EU database rules threaten small motor manufacturers

A European Union directive that will force automotive suppliers to submit details of the materials they use to an international...

A European Union directive that will force automotive suppliers to submit details of the materials they use to an international database could drive small component manufacturers out of business, industry watchers have warned.

Analysts also warned that the difficulties of bringing thousands of small and medium-sized components firms on board, many of which have limited IT skills, could see the directive delayed or lead to its failure.

The requirement to submit details of all substances contained in vehicle components via the Internet forms part of the EU's End of Life of Vehicles Directive. The directive requires car manufacturers and components suppliers to submit details of the materials they use to the Web-accessed database by 1 July 2003 and maintain entries thereafter.

The details are needed to meet the requirement that 95% of all scrap vehicle materials must be able to be recovered by 2015.

This is the first time a motor industry regulation has been enforced via the Internet, and many of the UK's 3,500 component manufacturers - many of them SMEs - will struggle to carry out the IT tasks necessary to comply, such as data analysis, entry and maintenance, experts believe.

A huge database run by EDS for Audi, BMW, Daimler-Chrysler, Ford, Opel, Porsche, VW, Volvo and Fiat underpins the initiative. Companies that do not comply with the new directive risk being dropped as suppliers by the car makers.

Barry Hodgson, principal consultant at Melcombe Business Associates, which works with a number of components suppliers in the West Midlands, estimated the cost per company to be £4,000-plus for the task.

"This is the first time such a quality regulation for manufacturers has been Internet-based. For the first time the person responsible must not only have the right business knowledge but also the skills to maintain the database entries," he said.

"Many small firms cannot afford the consultancy. It is difficult to tell how long the job will take and often the most IT-qualified person for the task in a small firm - often in the sales department - is too valuable to their normal duties to be released for this."

Simon Bragg, European research director at manufacturing IT analyst ARC Consulting, said, "There is a high likelihood this [the EU directive] could fail. For initiatives such as this to be successful, the big suppliers need to make it easy for the small suppliers to comply. Without this there is likely to be delay, it will be difficult to enforce, and the rogues will gain competitive advantage."

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