Summary of Key Issues for Stakeholders
Summary of Key Issues for Stakeholders as reported by Atmaana, together with DfT observations
1. Costs and Benefits
Firms that will be affected by the change in regulations are primarily those in the six key sub-sectors of Bus and Coach, Light and Heavy Commercial Vehicles, Trailers, Special Purpose Vehicles, Commercial Vehicle Body Builders and Systems and Component Suppliers. The impact will be variable depending on the type and volume of product produced, and the nature of the sub-sector. Additional compliance costs will be incurred as a consequence of the change in regulation but to what extent this will be offset by benefits, e.g. of access to the European market or of improved quality and reliability, is unclear and needs more detailed work. There are also clear risks that the regulatory changes could open up the UK market to European competition in terms of both the import of vehicles and the construction of bespoke vehicles.
(DfT is working with industry partners to raise awareness; industry trade associations are assisting their members on how to prepare for, and to exploit, the changes).
2. Uncertainty
The industry is deeply concerned by the continuing uncertainty about the form of the regulatory changes and the likely additional costs. Whilst it very much welcomes the Government's preferred policy of 'lighter regulatory touch' it waits expectantly to know precisely what this means and what flexibility the UK realistically has to derogate significantly from the ECWVTA requirements of the RFD. The earlier the uncertainty can be removed, the sooner the industry can plan its business development.
(DfT is very focused on ensuring that the schemes implemented are pragmatic in approach and is keen to provide industry with every opportunity to contribute to their development. It has recently issued drafts of the technical requirements to trade associations for informal consultation with their members and is now in the process of reviewing the feedback.)
3. Role of the Dealer
There is real concern in the industry about the need to inform dealers and make them aware of the changes coming given the key role they can play in the Type Approval process. Even where dealers are wholly owned by a manufacturer, which is common in light and heavy commercial vehicles, there is a perception that they are unfamiliar with the fact that the regulations are going to change and the implications.
(DfT is working with the SMMT and others to provide events targeted at dealers, sales functions and non-technical senior management in the industry. The events will aim to increase awareness of the issues and generate an environment within which industry works together to determine new effective ways of working.)
4. Small Series
The reduction in volumes eligible for Small Series from 500 to 75 under the RFD for M1 specialist vehicles is a major concern for certain sectors of the industry, e.g. specialist cars, wheelchair access converted vehicles, and is seen as a major threat to its future. It is also argued that it undermines efforts to improve production flow, quality and efficiency and takes the industry back to being a craft industry. The option of moving to full Type Approval is not feasible for the size of company affected given the very significant additional compliance costs that would be involved.
(DfT campaigned on this particular issue during negotiations but was not supported by other Member States. However a number of MEPs are now picking up on this point and may table amendments to the RFD in the European Parliament. It is also worth noting that another possible route is to opt for European Small Series Type Approval. Currently this scheme appears not to have a significantly greater cost over National Type Approval and permits a volume of 1000)
5. Change from being Unregulated to Regulated
There is common acceptance that the companies most affected by the regulatory changes will be those being brought into the regulatory net for the first time. This includes cases of moving from regulated but unchecked to regulated and checked. Many of these companies to not have in place quality systems and lack the infrastructure and in-house skills to introduce these. Quality is currently 'inspected in' through end of line physical inspections. For these companies the changes can threaten their survival. In many cases they will be completely unaware that anything is about to happen, unprepared for the changes and likely to find it very difficult to adapt.
(There are service providers in the market that will offer guidance and advice on introducing quality systems. The introduction of quality system requires a thorough understanding of the business, represents a significant change in the way people will work, and can be resource intensive. It is therefore advisable that any company needing to update their quality management regime take action sooner rather than later.)
6. Conformity of Production
On conformity of production, whilst VCA accept IS0 9001 they do not insist on it and Annex IX of the RFD sets out some of the standards to be applied in the conformity of production assessment, so that for many manufacturers who currently only operate end-of-line inspections for quality purposes there is no clearly defined standard that they need to achieve. Many of the smaller companies affected lack the experience, skills and resources to readily introduce quality assurance systems.
(SMMT and VCA have developed outline specifications and guidance. This is being refined and is expected to be published in 2007)
7. Inspection and Enforcement
A consistent theme across the industry is the deficiencies in the current enforcement processes and the widespread expectation that this will get worse in the new regulatory environment. The clear implication is that the lack of consistent and effective enforcement will continue to mean that the playing field is uneven and some companies find loopholes for avoiding having to comply. The willingness of the Government to address this is questioned given the major investment this will require in systems and people.
(DfT are aware of the concerns around enforcement. Consequently the enforcement of the Regulations is a significant part of the development and implementation of the services that will be provided by VCA, VOSA, DVLA and the DoE (NI) Agencies).
