As we head towards the opening of the 2007 International Motor Show Cars (IAA) in Frankfurt, the CO2 discussion in the automotive industry is continuing at an intense pace. Climate change and CO2 reduction have garnered enormous quantities of press coverage in both industry and general media. As a result, we are witnessing today a heightened public awareness which is in turn stimulating strong consumer expectations for regulators and the automotive industry to address this top priority issue.
Due to mounting public debate and regulatory pressures, we are currently seeing strong efforts and renewed investments by manufacturers and suppliers in providing solutions to the CO2 reduction challenge. As opposed to other environmental regulations affecting the auto industry, this time the solutions and strategies available are more complex and go far beyond the simple question of which is the most suitable engine technology. Both the auto industry.s response to a regulatory framework as well as its competitive positioning as a result of it, will depend on the nature of the detailed legislation itself. Environment protection groups are calling for greater legal enforcement and new, stricter laws, the EU and local governments are themselves considering a variety of regulatory measures, like CO2 emission limits or emission-based taxation. Responding to this, automakers emphasize the negative effects a proposed legislation might have and refer instead on technological improvements either already achieved or still upcoming. Furthermore, competitive battle lines between German, French and Italian manufacturers are being drawn up as to which strategic course of action the EU should employ to regulate CO2 emissions. Given their fleet structure, the Italians and French prefer a blanket approach in line with a uniform fleet limit, while most German companies call for a differentiated approach, based for instance on weight or segment of the vehicles and thereby request an equitable contribution to the required increase in fuel efficiency by all manufacturers.
On the other side of the spectrum, consumers continue to face uncertainties and have a myriad of questions that still need to be addressed.
Our study aims to investigate and analyse the framework, the challenges and the dynamics of the CO2 reduction puzzle in the automotive sector by shedding light on the fundamental issues and putting them in context: What are the overall motivating factors behind the environmental ambitions of the regulators? Where does the automotive industry stand in view of vehicle emissions and the efforts to reduce them? What are the current regulatory approaches towards achieving stricter CO2 targets and what supply-side approaches are there available to achieve such emission levels? Finally, the question needs to be examined as to what the consumer.s position is in all this and how the demand for cleaner vehicles can best be stimulated?
These are complex, interdependent and vital questions for the auto industry, explored by the experts of the PwC Automotive Advisory Practice and the PwC Automotive Institute (AUTOFACTS).
