Striving for a sustainable aftermarket

by Maria Ranieri,  Director Parts Magazine Italy

Among the most urgent issues facing contemporary society, environmental sustainability is perhaps the most decisive. The reflection on how to leave a better world to our descendants – accelerated by the current pandemic – and the international initiatives aimed at reducing CO2 emissions, must necessarily take also into account the automotive industry, which must do its part and contribute concretely to reducing the overall environmental impact of its activities and products.

The aftermarket sector must also stand up to these challenges, particularly since it is increasingly urged by the automakers oriented to the irreversible process of decarbonizing the planet and to energy efficiency strategies with the support of the various national governments (Paris Agreement 2030) with fiscal and administrative policies. These demands consider electric mobility to be a concrete solution for reducing and curbing concentrations of pollutants, above all in urban areas, bearing in mind that climate change can be prevented, especially by using energy generated from renewable sources. 

As part of this virtuous process aimed at reducing the environmental impact in the manufacturing (and disposal) of motor vehicles, everyone in the automotive industry – already struggling with disruptive trends such as self-driving vehicles and connected cars, digitalization, Big Data – is called to do his part, starting from the processes upstream of the production chain.

Aftermarket and sustainability

The commitment towards environmental sustainability of the aftermarket supply chain and its operators entails different tasks and impacts. Component manufacturers should reduce the emissions generated by their production processes and control the indirect emissions of their energy suppliers. Together with automakers, the component manufacturers constitute an eco-system that proceeds together towards decarbonisation, also including distribution and logistics. Repairers too, must also become an active part of this system, adopting correct behaviours and preparing to face the deep changes of the mobility world. Car repairers and body shops are already experiencing the effects of a car fleet that is orienting to hybrid and electric engines in an irreversible process.

Towards electric mobility

It is not the cars we use every day that contribute the most to greenhouse gas emissions: road transport accounts for about 11.9% of global greenhouse gas emissions and about 16-18% of CO2 emissions, while the auto industry generates about half (source: Bain & Company, 2021). However vehicles must contribute to the overall reduction of emissions. And Italy has one of the oldest car fleet in Europe: out of 38.5 million cars on the road, 30% are over 15 years (Euro 0-3). Adding Euro 4 models (10.4 million), obsolete cars are 56.4% of the total vehicles in circulation (UNRAE 2020 data). But things are changing.

The Italian car market, hit by the economic crisis caused by the pandemic, closed 2020 with a -27.9% drop, just over 1.38 million new registrations (Anfia 2021 data). Negative results, whose effects have been limited by government incentives that led to the scrapping of over 120 thousand cars, savings more than 155 thousand tons of CO2 compared to the annual average.  During 2020, the registrations of traditional-powered cars (-41% diesel and -39% petrol powered) decreased, yet alternative engines grew by 35%. And sales of hybrid and electric cars, thanks to the positive effects of the Ecobonus, increased by 122%!

Challenges in the pipeline

The rise of electric mobility represents a rather defined response to the environmental emergency and the aftermarket world is facing important challenges: the transition to greener models and the companies’ energy policy while continuing to operate on the contemporary market, still made up of petrol and diesel powered cars, and getting ready for the radical change that will come when the volume of electric cars becomes significant and will involve structural changes throughout the supply chain. In electric vehicles, for example, engine and gearbox components are expected to decrease by up to 70%, a reduction that will have a major impact on production, distribution, inventories and logistics. In the car repair shop, the complexity of tasks will increases and adequate training will be needed.  The relationship with customers will also change, so that new services and partnerships with specialized operators (insurance companies, fleet operators, energy suppliers) need to be developed timely. The environmental emergency must be transformed into a positive driving factor full of new opportunities.