At the end of the year no one predicted, the IAAF Conference 2020 provided a window on the world that could come next 

With 2021 just around the corner, the IAAF Conference provided a full-stop to the year  everyone would rather forget. Appropriately for 2020, instead of a day out in Milton Keynes, we were online.

IAAF Chief Executive Wendy Williamson set up proceedings. Her starting point showed just how far we have come since December 2019: “It’s difficult to believe that so much has changed in such a short space of time. No one had even heard of COVID, apart from the Chinese, and we were all sick to death of hearing about Brexit, and all the promises being made by politicians about what they felt was best for the UK.

“What a difference a year makes. Boris was elected with a landslide victory, and almost from day one, the government was having to cope with possibly the biggest challenge since the Second World War. A year ago it would have been unthinkable.

“Brexit has hardly been in the news, but that will all change.”

Commenting on the IAAF’s year specifically, Wendy said: “It has been the busiest year since I started seven years ago. Government advice was changing all the time, sometimes by the hour, so we very quickly introduced daily bulletins to ensure all of our members were kept up to date with what was going on.

“In addition to our communication activities, we were very busy lobbying. We were writing to Rishi Sunak, Chancellor of the Exchequer, Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy, as well as our various contacts with the DfT, DVSA, not forgetting our colleagues in Northern Ireland, where we wrote to Nicola Malone from the Northern Ireland General Assembly plus the DVA. Issues covered everything from MOTs to a range of financial, employee and employer support measures, plus of course, scrappage schemes.

“We also worked with other key trade associations from across the sector, to co-ordinate our lobbying efforts to best effect. We did have some success on the cancellation of the MOT exemption. Introduced the early weeks of the lockdown, this decision caused the biggest disruption to our sector. However, with 30% of vehicles failing their first MOT, this is an area of critical importance. At the lowest point in April, just 15% of vehicles were getting their MOT, but the situation has improved. The sector has really pulled together this autumn to get all the cars that took advantage of the exemption through. The next challenge will come in Q2 next year, when the industry will face sluggish demand, and that will unfortunately be with us for several years. Fortunately, the DVSA has been really supportive throughout.

“Other lobbying successes also included Type Approval. This was really interesting as it was the first example in our sector of the government going out on consultation to a piece of agreed EU legislation. Again, our concerns were listened to, and the consultation was subsequently adopted in full.

“Finally, yet again scrappage schemes were raised by the franchised sector and again we argued that as the majority of benefits would go to overseas vehicle manufacturers, it was little more than a marketing ploy to shift vehicles off the forecourt at the expense of perfectly good older vehicles. “

“However, in a world that no one predicted, there are some things we can absolutely predict; VMs not complying with legislation sound familiar? Take Type Approval, the most recent example of non-compliance. This was introduced across Europe and the UK in September. The legislation states that the information must be provided in a electronically processable format. This was meant to be the provision of all data for all vehicles, but the VMs are choosing a different interpretation; Data for one vehicle, at a time, not what was intended by the legislation, or is practical in today’s world.

“The legislation also states that the OBD port remain open for all service and repair, but some VMS continue to close the OBD port, insisting on a secure gateway with certified access. The result? They will know what work is being carried out on what car by whom.  The scope of the legislation stated everything from Euro 5 vehicles onwards, but the VMS have decided they will only comply with vehicles from September 2020 onwards.

“Finally, they are trying to classify the VIN number of the vehicle as personal data, which seems somewhat bizarre. If successful, it will have severe implications, potentially restricting access to the vehicle by the independent aftermarket. We will continue to fight these non-compliances to this important piece of legislation.

“We also have our work cut out on a number of other fronts. We have Block Exemption, our mother regulation, which underpins everything we do. That comes to an end in 2023. Remember, this gives us the right to service and repair all vehicles from day one and enables us to provide parts of matching quality. This is so very important to our sector. If we are not protected in this way, this could quickly result in a total lock-out from the vehicle for the aftermarket.

“Remote access to in-vehicle data is another vital area as vehicles are increasingly connected. As we see the growing importance of predictive maintenance and repair models, if we wait for the vehicle to turn up at the workshop with the problem, it will be too late. We need the right to access these vehicles much earlier. SERMI is the scheme to allow workshops to access secure areas of the vehicle in a safe and certified way. It has already had a tortuous seven-year struggle to see the light of day which now has further complications with emissions and Brexit. This is another key area for us to lobby on, as more of the repair tasks on vehicles are being re-classified as secure. This will become particularly important with the latest threat we are facing, that of cyber security, possibly the biggest threat yet to our sector.”

Wendy added: “We have our work cut out for us, yet again, for the year ahead.”

Context

Following a five minute chance to stretch, next up was the keynote speaker for the day, David Smith, Economics Editor of the Sunday Times, who provided a wider financial context, and some Brexit commentary: “I have some affinity for the aftermarket,” he observed, “being a regular user of independent garages, and having grown up in the West Midlands, surrounded by much of your sector.”

While Brexit was the central subject, the ongoing impact of COVID-19 was also covered. For David, there were four sets of questions that needed to be covered. First, the kind of recession and recovery would the economy experience, how the efforts of the Bank of England, with regards to quantative easing would impact, whether taxes would rise, and of course the level of disruption Brexit might bring.

On the potential impact of COVID-19 into 2021, he observed: “Unemployment will probably not go up as much as it has after the big recessions we can all remember; the early 1980s, the early 1990s, and the financial crisis.

“The motor industry is not a happy place at the moment, you can see this if you look at the SMMT’s rolling 12-year totals. It is still extremely weak. COVID-19 has been put on top of a lot of other things including the shift away from diesel, and the uncertainties over Brexit and so on.

Commenting on the impact of lockdowns and the tier system he said: “As long as restrictions are in place, there will not be a full recovery. I think we have to accept that.” There is some cause for optimism though: “There will be very a decisive bounce as we move into the Spring next year. That’s partly because of the vaccine, but also when you compare the second quarter of next year with what was happening this year, the numbers are just going to go off the scale. They will look spectacularly good, just because of a return to normality.”

On Brexit, David commented: “You shouldn’t forget about that, even though it has been going on for a very long time,” and he went on to discuss the increasing complexity of the situation, which has been compounded by COVID-19 pressures.”

Summing up, he concluded: “There are a few weeks of challenge to get through while restrictions are in place, and I think we all have to accept that. However, I am optimistic about what is in store for 2021. It is a question getting through to, after which the economic numbers will start looking very good indeed, for a time.”

Market

The next section looked at the likely state of the aftermarket in 2021 in three key areas. On first was Quentin Le Hetet from GiPA UK. He was looking at the marketplace, and the likely impact we might expect to see in the UK and Europe as a result of COVID-19.

Casting back to 2010, he looked at the changing market, as diesel rose and fell, and EVs and hybrids rose and rose. “We had a changing dynamic for the decade to come, with new energy and new mobility,” said Quentin. 

He continued: “The impact for 2021 and further beyond in terms of the automotive industry depends on two key structural points for the car parc, which is going to change massively.

As recently as two years ago, Quentin was predicting a fall in car ownership, but Coronavirus has shifted that course. “Because of COVID-19, everyone wants their own car to avoid taking any kind of public transport.”

On the fall in new car sales in 2020, Quentin said: “This is going to determine the car parc we have for the next 15 years. That lack of new registrations in 2020 will impact franchised dealers mainly for three years, then it will impact on independent garages. The other thing is that the car parc is going to age quite rapidly. The average age of the car parc at the start of 2020 was 7-8 years old. The number of 5-9 year old cars is going to increase, and by 2023 the car parc will be 14% older than it was in 2015.”

On EVs he said: “Last year, 10% of newly registered vehicles were either EVs or hybrids. We had the announcement this year that the UK government would ban the sale of ICE vehicles by 2030.”

2030 is still a decade away though, and older cars do not disappear overnight: “You will see more older diesel and petrol vehicles coming into the workshop, with good technical issues that need addressing.”

On the rise of EVs and hybrids, he added: “It is very important to start planning ahead. You invest too early, and you won’t see the right cars in your workshop. Do it too late, and it’s going to be too late. This is about finding the right balance, as well as training technicians to work on those vehicles.”

Moving over to people, we had a trio of figures from across the sector who were looking at the impact of COVID-19. We started on the recruitment side with Glen Shepherd from Glen Callum Associates and Andy Lees from PG Automotive, who were then joined by Rachel Clift from Ben who looked at the effect the pandemic was having on mental health.

Attack of the Cyber?

After a slightly longer break, enough time even for a coffee, Ronan McDonagh, Technical Director at FIGIEFA was up, talking about cyber security threat, and what the latest United Nation Economic Commission for Europe (UNECE) cyber security legislation could mean for the sector.

“A typical vehicle today will have maybe 100 million lines of software code,” he explained, “and 150 different ECUs inside the car.

“They are being more and more defined by their software. At the same time, cars are becoming connected over wi-fi to the outside world, and also the car are becoming autonomous. All of those factors increase the risk of a cyber attack.

“The fact that the vehicle is defined by its software provide the means for having a cyber attack. The fact the vehicle is becoming autonomous means potentially that the impact of a malicious hack could be very serious. I think cyber security is very relevant for us in the automotive industry, and is required in order to protect the vehicle, the driver and road users in general.

“We have some new rules coming in that have been defined by the UNECE. For us in the aftermarket, the indications are significant. Everything in one way or another will be affected by the regulations.”

Parts that are electronic in some way will be impacted: “The first question to ask will be is the component electric or electronic. If it’s not it won’t be affected. If it is, there will be a number of questions, such as does the part have an interface outside of the vehicle? Is there a significant safety impact related to that component? Does it have wireless sensors? Does it use, access or store data? Is it a network component? If the answer to any of these questions is yes, then the part will be subject to cyber security rules. That means you need to take some action. The first thing would be the requirement to put a cyber security management system in place. This is about defining processes.

“In the end though, you will need to fit that component to the vehicle, and in order to do that you need the requirements from the manufacturer to integrate it to the vehicle. If there are digital certificates, you will need to know that. “

Cyber security is likely to impact on parts manufacturers in a big way according to Ronan: “Some of the traditional reverse engineering that we have done to into making parts is going to become more and more difficult, if not impossible.”

True colours

After that cheery thought, we moved onto the IAAF’s recent activities with Head of Membership Mike Smallbone. As in previous years, IAAF membership growth was covered. However COVID-19 has done its work here too, so the  industry briefing sessions he normally discusses had already moved online, while  the IAAF golf days had given up on 2020 entirely and jumped into the future. 2021 promises to see things begin  to move back to normality, so keep your golf clubs handy.

Last up was IAAF President Terry Knox, with the IAAF Pride of the Aftermarket Awards. The IAAF Annual Dinner, usually held in the evening after the conference is  the regular home for such things, but in 2020, this shifted to lunchtime.

Terry then closed the conference with a few thoughts: “This year, more than ever, we have seen the true colours of the aftermarket showing through with generosity and support in the face of adversity.”

With Brexit looming, Terry concluded: “As well as representing us in the UK, it should be remembered that Wendy also represents us in Europe, through FIGIEFA. It is imperative that we remain engaged with our European federation, to stay on the front foot and face all the challenges ahead, whether it be digital developments or vehicle electrification. It’s good to know that regardless of Brexit, Wendy will be keeping us in Europe.”