Impact of the climate change discussion on the
German Auto Seminar,
German automotive
industry
Ingolstadt, May 29, 2008
Impact of the climate change discussion
on the German automotive industry
Dr. Guido Haak
Head of Product Management China/
Central Functions Product Management,
AUDI AG
Impact of the climate change discussion on the
German automotive industry
• Facts regarding CO2 and the
automobile
• The public discourse
• Impact on the German
automotive industry
• Summary
Impact of the climate change discussion on the
German automotive industry
CO2 emission = fuel consumption
1l Gasoline
1l Diesel
2.3 kg CO2 (Gasoline)
2.6 kg CO2 (Diesel)
Conversion factor consumption - CO2
ƒ
Gasoline: 1 l/100km = 23.8 g/km CO2
ƒ Diesel:
1 l/100km = 26.5 g/km CO2
120 g/km= 5.0 l/100km
120 g/km= 4.5 l/100km
Impact of the climate change discussion on the
German automotive industry
50% of consumption are avoidable losses
Overcoming
of external
driving resistances
█ 12% - weight (Inertia)
█ 11% - aerodynamic drag
█
Losses
Ideal
energy conversion
8% - aircon, cooling, electrics
█ 19% - powertrain: transmission,
tires, wheel bearings,
power steering pump
█ 19% - engine: friction,
charge changing
combustion process
█ 31% - engine: conversion
of chemical into
mechanical energy
Impact of the climate change discussion on the
German automotive industry
Significant efficiency increase in road transport
Traffic volume people/freight, CO2 emissions 1990 = 100
People km traveled
Tons km (freight)
CO2 emissions
Impact of the climate change discussion on the
German automotive industry
Automotive industry has only a small lever
Share of greenhouse
gases*
Share of regions in CO2
emissions worldwide
Others
- Methane
36%
- CFC
- Nitrousoxide
Share of industry sectors in
German CO2 emissions
Industry, trade
RoW
48%
Private
households
25%
13%
China
CO2
12%
14%
64%
43%
USA
24%
Rest EU
9%
UK 2%
3%
*w.r.t. anthropogenic greenhouse gases, i.e., man-made
Power and
heat plants
Germany
Passenger
cars
7%
Remaining
traffic
Passenger car traffic in
Germany has a share of
0.2%, in the EU of 1.4%
in anthropogenic greenhouse gas emissions
Impact of the climate change discussion on the
German automotive industry
• Facts regarding CO2 and the
automobile
• The public discourse
• Impact on the German
automotive industry
• Summary
Impact of the climate change discussion on the
German automotive industry
Issue #1: National regulation differs
National interests are different and
always will be …
… and motivate diverse regulations
and incentive systems
Local
environment/
pollutants
Technologies
Industry politics
Focus of
regulation
Resource politics
Environmental politics
Mobility
Global environment/climate
Impact of the climate change discussion on the
German automotive industry
Issue #2: Disharmonic approaches at all levels
EU
European fleet targets for CO2 emissions (EC proposal under
scrutiny)
Code of conduct for certain vehicle concepts
CO2 labelling
Green Procurement (environmental-friendly cars)
Eco-consumer-rating on basis of life cycle assessment
(production, use, disposal)
Länder
Länder
Countries
CO2 based annual vehicle taxes
Registration and import taxes
National CO 2 labelling
Städte
Städte
Städte
Städte
Städte
Cities
Diverse local regulatory policies in cities and communities
on basis of CO2 and pollutants, e.g.,
ƒParking fees
ƒToll systems
ƒLocal fleet requirements
ƒBan from inner cities
Impact of the climate change discussion on the
German automotive industry
More challenges than climate change
Responsibility for
our customers
Social responsibility
Cost of
ownership
Climate
change
Brand claim:
Technical and
traffic laws
Safety
Vorsprung
durch Technik
Use of
resources
Pollutant
reduction
Impact of the climate change discussion on the
German automotive industry
Customer behavior does not follow the public discussion
Buying reasons in the EU, Germany and USA 2007
Premium segment:
Design beats
environment
1.
Reliability
2.
Safety
3.
Value for money
4.
Total cost of ownership*
5.
Environmental friendliness
6.
Design/Styling
7.
Good relationship with dealer/service station
8.
Brand/prestige
*Purchasing price, taxes, insurance, consumption, service
Impact of the climate change discussion on the
German automotive industry
Integrated approach necessary to reduce CO2 in an
economically sensible way
Vehicle measures
Alternative fuels
CO2 emissions of a
single passenger
car in normed cycle
CO2 reduction by
generation and
consumption of
alternative fuels
Infrastructure
Driver behavior
Reduced CO2
emissions through
improved traffic
control
Assistance systems
and training to
reduce CO2 emissions
in real driving cycle
Regulation of CO2
emissions must
follow a holistic
approach
Impact of the climate change discussion on the
German automotive industry
• Facts regarding CO2 and the
automobile
• The public discourse
• Impact on the German
automotive industry
• Summary
Impact of the climate change discussion on the
German automotive industry
Implications of discussed and decided political measures
Short-term (next 12-24 months)
Further increase in Diesel share in Europe
Shift to smaller cars/smaller engines
Higher share of low consumption concepts
Increase in total cost of ownership for the customer
ƒExpensive
technology will be partially priced
ƒHigher maintenance cost for complicated technology
Long-term (next 5-10 years)
Risk of stigmatisation of vehicle segments (e.g., SUV)
Permanent shifts in competition
Diesel share uncertain due to increasing emission
standards (EU6) and fuel price development
Lead time 4-7
years
Impact of the climate change discussion on the
German automotive industry
• Facts regarding CO2 and the
automobile
• The public discourse
• Impact on the German
automotive industry
• Summary
Impact of the climate change discussion on the
German automotive industry
Summary
Climate and CO2 discussion is here to stay for the automotive industry
Car buyers all over the world expect the industry to provide climate
friendly solutions which cost nothing and allow them not to change their
behavior
The automotive industry will provide solutions to a certain extent but not
immediately and only at additional cost
Disturbances are generated in this process by contradictory regulation by
regional, national and international politics as well as by a public
discussion not based on facts
Impact of the climate change discussion on the
German automotive industry
Dr. Guido Haak
Head of Product Management China/
Central Functions Product Management,
AUDI AG
Impact of the climate change discussion on the
Disclaimer
German automotive industry
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