Well, here we are at the beginning of 2025 with what should prove to be another transformative year within the automotive aftermarket. While European Exhaust & Catalyst Ltd. is a well-established manufacturer of emission control products, intrinsically linked to the internal combustion engine sector, it remains paramount that we observe the market just as closely as any other business.
It’s hard to believe global strive to Net Zero originated way back in 2009 with the UK being the first G7 country to legislate for Net Zero by 2050 in 2019, shaving five years off the target set by Sweden two years previous. In 2020, the UK Government announced its commitment to end the sale of petrol and diesel engines by the end of 2030, only to extend that deadline to 2035 in September 2023. Our Labour Government pledged to revert back to the 2030 target within its manifesto but diluting that to include the sale of hybrid vehicles until 2035. At times like this, we count our blessings that we’re not a vehicle manufacturer.
Electric vehicle sales are predicted to hit 440,000 in 2025, roughly 24% of all projected vehicle sales and some way short of the 28% target set by the Government. So, what does all of this mean for a business like ours? Well, just like the rest of the aftermarket, the change in thinking from ICE to EV presents us all with challenges and opportunities to move with the times, remodel, upskill and diversify. But hang on, will the transition to EV suit everyone in the short to medium term?
While businesses (currently) have clear financial incentives to switch to EVs, there is a distinct lack of similar measures for the private motorist and while the best EVs may have a lower whole-life cost than petrol or diesel vehicles, the lack of grants and subsidies may be holding back retail sales. Couple that with the questionable charging infrastructure, the potential of range anxiety and for the private motorist, the residual value issue on many popular EV options with some losing 50% of their value in the first year of ownership. Additionally, the fear of battery degradation on used EVs causes some to think twice about a used EV.
All of this has an inevitable impact on the car parc, and for us, the future is quite clear. Despite the inescapable transition to EV or otherwise, the vast majority of vehicles on UK roads are still petrol, diesel or hybrid with latest statistics suggesting almost thirty-three million of those are represented by cars alone. Another noteworthy statistic is that the car parc is ageing; in recent years, the average vehicle age on UK roads has risen to 8.6 years and this is projected to rise further. Although EVs may be taking the spotlight right now, we have no doubt that many will choose to hold on to their trusty petrol and diesel cars and vans for years to come so our projection is that the market will remain buoyant for those willing and able to adapt.
Suggesting that our exit from the European Union has presented many challenges for UK businesses is the understatement of the decade but with that we have seen some divergence with respect to legislation within our sector. As a global exporter of our product we monitor changes in legislation closely, not only to ensure ongoing compliance, but also to anticipate forthcoming changes within the UK should our Government choose to adopt similar principles. One such change that will inevitably cascade into domestic legislation is the introduction of much more stringent limits to particulate emissions on diesel vehicles. Belgium was first to introduce new limits back in July 2022 with Netherlands, Germany and Switzerland introducing their own interpretations in January 2023.
While none of the aforementioned countries have a standardized limit, other territories within the EU will be introducing their own limits in the near future. We already know that the UK Government has been in consultation over this topic and we’re aware that testing is being conducted on new particulate measurement equipment with a view to introduction where current equipment is not currently process capable. While a revised MOT rollout date has not yet been finalised, we know it’s coming and our performance in Europe gives us the knowledge that we’re well prepared.
Other EU regulation that we feel may be adopted in some way by the UK is in relation to product safety and sustainability. Back in December, General Product Safety Regulation (GPSR) relaced the outgoing General Product Safety Directive (GPSD) across the European Union. This ushers in a new era of consumer protection and while it causes some initial headaches for manufacturers and distributors, it may protect the market from dangerous or substandard products. There’s no indication that the UK will adopt the regulation, but history shows the likelihood is significant.
Another recent EU introduction that may impact the UK in the near future is the Digital Product Passport (DPP) as part of the Ecodesign for Sustainable Products Regulation (ESPR) aimed at enhancing transparency across product value chains by providing comprehensive information about each product’s origin, materials, environmental impact, and disposal recommendations. ESPR also aligns with the hot topic of repairability so relevant to our industry right now. All highly riveting stuff…. watch this space.
Opening in 1997, European Exhaust & Catalyst Ltd. are amongst the longest established manufacturers operating within the UK automotive aftermarket and still the largest manufacturer in the UK that has the capability of developing and applying in house coating technology. Not only does this provide us with industry-leading emission-related expertise, but it also ensures that we’re not reliant on distant suppliers to underpin or supply our technology. Having this capability within the group elevates our intimate understanding of the product and its functionality at a molecular level enabling us to offer technical support and bespoke solutions, unmatched by anyone else in the sector.
So, what for European Exhaust & Catalyst Ltd for 2025? This year promises to be a remarkable one, not least because 2025 will be one of paradigm shifting innovation, change and a record year for new parts introduction. For those of you familiar with our company and products, you will already be aware of what differentiates us from other manufacturers along with the benefits of collaborating with a company like ours.
Extensive testing has enabled us to create a product development roadmap like no other in our history with many significant forthcoming releases covering Euro 6 catalytic converters, both diesel and gasoline particulate filters and SCR systems to ensure we offer our customers the most relevant and up to date part numbers to enhance their offering and market coverage.
In recent years, we have observed the rapid emergence of AI technologies and considered how it can enhance not only our business, but our customer offering and while we’ve identified that it is a powerful tool that will help us streamline our operations and drive innovation from predictive analytics to making it easier for our customers to engage with us. While AI has its place, customer feedback has shown that it is no substitute for the individualised touch. Another area that differentiates our business model from other suppliers in our sector relates to our Customer Training and Technical Aftersales Support. Customer feedback has shown that AI, even when impressively utilised, is absolutely no match for human interaction when it comes to training and technical support. Throughout 2024, we conducted several face-to-face classroom training sessions conducted by seasoned professionals with decades of industry experience. While online training has its place, customers exclaimed that there’s no substitute for the two-way nature of formal classroom training delivered by a facilitator who knows both the product and the industry. Although our defect rates are maintained at Best-in-Class levels, we are always ready to apply the personal touch when something does go awry. Each member of our technical support team has over 20 years of experience in the industry, offering support both remotely via email or telephone or indeed face to face wherever necessary.
As we sail through 2025, our plans are designed to propel us forward with innovation, growth, and strong commitment to our goals. By focusing on strategic initiatives, embracing new opportunities, and staying adaptable in a rapidly changing landscape, we are confident that this year will bring meaningful progress and success. With an unclouded vision and collaborative effort, we are poised to tackle challenges, build on achievements, and create a positive impact both for our business and yours.
Motor factors are an essential part of the supply chain crucial to keeping UK businesses and motorists running. As the automotive industry shifts towards more advanced technologies in both the ICE and EV sector, motor factors must stay ahead of the curve to meet the needs of their customers. European Exhaust & Catalyst’s partnership with motor factors is vital for mutual success. By working closer together, European Exhaust & Catalyst Ltd. can align goals, share knowledge and collaborate fruitfully, together navigating the challenges and opportunities of the evolving automotive aftermarket landscape.