Based in Oslo, Norway, Heming Bjorna is a senior commercial specialist with the U.S. Commercial Service who focuses in-part on Norway’s auto industry.
Bjorna recently shared his insights on the Nordic nation in response to questions posed by Aftermarket Business World.
Q: Are there certain factors in Norway that drive the need for parts and repairs?
A: Salt is widely used to prevent icy and slippery roads in the wintertime, which produces corrosion on chassis and brakes. This is likely the most significant factor causing extraordinary repair in Norway.
Cold temperatures may also cause a more frequent change of car batteries.
It is mandated to use winter tires during winter months. As a result, practically every car will need to have eight tires/rims available, inflating the market for rims by the number of cars on the road.
Q: To what extent has Norway embraced electric vehicles? How do these figures compare with standard internal combustion engine (ICE) cars and trucks?
A: In 2017, 158,650 new cars were sold in Norway, of which 33,080 were zero-emission. This is 20.9 percent. An additional 8,559 used zero-emission cars were imported because dealers were not able to meet demands. Some cars have one-to-two-year waiting lists. Most, or many, of the imported used cars are practically new.
In addition, 49,736 cars were hybrid electric, or 31.1 percent. So in sum, 52 percent of all new cars sold in 2017 in Norway had an electric drive train or engine, not accounting for the “used” imported electric vehicles from Europe.
Q: What are some of the more popular models in Norway?
A: The top-selling cars are:
- Volkswagen Golf (electric + hybrid + regular)
- BMW i3 (electric)
- Toyota Rav4 (hybrid and gasoline)
- Tesla Model X (electric)
- Volkswagen Passat (electric + hybrid + regular)
- Mitsubishi Outlander PHEV (Hybrid and regular)
- Toyota Yaris (hybrid and regular)
- Tesla Model S (electric)
- Skoda Octavia (Regular)
- Toyota C-HR (Hybrid and regular)
Q: Norway has a lot of oil, correct? Why do Norwegians have such an interest in electric vehicles?
A: Norway is, I believe, the tenth-largest exporter of oil, and perhaps the fifth-largest exporter of natural gas. However, gasoline itself, and combustion engine cars, are heavily taxed. On the contrary, electric vehicles are exempted from a 25 percent VAT (value-added tax), a progressive additional sales tax that could be significant for larger vehicles, as well as annual taxes, toll roads, ferries, parking, etc.
The significant difference in positive and negative incentives between zero emission and combustion engines drive the sales of EVs (hybrids get some tax reductions, but are closer to combustion engines). The demand is far greater then supply; if automakers had more on display (similar to what is expected in 2020), sales of EVs would approach 100 percent with the current incentive scheme.
Q: Is there an adequate amount of repair shops to service ICE vehicles? Or too many?
A: I have no numbers on this, but I believe there is a healthy competition. Bankruptcies among repair shops are on the rise, perhaps indicating more competition and/or lower margins.
Q: Do most Norwegians go to repair shops, or are there a lot of do-it-yourself repairs?
A: On modern cars, Norwegians mostly rely on annually or bi-annually scheduled services (as mandated by manufacturer – cars under 10 years old without this documentation are hard to sell). Needed upgrades are then performed by the repair shop.
Norway also follows the EU-mandated testing regime, which is bi-annual. Certified workshops (or some independent test labs) do the test, and consumers may choose to take their vehicle to another repair shop to have the repair done if they think the potential double-role is to their disadvantage.
There is limited do-it-yourself work in this market, especially for newer cars. An exception is for classic cars.
Q: Where do Norwegians typically have their electric vehicles serviced? At dealerships or independent repair shops?
A: I have no numbers on this, but my impression is that they are serviced at the dealership to a greater extent than combustion engine cars. This is particularly true for new and “different” or more specialized EVs such as Tesla and BMW i3.
Q: What advice do you have for U.S.-based manufacturers wishing to export into Norway?
A: It should be mentioned – Norway has an unusual exemption in the Norwegian vehicles directive, allowing for imports of FMVSS (U.S. Federal Motor Vehicle Safety Standards) cars very generally. Normally, all cars have to be EU-type approved. They need to be in their original state and older than six months old. Some 500-plus FMVSS cars are imported privately to Norway every year.
The accumulated pool of cars has over a long period of time created a sizable American car market, also for repairs. This is more of a do-it-yourself market, and the Amcar Association, with 16,000 Norwegian members, is said to be the largest in Europe. They also publish a magazine and bring very large delegations to SEMA and a number of road trips.
Q: What types of assistance do you provide for U.S. companies interested in or currently doing business in Norway?
A: Matchmaking is a key activity. We also work actively to maintain the FMVSS exemption “open.” This one is in-principal always under threat. We have also worked to promote other U.S. commercial interests in Norway in the auto industry and worked with manufacturers to promote their products.
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