Automotive World Megatrends Magazine – Q1 2013

megatrends Q1 2013

M A G A Z I N E

iDelphi-TVSi What hap ppened when a global T1 joined forces th India’s largest wit supplier

isticky businessi the ris se of adhesive bonding in biw

ifocus on safetyi aeb, truck saf fety tech and ev crash testing

iinductive power transferi charges the ev market ialways connected?i vodafone talks m2m

Plus: insights from Roland Berger, Frost & Sullivan and Global Policy Group

Megatrends

Contents ONE COMPANY MADE OF MANY great brands

Q1 2013 megatrends I N E M A G A Z

Q1 2013

Commercial Vehicle Group, Inc., is a global solutions supplier to the commercial

5

Interview: Dr Andreas Schamel, Ford

Si iDelphi-TV

a ened when What happ es oined forc global T1 j s largest with India’ supplier

vehicle and specialty industries. Headquartered in New Albany, Ohio, we have

sinessi isticky bu e of adhesiv

the rise biw bonding in

over 27 locations worldwide and are proud of the strong global brands we offer that strengthen our position as an industry leader in the markets we serve. Our commitment to our customers, as well as our culture of continuous

s on safet

yi

ifocu h and safety tec aeb, truck esting ev crash t nsferi power tra iinductive t e ev marke nnected2?mi ialways co charges th e talks m vodafon

improvement, have made us the strong, diversified and integrated company we are known for today.

Seating

Electrical

Interior TTrim rim

Structures

up Policy Gro nd Global Sullivan a er, Frost & land Berg ts from Ro Plus: insigh

>On the cover

9

Interview: Robert Plank, Schaeffler

50

Is natural gas a viable alternative fuel for HD trucking?

11 | Delphi-TVS The JV discusses combining global tech with domestic presence 27 | Wireless charging Will sparks fly as EV charging becomes cable free?

34 | CV, AEB and EV safety Thatcham deliberates EV testing (p34), while Delphi’s Global Engineering Director discusses truck safety in 2013 and beyond (p43) and Megatrends investigates whether AEB is the most important safety development of recent years (p38) 54 | Always connected?

Vodafone talks M2M for the auto industry

CVG Corporate HQ 7800 Walton Walton P Parkway arkway | New Albany Albany,, OH 43054 614.289.5360 | Visit us on the web www www.cvgrp.com .cvgrp.com

61 | Sticky business Adhesive bonding joins the mainstream to meet BIW demands Q1 2013

57

Outlook 2013:The Obama administration, Congress, and the auto industry 15 | Mobility integration A step closer to multi-modal, door-to-door travel

47 | Truck Transportation 2030 Impacting the CV industry

22 | Interview:Yves van der Straaten Secretary General, OICA

65 | OEMs and dealers must not ignore online car-buying

By Luca Mentuccia, Accenture

18 | Lubricants A design parameter, not an afterthought

64 | Auto brands must confront counterfeiting in China Insight from Dr Paolo Beconcini, CBM International Lawyers

Automotive World Megatrends magazine | www.automotiveworld.com 2

Megatrends

Editor's welcome Zero emission vehicles?

The CO2 emissions generated by electric vehicles in India are comparable with those of low-efficiency gasoline-powered cars. This is the finding of an independent research group called Shrink that Footprint, which examined the CO2 equivalent (CO2e) emissions of EVs in 20 leading economies. It found that once CO2 emissions of 70g/km for vehicle production are factored in, along with emissions from power production, fuel production and grid losses, EVs in India emit 370g CO2e/km.

Paraguay, Iceland, Sweden, Brazil and France came out best in the survey, ranging from 7093g CO2e/km, thanks to their use of low carbon power generation. India was joined in the top five worst performing countries by South Africa (318g CO2e/km), Australia (292), Indonesia (270) and China (258).

Automotive World Megatrends magazine

Publisher: Automotive World Ltd 1-3 Washington Buildings Stanwell Road, Penarth CF64 2AD, UK www.automotiveworld.com T: +44 (0) 2920 709 302 info@automotiveworld.com

Registered number: 04242884 VAT number: GB 815 2201 Chief Executive: Gareth Davies Editor: Martin Kahl

Sub-editor: Ruth Dawson

Like India, coal dominates electricity generation in China, which by 2015 wants to be building 500,000 plug-in EVs a year. The US government has set a higher target for 2015 of 1 million EVs on the road, although it has also conceded that this is “ambitious”; it ranked eighth (202g CO2e/km) in the report.

Emerging markets - and China in particular were singled out as offering the best business potential for battery EVs (BEVs) in a report published recently by Automotive World, Technology Roadmap: Battery Electric Vehicles. According to this research, BEVs will account for less than 5% of the new light vehicle market by 2020. It also highlighted the two well-known challenges facing BEVs: battery cost and range.

Chief Technical Officer: Michael Franklin

In an effort to overcome these issues, several companies say they are at an advanced stage in the development of wireless or inductive charging for cars, trucks and buses. Megatrends spoke to three players in this field to find out how feasible the technology really is.

Copyright Automotive World Ltd 2013

Another challenge that EVs face is the public perception of their safety. On page 34,

Subscriptions and Advertising: Gavin Dobson gavin.dobson@automotiveworld.com

3 Automotive World Megatrends magazine | www.automotiveworld.com

Andrew Hooker of the UK’s Thatcham Research tells Megatrends about the safety aspects of vehicles with electrified powertrains.

Thatcham, one of Euro NCAP’s-accredited test labs, also specialises in autonomous emergency braking. Although not required by law, AEB will be included in Euro NCAP’s tests from 2014. AEB has however, been mandated for heavy trucks and buses in Europe from late 2013, and NHTSA is considering mandating it for trucks in the US. On page 43, Delphi’s Mike Thoeny talks to Megatrends about this technology, which he says “will truly have a measurable impact on road safety”.

Based on the findings of the aforementioned 20 country EVs report, there’s much to be done to turn EVs into the zero emission vehicles that they are marketed as. However, in terms of reducing emissions and improving the efficiency of light vehicles, Ford’s Director of Global Powertrain, Research and Advanced Engineering, Dr Andreas Schamel believes the internal combustion engine still has a long, healthy future ahead of it, but only if it incorporates some form of electrification. On page 5, Schamel shares his thoughts on incorporating more efficient energy strategies into powertrain architecture. For the suppliers’ view, Megatrends spoke to Schaeffler’s VP of Corporate Engineering, Robert Plank, who was also one of the panellists at the first Shell Lubricants Technology Lecture. Joining Plank in the debate about the growing importance of lubricants in improving powertrain efficiency were Shell’s Selda Gunsel, Professor Gordon Murray and executives from Scuderia Ferrari and Infineum. Read our report on page 18.

We hope you enjoy this issue of Megatrends magazine and, as always, we welcome your thoughts and suggestions; email us at megatrends@automotiveworld.com.

Martin Kahl

Martin Kahl Editor, Automotive World Q1 2013

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Megatrends

Megatrends Those concepts are something that we constantly look at, and we have the necessary dialogue with all of those companies to make sure we stay on top. It is difficult to compete with an architecture approach which has more than 100 years of development history, to come up with something new which is really better in all aspects, without having other side-effects. Even if you find a concept which has a theoretical advantage, the investment needed to implement an entirely different manufacturing strategy usually makes it costprohibitive.

Dr Andreas Schamel, Ford Interview:

Director, Global Powertrain, Research and Advanced Engineering

On 1 October 2012, Andreas Schamel was appointed as Ford’s first European-based director of Global Powertrain, Research and Advanced Engineering. In addition to leading Ford’s global powertrain activities, Schamel will retain his position as joint Managing Director of Ford’s European Research Centre in Aachen, Germany - a role he shares with Pim van der Jagt. He will remain based in Aachen, Germany.

Here, Dr Schamel shares his thoughts on incorporating more efficient energy strategies into powertrain architecture Martin Kahl

How far do you think engine downsizing can go without affecting performance?

This will change as technology progresses.

Not only are you getting diminishing returns; when you over-downsize, you actually get the opposite effect. There's a certain amount of optimum downsizing at the current level of technology, and that's about where we are with the 1.0-litre in its applications for B-car, C-car, up to entry level C/D car. With the current set of technologies, we wouldn’t put it into anything heavier or more aggressive.

From a pure performance standpoint, that's not really the limiting factor, and the question is are you really gaining fuel economy?

Because if you push the horsepower higher, you need to lower the compression ratio with the current set, and you need to make sure the bottom end, launchability or drive-away isn't negatively affected.

Overall, you don't necessarily get a better CO2 value proposition. Having said that, there are technology enhancements in the pipeline which will move that border a bit further, but not infinitely. And there is a limit to how small you can make an engine. I can't really see us going for mainstream applications much smaller than a 1.0-litre engine. And if you reduce the single cylinder displacement further, you get into thermal dynamic losses and the equation isn't really that good. If you go further down than a three-cylinder, then NVH negative effects and firing frequency get in the way of a really enjoyable product.

Would you consider using a twocylinder engine in a very small car?

We have done some benchmarking on twocylinder engine technology and we are not really impressed. There are other means of getting extra fuel efficiency out of the current package if you don’t need the performance. So rather than going physically smaller, we would probably go towards a Miller cycle high compression ratio application, so that you have extra fuel economy without any further detrimental effects, which you would get if you go down in cylinder count.

That's at least when you're talking about the combustion engine as the main or only propulsion system. The answer could be different in a plug-in hybrid or any kind of a concept like that, where you don't necessarily have the engine running in its full operating speed range.

Are you pursuing cylinder deactivation at Ford?

On a three-cylinder, it's somewhat tricky. I wouldn't say totally unfeasible, but normally cylinder deactivation only works with an even number of cylinders, because you would typically switch off half of the cylinders. If you try to do it with an uneven number of cylinders, you either need to develop a very interesting but complex concept that enables you to alternate with every single cycle which cylinder you are deactivating, or you get into a completely infeasible firing frequency. So, effectively, it

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then feels to the customer like something is wrong with the engine. You are misfiring.

You're leaving out one of the combustion strokes. On our three-cylinder EcoBoost, we have made the engine small enough. We don't need to deactivate. The benefits of deactivation are really to be found in larger engines.

I am not denying those concepts a future role.

It is just a matter of which concept, when, what scale, what is the path to market, if it makes sense. Some concepts can be dismissed because there are crazy claims out there which just don't hang together. Some of them would have to reinvent some of the ground rules of the universe, and those kinds of ideas we do dismiss - I am not wasting my engineers' time on it. Some concepts out there are credible and just have realisation, investment or commercialisation issues.

You've talked in the past about how you see the internal combustion engine having a good, long future ahead of it, but that it will come with some assistance. Can you outline a little bit what you understand by that?

Are you therefore focusing on the 1.0-litre, three-cylinder strategy rather than deactivation higher up in the range?

Well, higher up in the displacement range, I wouldn't necessarily completely dismiss it. It is all a question of the order in which you deploy the technology elements to get fuel economy. Logically, you are doing it in the order of, A, the customer has the maximum benefit and the customer has fun driving, and, B, you are doing it in an affordable manner so the customer can still afford the car. On that scale, the cylinder deactivation wasn't the next logical step for us, but it could be in the future.

Ford Focus 1.0-litre EcoBoost

I often get asked about electrification versus internal combustion, and it's just not a question of the one versus the other. If you look at the complete spectrum of offerings out there, only the pure battery electric does not have a combustion engine. Everything else out there, whether it is range extender, plug-in hybrid, hybrids, they all have a combustion engine and they are all - as far as the element of propulsion which comes from the combustion is concerned - only as good as the energy conversion of the combustion engine. So from that aspect, there's still a great need to develop internal combustion engines. The development focus is slightly different in a highly electrified powertrain compared to a mildly-electrified or non-electrified powertrain. Look at our 1.0-litre EcoBoost: it uses stop/start, which is micro electrification. As you move up the ladder, you will find more electrification getting into the spectrum. What you are not doing, even on the most efficient combustion engine, is recouping the energy, which you're otherwise wasting on braking. In the future, I see that aspect of electrification as the very minimum level of electrification in the mainstream. The dynamic part of your driving pattern should not be wasted in the brakes.

So there are two key areas where energy could be recaptured: thermal dynamics and braking.

There are several interesting companies developing opposed cylinder layouts or different engine architectures. Is that something that's being considered at Ford?

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2011 Ford F-150 3.5-litre EcoBoost engine

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Yes. In terms of the combustion engine, including transmission, the focus has always been on the efficiency of primary conversion of fuel, turning the chemical energy into mechanical energy, and getting it to the wheels; effectively, getting the maximum number of calories stored in your fuel onto the road for propulsion. But, regardless of how much energy you get there, the first time you brake, you are heating up your brake pads with that very valuable kinetic energy. So that's something which, in the long run, we need to go after. And that will not be to the detriment of the combustion engine; it will be in synergy with the combustion engine and will augment

that part which you won't get out of even the most efficient combustion engine, because there's no backward pass. It's not like you can use the wheels to drive the transmission to actually have the engine producing fuel.

How does the work that you're doing for future powertrain technology tie in with the research into use of new materials, like carbon bre or ultra-high strength steel, lighter materials, aluminium?

It does tie in significantly. We started the dialogue on how much downsizing is coming, and the way we are looking at that is in a metric we call ‘D over M’ - displacement over mass of the vehicle. With a given set of technologies, you reach acceptable limits on how far you can go down with the displacement of the engine relative to the weight of the vehicle. So yes, you can work with the displacement but you can also work with the weight, and clearly, lightweight platforms, lightweight materials, nextgeneration vehicle platforms play an important role in enabling engine downsizing.

Another important factor is intelligent traffic management. If you know what traffic is coming then you don't have to waste the energy. Telematics and vehicle communications are key elements in addition to weight reduction and conventional fuel efficiency strategies.

In the short term, where do you expect to make the big CO2 savings?

There isn't really one thing I could point to.

There are still significant gains to be made in both gasoline and diesel technology. We do see now the hybridised vehicles coming into Europe, and there is still potential in the next generation of vehicles as well, but the next round of CO2 reduction will be in systems engineering, gaining 1% here and 1.5% there.

We call it ECOnetic Technology, a bundle of small gains and savings which together make double-digit differences.

Automotive World Megatrends magazine | www.automotiveworld.com

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Megatrends

Robert Plank, Schaeffler Technologies Interview:

Vice President of Corporate Engineering

A glance at Schaeffler’s offerings at the 2013 North American International Auto Show in Detroit illustrates how this supplier has evolved from being known as a bearings supplier to a supplier of modules and systems. Robert Plank,Vice President of Corporate Engineering talked to Megatrends about the company's evolution as an automotive engineering partner Martin Kahl

What role can suppliers, like Schaeffler, play in improving fuel efficiency and reducing emissions?

Schaeffler came out of the components sector and stepped up into modules and systems. We have a system understanding, so we can be an engineering partner to OEMs. And, with our components being everywhere there is motion, we can contribute in numerous ways to reduce friction, for example. There are three areas, or columns, where we can eliminate losses: reduction of forces, optimising the contact, and avoiding motion.

Can you please outline those three columns in more detail?

If we talk about reducing forces, the first thing you can do is reduce weight. One example would be by optimising the pre-load in the bearing through the arrangement of the bearing, or by choosing the right bearings in a gearbox.

Sealing is another area: 50% of the energy consumption of a bearing comes out of the sealing, so if you reduce the pre-load or optimise the geometry of the sealing then you can reduce the friction. We have developed a friction-optimised wheel bearing, and we reduced the friction of the seal by 50%, and we reduced the friction by optimising the geometry of the bearing by another 10%.

is in series production. This shows that the right arrangement and optimisation of the bearings can deliver noticeable benefits. So this is the first column.

The second is optimising the contact. We know that we need lubricant and we have two metal surfaces, so now you can optimise the geometry of the bearing itself. You also can optimise the micro geometry, like surface roughness and coating. And then you can optimise the material and the lubricant, and generally influence the friction coefficient.

And thirdly, you can avoid the motion through electrification, power on demand or cylinder deactivation.

With OEMs pressuring suppliers to reduce costs, how can a company like Schaeffler afford to carry out the sort of R&D that you think is required?

We have our own programme and strategy. We focus on our products, and we think in systems.

We try to be on the same level of engineering as our customers so we can explain to them how our products could contribute to and improve their system, like a powertrain or an engine or a vehicle. We are a very innovative company. Every year we spend roughly 5% of our sales on R&D. Last year we registered 1,800 patents, and we have 18,000 patents in place.

We try to be innovative and drive our products forward to help our customers meet requirements.

have demonstrated a 10.5% of fuel reduction, just by bringing all Schaeffler products together in one car.

If you do the engineering together and design the product together then you can ensure the greatest benefits.

Is there a difference in the approach to engine efficiency R&D between passenger cars and commercial vehicles?

There are some differences because the cost pressure is greater for commercial vehicles. You have to consider the whole lifecycle of the truck, including total cost of ownership and fuel economy improvement.

Do you see a similar difference between premium and sports car brands and mainstream brands in the passenger car segment?

In terms of fuel economy, the premium brands

are always ahead, with the others following.

What is the reason for that? Is it down to nancial strength?

No, it's a brand and leadership thing. Look at BMW, Daimler, Audi and Volkswagen: they try to be in front and the most efficient and others try to follow.

Finally, what future do you see for the combustion engine, and do you anticipate electrication playing an important role?

What is left is to look at the hidden and minor things. We need to look at the whole system and look at every point where there are energy losses, then try to find the best solution and adapt it to the application. There is no standard solution any more.

Yes. We will see combustion engines for another 50 years. But we will see hybridisation and electrification, for sure. It makes sense to optimise combustion engines because there is still potential in there, but we are also working on electrification. We have some prototypes running with electrified axles and also in-wheel motor prototypes. But the next step is probably the electrical and engine motors together, with combustion motors to drive the efficiency and enable cars to enter big polluted cities in the future.

And does that apply just as much for light vehicles as for heavy commercial vehicles?

So we will see everything. We also will see pure electrification, which can be more efficient by reducing friction, but it will take some time.

What opportunities remain for improving the fuel efficiency and fuel economy of light vehicles and commercial vehicles?

“

Do you feel that suppliers are brought into the design and development phases early enough, or would you like to be brought in sooner?

Yes. I think that what we see in optimising light vehicles is coming to commercial vehicles a little later.

With a given set of technologies, you reach accept able limits on how far you can go down with the displacement of the engine relative to the weight of the vehicle

”

We have a portfolio which engineers can just pick out of a catalogue. Of course we have energy efficient bearings, but the benefits could be greater if we were in the game, and the greatest benefit comes from working together from the very early stages. Some customers do that with us. And we

We reduced the friction by 30% in total, which relates to 0.2 in the NEDC, which is a small amount but used on every vehicle that would lead to a significant CO2 reduction.

The effect is bigger if you put those bearings in transmissions, for example. Then you can reduce, in a differential gearbox, up to 1.5% just by replacing the bearings with a double row of ball bearings. We proved this, and it Automotive World Megatrends magazine | www.automotiveworld.com

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Megatrends

Megatrends three, increasing the plant’s capacity significantly. This includes a doubling of the plant’s capacity for low-pressure carburising, the heat treatment coating technique which, whilst already employed by other companies, is used to unique effect by Delphi-TVS at Oragadam.

How a global Tier One found something in common (rail) with India’s largest supplier

Well protected from the dust and heat, manufacturing takes place in autonomous production units (APUs) where cleanliness and pinpoint accuracy are crucial. This is especially important for the production and assembly of the nozzles and injectors machined on-site.

The well-established joint venture in India between Delphi and India’s TVS merges global technology with the market presence of a respected domestic automotive supplier. Megatrends spent a day with senior executives at Delphi-TVS to discuss how each party benefits from this joint venture Martin Kahl

Navigate the heavily pot-holed track that leads off the Chennai highway to an industrial park on the outskirts of Oragadam, and you’ll find a low-roofed factory set in immaculately landscaped grounds. Here, Delphi-TVS manufactures complete diesel common rails, including filters, pumps, rails and injectors.

The fruit of the close relationship begun by Lucas and TVS in 1961, Delphi-TVS has around 1,000 employees and a turnover of approximately Rs 1,000 crores (US$187.9m).

At 52%, Delphi has the controlling share of the JV, which focuses on the development and production of diesel fuel injection equipment, and although a large percentage of its business is derived from car and light commercial vehicle common rail systems, it also supplies Bharat 5 (Euro V) common rail systems for 5.0 and 8.0-litre trucks.

What’s interesting about this joint venture is that it illustrates what can happen when one of the largest global Tier One suppliers partners successfully with a major Indian automotive company - in this case, India’s largest. The TVS Group, which employs over 40,000 people worldwide and claims a turnover in excess of US$4bn, operates in a multitude of areas including motorcycles, car components, computer peripherals and heavy

commercial vehicles as well as passenger car distribution, finance and insurance.

The Delphi-TVS JV benefits both parties, with Delphi’s global technology, engineering capabilities and international reputation complemented by the local knowledge, reputation and market reach throughout India of TVS.

Growth Delphi-TVS operates three plants, at Mannur and Oragadam near Chennai, and at Pant Nagar in Uttarakhand. Huge expansion is taking place at the Oragadam factory: two new manufacturing halls are being added to take the site’s total to

These parts play a crucial role in meeting the increased pressures that common rail systems need to operate under to meet Bharat IV. Common rail is of great interest and importance to the Indian market, where the growth of diesel has accelerated enormously in the last two years.

While the political debate continues about whether or not the fuel should be subsidised, diesel car sales remain strong thanks to attractive pump prices which put diesel at around 30% cheaper than gasoline. Common rail is a good way to meet Bharat 4 and 5 (Euro 4 and 5) legislation, say experts at Delphi-TVS, and the NVH performance of diesel cars is almost as good as gasoline cars now, thanks again to common rail.

Today, UPCR.Tomorrow, the world?

As outlined later, this JV is best portrayed by a jointly-developed product, the Unit Pump Common Rail, or UPCR. The UPCR was developed in India by Delphi-TVS specifically for use in smaller, mainstream and lower-end emerging market vehicles. Intended for small three and four-wheeled vehicles with one to three-cylinder engines, it is a low-cost adaptation of Delphi’s advanced common rail technology, designed to meet Euro 4.

The successful development, adaptation and commercialisation of the UPCR illustrates how India can be a driver of product development for other emerging markets around the world. T.K. Balaji, the Managing Director of Delphi-TVS Diesel Systems, agrees. “In the coming years, I definitely see India playing a role,” he says.

The three cylinder Unit Pump Common Rail (UPCR) system was developed in India for smaller vehicles at the lower end of the market

11 Automotive World Megatrends magazine | www.automotiveworld.com

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“The Indian market is a highly value-conscious market. Affordability is critical here, so people are very price-conscious. In the passenger car industry, the small car segment dominates. The upper end segments are there but they're not Q1 2013

Unit Pump Common Rail (UPCR) test bench

the dominant segment of the market. But the consumers are demanding the same kind of technologies and quality as you see in the high-end cars, so more and more innovations are likely to take place to make that happen.

This could be a great opportunity for us.”

international level. Does India have the appropriate systems in place? “That is a very interesting, perceptive question about India,” says Balaji. “If you go on the basis of what is in place now, and whether it could happen, you will never answer that question.

This is where the JV can exploit the fact that one partner is a global supplier. “Delphi is able to deliver that. The case in point is the UPCR, which we developed together. That is now being developed further to supply to other markets.” The majority of Delphi-TVS production is sold in India, but with the expansion at the Oragadam plant, it is reasonable to expect the facility to be used for export.

“India is full of entrepreneurship. Take the software industry: over 20 years, it has transformed from nothing into a huge industry, not only creating significant value here but also globally. I think you can never say what will happen in the future based on what is there today. There's a great capacity here to execute. What we are not so good at still is developing breakthrough technologies. But we're very good at absorbing technology and implementing it in a lower-cost manner.”

In the Indian market, the best business to be had is in the key, cost-sensitive mainstream A to C segments. Whilst Delphi-TVS needs to target these segments for the volume, is there an opportunity for the JV to also target premium models, as Delphi does in mature markets?

“It is an evolution,” says Balaji. “One has to wait and see. It could happen. We are supplying in India identical products that are supplied in Europe. We are also developing innovative low cost products.”

Engineering the engineers of tomorrow Although the potential may exist for India to be a leading source of product development for global emerging markets, the necessary infrastructure needs to be in place to produce engineers who can compete on an

But Balaji remains hopeful that breakthrough technologies can come out of India. “I think it will happen one of these days,” he says. “When you have highly competitive forces at play, as we do in India, innovation has to thrive.

Innovation becomes an intense competitive pressure where somebody has to do something different. So really all the ingredients are there for it; everybody is here and everybody is trying to get a share of the market. There's intense competition, and somebody will inevitably come up with innovative ideas. It's just a question of time.”

And the development of emissions regulations offers opportunities to companies like DelphiTVS, Balaji says. “Today India is at Euro IV. So we are just one generation behind Europe in terms of emissions standards. By 2020, I think we will be on a par [with Europe].”

Automotive World Megatrends magazine | www.automotiveworld.com 12

Megatrends The quality issue One of the biggest challenges that a supplier like Delphi-TVS faces in the Indian market, says Balaji, is quality. “While there have been big strides in quality in the last several years in India, we still have some way to go vis-à-vis international best practices. The zero defect concepts that are in place all over the world have not become commonplace in India.

Throughout the entire infrastructure of India, from discipline through to power issues, there are so many things that get in the way of achieving this goal. But the desire to achieve it is widely prevalent compared to, say, ten or 15 years ago. Today, employees no longer ask why they should do things. They recognise that they have to be done, but they are struggling to reach that goal. I think that's going to be a big issue. I am confident we will get there, it's just going to take time.”

A mutually-beneficial partnership Delphi and TVS have highly complementary skills, says Balaji. The many years of presence

in the Indian market gives TVS extensive relationships with all customers in India, including international customers. “We also have extensive aftermarket distribution and servicing.”

Meanwhile, Delphi’s technology leadership has enabled Delphi-TVS to become a key hightech supplier. “It would have been impossible but for the support from Lucas initially and now Delphi,” says Balaji. “Delphi has such a depth of technology in so many fields; there is so much we can learn from them. There is so much opportunity in this market that it is limited only to the imagination of the people who are running the business. It all depends how open-minded people can be.”

with a respected local market leader. The benefits to each party are clear, but looking to the future, Delphi-TVS needs to ensure it is seen as more than Delphi’s ‘India operation’. “And we have to play a part in that,” says Balaji. “It all depends on how TVS creates opportunities with Delphi, and for Delphi to take advantage of those opportunities, and vice-versa.”

Delphi-TVS is a successful, long-standing JV that brings together global technology

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Mobility integration: a step closer to multi-modal, doorto-door travel Sarwant Singh and Martyn Briggs, Frost & Sullivan

administration can save considerable costs, for which companies would be willing to pay a premium.

Also in the Netherlands, the NS-Business card, launched by NS trains, allows all modes of travel to be placed on a single invoice, again providing significant administrative benefits, and, more importantly, convenient travel across the entire country, whilst also allowing use of additional services such as short-term office space rental, or access to business class lounges. These solutions represent the most comprehensive mobility integration solution currently on the market.

However, in the long term, this could lead to complete efficient citywide, national or even international mobility solutions, provided the data is openly available. With several large organisations across the automotive, transportation, technology and infrastructure markets now viewing mobility as a long term pattern, it is surely only a matter of time until we see more fully integrated mobility solutions across the globe.

Sarwant Singh is a Partner and Global Practice Director of Frost & Sullivan’s Automotive & Transportation Practice. He is author of ‘New Mega Trends: Implications for our Future Lives’.

Martyn Briggs is Mobility Programme Manager at Frost & Sullivan, and manages strategic mobility research and consulting assignments, helping clients identify growth potential through leveraging technology and new business models.

As part of a recent report on mobility integration, Frost & Sullivan has identified three different business models, namely Mobility Integrator (MI), Mobility Aggregator (MA) and Mobility Player (MP). Each model differs primarily on the role that a particular stakeholder in a value chain plays, and also on the host of mobility services that are offered.

Picture a world in which you can purchase a single ticket for national or international travel, and receive with it detailed, door-todoor journey information for your best route before you leave the house, with on-demand flexibility allowing you to change your mind.

A ‘mobility integrator’ is a step closer to this concept of totally integrated, multi-modal, door-to-door travel. Frost & Sullivan has identified a number of scenarios, business models and early examples of this concept, whereby one or several organisations combine various modes of transportation and products to offer such a solution. This could be through using a mobile or web-based platform, to bring together technological advances in data processing or analytics and combine real time information and ticketing options through a smartphone, or smartcard, for example.

This is already beginning to interest several stakeholders across industries, particularly transport operators, technology providers, car manufacturers and fleet leasing companies, all of which are starting to offer products and services further away from their core business models.

A number of mega trends underpin this paradigm shift from considering single modes of transportation to a combination mobility network. For example, consumers are starting to question the need for car ownership, increasingly opting for on-demand usage

through car sharing clubs, and public transport use. Partially driven by cost considerations; improvements to infrastructure in increasingly urbanised areas; government legislation and, most importantly, the transmission of real time information on the go - facilitated by connectivity - this gives us the opportunity to travel more conveniently and rationally, using the best available option. However, many of these options are still considered in silos, and there is growing demand to piece the various mobility aspects together as a packaged offering.

Mobility integration and door-to-door travel, rather than station-to-station or point-topoint, is not restricted to any one sector, player or industry. It offers several opportunities in an ever-growing supply chain and requires a collaborative effort between a number of different players and stakeholders for the benefits to be realised.

However, this also presents one of the key challenges for successful mobility integration: either increased industry convergence is required, or a third party operator willing and able to enhance the opening of data, and to leverage the enhanced technology available, to piece it together. Solutions include journey planning and mobile applications, integrated ePayment methods and location-based services. But generally mobility integration must be underpinned by a flexible, convenient option of travel that optimises the available infrastructure. Early examples of this in the

1 Automotive World Megatrends magazine | www.automotiveworld.com

business to consumer (B2C) market can be seen in France, where transport operator Veolia Transdev’s Urban Pulse mobile application combines travel planning and ride sharing with city-based shopping deals, local events, and information on the location of friends via geosocialisation. Likewise, Daimler’s recently launched moovel application in Germany compares modes of transport for a door-to-door journey, and provides a booking service.

Whilst B2C solutions receive considerable press coverage due to their mass market appeal and convenience, there is potentially a larger and more profitable opportunity emerging: to provide integrated mobility for the business-to-business (B2B) market. With increased focus on, and regulation of, corporate social responsibility, cost reduction, and convenience and efficiency of employees, several organisations are now beginning to consider new mobility business models and budgets for employees, rather than simply providing a car or free reign on corporate travel. In response, fleet leasing companies have diversified their offerings.

Leaseplan, for example, offers a service called Mobility Mixx in the Netherlands, providing a card that allows employees to pay for long distance travel, car sharing and rental, public transport, parking and even refuelling; it also takes the administrative process out of house by issuing a post-use invoice. Of course, reducing the time spent on expenses Q1 2013

A Mobility Integrator would link every mode of transport, whether it operates them or not, and would be seen by the consumer as the point of reference for their journey and associated services. For example, the aforementioned NS-Business card allows users to rent office space from Regus, as the MI - this service would be seen to be offered

by NS, rather than Regus. The business model for doing so could be either through a percentage of revenue sharing, licensing, or fixed cost annual agreement.

A Mobility Aggregator would provide several travel related services: for example, a leasing firm offering rental of all types of vehicles, integrated with public transport networks.

A Mobility Player would be relatively more conservative, offering services close to the current business model. For example, an automotive manufacturer may open its product portfolio to allow flexible usage of several models rather than fixed use of one product, such as the recent BMW on Demand, or Mu by Peugeot services.

The future is set to provide a continued focus on integrated, multi-modal and ondemand mobility solutions, exploiting the trend towards the sharing economy and continued technology improvement. In the short term, this is set to include efforts such as more sophisticated journey planning tools and applications, smart parking and a better understanding of nearest transport services through continued smartphone proliferation.

Q1 2013

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Megatrends

automotive industry news analysis, research and events

Technology Roadmaps Automotive World's Technology Roadmaps investigate critical trends in the global light and commercial vehicle sectors.

Developed using only original research conducted by Automotive World, these ‘big picture’ reports contain valuable insight from the automotive industry’s most important stakeholders, helping readers to quickly understand the key issues facing the industry over the next ten years.

Technology Roadmap: Light vehicle safety

Technology Roadmap: Battery electric vehicles

Automotive World looks at advances in active and passive safety in developed and developing markets over the next ten years, and where connected car technology fits into the picture

This Automotive World report takes an independent look at the role that BEVs might play in the automotive industry of the future.

Technology Roadmap: Light vehicle safety

Includes exclusive in-depth executive interviews with BMW, Ford, Volvo, Autoliv, Continental, Delphi, Automotive Safety Council, CLEPA, Global NCAP, IIHS, NHTSA and Ernst&Young.

Future Technology Roadmaps by Automotive World: Alternative fuels Engine downsizing Fleet management Fuel cell vehicles In-car connectivity Lightweighting

Includes new, original interviews with Ford, GM, Renault-Nissan Alliance, Continental, Delphi, GKN Driveline, Johnson Controls, Better Place, Schneider Electric, ACEA, OESA, CHAdeMO, Frost & Sullivan and P3 Group.

Lubricants: a design parameter, not an afterthought Martin Kahl

By 2050, the world’s population is expected to reach nine billion. As a result, urbanisation is increasing, and so too is the demand for personal mobility. Global energy demand is expected to double by 2050, and as more energy usage means more CO2 emissions, there is a need for new, clean energy. The best solution is to use existing energy in the most efficient way - so began Dr Selda Gunsel,Vice President of Shell Global Commercial Technology, at the inaugural Shell Lubricants Technology Lecture, held at Imperial College in London in late 2012.

Power generation accounts for one third of total emissions, and transport accounts for one fifth of total energy consumption, said Gunsel.Yet, while new and alternative vehicle powertrain technologies are exciting, two thirds of cars will still use internal combustion engines (ICEs) in 2050.

20% of the energy produced by an engine is lost through friction. For this reason, lubricants can play a key role in improving fuel efficiency and helping to reduce CO2 Q1 2013

emissions. According to Gunsel, Shell has developed breakthrough engineering solutions like a split-lubrication system and lowviscosity synthetic lubricants. However, in order to bring these to market, “some of the existing industry specifications need to change.

And all parts of the industry need to work together - we cannot bring it to market without partnerships”.

Joining Gunsel at the event were senior executives from suppliers and OEMs, who presented the case for co-development of lubricants and the need to change current industry specifications to enable the use of synthetic and low-viscosity lubricants that could play a role in improving engine efficiency and reducing CO2 emissions.

Here, we’ve collated thoughts from Dr. Selda Gunsel; Robert Plank,Vice President of Corporate Engineering, Schaeffler Technologies; Dave Salters, Head of Engine Development, Scuderia Ferrari; Mark Struglinski,Vice President of Infineum; and Professor Gordon Murray, on the growing importance of lubricants in the automotive industry.

Lubricants as a vehicle design parameter Collaboration between Gordon Murray Design (GMD) and Shell Lubricants last year led to the development of an innovative concept engine lubricant in GMD’s T.25 city car capable of achieving a 6.5% improvement in fuel efficiency - a step up compared to the improvements of around 2.5% achieved in typical fuel economy lubricant development programmes.

Dr Selda Gunsel: We need to establish lubricants as a valuable design component, engineered with precision and blended with skill.

Professor Gordon Murray: Lubricants were something that typically got added after you’d finished the design of the car, and that's about as bad as you can get from a philosophy point of view. So it made us think that we should apply the philosophy of working with people from the beginning on the design in future to incorporate every single thing, including things like fuels and lubricants. And hopefully the

Automotive World Megatrends magazine | www.automotiveworld.com 1

Megatrends work we do with Shell in the future will go beyond powertrain and will look at every single component of the car which needs friction reduction.

We had to work very closely with Shell Lubricants’ engineers and scientists, in fact, on how lubricants could affect the engine of the T.25, because it's a very low viscosity oil, and we had to follow some very strict rules in the early days until we got enough confidence to actually run the car in public. In the early days we were stepping gingerly, working very closely with Shell engineers, and we had to adopt different strategies for warming up and running the engine.

Robert Plank: We see two big areas where we can step forward together with lubricant suppliers. One is a basic area, when we compare and benchmark methods and simulation methods and just together make it more precise to predict the optimisation effects we have. For example, Shell can contribute to the lubricant simulation and the features of lubricant. We can bring in the surface and the features of the metal components, and bringing in both methods together we get a better prediction. The other thing that I have learned through the years is we have to regard the lubricant as a design parameter from the very beginning. It's also valid for our components. So if we come together at the very beginning and take lubricants as a design parameter and bring surface or coating, for example, together then we can go into another area of optimisation.

Dr Selda Gunsel: The oil that we developed currently sits outside industry-accepted specifications. It's an extremely low viscosity oil, 0W-10: these types of oil formulations may be used in racing applications but they are not commercial oils at this stage.The lowest viscosity you can find in the marketplace is the 0W-20 grade oil, so we need to ensure that these types of low viscosity oils can be commercialised in the marketplace but in order to do that, we have to show that these oils are durable, they provide the protection against wear just like the thicker oils.We need to show that these oils can provide protection that the engine manufacturers need.We need to change the specifications in order for these oils to be commercialised.We alone cannot make the specifications - it’s for the whole industry.

Now that we've shown that these oils work in a concept application, we are working with some major OEMs who are really interested in working in this space. We are currently running durability testing, which involves

Megatrends dynamo and lab testing as well as field trials.

So far we are getting very good results in applications ranging from passenger cars to heavy duty truck applications. Durability, obviously, requires time so we need to run this for a number of years.

Professor Gordon Murray: For the first time ever, we can put a price on weight reduction: we put it at €5-€15 per kilogramme saved on the chassis. Once you've reduced the mass of the primary structure, you need smaller brakes, suspension, lighter steering, no power steering in some cases, lighter wheel components, lighter tyres - and so it goes on.

The trickle-down effect: applying F1 lubricants to mainstream vehicles Dr Selda Gunsel: We work very closely with Ferrari Formula One, developing the base lubricants, engine oils, gear oils and fuels.This is a great research platform for us because there are no specifications: the only thing is to win.

Whatever it takes we have a lot of flexibility in terms of lubricant formulation, gear oil formulation, and we design our fluids to operate under conditions that they would not normally be able to do - extreme temperatures, extreme roads, extreme speed.

We work really closely and, as a result, we learn to push our products beyond their design specifications under the most extreme operating conditions; we take the learnings and bring them to our normal, everyday products.

Dave Salters: We are quite fortunate, because our objectives are very easy.We have to make the most powerful engines but with the same volume generally. Engine development was frozen for a while, but all that meant was that we moved on to something else to find an advantage. And the oil and the fuel weren’t frozen.The engine is incredibly efficient, so we do everything we can to minimise the losses in the engine. And we don't really have any constraints. If we can come up with a good idea and it's obtainable or not obtainable but we make it obtainable, we can follow that.

Seeking out the small, incremental gains in fuel efficiency Dr Selda Gunsel: The advantage of lubricant technology is that it can successfully improve fuel efficiency and thereby help reduce tailgate emissions today, rather than waiting for a radical technological development in years to come.

Professor Gordon Murray: In terms of fuel economy gains, it feels like we have picked

1 Automotive World Megatrends magazine | www.automotiveworld.com

most of the low hanging fruit as far as engine design is confirmed. Now it’s time to focus on the small details that can make a big difference - and that includes lubricants. The work that Shell is doing in advanced lubricant engineering plays a really important role in enabling the kind of innovative and challenging design concepts we are developing at GMD to tackle emissions and fuel consumption.

All the low-hanging fruit has been picked. What’s left is a detailed attack on fuel efficiency Robert Plank: We deal with parts that nobody sees, like bearings. Tribology and lubricants is one of our core areas and is very important to us. If we look at the whole powertrain system, from the combustion engine through to the transmission to the wheels, there are a lot of components which are in motion. And if we talk about the mechanical losses within this system, there are three ways we can reduce those losses: firstly, reduce the forces; secondly, reduce the friction; and thirdly, avoid use by deactivation, power on demand, electrification or by downsizing.

These are the three areas throughout the whole system where we can find places to take small steps to optimise.

Mark Struglinski : One of the biggest challenges is to develop an oil that keeps an engine factory-clean. Believe it or not, nobody has ever done this. It's a really tough challenge. A clean engine lasts longer, so, in terms of sustainability you don't have to either tear the engine down to rebuild it or replace it. Clean engines last longer, and have better emissions. They maintain their factory emissions properties through the life of the engine, so that produces a cleaner environment.

Without chemical additives, your lubricant won’t work. The things that you add to the oil to keep it clean also tend to make the fuel economy worse. So we had to find a way to balance those two, to keep the engine clean but also to deliver leading edge fuel economy.

And it was a really difficult problem that needed some innovative approaches. We created a new friction modifier to do that.

We used some chemistry that wouldn't typically be used in these kinds of engine oils and we actually succeeded - it was launched last year into the marketplace.

Q1 2013

We work ver y closely with Ferrari Formula One, “ developing the base lubricants, engine oils, gear oils and fuels. This is a great research platform for us because there are no specifications: the only thing is to win.

– Dr Selda Gunsel

Q1 2013

”

Automotive World Megatrends magazine | www.automotiveworld.com 20

Megatrends

Interview: Yves van der Straaten, OICA According to data published by OICA (the International Organization of Motor Vehicle Manufacturers), global vehicle production - from passenger cars to heavy trucks and buses - grew by 3.1% in 2011, reaching an all-time record of almost 80 million units. Full yeardata for 2012 was not available at the time of writing, but as the US market recovers, and the European market declines, the BRICS nations continue to outperform their individual regions. At the same time, Asia and parts of Africa show strong potential, and OEMs and suppliers are beginning to make long-term strategic moves out of Europe to focus their operations on these growth markets.

Megatrends spoke to Yves van der Straaten, OICA’s Secretary General and Technical Director, about how he sees the global automotive industry developing in 2013 and beyond Ruth Dawson

Automotive industry sales and production are moving very clearly away from Europe, and into emerging markets. Is this because Europe as a market is declining or because of growth in other markets and why do you think this is happening?

That trend has been ongoing for a couple of years, and has accelerated over the last ten years. Right now we are in the middle of a huge crisis in Europe, but even if Europe was a growth market, the growth is often extremely limited, while the emerging markets are new markets. And if you simply look at the number of cars per 1,000 Q1 2013

inhabitants, in Europe we are at 500 or more.

In countries like Asia, excluding Japan and Korea, they are well below100. We are looking at figures like 30, 40, 50 vehicles per 1,000 inhabitants, so of course the growth potential is largely in these countries and not any more in Europe or the US, although the US in 2012 did pretty well.

In terms of production moving to these emerging markets, you produce where you sell, and since the sales are moving there, so too is the production. It avoids the burdensome and expensive logistics of producing in Europe and shipping to China, for

example. There is also the issue of labour and material costs etc., which, in Western Europe, are far more expensive than in these emerging markets. If we had to use European prices in China plus transport, logistics costs, etc., it would simply not be feasible.

OICA data published in 2012 showed Asia as the source of 40.6 million vehicles, up from 16.5 million units 20 years ago. How do you see Asia continuing to evolve?

Take China, for example: in 2012, we saw the growth curve in that major market slowing

Automotive World Megatrends magazine | www.automotiveworld.com 22

Megatrends down. In the past we had growth figures of 20%, 30% per year. It's always difficult to give a figure, but the latest forecasts I have seen for China 2013 indicated growth of between 5-10%.

Megatrends

2011

But that's still growth that many other markets can only dream of...

Exactly. It's still quite a positive development and I would call it a sustainable development.

By sustainable, do you mean that the market in China will continue to grow at 5-10% over the next ten years?

It’s impossible to give a precise forecast. But across the region as a whole, such a growth will be long-term. We always talk about China, but India is a huge market that also enjoys growth of 5-6% on an annual basis.

Do you anticipate the rapid levels of growth we have seen in China being replicated in India?

Yes, but with regular peaks and troughs, as we have seen in the past. If you look at history, these markets in South America have always been very unstable, but purely economically they are on a growth path.

You mentioned the ‘build where you sell’ concept: it's becoming increasingly important for reasons of logistics, currency exchange rates and the movement of goods between free trade and non-free trade areas. How much movement do you expect to see in emerging markets as a result of the build where you sell strategy?

I would say that Russia is once again in line to overtake Germany, and I would be tempted to say probably before 2020.

For one, you are certainly less prone to variations in exchange rates. And it’s a question of logistics: your suppliers follow you usually to the place you are producing and assembling, so there's a whole supply chain establishing itself once you set up an assembly plant somewhere. But I think it's simply a question also of long term stability.

I think India is rather different. Simply looking at the increase in GDP per inhabitant, the increase was dramatic over the last ten years in China, but now that growth is much slower. It's still growing, of course, but the growth is less dramatic in India than in China.And GDP per capita and number of sales, well, these two figures go hand in hand.

It's all about purchasing power.

These are really the main reasons.The cost factor, the logistics of course, and in any case, more and more you have a skilled workforce wherever you set up a plant, and even if that workforce is not yet totally skilled and trained, well, you have your own training programmes to train your future employees and so on, and that works quite well. So I think it's really a long term solution rather than shipping vehicles from one part of the world to another.

What role do you think Africa will play as a market over the next ten years?

Africa is growing quite nicely, particularly South Africa, where the expectation for 2012 was a market of something like 635,000 vehicles - that's a growth of more than 11%.

Of course, the figures compared to China are low but it is still growth, and what we have seen over the last couple of years is that South Africa tends to attract the other surrounding countries in the same movement. When there is growth in South Africa, then there is also growth in other sub-Saharan countries. That seems to be an interesting development, even though the absolute figures are rather small in comparison to other markets.

Two key markets where OEMs are investing are Brazil and Mexico. What prospects do you hold for South America as a region?

Mexico is a key country, and from there you benefit from NAFTA. There is also the advantage of the Brazilian market, which is huge, but in some countries, sometimes political and fiscal legislation may or may not attract investments. The fiscal legislation introduced in Brazil, for instance, resulted in a movement attracting local investment, including by those manufacturers which were not yet assembling locally.

Do you see the unrest in the Middle East and North Africa as something that could hinder any potential growth in the region over the next ten years?

I am sure it will, because of the uncertainty about what will happen at a political level in North Africa. The problem is simply that nobody knows. But Renault opened a plant in Morocco just a couple of months ago, and is

looking at Algeria as well, so there is still confidence in these countries. There is some vehicle manufacturing in Egypt, but those factories slowed down during the Arab spring, and in 2011 they were at minus 30% compared to 2010. I don't have the figures for 2012 yet, but I suspect that there will be quite a significant reduction due to the political unrest. 2012 might be a little better than 2011 because a new government is in place, but now there is some unrest again.

Do you see South America as a powerful automotive region over the next ten years?

Manufacturing data published by OICA in 2012

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Q1 2013

Q1 2013

Before the global economic crisis, Russia was talked about as being a market larger than Germany. How do you see the performance of Russia again over the long term?

We've talked about the emergence of the BRICS and about the recovery of the US market; now we should address the slowdown in Europe.The interesting phenomenon in Europe is that the mainstream OEMs are struggling, but the premium OEMs are not. How do you interpret this?

The premium manufacturers’ customers are less sensitive to the effects of an economic crisis. Mass-market manufacturers like Fiat, Peugeot or Renault are suffering because they have a different class of customer. How long this crisis will last, nobody knows. We [OICA] had a tour de table among our major members two months ago and, certainly the Europeans, including Germany, are extremely cautious about making forecasts for 2013.

December 2012 sales results in Germany were down by around 15%.The German market resisted quite well throughout 2012, declining by 2.3%, but December was really very bad. So I am curious to see the figures for January. But if it continues on the same trend then Europe is off to a bad start in 2013, including Germany.

The US market peaked at around 17 million units in 2007. It collapsed to 10.5 million, and it's now back up to around 14.5 million, with an optimistic outlook of 15.5 million for 2013.Trend analysis indicates the market could reach 17 million units in 2017. Do you think that Europe should accept a new normal? Are the current levels a new normal for Europe or do you think this is just a peak and trough?

I can only say that I hope it is not. Western Europe, or the EU-27, used to be at around 15 or 16 million. 2012 ended at around 12 million. That's definitely not a result which is satisfactory for us. And taking that into

account then what do you do with the plants? You have huge overcapacity. I'm not saying overproduction, because of course you are not going to produce vehicles that you won't sell, or at least you try to reduce that gap as much as possible, but the overcapacity is clearly there for most of the manufacturers in Europe. Not all of them, but most of them.

Do you see the emergence of megacities as a significant factor in the automotive industry?

The growth of megacities will definitely play an important role. It will affect transport, and how we fulfil transport needs. Offering a good transportation system might conversely introduce a deterrent to purchasing a vehicle.

Cars might become something for people in extra-urban or rural areas, where there is no alternative to your own private transport. But megacities will definitely experience increasing congestion problems, and they could slow down the new vehicle markets in countries with megacities. Look at what is happening in China, where Beijing and Shanghai are operating a lottery system for the right to purchase a vehicle. If and when other cities in other countries introduce similar policies, we will be watching very closely. But trying to predict what kind of effect this could have on the new vehicle market is difficult.

What is the feeling among OICA members of what 2013 means for the industry? And how do you see global vehicle sales developing over the next ten years? Several Tier One suppliers have individually said they expect sales to reach 115 million globally by 2020.

Do you agree with that forecast?

Yes, that's the figure that I have seen regularly as well. Whether it will be 100 or 115 million, I don't know. But, in any case, on a global scale I am still rather optimistic that the figures will continue to grow, simply because the demand is there. Looking at the forecast for some of the key markets, South Africa is expected to grow by 8% in 2013. In Korea, we expect 3-4%. For Japan, I don't know, but based on 2012, I am cautiously optimistic. We just mentioned the US, the latest forecasts I have seen for 2013 are between 14.8 and 15.4 million, so let’s say 15 million units. And the demand for vehicles is growing worldwide. Of course, there are major disparities among and between regions and countries, but on a global scale I think the 100 million unit mark should indeed be passed before 2020.

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Megatrends

Megatrends Wireless charging has long been the Holy Grail for EVs, and although it focuses on CVs, Momentum Dynamics has also perfected the technology for light vehicles.

Explaining why he believes wireless charging makes more sense for fixed route CV applications than for LVs, Daga said, “commercial vehicles have the real problem of heavy duty regular duty cycles, in which they have six or seven day week operations that may run 15, 16 or even 20 hours a day. For an EV to operate under those conditions, they need to be recharged intermittently during the course of their route.We provide a technology that solves that problem, by allowing that vehicle to make short period stops, take enough charge of power and to continue along its route, thereby allowing the vehicle to stay in circulation all day long.”

Wireless charging: the Holy Grail of the EV In a world in which electronic devices are increasingly being liberated from cables and wires, the idea that an electric vehicle should be recharged by plugging it in seems at odds with the high-tech nature of EVs.To overcome this challenge, a host of companies are looking at the potential for inductive power transfer, or wireless charging Martin Kahl

In April 2011,WiTricity Corporation and Toyota teamed up to develop wireless charging technology for plug-in hybrids and EVs. Delphi Automotive has also equipped several test vehicles with its wireless charging system, featuring technology developed by WiTricity.

A year later, in April 2012,Tokyo-based IHI Corp entered into a long-term agreement with WiTricity to manufacture and supply globally wireless charging systems for automotive and industrial applications; IHI,WiTricity and Mitsubishi had already been developing wireless charging components for EVs.

Likewise, Bombardier’s e-mobility subsidiary, Primove, is involved in the development of inductive charging for cars, buses and light rail, and has a dedicated e-mobility facility in Mannheim, Germany. In 2012, Primove demonstrated the wireless transfer of power to a tram in Augsburg, Germany, and has begun testing the technology on a passenger van.

Megatrends spoke to Momentum Dynamics, Qualcomm and Ampium - three companies travelling along very different paths towards the same goal of wireless power transfer.

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Gathering Momentum Based in Malvern, Philadelphia, Momentum Dynamics was established in 2009 and develops wireless power charging technology for electric vehicles. In an interview with Automotive World at CV Megatrends USA 2012, the Chief Executive of Momentum Dynamics, Andy Daga, said, “Our primary market is commercial fleet vehicles, where we can charge an electric commercial vehicle at 60,000 Watts - which is far higher than is required for a passenger vehicle.”

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That may sound ideal but Daga is keen to emphasise that it’s about more than just convenience.“The real point is that it is automatic. The driver of an electric commercial vehicle or car does not need to take any action other than park in order to charge their vehicle.This enables all-weather, vandal-free opportunity charging. Opportunity charging is key to both vehicle range extension and battery lifetime extension both crucial aspects that enable OEMs to sell more EVs.” Interest in Momentum Dynamics’ technology “has outstripped our expectations,” says Daga.

“We have major package delivery companies coming to us asking for a solution.There is no solution in the plug-in paradigm for a commercial vehicle.We’ve had a bus company come to us, and fleets and shuttle bus companies that run short duration routes, such as around university campuses.The need for clean technology in bus routes has been underestimated by most parties. It is in demand in universities and it is in demand by corporations which have programmes that can be met by no other method.”

The implementation of wireless charging would of course require embedding the technology in road surfaces. But rather than being frowned upon by authorities, Daga says the company has received positive feedback.

“We have a bus transportation authority in Pennsylvania that is so eager to deploy this technology that they have gone to the state of Q1 2013

Pennsylvania’s department of transportation and asked for money to help deploy this system as a trial.They want to see what they can do to reduce their fuel costs.They’ve tried all the alternative fuels, but none has satisfied their needs.This is the first time they have seen an application that can cut their costs dramatically, and so they are involving state authorities in a programme to outlay the system in the field.” Momentum Dynamics has also been approached by a rental car company in California and four major utility companies keen to get acquainted with the technology.

In terms of a timeframe for the implementation of wireless charging technology, Daga sees 2013 as a “big breakout year” for the deployment of multiple pilot programmes for passenger class-shuttle buses across the US; the company is also hoping to establish a pilot programme in London.

Daga refers to wireless charging as an emerging technology that is here now. He also emphasises that opportunity charging increases range and reduces TCO; he is keen to dispel what he sees as myths about the cost of the technology versus wired charging.

“Don’t believe everything you read,” he says.

“It’s less expensive.”

And not only is there a lower cost, says Daga, but the issues of power and price are closely linked.“It is not merely the provision of high power levels to vehicles, like 60 kW to a bus, for example, but being able to afford it. The cost of a current generation Level 3 high voltage DC off-board charger, at about US$75,000, is simply too high to promote widespread deployment.

We need to deliver - and Momentum Dynamics will deliver - an inductive charging system at well under US$10,000.”

Wireless charging on trial In late December 2012,AMP Electric Vehicles, which manufactures electric drive systems for Class 3-6 commercial truck platforms, announced a joint venture with Momentum Dynamics to supply the fully electric vehicles and wireless charging pads for a pilot programme run by Pennsylvania’s Berks Area Regional Transportation Authority (BARTA).

The pilot will begin in the first half of 2013.

According to the AMP statement, BARTA is not only the first major transportation authority in Pennsylvania to deploy fully electric vehicles, but it is also the first in the US to deploy electric paratransit vehicles.

Momentum Dynamics is one of the organisations funding the project, alongside the Commonwealth of Pennsylvania Department of Environmental Protection, and the Pennsylvania Department of Transportation.

Like Momentum Dynamics, Qualcomm Halo is involved in trial programmes. In London, it is collaborating with Chargemaster,Addison Lee, Transport for London (TfL) and the Mayor of London’s office, on the first large scale wireless electric vehicle charging (WEVC) consortium.

“We chose London because it is a megacity and had the will to take steps to clean up the transport infrastructure. But it’s also to look at things like user experience, different user cases, fleet operated vehicles versus car share versus private vehicles - and to prove that there is a sustainable business case for wireless charging and a charging infrastructure.

We invite OEMs to put vehicles into that trial and test the wireless charging hardware.”

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Megatrends

Megatrends The Halo effect Seeing the potential for wireless charging, in 2011, Qualcomm acquired HaloIPT, the Auckland, New Zealand-based inductive power transfer company best known for having developed the induction charging system for the Rolls-Royce 102EX experimental EV. With its name attached to such a premium product, Qualcomm Halo could easily have been labelled as a supplier of a premium technology. Dr. Anthony Thomson, Vice President of Business Development and Marketing at Qualcomm, concedes that the technology was initially viewed as such, but the company is now receiving considerable interest from more mainstream OEMs. “Over the years we’ve worked with a number of OEMs and integrated this into their vehicles. They tend to be confidential relationships which are ongoing. Renault is the first OEM who we've come out with and publicised work focused on the London trial.”

Thomson says there is a trend towards considering highpowered wireless charging for use on premium cars, and lowerpowered wireless charging for mainstream cars, something that would be “very, very helpful to sales of vehicles at the volume level”.

Little and often Qualcomm Halo promotes the idea of little and often charging, which suggests that fixed route vehicles, specifically buses, would be an ideal target. However, unlike Momentum Dynamics, Qualcomm Halo’s focus is on cars and light goods vehicles because of the vehicle volumes involved.

“There are some bus systems operating which show the user case to be very good, and reduction of battery mass of about twothirds, which is for putting a single infrastructure in and having multiple buses on a route, for example. We’ve always had an interest in that.” The CV sector has not been ruled out, however. “We do have technology which does very high power and relationships with companies who are progressing that. So we’re effectively involved but probably not as vocally or publically involved.”

When people talk about fuel cell vehicles, implementation is always said to be around ten years away; Thomson’s estimates for when

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wireless charging will be an option for passenger car consumers are somewhat less vague.

“That’s the big question, isn’t it? If you look at normal advanced engineering and production engineering, or serious production engineering timetables, validation timetables of auto manufacturers, you would really struggle to get anything out, and volume, before 2016. We have a number of projects in various states of undress with OEMs around the world, which would either deliver on or about that date or soon after.”

On-demand Whilst wireless charging removes the need for the wire, on-demand charging also removes the need for the battery. Does Thomson believe this is a viable option? “Automatic guided vehicles have been using on-demand wireless power for 20 years. It's very possible.

Our approach would be to get stationary charging into the market and get people comfortable with it, with dynamic charging as the long-term goal.”

Again, on-demand, or dynamic charging is a technology that is a long way from implementation. “We’re talking ten years before we see any major installs. We’re working on it actively, and we will make announcements in due course when we get demonstrations going and that sort of thing.

We’ve got lab demonstrations and very, very short runs, but the next step is to get that into segments of road and prove it out. I would think that in five years, we could see some demonstration level technology.”

Powering up Another company focused on dynamic power transfer is Ampium, founded in the UK in 2009

by Andrew Howe and Andrew Danes. “We wanted to take grid electricity, get it into the road and across to the car at the point of use, eliminating the energy storage battery - the problem with the electric vehicle proposition.”

The start-up company has installed its first road coils in a 20m section of road in Cambridge, UK. “We've focused on low infrastructure costs and on reusing processes and standards that are already used to put wires into the road. Wires are already in the road for presence detection, both on motorways and in urban environments around traffic lights. Our system will take grid electricity, upgrade infrastructure on the road, and wirelessly transport the energy that you need from the road to the car.”

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Megatrends Ampium’s technology is intended for hybrids.

“We bought a Toyota Prius, put a pickup coil on it, and demonstrated 20 kilowatts of power transfer into its DC bus,” explains Howe. With a hybrid, users could stray “off infrastructure”, that is, away from mainstream roads where wires have been installed and onto private or rural roads.

To convert Ampium’s Toyota Prius demonstrator involved “very little work”, says Howe. “We put a pickup coil on it and a small amount of power electronics and connected it onto those orange wires in the boot, with a battery sitting on it, and transferred 20 kilowatts into the car.Very little work is required on an existing battery electric vehicle.”

In addition to the conversion requiring minimal conversion, Howe describes the cost of the process as highly attractive. “The cost of adding the technology to a hybrid is a matter of putting a pickup coil on it and some power electronics.You're talking a few hundred [British] pounds of parts in volume manufacture rather than thousands for putting a battery on.”

But Ampium wants to go one step further than converting hybrid cars. “Our proposition is that you would take a vehicle, add a pickup coil and a fairly small motor, and create a hybrid car using road powered electricity when you're cruising.”

Roadworks ahead?

Whilst the case for wireless charging may be convincing long term, it would bring with it considerable short term disruption as the wireless charging technology is embedded into

the wider infrastructure. There would also be considerable cost involved in carrying out such projects.

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Qualcomm Halo’s Thomson disagrees. “Look at putting a charging bollard in. If you're burying a 1,500 to

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1,800 mm tall charging bollard in the ground, you've got to put a third of it under the ground and two thirds of it above. You’re putting quite a significant amount of hardware into the ground and in a congested city like London that’s difficult even before you’ve considered the sub-terrain environment with telephone cabling and fibres. Our infrastructure is actually quite petite and initially we’re talking about probably just putting in low-profile pads on the surface. We think the civil works involved would be less than with a plugin system.”

philosophically. The infrastructure would cost a considerable amount of money, he agrees, “but national scale infrastructure is always a lot of money. If you look at the cost of building a nuclear power plant, I am sure that we could upgrade our trunk road infrastructure for that cost and decarbonise our road transport.”

Taking a big-picture view of the question, Ampium’s Howe sums up

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How the GENIVI Alliance Works The GENIVI Alliance is an automotive and consumer electronics industry association that drives collaboration among vehicle manufacturers and suppliers, to build open source infrastructure for in-vehicle infotainment (IVI) systems. IVI is a rapidly changing and expanding field within the automotive industry. It covers many types of vehicle infotainment applications including music, news and multimedia, navigation and location services, telephony, internet services and more. The alliance aims to align requirements, deliver reference implementations, offer compliance programs, and foster a vibrant open-source IVI community.

The majority of GENIVI’s work is conducted through the technical and marketing teams and groups. There are currently six topical “expert groups” – Automotive, CE Connectivity, Location-based Services, Media and Graphics, Networking, and System Infrastructure. The EGs establish and prioritize the technical requirements, identify and enhance components that implement those requirements, and together develop the GENIVI Compliance Statement.

In Asia, regional expert groups also develop specific requirements unique to their locations. All of these requirements are collected, reviewed and integrated by the System Architecture Team, resulting in a comprehensive compliance specification.

The Program Management Office develops and monitors the technical working plan resulting in a regular, six-month release cadence. The Baseline Integration Team provides a continuous build environment where EGs and members can test their developed software against a number of GENIVI compliant Linux distributions.

The GENIVI compliance program is a key deliverable of the alliance, providing the set of specifications for GENIVI member companies to measure their products and services. Those that meet the specifications may be registered as GENIVI compliant and listed on the GENIVI website. Compliant platforms consist of Linux-based core services, middleware, and open application layer interfaces. These are the essential but non-differentiating core elements of the overall IVI solution set.

Automobile manufacturers and their suppliers use these compliant platforms as their common underlying framework and add to it their differentiated products and services (the consumer-facing applications and interfaces).

GENIVI is identifying these common automotive infotainment industry requirements to establish an open and robust baseline from which to develop products for the common good of the ecosystem.

The GENIVI Alliance is open for membership to all organizations engaged in the automotive, consumer electronics, communications, software, application development and related industries that are invested in the success of IVI systems and related products and services.

OEMs

First Tiers

OSV, Middleware, Hardware, and Services Suppliers

Power cut: EV makers focus on post-crash performance Despite the slow start that many high profile battery electric vehicles have made in terms of sales, there is widespread agreement that new cars will increasingly use some form of powertrain electrification. Bringing live electricity into a vehicle, be it battery electric, plug-in hybrid or fuel cell, adds complexity to the safety features designed and developed for that vehicle. Nevertheless, in late 2012, the Volvo V60 Plug-in Hybrid scored five stars in its Euro NCAP test; in the US, the 2013 Ford Focus Electric recently scored five stars in its NHTSA NCAP test.

In 2012,Thatcham research in the UK became the eighth Euro NCAP-accredited test lab.

Megatrends spoke to Andrew Hooker, Future Vehicles Engineer at Thatcham Research, about the safety aspects of electric vehicles Martin Kahl

What are the fundamental differences between electric vehicle (EV) and internal combustion engine (ICE) car safety?

The core difference between EV and ICE safety is that we have familiarity with ICE technology developed over many years, yet for many, EV is new and unfamiliar. The vehicle manufacturers and the other technology providers are naturally striving to develop the most efficient EV that today’s technology constraints will allow; yet as soon as that vehicle is launched, it is released on consumers, service and repair industries, and emergency services largely unfamiliar with it. EVs were keenly promoted in the early 20th century, but in reality, since marketing of the Mitsubishi i-MiEV and the Nissan Leaf began, Thatcham has managed a surge of concern from many sectors within and outside of the industry.

[safety restraint system]. Yet this does not account for every emergency scenario. We know from our collaboration with the emergency services regarding casualty extraction that they often require the electrical system to be active for moving electric seats to a position where a driver with spinal injuries can be safely extracted.

With an ICE vehicle, the fuel cut-out reduces the risk from fuel system fire, but leaves the electrical system operating. With an EV, there are a number of components that still present a risk, even after the high voltage system which powers the engine has been ‘locked out’. Capacitors still hold charge, the magnets in the motor rotor mean it can

move and align itself, and the battery itself remains susceptible to temperature.

Should EVs undergo different safety tests from ICEs? No, at Thatcham we do not as yet believe this is necessary. We have the very successful Euro NCAP programme that is far more than just a test of the vehicle structure, with aspects such as pedestrian safety and ADAS [advanced driver assistance systems] technologies being assessed. A well known incident in the US, in which NHTSA crash tested an EV which subsequently caught fire, did exactly what it should have done: it identified an issue, albeit in less than ideal circumstances.

How do the safety requirements differ between different forms of electrified powertrain, for example, between battery electric vehicles (BEVs), hybrid EVs (HEVs), plug-in hybrid EVs (PHEVs) and fuel cell EVs (FCEVs)?

Silicon

www.genivi.org

With HEVs and PHEVs, the lack of knowledge is compounded, because to the untrained it appears to be an ICE vehicle.

OEMs have done well with the safety protocols for EVs with automatic cut-out of the high voltage system governed by the SRS Q1 2013

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Megatrends

Megatrends

What can be done to ensure the safety of EVs not only in crash situations, but also post-crash, where often small garages and warehousing may be involved in the storage or repair of the vehicle?

with safety testing. At Thatcham we carry out assessments on the Volvo V60 Plug-in Hybrid, as we would on the V60 with an ICE, and it passes or fails. The manufacturer is aware of the additional mass and must engineer the vehicle to perform. In the case of the V60 Plug-in Hybrid,Volvo still achieved the five-star rating in the Euro NCAP assessment. That’s the advantage of a clear and transparent protocol like Euro NCAP; the vehicle manufacturers know what they’re working towards.

The solution is greater dissemination of EV knowledge through accurate specific data and training. The media has commented on the slow take up of EVs, yet in the UK alone there are 50,000 Honda and Toyota HEVs already on the road in addition to battery EVs. At Thatcham we’re proud to have been central to this up-skilling, as being non franchise-specific we’ve been able to provide knowledge and training across the industry to many sectors and are continuing to do so.Vehicle recovery specialists, emergency services, and even HM Customs and Excise have received training and equipped themselves with the tools and necessary PPE [personal protective equipment].

From a pure safety perspective, what is the safest way of designing and manufacturing an EV? The battery location that most manufacturers have chosen, namely deep and central within the structure, makes the most sense as it is away from harm in the majority of incidents.

Toyota has located a compact Li-ion battery under the front centre console of the Prius+.

The location of the high voltage cut-out device has been markedly better in some vehicles than in others. But of equal importance is that the EV, HEV or PHEV is recognisable as such, so that appropriate care is taken. The clear identification of high voltage

Incidents involving laptop batteries or the NHTSA incident we referred to have led to questions about the safety of lithium-ion (Li-ion) batteries, yet they remain the battery of choice for the majority of EVs. What is the view among safety experts of the Li-ion battery versus other energy storage solutions?

Li-ion battery technology is the choice for the majority of EVs because of its energy density.

That is only logical as the manufacturers need range performance to make EVs a practical alternative to ICEs.Yes, there have been incidents with Li-ion batteries, but put this into perspective with volume: according to Cisco Systems, by the end of 2013 there will be more smartphones than people on earth.

That’s a lot of Li-ion batteries, and comparatively few incidents.Vehicle engineers have learned how to safely package fuel tanks, SRS airbags and LPG, and we are already seeing developments in battery handling.

What is the procedure for post-crash EV batteries?

There is no set procedure for batteries postcrash. Actions depend on the incident. If the vehicle is flood damaged or otherwise badly damaged enough to be deemed a total loss, it will probably go to a salvage specialist intact.

The better salvage companies have handling procedures.

The exception really is Renault, with its battery lease scheme, where most aspects are covered by Renault, including battery shipment costs to France.

If the battery is removed post-crash, for vehicle repair, it should be clearly labelled and identified, and stored somewhere dry at a suitable temperature. It should be remembered that although the battery lockout or cut-off will have been performed, the battery will still be in whatever charged state it was in prior to this.

PSA and Bosch are jointly developing Hybrid Air, a hybrid solution which will enable the production of battery-free hybrid cars. Apart from the efficiency, cost and energy storage advantages that PSA has mentioned, could there be any safety advantages in removing entirely a Li-ion battery from a vehicle?

At Thatcham we are of course aware of Hybrid Air, but we’ll let PSA and Bosch, and others, mature the technology before we comment on this specifically. There are efficiency and energy storage issues to overcome too, not least of which will be the temperature changes induced by changes in air density. This will be an issue for the storage tank, and the mechanical pump and motor. And although very rare, a storage system is susceptible to failure too.Yes, we’d always

3 Automotive World Megatrends magazine | www.automotiveworld.com

cabling in orange has been well received, but we’d like manufacturers to ensure that thought is given in development to emergency rescue and repair, so that no cables are channelled around the exterior, close to panels that might need to be cut through. And lessons learned from the NHTSA Volt incident, regarding what happens in accidents when the vehicle is unlikely and unable to perform within its usual parameters, are vital.

Does the rising use of different materials for alternative powertrain cars, like carbon fibre, present any problems, challenges or opportunities to vehicle safety?

At Thatcham, we know and accept that OEMs can and will use different and new materials.

As conventional ICE vehicle structures get stronger with increased inclusion of presshardened steels in the body construction, this should translate into safer structures for the PHEV and BEV derivatives. Some OEMs are much better than others at building practical and economical ‘repairability’ into their designs. Obviously weight reduction, whether

by CFRP [carbon fibre reinforced plastic]

inclusion or by UHSS [ultra-high strength steel], can lead to smaller and less exposed battery packs. As some are looking at integrating the battery cells within the vehicle structure itself, we could see an opportunity for the engineering of battery behaviour following an impact within the impact force load paths. Many engineers feel steel is not a suitable housing for a high voltage battery, but it is a known material with predictable behaviour, so maybe body integration could be a good compromise.

Is there anything in particular that you are pushing for in terms of EV safety?

As discussed before, we accept that PHEVs and EVs are in development, and are here to stay. Clear and specific handling and repair information needs to be available. Whilst we respect the manufacturers’ needs for their own branded aftersales networks, we know that in reality, cars soon disseminate externally into the wider independent networks.

Thatcham has been approached by, and is working with, some manufacturers so that we can train and educate industry sectors, and we are happy to collaborate on this with others.

advocate removal of any potentially harmful component from a vehicle, such as a Li-ion battery, but so far we have seen little evidence of unacceptable safety risk.

What is the best way to cool batteries coolant or air?

There are advantages and disadvantages to both methods. Water cooling works well, but one notable incident in an American safety test was as a result of battery shorting in conjunction with a coolant leak. Air cooling is simpler, and more energy efficient. The proposed lithium-air batteries, as the name implies, are open to air so self-cool to a degree.

But moisture content in the atmosphere is an issue that manufacturers have to overcome.

Hybrid powertrains add considerable weight to a vehicle, especially one which is also available with an ICE. What impact does this additional weight have on developing safety technology and safety testing for a vehicle?

There has been some, as yet unconfirmed, data from the US that the additional mass is resulting in a reduction in occupant injuries in HEVs and PHEVs, but the weight is not an issue Q1 2013

In late 2012, the Volvo V60 Plug-in Hybrid scored five stars in its Euro NCAP test

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Megatrends

Better.

Where It Counts.

AEB: probably the most important safety development of recent years From 2014, the Euro NCAP safety test will include autonomous emergency braking (AEB) systems.

Megatrends talks to leading industry figures about the importance of this technology Martin Kahl

Autonomous emergency braking (AEB) systems prepare and ultimately apply maximum braking at the last possible moment before a front-to-rear collision, if the driver does not do so. Combined with stereo cameras, lidar, radar or a combination of these known as ‘sensor fusion’, AEB has been shown to help to reduce low-speed shunts by 2527%.

Better is taking the industry-leading ISX15 and increasing fuel economy by up to 2 percent. Better is being the first to receive EPA 2013 certification and meeting 2014 greenhouse gas and fuel-efficiency standards a year ahead of schedule.

Better is continuously improving the components of our totally integrated system, for better fuel economy and reliability. And better is having the largest authorized parts and service network in North America, with Cummins Care available 24/7/365. At Cummins, we know that being better where it counts means being better in every way. See cumminsengines.com for details.

Figures from the European Commission suggest that AEB could save 8,000 lives a year in Europe alone. 75% of light vehicle crashes occur at speeds below 20mph (32kph), and around 25% of insurance claims involve frontto-rear crashes: AEB offers improved safety for drivers, and can reduce the potentially crippling effects of whiplash.

AEB is also something that insurance companies are looking at with serious interest.

In the UK, the Association of British Insurers (ABI) has agreed to incentivise the purchase of vehicles fitted with AEB as standard, by giving

since 2012 for new cars and from 2014 for face-lifted cars. However, as noted in a recent Automotive World safety report (Technology Roadmap: Light Vehicle Safety, available at automotiveworld.com/research), there is qualified industry support for the regulation of

them a lower group rating. James Dalton, the ABI’s Head of Liability, told Megatrends, “we urge manufacturers to fit AEB as standard rather than as an option.”

AEB has been mandated for trucks in Europe...but not for cars In light of the convincing arguments for AEB, the technology will be included in Euro NCAP testing from 2014, and it would be logical to ask whether it should be mandated, much the same as, first, safety belts, and then ESC (electronic stability control) were. ESC has been required

Cars fitted with AEB as standard Oct 2012 Make/Model

System Name

Lexus LS Advanced Pre Crash Safety System

Mazda CX-5 Smart City Braking System Volvo S60 CitySafety Volvo S80 CitySafety Volvo V40 CitySafety Volvo V60 CitySafety Volvo V70 CitySafety

Volvo XC60 CitySafety Volvo XC70 CitySafety

VW Golf V11 (Dec 2012) City Emergency Braking

Source:Thatcham

©2013 Cummins Inc., Box 3005, Columbus, IN 47202-3005 U.S.A.

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Megatrends safety technology in light vehicles. Support is ‘qualified’ because although the roll-out of technology can be accelerated by legal enforcement, market forces are generally believed to be more powerful and faster-acting than the slow pace of change brought about by regulation.

The European Commission has produced rules requiring the fitment of AEB and lane departure warning (LDW) systems in trucks and buses over 3.5t from Q4 2013, with 100% fitment by the end of 2015. So what are the chances of legislation requiring AEB in light vehicles?

Michiel van Ratingen, Secretary General of Euro NCAP, explains why trucks were selected for AEB regulation first:“The cost benefit for these types of vehicles is much better, much more positive.The systems are, of course, as expensive for trucks as they are for passenger cars, but trucks are generally much more expensive, so the cost added to these vehicles is relatively small while the benefits are huge.

That cost benefit is different for trucks and makes sense. It's much more worthwhile promoting implementation through regulation than it is for passenger cars.”

Whilst van Ratingen sees the benefits of mandating the technology in trucks, he says, “I don't think, really, that we need regulation for AEB in cars at this stage because we have Euro NCAP really pushing fitment.” Referring to the UK ABI’s decision to incentivise AEB, he says,“this is a good example of the insurance industry taking the first step”. Euro NCAP’s inclusion of AEB in its testing in 2014 will “basically drive it home”. Moreover, “the big disadvantage of going to a

Megatrends mandatory process is that it has to work for all types of vehicles, all models, and so the requirements would get watered down so much that the end benefit would be lost. I believe much more in the model of taking best practice, making fitment standard and driving it through commercial and then customer demand, to make sure that there is a competitive market there. Make it standard, and make people want to buy it.”

group.“I think it's all about the consumer demanding and expecting technology to be in a vehicle,” she says.“And we have to also think about fleet and professional drivers, who are going to be out in those cars doing 60-90,000 miles a year.They also need to be put in the safest vehicles. Furthermore, not everyone can drive around in new cars, but everybody has the right to safety and I think we need consumers to say they expect this.”

Anders Eugensson, Director of Government Affairs at Volvo Car Corporation, is adamant that market forces, not legislation, should lead the way.“I think you can never use regulations to push technology. Just look at ESC: it's taken ten years to make it mandatory.There's no way you can have AEB mandated and pushed forward. If you start working on the regulation now, the best experts will look at what is possible now with technology, come up with a proposal, and send it to Brussels.They take two years to discuss it. Meanwhile, development of the technology continues. It can take four years for regulators to decide on a mandate, and then they have to give about four or five years' lead time before implementing it. It could take up to ten years.

During that time, technology has advanced.

And you face a risk of locking into today’s technology instead of having consumers push for it constantly and having a Euro NCAP rating.And also, that mandate may stay in place for another ten years, so you basically lock yourself into 20 years of knowledge and development instead of having this constantly pushed. Mandates are for the past.”

Cost

Lesley Upham is Commercial Director at Thatcham Research, and also sits on the board of Euro NCAP as chair of the communications

As ever, cost lies at the heart of any such decision.“It has to make sense economically,” says van Ratingen.“The cost benefit is very important, so that means the technical requirements will be lower for cars that are cheaper. I think that's the wrong way of approaching technology like this. It works very well with some basic crash performance but it doesn't work very well with this type of high end technology that develops very fast - every generation is smarter than the previous one.

Let's use the market, not regulation, as a mechanism to increase demand, to pick the best systems and to drive those into the market.That is my opinion.”

As safety requirements become more stringent, the level of technology increases, adding cost to the vehicle. Either the OEM has to absorb the cost, or it has to pass the cost on to the consumer. But at the same time, the bit-price of that technology is reducing all the time, and software developments mean that hardware can be used for multiple tasks and functions.

At Volvo, says Eugensson,“we decided to fit AEB as standard. Now we're getting the high

“

I don't think, really, that we need regulation for AEB in cars at this stage because we have Euro NCAP really pushing fifittment

”

- Michiel van Ratingen, Secretary General, Euro NCAP 39 Automotive World Megatrends magazine | www.automotiveworld.com

Q1 2013

volumes, the cost is going down, and we don't understand why some manufacturers don't have that as standard, to be honest. But we are working with the other equipment, like the radar and the camera, to make them less expensive, and once we have high enough volumes and the cost is acceptable, we're going to make them standard too.Then, once we have that, we basically have everything we need for applying systems to it because no additional hardware is needed.

Once the hardware is in the car, the OEM can begin to customise it and add algorithms.”

Educating drivers One of the big successes of Euro NCAP has been educating consumers to appreciate things like passive safety and crash protection.

But Upham underlines the need to not only fit the technology, but to make sure customers understand it.“It's not just the fact that technology is there - it's also about educating drivers on how they can make the most of it for themselves. It's a combined message: fit the technology and ensure people realise what opportunities are there for them.”

Passive vs active safety First brought to market by Volvo, the introduction of the safety belt - perhaps the simplest form of passive safety technology defined safety for generations to come.As active safety technology becomes increasingly important, what are the roles of passive and active safety in advancing the way in which we can protect pedestrians and occupants?

“We believe active safety is the key to moving forward,” says Eugensson. “Without active safety, we're not going to get significantly closer to zero fatalities and zero injuries, so active safety is necessary. Reducing the violence in a crash and, hopefully, avoiding a crash, so mitigating or avoiding crashes is the key to what do.Without the active safety system, we're never going to get there.”

make certain is that consumers understand the technology, are able to identify the best safety systems and can assess vehicles which are going to affect their particular lifestyle.

One of the things which Euro NCAP is looking at is translating its website into other languages, to make that information very accessible and assist buying decisions. It doesn’t only relate to new cars - new cars will eventually become used cars. Even when you're buying a used car, go to the NCAP site to make certain you understand the choices that you can make, and, more increasingly, you'll see those websites in the language of your choice as well, which is very important.”

Most injuries in car crashes are due to “speeding, drunk driving and not wearing seatbelts,” says Eugensson. But eliminate these, and “you still won't get down to zero, so you still need an AEB system”.This is why a combined approach is needed - passive safety can only go so far, and it needs to be supported by active safety technology.

Optimising passive safety If AEB is used to mitigate the most extreme events, does that mean that passive safety systems can be optimised to work in a more effective way? “Yes, it does,” says Eugensson, “because the distribution of crashes is going to move down, so you're going to have lower speeds, and if we can have optimisation of the passive safety systems for another speed range, a lower speed range, that could help.

Some of the safety features can be a bit harsh.

We, as the manufacturer, have to deal with low speed crashes and high speed crashes, and sometimes you have to compromise.You try to optimise where you have most crashes.The energy levels in a crash at 40mph are quite

different to the energy levels in a 20mph crash. So the airbags have to be developed in a way that you can adapt to how fast the occupant is moving towards the airbag, for example. Optimising definitely would help, but we need to move high speed crashes into a range where we can protect occupants. For example, slowing a 60mph crash to 40mph would get us in the range. Otherwise it wouldn't be possible to protect the occupant.

So that's one of the things about integrated safety - taking speed down and having other possibilities to protect people.”

A third, and relatively new, dimension is pedestrian safety, says Eugensson.“We [Volvo] have a pedestrian detection system which brakes the car for pedestrians.We also have a pedestrian airbag, so that even if you are not able to avoid hitting the pedestrian, once you hit the pedestrian, the speed will be reduced.

Then it will adjust how the pedestrian hits the hood and the windscreen by lifting up the hood and protecting the head against impacts into the A pillars and the windshield area with an external airbag. I think that's a good example of how you can combine passive and active safety technologies.”

In 2011, Euro NCAP introduced the testing of ESC, and in 2013, it will include speed assistance systems in its tests. From 2014, two of three AEB technologies, low speed and high speed, will enter the Euro NCAP programme; the third, pedestrian detection, will be brought in from 2016.Although there is no legal requirement for AEB, it is hard to imagine buying a car in five years’ time that is not fitted with a technology that Michiel van Ratingen describes as “probably the most important safety development of recent years”.

Advances in active safety development have not, however, led to passive safety technology being sidelined.“No, they work together,” says Eugensson.“We talk about integrated safety: you're moving the crash violence into a range where the passive safety systems are going to be even more efficient. So they work together, with active safety avoiding or reducing accidents, and passive safety technology handling the situation if there is a crash.”

Upham agrees:“Active and passive safety work hand in hand.The next thing that we need to Q1 2013

Volvo V40 pedestrian airbag

Automotive World Megatrends magazine | www.automotiveworld.com 40

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Megatrends

Megatrends What do you think have been the major changes in truck safety technology in recent years, and where do you think CV safety is headed over the next decade?

A critical development in CV safety has been the introduction of active safety technology, enabling features such as Advanced Emergency Braking Systems (AEBS) and Lane Departure Warning (LDW). These technologies help alert drivers to potential accidents and, in the case of AEBS, can actually apply braking automatically when the driver does not react in time to prevent or lessen the impact of an accident. Looking forward, you can expect to see the addition of sensors to provide a complete 360 degrees of coverage around the vehicle enabling further collision avoidance capability, eventually including steering control in addition to braking. AEBS and LDW will become mandatory equipment in Europe for certain new commercial vehicles beginning in November 2013, and phasing in through 2015. Other countries are evaluating similar measures to increase road safety.

Interview: Michael Thoeny, Delphi Electronic Controls Although there are no plans to mandate autonomous emergency braking (AEB) technology in light vehicles, the fitment of AEB and lane departure warning (LDW) systems will be required in trucks and buses over 3.5t in Europe from Q4 2013, thanks to a European Commission mandate. By the end of 2015, 100% fitment will be required, and in the US, NHTSA is also considering mandating the technology in heavy trucks.

As the commercial vehicle industry prepares to meet this legislation, the role of suppliers is crucial.

Megatrends spoke to Mike Thoeny, Global Engineering Director at Delphi Electronic Controls, about developments in commercial vehicle safety technology Ruth Dawson

3 Automotive World Megatrends magazine | www.automotiveworld.com

Q1 2013

braking as compared to passenger cars.

Delphi has already secured a strategic win with a leading European commercial vehicle manufacturer that will enable the OEM to comply with the new AEBS regulation in 2013, and the level of re-use described here helped us to reduce time to market and overall system cost.

Are there any technologies that can be used in both, or that can be adapted from one for use in the other?

Absolutely. Our radar and vision-sensing technology building blocks are nearly identical for the two markets. The major difference is in the alert and vehicle control algorithms.

What are the main differences in truck safety technology requirements by region?

Europe and Japan are more focused on legislation to reduce road accidents, where other regions are still investigating options.

Based on Delphi’s on-going safety production programs in Europe, North America, and Asia

we have visibility to the communication between global entities to share findings and hopefully reach common conclusions on future requirements.

Are you seeing demand for advanced safety technology even in markets where safety standards are particularly low, or where safety regulations are implemented loosely, or not at all?

We are starting to see demand in several emerging markets for advanced safety technology, however it is clear that in markets where regulations exist, demand is increasing significantly.

What influence do fleets have on the development and fitment of particular safety technologies on trucks?

The CV market is unique and varies globally by region on the impact of fleet purchases for new technology product options. In some markets, fleet priorities are a key driver for safety related content. Fleets have a mission to optimise costs, and given the

Furthermore, connectivity enabled by vehicleto-vehicle [V2V] and vehicle-to-infrastructure [V2I] systems will allow vehicles to share information in real-time with each other and the network, further expanding the ’cocoon of safety’ around the vehicle from hundreds of metres to hundreds of kilometres. Looking even further, these systems will enable autonomous driving or highway platooning.

Delphi is highly engaged in all of these areas, as we focus on a safe, green and connected future.

What are the main differences between light vehicle and medium/heavy commercial vehicle safety technology?

Given the significant differences in vehicle dynamics between light and heavy duty commercial vehicles, active safety systems originally developed for passenger vehicles must be adapted. We have been able to leverage Delphi’s industry-leading performance in vehicle and pedestrian collision avoidance on passenger car systems to the heavy commercial vehicle market by sharing existing radar and vision sensors, with updates to sensor algorithms for vehicle control and alerts specific to differences in dynamics. For example, longer stopping distances require earlier driver alerts and braking distances, and tracking algorithms must adapt to how truck cabs “dip” when Q1 2013

Automotive World Megatrends magazine | www.automotiveworld.com

Megatrends

benefits of active safety systems in reducing expensive accidents and down time, they will help to stimulate demand. And fleets are already aware of the side benefit of improved fuel economy and reduced emissions when using a vehicle equipped with AEBS and adaptive cruise control.

However, moving forward, the vehicle integration complexity of systems that link sensors, braking, steering, driver monitoring and alert will drive CV manufacturers to include these advanced systems as standard equipment.

As you mentioned earlier, AEB has been mandated for trucks and buses in Europe, and there are moves to mandate it in the US too. How long do you think it will be before all trucks are fitted with AEB? Do you envisage AEB being fitted on all trucks globally?

developments in any particular areas of safety?

to-grid or vehicle-to-vehicle over the next decade?

Although active safety sensor development was driven initially by the automotive market need for high performance radar and vision systems, the CV market could be in the lead when it comes to the implementation of vehicle-to-vehicle and vehicle-toinfrastructure systems.

I expect advances in both, although a focus on vehicle-to-vehicle will predominate in countries that will not make the significant investment for vehicle-to-grid infrastructure systems.

What role do you think telematics and connectivity will play in truck safety over the next decade?

Trucks have a long service life, so the rollout of AEB and other advanced safety features globally will take time. The Europe mandates that start in 2013 for AEB - or AEBS - and LDW are clearly accelerating the market, and I expect to see other regions roll out similar requirements. It will truly have a measurable benefit on road safety.

Connectivity will be a major development in the coming years for both light duty and CV markets. Fleet owners and drivers will demand more information that is enabled by connectivity systems, and overall vehicle safety will be enhanced as V2V and V2I essentially extends the range of today’s radar and vision sensors to help keep CV drivers out of danger well ahead of any potential accidents. Governments are interested in this technology not just for the potential to save lives, but also to address the growing problem of highway overcrowding - as these systems lend themselves to enabling smoother traffic flow.

Is the truck industry leading other sectors in terms of technology

Do you anticipate connectivity-related safety technology to focus on vehicle-

Automotive World Megatrends magazine | www.automotiveworld.com

As safety requirements become more stringent, how will suppliers and OEMs be able to deliver technology at an affordable cost, particularly in emerging markets where total cost of ownership comes first, and where there is an emergent low-cost, or lower-cost, truck market?

Advanced safety technology product costs have come down significantly due to a relentless pursuit of cost reduction while optimising performance in real-world driving situations. Development and verification costs are also being reduced as the technology matures. Since Delphi’s first launch of vehicle radar systems in 1999, we have seen great movement down the price curve as we evolve more efficient designs and our supply base makes advances in lower cost processors and components. As volume increases, I expect this trend to continue. This will enable standard-fitment of these technologies in all markets.

Q1 2013

Megatrends

Megatrends Megatrend 3: total fleet transparency

Truck Transportation 2030: impacting the commercial vehicle industry Changes in the global transportation industry, such as new logistics business models, will have a major influence on the truck market over the coming 20 years.The industry will have to adapt to new patterns of behaviour, global economic megatrends and new mobility concepts, all of which will place new requirements on truck OEMs and their products. At the same time, challenges within the truck industry such as increasing competition will force OEMs to adjust their business models Norbert Dressler & Sebastian Gundermann, Roland Berger Strategy Consultants Truck Transportation 2030, a new study by Roland Berger, sheds light on crucial developments in the truck transportation industry. It presents the results of the consultancy’s discussions about the long-term impact of these developments on industry players with key decision-makers at international logistics providers, commercial vehicle manufacturers, suppliers and other relevant organisations.

Most influential megatrends through 2030 [%] QUOTES

1

Demographic change and urbanization

2

Highly efficient, emission-free and silent trucks

37%

3

Total fleet transparency

37%

Future opportunities and challenges

4

Tolls and regulations

Based on our analysis, we have identified six key megatrends.

5

Accidentnt free transportation

6

Increasing competition

Megatrend 1: demographic change and urbanisation The world's population is growing rapidly especially in developing countries, where 85% of the world's 8.3 billion people will be living by 2030. Over half of the global population will live in cities, driving urban sprawl and increasing the number of megacities. These developments will lead to seismic changes in the truck industry through to 2030.

Transportation flows will increase in line with population growth, so developing countries will both offer the greatest market potential and dictate new requirements. Substantial demand for specialised vehicles, combined train/bus/truck transportation concepts and possibly even completely new vehicle

Important trend

33%

44% 56% 49%

49%

82%

53%

90%

28% 65%

23% 67% 28% 84% 19% 68%

"In ter erms ms of ur urba banization, you can definitely see the need for more speciali alize zed vehicles, so in that respect, it's impor impor mporttant" "Gr Gree een policies ar aree often used as part of the mar marke keting strrategies of big companies" st "That's absolutely cri critical" "That's what [our company] has been built on. Infor nform, m, track and trace: inf nfor ormat or matiion is just as impor mat mporttant as the pr produ oduct itself" "Tolls and reg regulation ar aree mor oree of a big trend in in Eur Europe opean count untrries WKDQ L Q LQ HPHU Q HPHUJLQJ Q HPHU JLQJ PDU PDUNH NHWV ,Q WKH (8 KRZHYHU HU >ÂŤ@ it is definitely a key trend" "Accident-free transpor "Acc orttation is definitely an impor mporttant trend in the European mar arke ket, and wil will also increase in the futur uture" e" >ÂŤ@ LW LV FOHDU WKDW Asian manuf ufac actur urer erss ar er aree growi growi owing ng, but it wi willl take a whil while befor oree they rea reach the level of European mar marke kets"

Very important trend

Source: Interviews; Roland Berger

categories will develop to bridge the growing distances between urban logistics hubs and city centres.

Megatrend 2: highly efficient, emissionfree and silent trucks A combination of increasing green legislation, rising energy prices and growing environmental awareness among customers makes fuel efficiency more relevant than ever.

Emission reduction targets are expected for most major truck markets by 2020. This will

Automotive World Megatrends magazine | www.automotiveworld.com

necessitate alternative vehicle concepts (hybrid or fully electric vehicles) as well as significant gains in fossil fuel efficiency. The development trajectory of electric and hybrid trucks will be boosted by the fact that their engines are exceptionally efficient in urban stop-and-go traffic. They also meet inner-city zero-emission requirements, which will probably be commonplace by 2030. However, with no positive business case in sight, electrification will for the time being mainly be driven by political rather than economic factors.

Q1 2013

Another important requirement will be full transparency along the entire value chain for fleet operators. The key to achieving such transparency is to integrate the various technological aspects of the system into endto-end solutions. This would enable real-time monitoring, which increases flexibility and minimises idle time, thereby cutting logistics costs. Integrated logistics systems (including vehicle-to-vehicle and vehicle-to-infrastructure communication) are estimated to save corporate fleets at least 10% on fuel consumption. This integration will drive forward the trend toward increased transparency and overall up-time. In addition, the ’captive’ telematics services that OEMs provide today will gradually give way to opensource systems (e.g. cross-brand). OEMs will have to support the hardware, but suppliers will deliver both the hardware and platformindependent software solutions. Most vehicles are expected to be equipped with the necessary support systems by 2025.

Megatrend 4: tolls and regulation As traffic volumes increase and emissions standards become stricter, tolls - currently the standard regulatory mechanism in Triad markets - are likely to spread to developing countries, too. Tolls and regulatory fees are expected to increase from around 10% of total transportation costs today to an average of 15-25% by 2030. Fleet operators, for whom total cost of ownership is a major concern, are likely to pass these additional costs to OEMs. Accordingly, OEMs must try to find ways of cutting overall fleet operating costs.

Megatrend 5: accident-free transportation After being somewhat overshadowed by environmental concerns for a time, safety issues are once again coming to the fore.

Stricter safety legislation is in the pipeline in several regions.Yet despite improvements, numerous active and passive safety features that are already widespread in passenger vehicles have yet to be implemented in trucks.

Future developments will include using advanced materials, developing assistance and safety systems, and integrating all the available technologies in future truck generations.

Within the EU, advanced safety features will mostly be in place by 2015. These features will also grow in importance in emerging markets.

Megatrend 6: increasing competition The global truck market is expected to grow by Q1 2013

around 4% a year through to 2020, while competition will be fiercer than ever. The demand side will likely be dominated by a few extremely large ’mega-logistics providers’, Six main consequences for truck OEMs putting pressure on OEMs' margins. On the supply side, with quality and technical standards finally converging across global markets, players Separation of longin emerging markets might even target the haul and city traffic lower ends of the Triad markets (Europe, Japan and North America), in addition to adjacent regions such as Russia. Investment by Asian OEMs into Western players also be an Changewill of business option.

OEM/supplier alliances will model for truck OEMs OEMs Six main consequences forincreasingly truck develop as a means to fight tougher competition, share the burden of investment Integration of tractor and counteract stagnation in Triad markets. and trailer Âąofreduced Separation longair resistance and haul and city traffic Six consequences for truck concept and trailer lightweight manufacturers

1

2

13

Source: MAN (Concept S)

and aerodynamic solutions, taking efficiency to a new level. Partnerships between OEMs and trailer manufacturers could be one option.

However, height and length restrictions remain hurdles for innovative truck concepts.

4

Fully electric and hybrid vehicles

Truck OEMs must develop region-specific Global, flexible so that alternative powertrain solutions concepts and long-haul traffic and city traffic becomes specialization more efficient. Suppliers have a vital part to play in facilitating technological change: The assistance they provide in developing key Cooperations Fully electric technologies will give anand invaluable andthem mergers hybrid vehicles USP.

5 64

Source: Roland Berger

These megatrends willChange have aofmajor impact on business model for truck OEMsWe truck manufacturers and their suppliers. have identified six main consequences for Six main consequences for truck OEMs these Sixplayers. main consequences truck OEMs Integration for of tractor and trailer Âą reduced air resistance and Separation of longlightweight concept Separation of longhaul and city traffic haul and city traffic Source: Roland Berger

2

Source: MAN (Concept S)

3 11

Truck OEMs must align their product offerings with the new transportation requirements Change of business caused by demographic development Change of business model for truck OEMsand model for truck OEMs urbanisation.

As infrastructure changes, Six main consequences for truck OEMs medium-duty trucks will become less of tractortrucks will important and light-Integration and heavy-duty of tractor andIntegration trailer ¹ reduced come to the fore. The emergence of and trailer ¹and reduced air resistance Separation of long’megatrucks’ as a solution forconcept heavy air resistance andlong-haul lightweight haul and city traffic concept traffic will depend on lightweight political decisions.

22

Source: MAN (Concept S)

Source: MAN (Concept S)

Source: Roland Berger

33 1

Source: Roland Berger

Change of business model for truck OEMs

2

Customer structures are also subject to Integration of tractor change. A few large customers are expected and trailer Âą reduced to grow in importance, puttingand pressure on air resistance Six main consequences for truck OEMs OEMs' margins.

To lightweight remain competitive, concept manufacturers will be forced to act as Source: Roland Berger business solution providers, increasing their vertical integrationSeparation to include of longhaul and city traffic comprehensive service offerings and innovative mobility solutions (new business areas to be verified). This will naturally also have an impact on suppliers, who will have to Change businessin the think carefully about theirofposition model for truck OEMs future value chain.

3

Source: MAN (Concept S)

1

2

Source: MAN (Concept S)

Integrated truck Source: Roland Berger

Integration of tractor and trailer Âą reduced air resistance and lightweight concept

3

and trailer concepts must complement the development of lightweight

5

Global, flexible concepts and specialization

Global, flexible concepts can help companies meet the demands Cooperations of specific markets.

Besides global premium platforms, budget and mergers and low cost platforms are required.

OEMs Fully electric and Fullyvehicles electric and vehicles hybrid will build both low-cost and budget hybrid Increasing vehicles on respective platforms. competition and cost pressure will promote flexible adjusted platformGlobal, concepts - thus off-road Global, flexible concepts and budget trucks could and use the same robust concepts and specialization platform. specialization

6 44

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Cooperations andCooperations mergers Fully and andelectric mergers hybrid vehicles

66 4

OEMs need to build new partnerships or improve existing ones, especially in emerging Global, flexible will enable them countries. These partnerships concepts and to address local market requirements, leverage specialization low production costs and share R&D investments. Suppliers must follow the OEMs' lead in terms of development direction and Cooperations geographical footprint. and mergers

5

Driving the change

6

Driving innovation and developing new Fully electric and business models, hybrid while vehicles fending off increasing competition and ensuring compliance may appear a daunting task.Yet each of these harbours attractive opportunities for Global, flexible companies that act swiftlyand and resolutely. Now concepts is the time to actspecialization - to drive the change, rather than be driven by it.

4

5 6

Cooperations Norbert Dressler is Partner, Roland Berger andStuttgart mergers Strategy Consultants,

Sebastian Gundermann is Principal, Roland Berger Strategy Consultants, Munich

Automotive World Megatrends magazine | www.automotiveworld.com

Megatrends

Is natural gas a viable alternative fuel for HD trucking?

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The idea that natural gas might oďŹ&#x20AC;er an alternative to both diesel and gasoline is not a new one, nor is any debate around the issue.

But over the past few months, the conversation both within Europe and North America concerning the viability of natural gas has intensiďŹ ed.

It is, it must be said, a broad discussion, populated by numerous voices which takes into account geopolitical, economical, national interest and environmental considerations and has joined energy suppliers, equipment manufacturers, and consumers, with an unsurprisingly discordant result.

The case for dieselâ&#x20AC;Ś

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Oliver Dixon looks at the disparate strands that currently populate the natural gas debate, and asks whether attempts to introduce NG in Europe and North America will be welcomed by the heavy duty trucking industry

There's a good reason why diesel powers the vast majority of the global heavy duty truck ďŹ&#x201A;eet.

It is an extremely dense power source, and an engine thus powered develops maximum torque at a far lower engine speed than a gasoline engine. For HD trucks, designed to move heavy loads, this is clearly an attractive quality, so the

adoption of diesel as the fuel of choice for the global heavy duty ďŹ&#x201A;eet is not a surprising one.

And, were everything else to remain equal, there is little reason to regard diesel as anything other than the most appropriate fuel for the bulk of heavy duty applications.

But everything else isn't equal. The price of diesel has risen markedly in both North America and Europe over the past decade.

Trucking company operating margins have gone in the opposite direction, and the trading environment is as tight as it has ever been. With fuel representing the single largest input cost of the majority of trucking operations based either in Europe or North America, any means of reducing this cost is likely to be given considerable attention.

While considerations of cost are clearly the key operational driver towards a possible wider spread adoption of natural gas as a fuel for the HD segment, other issues are now presenting themselves as signiďŹ cant contributors to the debate.

â&#x20AC;Śfaces a convincing case for NG Corporate social responsibility (CSR) and sustainability covers much ground. While it is clearly foolish to regard transportation - or for that matter any economic function - as impactneutral upon the environment, in the battle for public perception, environmental awareness is seen entirely reasonably as a plus. There is nothing new here. However, for the big shippers, this CSR-sympathetic approach is now being demanded of suppliers too. If natural gas is seen as a positive in terms of CSR image, then so it should beneďŹ t from a signiďŹ cant tailwind.

The notion of energy security has long been a key consideration: the oil shock of 1973 demonstrated just how crucial an uninterrupted energy supply was to a modern hydrocarbon-based economy.

The International Energy Agency (IEA) mandates that each member hold oil stocks equivalent to at least 90 days of net imports and maintain emergency measures for responding collectively to disruptions in oil supply of a magnitude likely to cause economic harm to its members.

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Automotive World Megatrends magazine | www.automotiveworld.com 0

Megatrends The US is becoming sufficient in NG But discussions surrounding energy security in the US have taken a slightly different turn. In 2005, the US imported 12.5 million barrels of oil per day. It was more or less completely dependent upon oil sourced from regions that, by any reasonable geopolitical measure, could not be seen as reliable.

By 2014, according to IEA figures, the US will import just six million barrels a day. This significant reduction is in part a function of reduced usage, but also a result of the increase in domestic production of crude oil. However, six million barrels per day is still significant, and, despite the rather excited news flow to the contrary, the US is unlikely to achieve oil independence any time soon. Charles K. Ebinger and Kevin Massy of the Brooking Institute echoed such sentiments in a recent memo to President Obama:

Megatrends surrounding the environmental sustainability of its recovery.

But let’s assume that the supply of natural gas within North America is both viable and environmentally sustainable. If this proves to be the case, then two of the three primary drivers towards adoption are clearly in place. Selfsufficiency of supply equates to energy independence, while the cleaner burning, CO2friendly nature of natural gas plays well to the audience in terms of environment and CSR. We can infer that the apparent abundance of supply over demand should also offer some - albeit unquantifiable - differential in terms of cost too.

So what will it take to get the stuff out of the ground and into the tank of the North American HD fleet?

At present, industry figures suggest that a diesel equivalence comparison with natural gas in terms of cost shows a fairly marked differential of US$1.50 - US$2.00 per diesel equivalent gallon at current natural gas prices. This is a significant difference, but the lack of widespread availability causes it to remain something of an abstract number.

Today, there are around 150,000 gasoline and 75,000 diesel filling stations within North America. Natural gas (CNG) outlets number just over 1,100. This lack of infrastructure is clearly an issue: especially given the furore caused by the mooted adoption of DEF for EPA 10 compliance, and the infrastructure arguments that were rolled out during the lead in to 2010. The latter was predicated upon the

"The oil and gas boom has had many commentators breathlessly heralding an era of US energy independence. This is unlikely to materialize either practically or economically.

Under even the most optimistic scenarios for domestic hydrocarbon production, the United States will continue to import millions of barrels of crude oil per day for the foreseeable future, albeit increasingly from our own hemisphere rather than the Middle East. And as long as the United States is connected to the global trading system, it will be subject to supply and demand shocks beyond its borders, meaning that price disruptions anywhere in the world will be passed on to U.S. consumers."

ability - or otherwise - of the industry to supply gallon jugs of an inert liquid to truckstop shelves.

Piping natural gas to those same truckstops would seem like a rather more involved undertaking, but it is clearly one that has to be addressed before any form of wider spread adoption can even begin to be considered. Does this make natural gas a simple energy play in this context? At one level, yes, but infrastructure issues are not the only restraint here.

Limited choice in NG engine offerings…

Diesel is currently the dominant fuel in the HD segment, and there are plenty of diesel engines from which to choose. Natural gas does not suffer from the same plentitude, with only two engine choices on offer. Both produced by the Cummins Westport JV, the ISL G is an 8.9-litre 250-320 bhp offering that falls short of the requirements of mainstream Class 8 trucks, while the HD15 15-litre unit, which outputs 400-550 bhp, is realistically the only choice available to HD operators requiring a like-forlike natural gas alternative.

This lack of choice appears to act as a restraint in two ways. On the one hand, what amounts to a single engine choice may serve to delegitimise natural gas as a genuine alternative to diesel in the mindset of the mainstream North American trucking industry. And perhaps in part because of the scarcity value, the on-cost of specifying a natural gas unit is significant: the incremental cost generally cited ranges between US$45,000 - US$100,000 over a comparable dieselpowered truck. This additional expense lies in

the engine (30%) and the gas tanks (70%), and is clearly noteworthy. So too are the costs inherent in retrofitting service bays for natural gas trucks, at US$200,000 - US$300,000. In summation, opting for natural gas requires considerable upfront investment. …but this may be about to change A key catalyst to development here looks to be the launch later this year of the Cummins Westport ISX 12 G 12-litre unit. While this is being slow-marched to market, it will be followed in 2014 by Volvo’s dual fuel 13-litre unit, and in 2015 by Cummins’ own gaspowered 15-litre unit. It seems reasonable to assume that a broader engine choice will serve to address both the legitimacy argument and possibly reduce the initial cost implications too.

If the natural gas product range increases, then it seems reasonable to assume that so too will the willingness on the part of the suppliers to grow infrastructure. If these two key restraints are removed, then the third, less obvious but equally important barrier to adoption should also be mitigated, and a larger adoption rate should allow some semblance of residual value discussion to take place.

Will Nor th America welcome NG? Natural gas exists in a strange place at present.

There is an abundance of supply, and the technology exists to harness it. And while some fleets have pointed to improved fuel efficiency at EPA 10 as narrowing the reckoning

According to a recent Deloitte survey which polled 250 oil and gas executives, 75% believe the US already is natural gas sufficient or will be within ten years. The US Energy Information Administration (EIA) figures lend credibility to this survey: of the natural gas consumed in the United States in 2011, some 95% was sourced domestically.

There is much more to debate here: the argument that sets CNG against LNG is one that is still in its infancy, while at a broader level the sustainability of the North American gas supply remains in question. Clearly, if the differential between diesel and natural gas narrows significantly, then this too will skew any future reckonings.

That said, and with a number of other caveats, it is hard to believe that the North American trucking segment should not constitute a significant end market for natural gas in the coming years. The barriers to adoption are clear, but are far from insurmountable, while the benefits are both demonstrable and quantifiable.

OEMs have a clear and vested interest in retaining diesel as the fuel of choice at a global level. A focused effort upon natural gas for North America alone is unlikely to be welcomed by equipment suppliers which increasingly prefer to view the world as a common market.

Europe prepares to deploy its NG infrastruc ture However, at the end of January, the European Commission published the Clean Power for Transport package, which includes a proposal for a Directive on the deployment of an alternative fuels infrastructure, aimed at developing harmonised standards and setting clear targets for the rollout of consolidated alternative fuels, among which CNG and LNG play an important role. The paper demands a maximum 150km distance between CNG and 400km between LNG fuelling stations at a national level Europe-wide by 2020.

If we add this European initiative to the situation in North America, then the obvious conclusion is one that sees the likely marketplace for natural gas growing significantly in two major global truck markets. At this point, globalised equipment suppliers would seem to have little choice but to fall into line.

The EIA's Annual Energy Outlook 2013 Early Release projects US natural gas production to increase from 23 trillion cubic feet in 2011 to 33.1 trillion cubic feet in 2040, a 44% increase.

Almost all of this increase in domestic natural gas production is due to projected growth in shale gas production, which will grow from 7.8 trillion cubic feet in 2011 to 16.7 trillion cubic feet in 2040. Granted, natural gas adoption rates are miniscule at present within the US vehicle fleet, but that aside, there is clearly some headroom for wider spread adoption without supply constraint. Against this, we have to set the twin issues of the true size of the shale reserve and the well-documented concerns 1 Automotive World Megatrends magazine | www.automotiveworld.com

somewhat, a more cost effective fuel type is never going to be dismissed out of hand.

Is natural gas going to have an impact on the North American trucking industry? Without a doubt, but it is an impact that will take some time to arrive. Perhaps the hardest task at present is not one of selling the logic, but of managing the expectations. Transport is, ultimately, a highly conservative, change-averse industry. But changes do happen: natural gas will play a significant role in the years to come. How significant remains to be seen.

BTIC Westport cryogenic liquefied natural gas (LNG) storage tanks with integrated LNG pumps

Q1 2013

Q1 2013

Oliver Dixon is Editor, World Truck Analysis

Automotive World Megatrends magazine | www.automotiveworld.com 2

Megatrends

Always on, always connected: M2M comes to the auto industry Automotive OEMs see machine to machine (M2M) technology as a way of generating revenue and differentiating themselves from their competition. Myriad business opportunities exist, from consumer infotainment to traffic management, safety and security. Megatrends talks to Vodafone, which is anticipating significant growth in its M2M business Martin Kahl

The concept of ‘always on, always connected’ is becoming a reality. As the global ownership of mobile devices grows, so too does the number of business opportunities. Worldwide, Vodafone expects the number of people connected to grow to three billion over the next three years.

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Within this, a key growth area for Vodafone is machine to machine (M2M).Vodafone’s M2M operations sit within its Enterprise division, which represents 24% of the company’s overall global revenue, and Vodafone is expecting its M2M business to continue to grow significantly. The company currently has around 400 million consumer hand-held connections globally, and 8.8 million M2M connections - it is expecting the latter to grow rapidly, driven largely by the automotive industry, domestic and industrial smart metering and health industry applications, as companies seek new ways to meet regulations, reduce costs and increase efficiency.

In terms of where in the world M2M growth can be expected, Tony Guerion, Head of Machine to Machine at Vodafone Group Services, told Megatrends that “Asia will grow quite significantly over the next three or four years due to the availability of mobile”. So too will “the Americas, including South America, where growth will be at the same pace as Europe, roughly 28-30%.

“The question is no longer, ‘what can technology do?’ Now it’s 'how can we use that to gain a business advantage?’ The evolution of M2M is going to accelerate dramatically over the next 18-24 months, and there are a few reasons for that. The first is regulatory, and varies from region to region. The EU is aggressively driving the adoption of M2M, including smart metering in homes, and eCall, Q1 2013

so that if a car is involved in a crash, the emergency services are alerted. We don’t know whether the regulation will be introduced in 2015 or 2016, but what is certain is that everybody in the industry is talking about it and starting to implement it.”

Automotive OEMs see M2M as a way of generating revenue and differentiating themselves from their competition, be that through infotainment, different or additional telematics services, or billing the customer slightly differently. Myriad business opportunities exist, in areas such as consumer infotainment, traffic management, safety, security and eCall.Vodafone is also working with the insurance industry on usage-based car insurance related to when drivers use their cars, and their driving pattern.

Speaking to Automotive World at Automotive Megatrends India 2012, held in Chennai in September, Hitoshi Ono, Global Business Development Manager - Automotive at Vodafone, said, “We have a very large interest in the automotive industry from a telematics perspective, and Vodafone is creating unique services, infrastructures and products to support this.”

There are two ways of delivering automotive telematics applications, explained Ono. “The

first is the mobile phone unit connecting to the head unit, called tethering. And another is having embedded connectivity in the car.

Vodafone M2M focuses on the latter.”

A number of opportunities exist for providers of automotive M2M technology, “for example, safety and security, and infotainment,” said Ono. “Then there are peripheral services like customer retention-focused applications, customer acquisition-focused application, and data reapplication. There are multiple streams that arise from telematics applications today that we are starting to realise. We are first trying to provide basic managed connectivity that is completely unique to OEM requirements. We have already built certain components, like an automotive-grade machine to machine-dedicated SIM, as well as the dedicated machine to machine platform.”

The forthcoming Opel Adam is an exercise in personalisation, with over a million ways for buyers to individualise their car, and connectivity will play a key role in that strategy. Opel says the Adam will be “the most connected car on the market.” At the 2013 Detroit Auto Show, Ford and GM announced

Automotive World Megatrends magazine | www.automotiveworld.com 54

Megatrends

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plans to open up their APIs [application programming interface] to external developers; and a year earlier, at Automotive Megatrends USA 2012 in Detroit, OnStar announced its plans to open up its APIs. Vodafone takes a similar approach, said Guerion. “We are looking to develop the number of APIs that we have, and to ensure that whatever we can provide to car manufacturers is actually relevant to the car industry, and if that means opening the APIs to developers, we will. Indeed, we already do this - we have a programme called Developer Support where we help our customers build the right applications, but also to build the right API environment. That is clearly something we need to do. Up to now, because some of the requirements were more or less the same, we have a library of APIs that meet our needs. But in the future, there will be a need to make sure that we have flexibility in opening APIs and making sure that we can offer additional streams of information or whatever it is to car manufacturers.”

At the same time, what is offered needs to be safe. What responsibility does a company like Vodafone have that ensures that what is offered meets automotive standards and regulations? “We have SLAs [service level agreements], so everything we do with, in this case, car manufacturers, is covered contractually.You can imagine that there is no way that a big OEM will take any risk around information breaches, for example.”

Providing services is one thing. Encouraging people to utilise those services is another. “If we want end-users to actually use these services,” Guerion said, “we need to work with the car manufacturers to come up with the right pricing and billing strategies.You don’t want your end-user to receive 20 different bills. We need to do things in a smart way - that’s quite a challenge and we are investing in that because the experience for the driver will be a differentiator for car manufacturers.”

The emerging markets are particularly interesting when it comes to the level of connectivity that an occupant in a vehicle can enjoy. Some OEMs offer global products, others tailor their products to specific markets, be it the vehicle itself, or the content offered within the vehicle. “Different markets have different needs, and different car manufacturers have different needs,” Guerion agreed. “One of the requirements for BMW is to make sure that whatever is delivered can be used globally, making sure that the service will work globally, and that the features of the service are available globally. For BMW, it does not make any difference whether you are in Albania, Qatar or Germany. All global OEMs are looking for global solutions, but they are also looking to fine-tune them to certain markets, to make sure that they comply local market regulations and that they meet the demands of the local population.”

In emerging markets, most vehicle occupants are likely to have a cellphone, but they will probably not be in a car with an embedded telematics or infotainment platform. Thus, the car remains a black spot for as long as the device cannot be connected to the vehicle’s existing audio system, for example. How is Vodafone as a provider able to bridge the

Automotive World Megatrends magazine | www.automotiveworld.com

divide between those people who have a built-in device such as ConnectedDrive in a BMW, and those who would like their brought-in device to be connected? “The major OEMs want connectivity to be embedded at the car factory. In emerging markets, we need to find a clever way to use a cellphone to deliver these services. We’ve been working on ways to use the mobile phone and understand how we can deliver services, but our focus so far has been on working with the bigger manufacturers.”

As for developing technology and services to bring in the many millions of older, ‘disconnected’ vehicles on the world’s roads, “we are still working on that,” said Guerion, and it all comes down to cost. “Whatever you provide, it needs to be cost-efficient. If you want to offer on-demand services and infotainment, you need to ensure that the solution is cost-effective and that the business case is attractive enough to go back to cars that are three, four or five years old, and we haven’t made a decision on that at this stage.”

As noted earlier, peripheral services are also a key part of automotive M2M developments, and an example of this is work with the insurance industry. “We are working with insurance companies to provide them with the right data so that they can define driver profiles and then through use of an algorithm, come up with the right insurance price for drivers,” said Guerion. “We see insurance as a big driver for M2M applications, especially in the automotive industry. This is something we have been looking at in India, where you will be paying as you drive, based on factors such as the distance, time and speed that you drive.

The insurance companies have come up with a way to calculate a price on a daily or distance basis, for example. That will be huge.”

Q1 2013

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Megatrends

Megatrends GHG emissions - something that does not require additional action by Congress. Many of these efforts will focus on stationary sources, especially new and potentially existing power plants, but they could well affect car and truck emissions too.

Most notably for the coming year, the carbon emissions and corporate average fuel economy (CAFE) rules for passenger cars and light trucks issued in 2012 will be fully implemented between now and model year (MY) 2025. These rules could be modified for their final four years (MY 2022-25) through a mid-term review in 2018, but wholesale changes at that time are very unlikely. These rules are already pushing manufacturers to make significant increases in light-vehicle fuel economy; credits and incentives are also helping to drive continued interest in electric, plug-in hybrid-electric, and fuel cell vehicles, particularly in light of zero-emission vehicle (ZEV) sales requirements in California and a dozen other states.

Outlook 2013: the Obama administration, Congress, and the auto industry

GHG emissions and fuel consumption standards

Ian C. Graig, Global Policy Group President Barack Obama, having won reelection in November, took the oath of office for his second four-year term on 20 January.

For the next two years he will work with a Congress that was changed only slightly by the presidential elections: the Democrats retained and slightly expanded their Senate majority, while the Republican Party retained a slightly smaller majority in the House of Representatives. The political outlook for 2013 thus far remains uncertain, with fears that the gridlock which gripped Washington in 2011 and 2012 could continue.

So what is this new year in Washington likely to bring for the automotive industry? First, the industry will be dealing with a host of new policy makers - not an unusual situation at the start of a president’s second term.

Transportation Secretary Ray LaHood, Environmental Protection Agency (EPA) Administrator Lisa Jackson, and Secretary of Energy Steven Chu have already said that they are leaving. There have also been changes at lower levels of the EPA and other agencies, which, although unlikely to alter the

fundamental direction of Obama administration policies, will change the policy makers with whom the industry interacts.

However, President Obama’s re-election, and the somewhat surprising expansion of the Democrats’ Senate majority, ensures that there will be no fundamental changes in many of the policies that most directly affect the automotive industry. For example, the administration will now continue to implement the country’s first-ever rules regulating greenhouse gas (GHG) emissions from the largest new or modified stationary sources and from mobile sources, including cars and trucks - issued during Obama’s first term. If control of both houses of Congress and/or the White House had been handed to the Republicans, such regulations could have been slowed or even rolled back.

(Political) climate change Looking ahead, the surprising prominence that the President gave to climate change in his second inaugural address is likely to

Automotive World Megatrends magazine | www.automotiveworld.com

foreshadow additional efforts to reduce carbon emissions - particularly since polls show that record temperatures in the US last year have revived public concern about global warming. This does not mean that Obama will resuscitate proposals for a national cap-andtrade system, however. Such proposals, which stalled during his first term, still have little support in Congress.

The political outlook for 2013 thus far remains uncertain, with fears that the gridlock which gripped Washington in 2011 and 2012 could continue Nevertheless, it does mean that the Obama administration can be expected to continue using its existing authority under the Clean Air Act to expand its efforts to regulate Q1 2013

Looking to the medium- and heavy-duty market, rules finalised in 2011 for the first time subject medium- and heavy-duty vehicles to GHG emissions and fuel consumption standards. The current rules will be phased in over model years 2014-18; the Obama administration is expected to use its second term to propose a new set of fuel consumption and GHG emissions rules for the heavy-duty market to take effect starting in MY 2019.

It is also widely expected that the Environmental Protection Agency will now move ahead with planning new Tier Three rules to reduce light-vehicle emissions of ’criteria’ pollutants - such as carbon monoxide, nitrogen oxides, etc. - and to reduce the sulphur content of fuel. The automotive industry has generally been supportive of a national Tier Three standard, which would keep vehicle manufacturers from having to certify vehicles to separate California and federal standards. Conversely, the oil industry opposes the low-sulphur fuel rules needed to allow more stringent emissions controls. These Tier Three proposals could come in 2013, with a goal of taking effect as early as MY 2017.

Support for the development of advanced vehicle technologies The Obama administration will also continue Q1 2013

to advocate federal support for developing advanced vehicle technologies and vehicle electrification, including development of advanced batteries, though the administration recently recognised that electric vehicle demand has increased more slowly than it once expected. These efforts to support the development of vehicle technologies will be limited, however, by budget realities. In fact, such programmes at the Department of Energy (DOE) are already facing mandatory cuts as part of debt and deficit reduction efforts, and those financial pressures are unlikely to ease.

turn are driving interest in natural gas-fuelled vehicles. Interest is focused for now on the medium- and heavy-duty commercial vehicle markets, most notably transit and short-haul vehicles, but interest could grow in the longhaul market as a national natural gas infrastructure is developed. Budget pressures will likely limit any federal financial incentives aimed at promoting the use of natural gas in vehicles, though federal emissions rules do offer credits for natural gas vehicles, and the federal government may have a role to play in developing a natural gas infrastructure.

President Obama’s re-election, and the somewhat surprising expansion of the Democrats’ Senate majority, ensure that there will be no fundamental changes in many of the policies that most directly affect the automotive industry

In sharp contrast to the growing interest in natural gas, Washington’s interest in biofuels has faded notably. Several key federal incentives for ethanol and other biofuels were recently allowed to lapse, though the federal renewable fuel standard RFS2 will require continued increases in the use of ethanol through 2022. In addition, the EPA recently allowed the use of E-15 - 85% gasoline, 15% ethanol - in MY 2001 and newer light vehicles, despite automotive industry concerns about the damage that could be caused in vehicles designed to use E-10. Further federal incentives for biofuels seem unlikely in the near future.

Many of these programmes saw significant increases in funding under the economic stimulus strategy implemented during the recession, but such a surge in federal dollars cannot be expected over the next few years.

At the same time, federal advanced vehicle technologies programmes have enough support from industry and the White House to avoid overly steep budget cuts.

Development of vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) technologies could also be affected by ongoing cooperative research between industry and the Transportation Department, which may also decide in the year ahead how to proceed with rules related to connected-vehicle technologies.

Interest in natural gas is expected to grow…

Natural gas will be an area of growing interest in the coming months, especially in the commercial vehicle market, but this interest is being fueled more by market developments than government mandates or incentives. The dramatic increase in US natural gas production using hydraulic fracturing (fracking) and directional drilling has pushed domestic natural gas prices to very low levels, where they are expected to remain for some time. These low prices in

…as interest in biofuels fades

These comments have focused largely on regulatory or legislative developments that directly affect the car and truck industries, but the US vehicle market will also be affected by a host of policy decisions - on such issues as the federal debt ceiling, federal spending, tax reform, etc. - that could have a huge impact on the economic recovery. More importantly, the automotive industry, like all of American business, would benefit if the Obama administration and members of Congress could break the partisan gridlock that made the outgoing Congress the least popular and most ineffective in recent history.

Ending that dysfunctional situation would be the best gift Washington could give to the automotive industry in 2013.

Ian C. Graig, chief executive of Global Policy Group, Inc., has written in the past for Automotive World and Megatrends magazine on a wide variety of US policy trends and their implications for the automotive industry. Global Policy Group is a Washington-based policy research and consulting firm whose clients include leading US, European, and Japanese firms in the automotive, energy, utility, information technology, and financial services sectors. For more information, visit www.globalpolicy.com or contact Ian Graig directly at ian.graig@globalpolicy.com.

Automotive World Megatrends magazine | www.automotiveworld.com

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Megatrends

Megatrends

How adhesive bonding has made gluing cars together a reality Greater stiffness, lower manufacturing costs, reduced weight, improved durability, superior packaging and greater long-term refinement - these are some of the many requirements of the modern automotive body-in-white. As the industry strives to meet these demands, one technique finding its way into the mainstream is the use of adhesive bonding. Megatrends talked to Jeff Kapp, senior technical specialist (structural adhesives) at Tier One joining specialist 3M, to find out more Ruth Dawson

As vehicles age, the heat affected zone around spot welds can develop micro cracking that leads to increased flexing of the body. This can lead to squeaks and rattles from trim components, especially where tolerances have been tightened to increase the feeling of quality. The current trend is strongly towards an increasingly premium experience, so this is a developing problem reflected in a growing number of costly squeak and rattle warranty claims.

smaller spaces, so consistency is vital. Point fixing such as spot-welding creates localised stress points, but adhesive bonding spreads the loads, not only making the join stronger but also allowing more of the material to contribute to energy absorption. Some new, lightweight structures would not be possible without adhesives to improve crash worthiness. And unlike welds, an adhesive bond maintains the majority of its strength throughout the vehicle’s life.

We’ve worked with one vehicle manufacturer who was so concerned by this issue that it was stopping them offering the longer warranties that increasing competition in their sector demanded. Traditional work-around solutions, such as additional spot welding or TIG welding of the body-in-white supplemented by new reinforcing components, had already been rejected due to the increased cost and manufacturing complexity.

The project with 3M was so successful that a number of barrier components, or compliant foams, used at critical trim interfaces to reduce squeak and rattle were also eliminated, creating further savings in materials and processes.

Do adhesives offer any advantages in terms of weight reduction compared to welding?

Can you comment on any potential safety benefits?

Can you please outline the current use of adhesives in light vehicles and in medium and heavy commercial vehicles?

The growing popularity of adhesive bonding of body-in-white is driven by a range of interrelated benefits that the industry is only just starting to fully exploit. Early applications were largely focused on addressing specific issues, usually to either solve structural problems with vehicles already in production or to reduce weight by integrating aluminium or thinner gauge steels alongside conventional steels. Today, we are seeing body-in-white engineers designing vehicles specifically to take advantage of a wide range of benefits, leading to greater stiffness, lower manufacturing costs, reduced weight, improved durability, superior packaging and greater long-term refinement.

CVs present a slightly different requirement as the focus is on maximising payload and space rather than ride, handling and refinement.

However the large ‘open’ structures and need for the best possible access also lend themselves well to the use of structural adhesive. The weight challenge is also shared as every kilo saved on the vehicle can translate to an extra kilo of payload (for the same laden kerb weight).

What are the differences in cost and ease of use of adhesives versus traditional welding?

That’s a complex question because there are so many variables. Generally, welding stations require vastly more capital. Adhesives can be applied robotically to give excellent consistency, but in some areas they can also be applied by hand as a pre-shaped film. We also have to consider the savings that can be made on the vehicle structure. Spreading the stress of the bond across a wider area compared with a spot weld allows a thinner gauge material to be used, with significant cost and weight savings. In some instances, sections of reinforcing can be eliminated and the number of welds reduced.

Excellent gap filling properties can eliminate the need for additional sealants or for costly tooling changes, while zero read-through there is no damage to the reverse surface means there is no need for additional finishing or trim components.

We are also finding that our customers are using the unique pre-cure capability of 3M adhesives to simplify manufacturing processes in other ways by allowing more subassembly to be conducted off-line, before paint or even off-site. The time between assembly and bake, when the structural adhesives are cured in the

1 Automotive World Megatrends magazine | www.automotiveworld.com

paint ovens, can be weeks, allowing batch manufacture and manufacture at alternative locations without risk of assembly distortion.

This can be particularly useful for the assembly of closures with increasingly dense electrical and electronic content, where assembly by a supplier can provide manufacturing and capital savings. Adhesives also help to release packaging space and allow optimised geometries because there is no requirement for access by a welding gun.

Safety is another reason to adopt adhesive joining, particularly as a supplement to conventional techniques.Vehicles with fatigued welds are clearly not as safe as new vehicles, but there are further layers of complexity to the safety case. Structural engineers now have to manage more energy, more quickly in

Spot welds are by definition points of high stress, so the main light-weighting advantage is that by spreading the stresses across a wider area, you enable the use of thinner gauge materials. The increased stiffness, coupled with the superior durability of the join, also allows some reinforcing components to be eliminated.

The elimination of the need to weld all the components also enables the use of materials that can be difficult and expensive or impossible to weld, such as aluminium and carbon fibre. We are seeing growing use of hybrid structures, where disparate materials such as steel and aluminium or aluminium and carbon must be joined. You can’t weld these combinations, so you either have to use physical fastenings which are expensive to apply and create localised stresses, or you bond them. Even lower cost cars now use a considerable multitude of steel specifications, many of which are difficult to

weld or difficult to weld to steels with significantly different specifications.

Adhesives are largely materials independent - particularly with the new generations that 3M is developing specifically to reduce substrate sensitivity - so are an important enabling technology for these more complex light-weight, hybrid structures.

How will the use of adhesives in car manufacturing evolve in the next decade?

Applications are growing in every region as vehicle manufacturers come under increasing pressure to reduce fuel consumption and CO2 emissions. The 2020 requirements can only accelerate this trend, driving sophisticated materials into higher volume segments.

3M is focussing its R&D on techniques that allow this to be accomplished alongside improvements in process robustness and efficiency that often more than mitigate the increased cost of materials. I’m also going to predict that it won’t just be materials that change, but that we will also start to see new construction architectures in volume production. With so many vehicles now reliant on structural adhesives, body-in-white engineers are developing tremendous confidence in the technique. We are already seeing some concepts using adhesives to open-up possibilities for radical new architectures. I’d say we’ll see some of these ideas entering production possibly in significant volumes, driven by the reduction in weight that can be achieved.

“

How easy is it for manufacturers to switch from traditional welding techniques to using adhesives?

We are finding that most vehicle manufac turers star t by introducing adhesives as a supplement to spot welds or rivets as an incremental change, to solve specific challenges

You wouldn’t switch completely unless you were moving to a substantially different body technology, like carbon or possibly aluminium.

We are finding that most vehicle manufacturers start by introducing adhesives as a supplement to spot welds or rivets as an incremental change, to solve specific challenges. This helps them build confidence in the technology and develop in-house expertise. Then the next vehicle is designed from the beginning to more fully exploit the benefits of adhesive joining.

”

Is there a difference in the durability of adhesives versus welding?

Q1 2013

Q1 2013

Automotive World Megatrends magazine | www.automotiveworld.com 2

Megatrends

Auto brands must confront counterfeiting in China Dr Paolo Beconcini, CBM International Lawyers In October 2012, the US Department of Transportationâ&#x20AC;&#x2122;s National Highway Traffic Safety Administration (NHTSA) issued a consumer safety advisory to alert vehicle owners and repair professionals to the dangers of counterfeit airbags.

NHTSA had become aware of problems ranging from non-deployment to expulsion of metal shrapnel during deployment. The airbags look nearly identical to certified original parts, with leading manufacturersâ&#x20AC;&#x2122; branding marks.

The move follows police seizing nearly 1,600 counterfeit airbags from a North Carolina mechanic in August 2012: a counterfeit automotive parts ring was buying fake airbags from a plant in China, where the bags were sold for a fraction of the usual cost. In the first nine months of 2012, US Immigration and Customs Enforcement was reported to have seized around 2,500 counterfeit airbags.

Brand protection in China can be a very frustrating enterprise for brand owners, as the victims of Chinese counterfeiters, and for those professionals trying to help them by providing effective solutions. It is also frustrating for EU and US government officials trying to encourage China to overcome and remove everyday obstacles to the effective enforcement of trademark and design rights.

It is this lack of political will in the Chinese provinces that is hindering national efforts to deliver a lasting defence against counterfeiters.

While the central government in Beijing has stepped up and improved intellectual property laws and guiding policies, everyday trademark enforcement and anti-counterfeiting actions are handled locally. In such a huge country, local enforcement authorities are usually physically very far from Beijing and are often inclined to serve local economic and political interests, rather than closely following national policies and the rule of law.

Q1 2013

Trademark enforcement authorities, including local judges and other officials, are appointed by the local governments and municipalities, which often have interests in economic activities which may directly or indirectly profit from business generated by counterfeiters. In some cases, local governments have invested financial resources in the construction of markets where counterfeit spare parts are sold.

It is often forgotten that counterfeiting businesses also create satellite industries of a lawful nature which benefit the local economy and labour market. For example, lawfully operating trading and shipping companies may be involved in the sale and distribution of counterfeit goods. Local governments, especially those at municipal and district level, are therefore reluctant to implement anticounterfeiting policies, for fear of damaging

successful enforcement; flawed portfolios may be used by authorities as an excuse to deny enforcement. Manufacturers must also bear in mind that brand protection should not focus only on trademarks, but also design patents.

OEMs should concentrate and even intensify raiding and administrative enforcement in key Chinese regions to create good relations with local enforcement authorities. Eventually, to efficiently allocate financial resources, intense enforcement should be focused only on counterfeit of goods where the added value is not based only on the brand, but also on the related technical performance and safety of the product. By actively preventing such key spare parts from entering global markets, risks deriving from warranty and safety claims arising from malfunctions and accidents caused by non-genuine parts will also be prevented.

It is this lack of political will in the Chinese provinces that is hindering national efforts to deliver a lasting defence against counterfeiters

The automotive and manufacturing industries need to recognise that brand protection accomplishes more than protection of the brand name: it helps to avoid the warranty, safety and legal risks related to product malfunctions and personal injuries caused by flawed non-genuine parts.

the local economy and labour market.

In spite of this hostile environment, short term enforcement through investigation and administrative raiding of counterfeit spare part factories and warehouses is a necessary evil for OEMs. The best way to reduce the risk in this unfavourable legal environment is for manufacturers to set clear objectives when determining their brand protection budgets and strategies, and the tools they choose to implement these strategies.

This article first appeared in the Comment section of AutomotiveWorld.com. For more expert insights and analysis of the global automotive and commercial vehicle industries, visit automotiveworld.com/comment.The AutomotiveWorld.com Comment column is open to automotive industry decision makers and influencers. If you would like to contribute an article, please contact editorial@automotiveworld.com.

In particular, OEMs need to adjust their intellectual property rights portfolios in China in order to respond effectively to the different types of threats posed by counterfeiters. A strong IP portfolio is a precondition for

Dr Paolo Beconcini is a Partner at CBM International Lawyers. He specialises in intellectual property and product liability law and has worked for many leading automotive brands. Now based in Beijing with CBM Lawyers International, Beconcini has been working in China for over 11 years.

Automotive World Megatrends magazine | www.automotiveworld.com

Industry viewpoint

Megatrends the consumers surveyed who say they research their car purchases online before buying a vehicle, 78% visit at least six websites or more first, and 15% say they browse more than 20 websites to get the information they need.

OEMs and dealers must not ignore online car-buying Luca Mentuccia, Accenture

The global automotive industry has come a long way since the upheaval of a few years ago, as evidenced by the recent 2013 North American International Auto Show (NAIAS) in Detroit: not only was there an array of gleaming new vehicles and greener models, but also a new optimism thanks to an industry rebirth that is, in large part, working.

Yet the ability to sustain success results from taking full advantage of every opportunity, and some OEMs and dealers are not focusing enough on digital marketing, an area that can have a direct impact on the bottom line. The first stop for more and more car shoppers is not the dealer showroom, but the Internet.

And, while conventional wisdom would suggest that car websites should aid and support sales performance, a new Accenture global survey of 13,000 drivers

Automotive World Megatrends magazine | www.automotiveworld.com

in 11 countries suggests that the current state of industry websites may be hindering it.

75% of consumers surveyed say they still need to turn to more traditional offline media for the information required to make their carbuying decision

The study, conducted in Brazil, China, France, Germany, India, Indonesia, Italy, Japan, Malaysia, South Korea, and the US, found that while consumers are generally satisfied with their online experience, they want content on automotive industry websites customised to be more relevant to their specific car-buying needs, and they believe such a change would make the process simpler and faster. Of

Q1 2013

Furthermore, 75% say they still need to turn to more traditional offline media for the information required to make their car-buying decision.

In the coming months, other major motor shows at cities across the globe - from Geneva and Shanghai to New York, Frankfurt and Tokyo - will introduce the latest cars, trucks and in-vehicle technology designed to encourage car-buying and enhance OEM and dealer profitability. As car shoppers depend more and more on websites to make their car-buying choices, it only makes good business sense for companies to put as much effort into developing an effective, interactive digital marketing platform, just as it does to create extraordinary physical presentations like motor shows and to establish successful brick and mortar dealerships.

Putting digital marketing to better use will only complement the OEM/dealer business model, and could yield an increase in topline sales for the industry of 1-2%. 83% of those polled believe that improved websites would significantly reduce the time needed to purchase a vehicle. They also want a better integrated online-offline sales process that provides a seamless transition from shopping on the web to completing the car purchase in the showroom.

Moreover, the desire for better digital marketing is not borne out of interaction with automotive industry websites alone.

Q1 2013

More than three quarters of consumers (76%) feel that the sector significantly lags other retail industries in the use of digital media tools, such as video and 360-degree media tours - and the vast majority of respondents believe that better interactive digital marketing is a must for the automotive industry.

The study goes on to reveal that shoppers would be willing to elevate the online-offline sales process even more.

Given the opportunity, 93% would consider having the option of making the entire purchase of a car online, including financing, price negotiation, the back office paperwork, and delivery to their home.

Some of this may not be possible now.

But, if such a scenario were to become feasible, it too would only serve to augment and enhance sales performance, not hinder it.

One of the most pressing challenges facing retailers across industries today is having the ability to continuously give consumers what they want in an online experience and effectively integrate that experience into their brick and mortar operations. Although the automotive industry is experiencing a strong recovery, OEMs and dealers must focus on providing a consistent customer experience to the online sales process.

Consumers want better online support, advice and personalisation when buying a car. Through the use of sophisticated digital technology, better online interaction with customers can simplify the buying process.

Luca Mentuccia is Automotive Industry Global Managing Director with Accenture, a global management consulting, technology services and outsourcing company

Automotive World Megatrends magazine | www.automotiveworld.com

How do I control my fuel usage & cost?

How do I adhere to poka-yoke for fueling?

Industry Leading NAND Flash Storage for Automotive IVI Â&#x2019;Â&#x2021;Â&#x2026;Â&#x2039;ƤÂ&#x2026;Â&#x192;Â&#x17D;Â&#x17D;Â&#x203A; Â?Â&#x2030;Â&#x2039;Â?Â&#x2021;Â&#x2021;Â&#x201D;Â&#x2021;Â&#x2020; Â&#x192;Â?Â&#x2020; Â&#x2021;Â&#x2022;Â&#x2013;Â&#x2021;Â&#x2020; Â&#x2C6;Â&#x2018;Â&#x201D;

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ISO/TS 16949:2009 ISO 14001:2004

*

FUEL MANAGEMENT SOLUTIONS FOR AUTOMOTIVE PLANTS

ASSEMBLY LINE

Automated fuelling with grade and quantity preset Barcode based VIN identification

Adhere to Poka-Yoke !

PAINT SHOP

Accurate control of fuel delivery through GVR Electronic Meter registers

Accountability assured !

STORAGE TANK

Magnetostrictive Automatic Tank Gauges with high level of accuracy

Real time control over inventory !

Technology with a human touch.

Dispatch Yard

Automated delivery of fuel with Vehicle and Driver identification

Control & Visibility !

Why ATP Protective Pr otective Enca Encapsulation psulation Molding

SMT (Surf (Surface ace Mount Technology) Technolog y) cards car ds with Exposed Componets and Contacts

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Č&#x2039; Â&#x2021;Â&#x2022;Â&#x2013; Â&#x2014;Â&#x201D;Â&#x2039;Â?Â&#x2030; Â&#x2014;Â&#x201D;Â? Â?Č&#x152; Â&#x2019;Â&#x2019;Â&#x17D;Â&#x2039;Â&#x2026;Â&#x192;Â&#x2013;Â&#x2039;Â&#x2018;Â? Â&#x2019;Â&#x2021;Â&#x2026;Â&#x2039;ƤÂ&#x2026; Â&#x2018;Â?Â&#x2022;Â&#x2014;Â&#x17D;Â&#x2013;Â&#x192;Â&#x2013;Â&#x2039;Â&#x2018;Â? Â&#x2021;Â&#x201D;Â&#x2DC;Â&#x2039;Â&#x2026;Â&#x2021;Â&#x2022;

SAFE FUEL PUMPING

Submersible turbine pumps with capability to deliver fuel across the plant

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Avoid day tanks and hassles !

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Contact No: +91 22 6637 9000 | Mobile No.: +91 99200 40610 Email Id: sales.gvrindia@gilbarco.com | Website: www.gilbarco.com

In agreement with customers, ATP ATP performs AEC Q100 qualification whereas the test conditions are adjusted to meet the SD card specification and requirements of IVI applications.

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Íť ĆľĆ?Ć&#x161; Ć&#x2030;Ć&#x152;ŽŽĨ Íť tÄ&#x201A;Ć&#x161;Ä&#x17E;Ć&#x152; Ć&#x2030;Ć&#x152;ŽŽĨ Íť ^ Ć&#x2030;Ć&#x152;ŽŽĨ Íť ĹśĹ&#x161;Ä&#x201A;ĹśÄ?Ä&#x17E;Ä&#x161; Ć?Ĺ&#x161;Ĺ˝Ä?ĹŹ Ć&#x152;Ä&#x17E;Ć?Ĺ?Ć?Ć&#x161;Ä&#x201A;ĹśÄ?Ä&#x17E;

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