming, barbecuing or smoking?
There is certainly reason to suspect that this is the case. It is without doubt easier
to demand driving restrictions than to ban heating systems or close down industrial
facilities.
However, a holistic approach is needed with regard to air purity. Agitation is
the last thing we need, particularly since the amount of particulate matter in the
air was reduced by 90 percent in Germany during the 1990s. And, by the way,
the renowned lung specialist Prof. Dierkesmann from the Schillerhöhe Clinic in
Gerlingen has noted that “the amount of particulate matter produced when
vacuuming, when frying a steak in the kitchen or when smoking a cigarette can
far exceed that contained in the air outdoors.”
Is it true that a city toll can effectively reduce the
amount of particulate matter produced by traffic?
A city toll would not be an effective tool to achieve this goal. Not only
does traffic account for only a small share of the PM concentrations; people and the
economy are dependent on cars. It is therefore questionable whether a city toll
could appreciably reduce the amount of traffic without also having a negative economic impact on downtown areas that are already less competitive than suburban
locations. Such an approach might work in a European mega-conurbation, of which
there are none in Germany. The only goal here is to make money. Even London is
an example of how unsuitable a city toll is in this regard. While the municipality
increases its income and the traffic flow is speeded up, the costs are borne by the
less wealthy citizens and the downtown businesses. The wealthy benefit in the end.
217
218
11
Is it true that diesel cars without a filter are
currently dropping considerably in value (800 to
1,000 euros over the past two weeks, according
to EurotaxSchwacke) and that many residual
value calculations made by leasing companies
and automotive banks are no longer valid?
Let's be careful here! According to several studies such as the Deutsche
Automobil Treuhand GmbH (DAT) market research survey, such figures wrongly
give the impression that the lack of a diesel particulate filter is having an extremely
negative impact on a diesel car’s residual value.
As part of its current market research activities, DAT has discovered that though
there is some uncertainty about how much vehicles lacking a diesel particulate filter
will drop in value, any such drop will certainly be less than some media
are now claiming. Because of the prospect of obtaining subsidies for retrofitting
diesel particulate filters, any drop in value for the vehicles in question will be limited
to the cost of retrofitting the car. These costs are far lower than the drop in value
currently being postulated by some people.
The DAT market analysis could not confirm reports that the value of new diesel
vehicles lacking a particulate filter had dropped by 1,000 euros. Irrespective of this
situation, any future drop in the value of diesel vehicles (with or without particulate
filters) will certainly be influenced by the extent to which the retrofitting of the cars
will be subsidized and whether diesel vehicles lacking a particulate filter will be
subject to driving bans or not. At present, it is still not possible to reliably determine
how this might affect the residual values of both types of diesel vehicles.
We can therefore conclude that the figures quoted in discussions regarding
the residual value of diesel vehicles without particulate filters are
clearly exaggerated.
Annual Report 2005
12
Is it true that the German automakers’ commitment to reducing the fuel consumption of new
cars by 25 percent by 2005 can be achieved only
if a large proportion of the vehicles are equipped
with diesel engines?
Yes, that is true. The diesel engine is an indispensable component of our strategy
to protect the earth’s climate. Without the diesel’s outstanding fuel consumption
levels, we will not be able to attain our objectives with regard to the climate nor will
we be able to live up to our voluntary commitment concerning fuel consumption
levels in Germany and Europe as a whole. The growing popularity of diesel technology has helped us make considerable progress when it comes to reducing fuel
consumption and CO2 emissions. We are therefore pleased that a voluntary commitment was once again chosen in preference to regulatory measures.
Is it true that German commercial vehicle manufacturers will not offer a particulate filter?
It should be pointed out that the particulate emissions of trucks complying
with the Euro 4 and Euro 5 standards are 97% lower than those of vehicles not meeting these limits, making the former practically soot-free.
In addition, the manufacturers are already making preparations for possible further
regulations regarding the reduction of emissions limits for heavy-duty commercial
vehicles early in the next decade. As is the case with passenger cars, this step
would probably bring emissions regulations to a final point.
German commercial vehicle manufacturers already offer heavy-duty trucks with
SCR technology that comply with the Euro 5 standard, even though this limit will
not become binding for Europe until the end of the decade. Compared to trucks
meeting the Euro 1 standard, theses trucks – just as those complying with Euro 4
trucks, which become binding in 2006, – have particulate emissions
reduced to a small remainder of only 3%, including ultrafine particles.
219
220
Additional emission reduction measures can be expected for the future. The manufacturers have not only been testing particulate filters for use in new vehicles; they
have also been looking for solutions that can be retrofitted into existing vehicles on
a large scale. Thanks to the proven cooperation with exhaust gas specialists from
the supplier industry, we will soon see the market launch of several highly effective
solutions. This shows the automotive industry’s dedication to doing its part in finding
a solution to problems posed by particulate matter.
Is it true that SCR technology cannot be
combined with a particulate filter?
The introduction of SCR technology is a quantum leap in the reduction
of emissions from heavy-duty commercial vehicles. The first vehicles that comply
with the Euro 5 standard are already on the market, even though this limit will not
become obligatory until the end of the decade. The manufacturers are doing all they
can to exploit the potential of SCR technology to reduce emissions and if necessary
to combine it with particulate filters. Thus we can find solutions that are all geared
toward changing the emission characteristics of heavy-duty trucks so that they will
be comparable with those of passenger cars.
Is it true that soon trucks in particular will be
banned from driving into congested downtown
areas, as these vehicles are the main emitters of
particulate matter?
Although trucks account for only 7% of local particulate matter concentrations and are therefore not the main emitters, any decision on whether
trucks will be restricted in downtown areas will have to be made locally. It will
13
Annual Report 2005
14
primarily be the task of the municipalities to implement traffic restrictions responsibly, which means improving the organization of traffic flows and imposing bans
only as a last resort. This will be necessary because of the need to protect trade
and industry and the necessity of ensuring an uninterrupted supply of goods for
the population.
The local authorities are therefore in an unenviable position, particularly when
weather conditions restrict the exchange of air for an extended period of time.
After all, the law requires that the emission limit values be met. That applies to
both commuter traffic and to delivery transport. A driving ban would be a
serious step that would have major repercussions, not only making
cities difficult to reach but also affecting their appeal as a place to live,
work and do business. People in Germany can still recall the discussions regarding plans for “car-free” cities and the subsequent need to change these plans.
Is it true that trucks emitting large amounts of
diesel soot will be subject to a higher highway toll
in the future?
Yes, that is the plan. At the Transportation Minister Conference in early April, the
federal and state governments of Germany agreed in principle on measures of this
sort. In addition, the European transportation ministers agreed in mid-April that the
possibilities for differentiating between various types of trucks in the EU toll directive
should be expanded. If the new directive is approved in its current form, there will
be more leeway with regard to tolls on the European level as well. However, the
exact details of any measures would still need to be drawn up.
According to the currently valid toll regulation, heavy-duty trucks that comply
with the Euro 4 and Euro 5 standards and are therefore extremely clean
are charged only the lowest toll rate. This approach is certainly logical with
regard to air purity, as the two Euro standards impose the same particulate limits.
However, Euro 4 trucks will be charged the same medium toll rate as Euro 3 trucks
beginning next year, even though Euro 3 trucks emit more particulates.
221
222
Treating both kinds of trucks the same way runs counter to the plan of differentiating the toll rates with the aim of reducing vehicle emissions. This type of differentiation does not help us achieve air purity goals.
In view of this situation, the automotive industry is calling for an improved
emission-dependent motor vehicle tax, which currently takes only Euro 2 into
account. The tax should be updated so that the tax rate for Euro 4 and Euro 5
trucks would be reduced to the minimum European level, thus also helping to harmonize the competitive situation for road transport.
Westendstraße 61 • D-60325 Frankfurt/M., Germany
Tel.: +49 (0) 69/9 75 07- 0 • Fax: + 49 (0) 69/9 75 07- 2 61
www.vda.de • info@vda.de
15
ISSN 0171-4317
Copyright: Verband der Automobilindustrie e.V. (VDA) 2005
Westendstrasse 61, D-60325 Frankfurt am Main
Internet: www.vda.de
Editor: VDA Communications
Dr. Karsten Eichner
Design: edition agrippa gmbh, Cologne · Berlin
Printing: Henrich Druck + Medien GmbH, Frankfurt am Main

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