Asian car manufacturers are outperforming their American and several of their European rivals in using their economic, environmental and social resources more efficiently.
This was revealed through the largest ever global study on the sustainability performance of car manufacturing, involving researchers from Queen's University Management School in Belfast.
The report entitled Sustainable Value in Automobile Manufacturing looks at the sustainability performance of 17 leading car manufacturers between 1999 and 2007.
The survey examines a set of nine environmental, economic, and social resources: capital use, water use, and waste generated as well as emissions of carbon dioxide, nitrogen oxides, sulphur oxides, and volatile organic compounds; further, the number of employees and the number of work accidents are taken into account.
The analysis is based on the financial, environmental and social data reported and published by the companies themselves and as a result 17 out of the 20 largest carmakers worldwide were included in the ranking: BMW Group, Daihatsu, DaimlerChrysler/Daimler AG, Fiat Auto, Ford, General Motors (GM), Honda, Hyundai, Isuzu, Mitsubishi, Nissan, PSA (Peugeot, CitroŽn), Renault, Suzuki, Tata, Toyota, and Volkswagen Group.
It also looked at how efficiently car manufacturers used key natural resources compared with their industry peers and how much profit or loss was generated with these resources.
The Sustainable Value approach applied in this study has been developed by Prof. Frank Figge of Queen's University Belfast and Dr. Tobias Hahn of Euromed Management School Marseille. Prior to this present survey, the approach had been tested and refined in two extensive comparative studies funded by the European Commission and the German Federal Ministry of Education and Research.
Dr. Tobias Hahn, associate professor at Euromed Management School Marseille says, ''A unique feature of the survey is that it analyses the sustainability performance of a whole sector. The 17 companies under review account for approximately 80 per cent of automobile manufacturing worldwide.''
Compiled in partnership with researchers from the Euromed Management School Marseille, and the Institute for Futures Studies and Technology Assessment (IZT) in Berlin, the study calculated the ratio of sustainable value to sales so that different companies can be directly compared irrespective of their size.
Sustainable value includes not just the use of economic capital but also environmental and social resources. It is the first value-based method for assessing corporate sustainability performance.
In the report Asian car manufacturers including Toyota, Hyundai, Nissan, Honda, and to a lesser extent, Suzuki have all out-performed their North American competitors Ford and General Motors, both of whom lie well into negative territory, with GM showing the most striking downside trend.
There is a mixed picture among European manufacturers. While BMW tops the ranking of all 17 manufacturers in most of the years assessed, other European carmakers PSA (Peugeot, CitroŽn), Renault, Volkswagen and DaimlerChrysler / Daimler AG only occasionally keep pace with the industry leaders. Fiat Auto consistently falls behind throughout the entire review period.
Professor Frank Figge from Queen's University Management School, one of the authors of the study, said, ''Economic crisis, energy crisis, climate crisis and recent global developments have affected the automobile industry like few other sectors. Never before has it been as important for car manufacturers to employ their economic, environmental and social resources wisely Ė and efficiently.
''However, while issues such as fleet consumption and CO2 emissions have been firmly put on the public agenda, the equally considerable environmental impact of the production phase of car manufacturing has as yet been largely ignored. The survey attempts to close this gap.''
The study also shows the improvement potential that a car giant like General Motors has in how it could improve its long-term performance. GM achieved a sustainable value of minus Ä9.87 billion, in comparison with BMW, which having used all the resources efficiently doubled its sustainable value to Ä2.8 billion from 1999 to 2007.
|BMW Group ||1 ||1 ||1 ||1 ||2 ||1 ||1 ||2 ||1 |
|Daihatsu ||10 ||9 ||8 ||14 ||10 ||12 ||10 ||n/a ||n/a |
|DaimlerChrysler* ||2 ||6 ||11 ||7 ||8 ||7 ||7 ||6 ||3 |
|FIAT Auto ||13 ||13 ||15 ||16 ||16 ||15 ||15 ||12 ||15 |
|Ford ||5 ||4 ||12 ||13 ||11 ||10 ||13 ||14 ||14 |
|General Motors ||9 ||11 ||14 ||15 ||15 ||14 ||16 ||15 ||16 |
|Honda ||4 ||3 ||4 ||5 ||6 ||5 ||3 ||4 ||4 |
|Hyundai ||n/a ||n/a ||3 ||4 ||5 ||8 ||6 ||7 ||7 |
|Isuzu ||14 ||12 ||9 ||11 ||3 ||3 ||5 ||3 ||5 |
|Mitsubishi ||12 ||14 ||10 ||10 ||14 ||16 ||14 ||13 ||8 |
|Nissan ||n/a ||n/a ||n/a ||3 ||4 ||4 ||4 ||5 ||10 |
|PSA ||11 ||10 ||7 ||9 ||9 ||11 ||9 ||11 ||12 |
|Renault ||7 ||8 ||13 ||12 ||12 ||6 ||12 ||9 ||13 |
|Suzuki ||6 ||5 ||6 ||8 ||7 ||9 ||8 ||8 ||11 |
|Tata ||n/a ||n/a ||n/a ||n/a ||n/a ||n/a ||n/a ||n/a ||9 |
|Toyota ||3 ||2 ||2 ||2 ||1 ||2 ||2 ||1 ||2 |
|Volkswagen ||8 ||7 ||5 ||6 ||13 ||13 ||11 ||10 ||6 |
(* DaimlerChrysler is replaced by Daimler AG in the year 2007)
Over the review period it is generally Fiat Auto, General Motors, Isuzu and Mitsubishi that bring up the rear. While Isuzu only comes in last place in 1999, Fiat Auto manages to do so every year in the period 2001-2003.
During the reporting period Mitsubishi is positioned towards the bottom of the mid-field for most of the time, but comes last in 2000 and 2004. General Motors is also consistently low down in the rankings, coming last in the years 2005 to 2007.
The performance trend is therefore negative over the observation period as a whole. While GM came ninth out of the 14 companies analysed in 1999, it ranked in the last three places during the period 2001-2007.
Other companies showing a negative performance trend compared with their industry peers over the review period include Ford (1999: 5th; 2005: 14th), Renault (1999: 7th; 2007: 13th) and Suzuki (1999: 6th; 2007: 11th).
By contrast, the performance trend was positive for Isuzu (1999: 14th; 2007: 5th). When analysing company-specific trends, it should be noted that in the period 2001-2007 two new companies joined the rankings: Hyundai (2001) and Nissan (2002), both of whom occupy high positions. Mitsubishi, for example, improved from 12th to 8th place between 1999 and 2007; in the rankings for the original group of manufacturers, however the company would actually have finished in 6th place in 2007.
One group of companies features relatively consistently in the middle of the rankings (apart from the odd year): Daihatsu, PSA and Volkswagen, although Volkswagen drops away in 2003 and 2004 when it ranks 14th and 13th respectively in the list of 16 manufacturers.
Tata Motors, which has been included as of 2007, ranks ninth in this year, slightly above the industry average.
The original version of this study triggered public interest and sparked discussion within the industry. BMW Group expressed an interest into how its efficiency gains documented in these regional assessments would translate into an evaluation of its sustainability performance relative to major automobile manufacturers worldwide.
Therefore, it provided substantial financial support for the present survey along with funding by the research institutions involved in the study.