Insight

Welcome to the 2024 Janus Perspective, a unique feature that includes a wide cross section of global fastener business leaders. Named after the Roman God 'Janus' – who had the ability to look to the future and to the past, and was often depicted with having two faces – this feature brings together thought leaders from every facet of the industry, from around the world, to give us their retrospective on 2023, as well as prospects and challenges for 2024.

Paolo Pozzi, CEO

2023 was a recovery year for the economy in general, with significant improvements concerning global GDP, supply chains, as well as raw material and energy prices. The recovery, however significant and welcome, was not enough to be back to pre-Covid-19 levels.

Similar to each year since Covid-19, 2023 had no shortage of challenges. Among the major ones were increasing interest rates and geo-political tensions, which have threatened the uncertain business environment. However, inflation rates appear to be now much more under control than they were at the beginning of the year – thanks to one of the strongest actions of the ECB and FED that has ever been experienced by the market. 

The automotive industry met these challenges during a period of great transformation – due to the herculean effort for decarbonisation and the shift towards electrification. This shift is giving a heavy blow to the traditional OEMs, which barely saw it coming and are now running after newcomers that are more agile and very appreciated by the market. Huge investments have been set for electrification and ‘the machine’ cannot be stopped now. However, it is a matter of fact that the market is experiencing some hardships in digesting the high prices of electric and hybrid vehicles and volumes are not as fabulous as expected, as well as being highly reliant on government incentives.

As a result, some investments in electric technology have been either postponed or downsized. In the EU the decarbonisation effort is at its strongest. The EU has set very challenging goals and impacting regulations, the results however, are yet to come. EURO 7 limits have been postponed on fear for insignificant environmental benefits versus huge implementation costs. CBAM (Carbon Border Adjustment Mechanism) is already in place in its transitory phase and many concerns arise regarding the outcome on raw material prices and procurement availability. However, the major concern related to electrification is that it implies a radical shift of the centre of the automotive industry towards China, which has the technology, the supply chain, and the market, that allows for a development of this strategy and promises a very brilliant future ahead.

With more than 25 million cars sold in 2023; 4% estimated growth for the next two coming years; as well as a solid and innovative vehicle offer; China is not only ready to become the most energetic automotive market in the world, but is also ready to launch an attack to the European market, which is unheard of and would have been considered madness not many years ago. 

While the automotive industry is under pressure, the industrial world comes out of two consecutive years of double digit growth – thanks to the end of the Covid-19 pandemic, as well as the improvement of global supply chains and raw material prices. However, H2 2023 already set an end to this recovery period and volumes will adjust consequently in 2024. Additional raw material price falls is not to be expected, on the contrary, there is some risk that some prices (especially for metals) will rebound due to the volatility of the situation.

The European fasteners industry will have to manage all these challenges with additional restrictions on the sustainability side. The EU is accelerating on decarbonisation strategy to re-establish competition parity with outside EU partners taking into consideration the carbon emissions related costs. The risk is to jeopardise the European manufacturing system by destroying its competitiveness versus the rest of the world. Therefore, we must advocate for a gradual transition that would take into consideration all the aspects of sustainability.

The objective, however, is to surf the disruption experienced in each sector and catch all the opportunities by adjusting to the new market requests. In this environment, leveraging on innovation is a must. We have powerful tools for the purpose, digitalisation and AI are just waiting for viable business applications to deliver their full potential. The power of these tools lays a paradox at our feet since on the one hand they could substitute massively the requirement for human labour, but on the other hand we have never seen such a human resources shortage. We need to define policies and set the organisations such that they empower people and give them the right opportunities to deliver results.