Automotive Exports March 2021

Italian auto
suppliers eager
to resume
production as
Europe gradually
reopens
With the European car industry preparing
to restart its engines as coronavirus
lockdowns across the continent begin to
ease, automotive suppliers in Italy do not
want to be left behind.
China-owned Volvo Cars and Germany’s
Volkswagen Group, the market leader in
Europe, are among the manufacturers who
have announced plant reopenings.
But in Italy, the initial epicenter of the
coronavirus outbreak in Europe, the
government has signaled that the economy
will reopen gradually only after May 3,
despite industry calls for an earlier restart.
“We are ready to restart on May 4,
but in fact it would really be necessary
to do it earlier,” Marco Stella, head of
the components branch of the Italian
Association of the Automotive Industry
(ANFIA), told.
While the bulk of the European car industry
is aiming to revive production in early May,
auto parts suppliers need a head start
to deliver their products in time for the
assembly line, Stella said.
Stella is also chief executive of DTS, a
maker of exhaust and fuel systems for
high-performance cars, and one of the
vice presidents of CLEPA, the European
Association of Automotive Suppliers.
DTS is based in the heart of Italy’s so-called
Motor Valley in the northern Emilia-
Romagna region. Its headquarters are in
Maranello, which is also home to Ferrari.
The famous prancing horse marque is
one of DTS’ top clients, alongside other
supercar brands such as McLaren, Aston
Martin and VW-owned Bugatti and
Lamborghini.
Italian daily La Repubblica reported that
the restart of car production in Germany
could be at risk if the supply chain from
Italy does not resume promptly.
But a German auto industry expert,
professor Ferdinand Dudenhoeffer from
the Institute for Customer Insight at the
University of Gallen in Switzerland, said the
claim was a bit overblown.
He said Italy “has a limited importance for
the supply chains in Europe,” and noted
that carmakers usually “have at least two
suppliers for a component.”
“There may be a bottleneck in one instance
or the other, which in my opinion should
not be fundamental. So La Repubblica is
putting it somewhat dramatically,” he told
DPA.
According to Stella, exports to Germany
accounted for nearly 10% of the Italian car
component industry’s 50 billion-euro ($54
billion) turnover last year.
He also mentioned a recent letter of
support from Hildegard Mueller, president
of the German Association of the
Automotive Industry (VDA), addressed to
Italy’s main business lobby Confindustria.
“(Mueller) stressed the interdependency of
our industries, and how much the German
car industry needs its Italian suppliers and
partners in value in Europe,” Stella said.
The coronavirus pandemic has struck the
European car industry at a time when the
sector was already going through a difficult
transition.
Manufacturers have for a while been
under pressure from ever-tighter emission
standards and the cost of new investment
in technologies for hybrid, electric and selfdriving
vehicles.
Against that backdrop, sales for new
cars in the European Union tanked by
more than 55% in March, a year-on-year
record collapse blamed on pan-European
lockdown measures.
Stella talked of the need for a “bazooka”
in terms of market subsidies to revive
demand – a move also called for by the
European Automobile Manufacturers
Association (ACEA).
According to Dudenhoeffer, “the
coronavirus will weaken the European
auto industry for a very long time,” forcing
restructuring which “not all” of the current
players “will survive in their current form.”
“There will be mergers, overcapacity
will have to be reduced and workforce
numbers will decrease significantly,” he
said, predicting hard times for Ford, Fiat-
Chrysler, Peugeot-Citroen-Opel, Renault
and Jaguar-Land Rover.
“On the other hand, I see the German
Volkswagen Group and BMW as being in a
stable position. VW in particular will also
expand its global market leadership with
electromobility,” Dudenhoeffer said.
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