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EU emissions targets top carmakers' challenges in 2020

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EU emissions targets top carmakers' challenges in 2020

One of the biggest tasks for the automotive industry in 2020 will be determining how to navigate new European Union regulations that greatly reduce the permitted level of CO2 emissions from vehicles. The CO2 emissions of carmakers' fleets must reach a collective average of 95 grams per kilometer, with individual targets depending on the composition of those fleets.

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A sign in Hamburg indicating the German city's ban of diesel vehicles that do not conform to the Euro 5/V standard.
Source: AP Photo

To give an indication of the significance of this shift, PA Consulting determined that based on current purchasing patterns, automakers will face collective fines of about €14.5 billion in 2021 for noncompliance — 2020 has been determined a "phase-in" year during which "super credits" will be awarded for nonpolluting vehicles and 5% of fleets are exempt from calculations.

The situation is further complicated by the patchwork of rules that govern individual regions across the continent. A number of cities in Germany have banned certain older, more polluting classifications of diesel cars from their roads. The U.K. city of Bristol has taken this a step further and proposed to bar the latest Euro 6 diesels, despite criticism from observers who note that many such models are in fact less polluting than the gasoline alternatives that would remain on Bristol's streets.

Add to this the fact that CO2 emissions from vehicles in the EU have in fact risen for the past two years, thanks in no small part to the increasing popularity of larger, more fuel-intensive SUVs, and the mission at hand appears almost herculean. As the next round of quarterly earnings nears, expect carmakers to come under pressure to declare whether they expect to meet these targets and, if not, how costly the shortfall will be.

Consumer Edge is a weekly collection of critical developments across the automotive; retail; and food, beverage, and tobacco industries. Drawing on exclusive analysis and value-added content from the Consumer News team at S&P Global Market Intelligence, it is published every Thursday. Click here to subscribe.

Chart of the week: Probability of default for US department stores

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Automotive

Diesel's decline may not be such good news for environmentalists, carmakers

Their reputation was shattered by the Volkswagen dieselgate scandal, but new models now compare favorably to gasoline engines when it comes to emissions.

GM, Ford, Fiat Chrysler to see increased hourly labor costs through 2023

The Center for Automotive Research said Jan. 15 that the costs will increase from the new four-year United Auto Workers contracts.

CES 2020: From cars to content to phones, annual trade show did not disappoint

The Consumer Technology Association's annual show saw plenty of fireworks for its 2020 event, including Sony's first car prototype, foldable phones and a splashy new mobile video platform from one of the biggest names in entertainment.

China auto sales slump 8.2% in 2019; clean energy vehicle demand falls 4%

The Chinese auto market contracted for the 18th consecutive month with the December sales sliding by 0.1%, according to the China Association of Automobile Manufacturers.

Retail

Retailers intensify investment in technology to tackle organized theft, violence

Stores are reporting an increase in violence by organized retail crime perpetrators, according to the National Retail Federation.

Department stores must rethink products, locations after weak holidays: experts

To change their trajectory in 2020, certain retailers will need to reevaluate their current store portfolios and offer unique products, experts said.

January retail market: Sales rise in December; 2 companies go bankrupt

Employment in the sector also increased during December, according to an analysis by S&P Global Market Intelligence.

Amazon could face antitrust suit in 2020, but asset breakup unlikely

If regulators find evidence that Amazon engaged in anti-competitive practices, the company could face enforcement actions ranging from new regulations to a breakup order, antitrust experts said.

Frustration mounts in UK retail sector over failing businesses' insolvency abuse

Struggling retailers' use of Company Voluntary Arrangements often results in rent cuts, which leave landlords out of pocket and competitors operating at a disadvantage.

Food, Beverage & Tobacco

Food in Focus: Wholesale prices slow their increase in December 2019

Three major U.S. food companies also struck deals to sell businesses that manufacture bagels to beef jerky in the month leading to Jan. 15, according to S&P Global Market Intelligence.

Dining out: US restaurant sales growth drops below retail gains in December 2019

The bulk of the 15 largest publicly traded restaurant companies had share prices that rose in the month ended Jan. 16.

New protein sources, less salt key goals for Beyond Meat in 2020

The maker of alternatives to animal meat is open to using protein-containing plants available in parts of the world where it starts local production, Executive Chairman Seth Goldman said Jan. 13.

S&P 500 Consumer Staples and Discretionary indices

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