GUARANTEE THE CONTINUITY OF FIRMS
AICA 37TH NATIONAL GENERAL MEETING
Putting easy recipes aside, in order to overcome the omnipresent crisis, the strength of a healthy company, especially when its quality is top level, as in the case off Italy’s garage equipment industry, is its ability to believe in itself and in real and constructive aggregation. This was the leitmotif of the general meeting of garage equipment manufacturers
The strength of the association
“As an entrepreneur, a feeling of alienation and the distance between what we are experiencing in our trenches and what is happening in the country is such that I don’t feel like joining in the chorus of proposals for solving the problems that are just empty words. I believe that it is better to leave to others the role of commenting on economic analyses, because we know very well who will pay the bill in the end, with firms at the top of the list. I think it is much more useful to concentrate on initiatives that, as AICA, we can take in the knowledge that now more than ever before we can depend only on our own strengths”. This was how chairman Giorgio Cometti opened the 37th AICA national general meeting.
The common denominator that led to the birth of AICA thirty-seven years ago was the determination to bring out the values of companies which, at that time, were contractors and made equipment that was frequently sold with the brand names of other countries. It also led to the birth of the Autopromotec fair, the aim of which is to increase the strength of Italian products. The undeniable result of this work is the fact that Autopromotec has become a leading international event. “And today, 24 November 2012, in the middle of the crisis, not only can we confirm the record numbers of the previous edition, but in all probability we will have a few more exhibitors. To highlight the context in which we work it is interesting to analyse some data that came from a neutral source in the segment of fairs in general. Of the 86 new fairs that opened in the last four years, 85 have closed and the total market fell by 10%. The reason is obvious: at one time company budgets were such that they could take part in several fairs, but this is no longer the case; they meet once every two years in one place, in our case Bologna. However, we should not forget that it is precisely when things are not going well that, if we have the chance, we must make choices that guarantee the continuation of firms. If we wait until the decline begins, it will be more difficult to stop it. Together with our tyre members, AIRP, this is why we have decided to equip ourselves with the tools for answering the requests for the services of tomorrow and create the conditions for becoming the automotive aftermarket hub in Italy”.
The idea is to build a “community” which gathers around itself all the players in the automotive aftermarket. The moment is right because for the first time in history revenues from repairs in Italy exceed those from the sale of new vehicles. And then to create a series of initiatives that will strengthen relationships with other manufacturers’ and users’ associations, many of which hold their meetings at Autopromotec. The chairman also emphasized the importance of communication and education. Much appreciated among the recent actions that combine communication and education were the AICA leaflets on machinery safety and exhaust extraction. “Users are frequently confused by certain low-cost commercial offers and neglect essential safety needs. They then find themselves in trouble in the event of an inspection or, worse still, an accident”. Going on to innovation and the importance of keeping in step with developments “we are recognizing that our firms, which are very good at designing and producing, often do not know, sometimes because of their size, how to localize funds for research: they do not know the channels, practices or language. Faced with these problems, they tend to give up”, but it is important to get the advice of expert consultants so that won’t miss significant opportunities.
We also need more lobbying. One of the problems of mid-size firms is that they have neither the numbers of artisans nor the economic power of large groups. This is why they do not get the necessary support from the institutions. A typical example is the new road worthiness system”. Member companies have invested considerable resources in the implementation of the new communication protocol, but now they have to reckon with the time schedules for implementing the entire system. For this reason it is necessary to multiply our efforts and involve other travelling companions who share our objectives and interests, to achieve the critical mass necessary to make our voice loud and strong. To give a concrete example, the subject of vehicle inspections concerns us, but also vehicle manufacturers, spare parts manufacturers and car repairers. It is in the interest of insurance companies that vehicles are efficient and, if we are able to do a good communication job, it should also be in the interest of the end user. It is true that road worthiness tests are perceived as a cost, but it is equally true that when you are waiting at a traffic light, the last thing you want is someone behind you whose brakes are defective or has bare tyres, especially if the road is wet.
On Made in Italy and its protection, the situation has worsened. We left each other talking about a legislative framework under development, but today the regulatory procedure for putting the subject in order at Community level has been completely blocked. We continue to follow up the matter, but we are more pessimistic than ever about a quick solution. However, we have to say that, in some cases, products that made a lot of noise because of their price were deflated as soon as reliability and servicing were put to the test. Even countries that have had strong penetration of low-cost equipment are beginning to reconsider and are opening up spaces for Italian garage equipment. I just want to tell you in advance that in the past we could count on the logistic and financial support of ICE for attracting buyers to Bologna, but today we must do all this ourselves”.
Cometti spoke at length about certain organizational matters and emphasized that investments and efforts were being made to bring many international operators to Bologna. “We are working on efficiency, the choice of objectives and the ability to be creative, innovative and have a streamlined decision making processes, because we can count on extremely proactive members. The challenge we are launching for the next two years is extremely demanding and on the verge of being bold, but if we are not a little bit outrageous we cannot map out new roads. Today we are going through the most serious financial crisis within living memory, so we certainly cannot profess to affect optimism. It is equally true however that in 2012 there are countries that are still in strong expansion: for example those that are best known to us like Brazil and Turkey. We are not feeling sorry for ourselves, but working to ensure that growing numbers of operators come to Bologna to buy our products. I would like to remind you again that our association does not have the same support as the strong powers, we try to implement the initiatives we are capable of doing. To conclude, as a good engineer from Veneto I only know one way to tackle problems and that is to get to work”.
Analysis of association balance sheets
Onelio Picchioni, AICA vice chairman and treasurer, presented the association’s accounts for the approval of the general meeting. Specifically, he described the 2011 statement, the 2012 provisional balance, and the 2013 estimate, which shows a balance. This will allow for continued investment in promotional actions for the garage equipment sector, a world excellence in the Italian automotive industry.
Tools and opportunities for supporting research and innovation
Innovation and tools for supporting research and development were discussed by Roberto Furini, chief executive officer of Warrant Group, a company specialized in strategic consultancy in support of firms. With over 130 professionals and more than 2000 clients, in addition to its headquarters in Correggio, Warrant has another four offices: Casalecchio di Reno (BO), Piossasco (TO), Rome, and at the science and technology park Kilometro Rosso (BG). In Europe, the company operates through the European Funding Division of Brussels and in India through Agré-International in Mumbai. Over about 20 years of working in the innovation area Warrant Group has created a database of over 10,000 projects, developed and justified in favour of firms, for a total value of about 6 billion euros.
As stated by the Minister for Economic Development, Corrado Passera”, – Furini emphasized – “there are two areas on which ministerial interventions will focus in the coming years: new entrepreneurism and networks of firms. The new national incentive policies firmly believe in a “team game” and in “network” collaboration for sharing common experiences, knowledge and expertise aimed at the increased competitiveness of the entire system and not just the individual. It is not by chance that the Stability Law (Law 228 of 24.12.2012) envisages the institution of a fund for tax credits for industrial research and experimental development that firms, with particular reference to SMEs and networks of firms, carry out in-house or implement through universities, public research bodies or research institutes.”
But what is the state-of-the-art of our entrepreneurial system in this respect? On the firm networks front, despite the fact that our country is extremely eclectic and has a wealth of excellences, it is struggling to cooperate where working as a network would be successful in an industrial fabric composed mainly of small and mid-size enterprises. It is primarily a cultural problem: an entrepreneur finds it difficult to overcome traditional diffidence and share experiences, knowledge and expertise with the objective of individual and shared growth. “Something that absolutely does mean sharing know-how and, therefore, industrial secrets, but uniting his own excellences in terms of skill, experience, technology, method, innovation. Also bearing in mind that when an innovation project is approached, it is does not follow that they have all the technological expertise in-house that would be easily achievable through cooperation with universities, research centres, innovation companies.” On the research and development front, all companies, irrespective of their size, understand that if they want to remain on the market and be competitive, they must be innovative. Growth, profitability and competitiveness are in fact the pillars of company wellbeing that are directly connected to four drivers of development: take to market innovative product or services solutions that will attract existing or potential customers; widen the horizons of business and tap the riches of growing economies; build, efficiently coordinate and create the loyalty of human capital and, lastly, choose the best financial strategy to support prior activities. They are 4 essential levers that enlightened entrepreneurs must work on contemporaneously.
But what does being innovative mean in concrete terms? “For Warrant it means working alongside companies to support their business from the point of view of transferring the technology required to make them competitive; from a financial point of view it means making adequate use of the public funds available. In any case, before taking any action, the company must carefully analyse the skills, organization and processes that will enable it to make an objective assessment of its ability to generate innovation and support the pressure of innovation in its sector. Secondly, to invest in an innovation project it is important that the company takes three parameters into consideration: its own means, public incentives, medium- and long-term financing directly linked to the banking world. Last but not least, the company must understand the different operational stages of a research and development project (basically three: basic research, applied research and industrial development) in such a way that it can take full advantage of the opportunities derived from public funding, some of which is addressed only to basic research, while others foster industrial development. It should be understood that being innovative must not be correlated with the possibility of obtaining funding, but as essential for pursuing an industrial plan in competitive terms.”
Another fundamental aspect is a correct and thorough knowledge of the tools made available by the European Commission and the mechanisms for accessing them. Specifically, the Seventh Framework Programme for technological research and development (FP7) is the EU tool specifically designed to support research and development. In force from 2007 to 2013 and with total funds of 51 billion euros, the Seventh Framework Programme is now close to termination. In particular, for this last year, 8.1 billion euros were allocated to support projects and ideas that will drive European competitiveness and tackle such issues as health, protecting the environment and finding new solutions to the growing challenge of urbanization and refuse management.
Although Italy has always been one of the biggest net contributors to the EU balance sheet and in recent years recorded growth in the number of Italian firms participating in tenders, we still do not have the ability to use European resources in the same way that our competitor countries do. In effect, a company, whatever its size, that wants to make use of the many opportunities envisaged is taken aback by the inextricable jungle of regulations that are difficult to interpret and apply. To make use of these opportunities, the first step is to ascertain their existence, the second is to verify the possibility that they can be a beneficiary, and the last step, the most difficult, is the study, design and preparation of the necessary forms. The correctness of these elements is a necessary condition for not missing an opportunity to acquire the relevant contributions. Also bearing in mind that the European Union’s next financial programme, “Horizon 2020”, will have funds of 81 billion euros, which for Italy is an extraordinary strategic opportunity for growth and the creation of new jobs, an opportunity that in this international scenario we absolutely cannot miss.”
MCTCNet 2 development and prospects and new European road worthiness proposals
AICA consultant Massimo Brunamonti talked about the situation of road worthiness laws in Italy and abroad. Firstly, of course, MCTCNet2, situation, time schedules and application methods. “We all remember that last year we manufacturers were involved in an experiment prompted by the Ministry for Transport. I believe that is important to point out that, despite the complexity of the system, the experiment was basically successful in the sense that it demonstrated how inspections, also with MCTCNet2, can be carried out with absolutely automatic and practical methods and in times that are comparable with those that were and still are the same today, with the clarification of costs, resources and infrastructures. Basically, the Ministry had confirmation of its idea of having reliable inspections with the centralized and automatic collection of data for all. From a theoretical point of view this removed doubts, from a practical point of view it is coming up against some problems, because in order to implement the system it is necessary to have market availability of the biggest possible choice of MCTCNet2 homologated software and equipment, and this does not match the Ministry’s limited resources”.
Subsequently, the Ministry issued a circular in which it “clarifies” or “reviews” the timescale for the implementation of MCTCNet2. In this circular, the new programme specifies that: from 1 April 2013 would begin on installing software in the inspection lines, PC station and PC booking. At that date, verification would also begin of equipment adaptation; that is, the equipment used in the inspection line, which to date is homologated for the MCTCNet1 standard, would undergo verification of conformity with MCTCNet2, but how these verifications would be carried out has not been defined. This is still not clear. Lastly, confirmation has been given that the inspection centres have one year, that is until July 2014, to adapt all equipment to MCTCNet2. In another circular, the Ministry also introduced amendments to the technical standard. Will everything be done in time and with what guarantees? “I refer once again to the fact that from 1 April the equipment could be verified, but we still do not know how the verifications are to be carried out. This is the situation in Italy. Moreover, there are problems with the structures currently available for the technical verification of homologation. Basically, our market lacks an essential mechanism by which manufacturers can put new products on the market”. In brief, the MCTCNet2 time schedule is: from 1 April 2013 all software that has passed verification and has received the homologation certificate can be installed at inspection centres; 1 April 2013 is the date for the start of verifications of MCTCNet2 adaptation to the equipment for which the relevant documents are expected to be issued by 30 June 2013; starting 1 July 2013 MCTCNet2 updates can be installed in existing equipment, or new equipment compatible with MCTCNet2 and which has passed the verifications; the inspection centres have one year to adapt their structures; on 1 July 2014 the MCTCNet2 environment will be compulsory for everyone.
Going on to the European picture, the European Commission issued a regulatory proposal for the new road worthiness inspections in a European Union “white paper”, which intends to halve deaths from road accidents by 2020, as in the 2001-2011 ten-year period. In this light, fundamental for achieving this objective is the vehicle’s ability to be driven safely. In the regulatory proposal the Commission envisages a new inspection method for all types of vehicles. Light and heavy. In brief, the new inspection package envisages: the inclusion of two-wheeled vehicles, which is already the case in Italy; a different frequency of inspections which passes from 4-2-2 to 4-2-1, with more inspections required for vehicles that have over 160,000 km on the clock; the introduction of national electronic registers for collecting inspection data which would be shared with other Member States; an obligatory number of roadside verifications in accordance with a vehicle risk profile; the introduction of legal proof provided by registering the kilometres of every vehicle. In effect, there are important new developments for garage equipment makers. The change in frequency and the introduction of a minimum number of roadside checks should generate a significant number of inspections every year, and this is certainly positive for us. The regulatory proposal also introduced instrument verification of suspension. To be introduced gradually are instrument tests of electronic devices and electronically-controlled safety devices, so ABS, ASR, etc.. All new developments that are totally positive for us and the spin-off business before and after inspections. “In Europe there is a very differentiated picture of inspections at this time and this does not help the harmonization of regulations in European Union countries. For example, in Germany, a law was passed on 30 March last year which introduced tests on electronic safety devices, but they are to be carried out with specific once-off methods and instruments. This is a problem and can lead to problems with pre and post inspections. What I mean is: if the inspection is carried out with one instrument, or with a method that cannot be repeated, the vehicle cannot be repaired or be inspected. AICA is monitoring the situation and it will be first in line with EGEA for giving Italian garage equipment makers a national and international voice”.
Actions for promoting Autopromotec abroad
Emanuele Vicentini, Autopromotec brand manager, spoke about the initiatives for the 2013 fair and the prospects of the fair market. “We are carrying out many initiatives and the jewel in the fair’s crown is still equipment and the internationalization of the fair depends on the fact that Italian equipment has been internationalized”.
Vicentini spoke about the evolution of the fair and growing attendance by visitors from abroad in general and above all in 2011. Satisfaction also with regard to attendance at the last edition by national and international specialized press, journalists, web portals and blogs. “The most significant initiatives include the confirmation of AutopromotecEdu with a more important, more international calendar that meets the need for sector knowledge; our ambition is to ensure that it can continue even beyond the fair because companies need educational moments. AutopromotecEdu is an arena for taking an in-depth look at after sales and assistance and the conference that was previously called Simposio Europeo this year will be called the International Automotive Aftermarket Meeting, to go beyond Europe and include BRIC countries and the new BRIC”.
Another important project is Autopromotec Industrial Vehicles Service, which was set up in 2011 and has been reconfirmed for 2013 in order to increase the visibility of servicing for heavy vehicles at the fair. The initiative does not mean special areas or dedicated pavilions, but a specific tool, a guide for operators specialized in this sector who can optimize their visits to the stands. New proposals include Autopromotec Filling Station Equipment. “What have we done? In effect, people who work in filling stations are not interested in just one product category, they are interested in at least three different product categories, from car care to equipment to vending and everything connected with them. So we have already created a directory for them, a small catalogue, a guide for sector operators to the different areas of the fair where they can discover new products”. Promotion actions have focused on some countries like Brazil and Turkey, where a road show was organized and a study of the country’s domestic automotive sector was carried out. Considerable importance was given to association relationships and agreements with international associations. Important delegations from many countries are also expected.
There is no lack of digital developments: the new Autopromotec site and App. Future trends: the fair market is very complicated and opportunities to evaluate new initiatives, large initiatives within the fair are a thing of the past; perhaps it is more correct to imagine it as an aggregator of companies and no longer and only as a fair organizer, but the provider of a series of services and other networking events. “The focus must always and necessarily be more international. Lastly: fairs versus virtualization: in my opinion the moment has come for overcoming the contrast and enter into the idea of interpenetration: you go to a fair and when you return you speak at virtual level on all the social networks. Now everything goes through virtual contact and in sunlight. Perhaps previously we chose a restaurant on Google and after reading the comments of those who had been there we decided to go and see for ourselves. Through comments we now know what is happening in garages and there might be one that will say: ‘Watch out! This garage is not at the same level at the other one. So the end user increasingly influences B2B. I think that it is time for us to interpenetrate increasingly; we have all the tools needed to direct this virtualization and flow of information from our entire world.”