Automotive World Megatrends Magazine – Q4 2013

MEGATRENDS Q4 2013

M A G A Z I N E E XC LUS I V E I NTE R V I E W

Gordon Murray FORMER F1 DESIGNER TALKS ISTREAM AND THE FUTURE OF ENGINEERING

Blowing liquid air THE NEW INTERNAL STEAM ENGINE SET TO REVOLUTIONISE LCVS

Who should be driving your car?

WE ASK WHO SHOULD BE MAKING, SUPPLYING AND CONTROLLING OUR CARS

Race Sunday, tweet Monday

SOCIAL MEDIA SPARKS A NEW DAWN IN MOTORSPORT

WITH INSIGHTS FROM FROST & SULLIVAN, ROLAND BERGER, JATO AND ST IVES GROUP

WELCOME TO MEGATRENDS Q4 2013

Editor's welcome Welcome to Megatrends Q4 2013 As the end of the year rolls around, we are

help somebody get from an idea on a bit of

implications.

the innovator, Murray speaks exclusively,

left to ponder 2013’s events and their future Millennials’

dwindling

enthusiasm for purchasing has been the topic

of many a water cooler conversation, car hacking too, but is either as much of a problem as they seem? Rachel Boagey investigates on pages 18 and 26.

This issue of Megatrends revolves around one big question: who should be driving your car?

From the word go, car design and development

is changing. The car is no longer exclusively a

product of the traditional automotive industry: consumer tech companies may be muscling in

paper to the cars coming off the line.” Ever revealing more than one little hint of what’s in store for the future.

Albeit from a less glamorous world than

Murray, Peter Dearman, founder of the Dearman Engine Company, is no less the entrepreneur. On page 68, the company’s

Chief Executive Toby Peters talks about its new liquid air engine, first developed in

Dearman’s garage workshop and now set to revolutionise LCV powertrains.

but, says Gary Shapiro, Chief Executive of the

But perhaps the most talked about

time for the two sectors to converge. Shapiro

autonomous vehicles. Both the US and UK

Consumer Electronics Association, now is the

speaks to Martin Kahl ahead of January’s CES on page 76.

While it is clear that OEMs can incorporate smartphones into cars very well, the question

still remains whether tech companies will be

able to build cars themselves (page 57). Many

may conclude that the likes of Google and Apple would be better off working as mere suppliers to OEMs, but new manufacturing

technology of the year is that which is driving

are seemingly against driverless cars being on

public roads for anything other than testing

at present, but the likes of Mercedes is ready to go. But there is still one matter to resolve before autonomous vehicles should be

allowed on the roads: just who, or what, should be driving your car when you are

taking a back seat? Frost & Sullivan’s Prana Natarajan considers the matter on page 60.

processes may give them just the boost need

We hope you enjoy this issue of Megatrends

On page 50, Formula 1 heavyweight Gordon

ruth.dawson@automotiveworld.com.

to build an ‘iCar’.

Murray

discusses

his

new

iStream

manufacturing process which, he says, “could

and, as always, welcome your thoughts and suggestions.

Simply

very, very simply make an Apple or a Google

Ruth Dawson

Murray Designs has “a full suite of tools, to

Automotive World

or a Sony or anything like that”. Gordon www.awmegatrends.com

email

Ruth Dawson, Publications Editor,

Automotive World Megatrends magazine ISSN: 2053 776X

Publisher: AW Megatrends Ltd 1-3 Washington Buildings Stanwell Road, Penarth CF64 2AD, UK www.awmegatrends.com T: +44 (0) 2920 709 302 megatrends@automotiveworld.com Registered number: 800516 VAT number: GB 171 5423 23 Chief Executive: Gareth Davies Editor: Martin Kahl

Publications Editor: Ruth Dawson

Production & Design: Michael Franklin Analyst: David Isaiah

Staff writers: Rachel Boagey Rachael Hogg

Commercial Manager: Gavin Dobson Events Manager: Amanda James

Copyright AW Megatrends Ltd 2013 Megatrends | 3

IN THIS ISSUE

Contents > ON THE COVER Dr Ajit Kumar Jindal, Head of Technology, 21 Interview: Commercial Vehicles, Tata Motors

24 R&D locallisation and captive engineering centres

18 The millenial conundrum 38 | Race Sunday, tweet Monday Social media, globalising brands and cost reduction are breaking new ground for a mainstay of vehicle promotion

Rachel Boagey investigates this newly identified generation’s growing apathy for car purchasing

68 | The internal steam engine Toby Peters discusses the Dearman Engine Company’s new liquid air innovation 50 | The automotive architect Formula 1 designer Gordon Murray on his iStream manufacturing process, industrialised housing and supercar dreams

26 Is car hacking that much of a problem?

33 MD of Netherlands safety institute talks three hot topics

57 | Can tech companies build cars?

Non-traditional manufacturers are gaining ever more ground in car tech but making a real life ‘iCar’ is another matter entirely 60 | Who should be driving your car?

Autonomy may have been the hot topic of 2013, but who, exactly, should be in charge of your car when you are not?

4 | Megatrends

22 Are Chinese OEMs still copying car designs?

Paolo Beconcini analyses the legal ramifications of ‘copycat’ car developments www.awmegatrends.com

IN THIS ISSUE

28 Can the ICE survive the EU?

34 CO2 emissions and the future of brand success

Six panellists give their thoughts on a regulation that could see conventional powertrains outlawed by 2050

67 Is car sharing the new proving ground for tech? alternative fuels Product Manager on beating 45 Volvo’s emissions legislation with better overall design

78 Lubricants: no longer just a commodity

54 LTE: building a better connected car

46 | From i3 to IT Martin Kahl talks to Mario Müller, BMW’s Vice President of IT Infrastructure, about the future of data in electric cars

> ALSO IN THIS ISSUE

37 Interview: Ian Taylor, Senior Technologist, Shell Lubricants

11 | Streets ahead Inrix dreams of maps independent of roads 71 | Simulators: the final frontier? rFactor Pro’s Chris Hoyle argues the case for replacing prototypes 73 | Mirror image

Are Tesla’s attempts to get rid of side mirrors misguided?

75 | Big data, bigger opportunities

Now is the time to improve customer experience using data already available

82 | Navigating logistics challenges in Africa www.awmegatrends.com

Anna-Marie Baisden analyses BMI’s new report

76 CES head Gary Shapiro talks converging industries Megatrends | 5

CONTRIBUTORS

CONTRIBUTORS Anna-Marie Baisden Head of Autos Analysis, Business Monitor International

Dr Wolfgang Bernhart Senior Partner, Automotive Competence Center, Roland Berger Strategy Consultants

He has successfully assisted in several patent infringement lawsuits in China, including MAN Group in landmark design patent infringement case Neoplan v. Zonda.

When BMI’s online industry coverage was first introduced, Anna-Marie covered a number of sectors before specialising in the automotive industry. She helped build and develop BMI's Autos service and now heads a team of analysts, covering all aspects of the sector. Her work encompasses not only producing and co-ordinating auto analysis, but also presenting it to industry players, including major OEMs.

After gaining a PhD in production technologies, Wolfgang began consulting 20 years ago, and joined Roland Berger in 2006. He now specialises in technology-related growth strategies for OEMs and suppliers, emerging market strategies, cost innovation programmes, optimisation of product creation processes, and the related organisational and footprint strategies.

Scott Logie Strategic Marketing Director, St Ives Group

Gareth Hession Vice President of Research, JATO

Rachael Hogg Staff writer, Automotive World

Scott is one of the UK’s leading data management and marketing solutions experts, and has developed business and improvement strategies for many Occam clients. He has been widely quoted in the press and recently appeared on Brand Republic and Direct Response. Scott is also Chairman of the Direct Marketing Association.

Gareth previously ran the asset risk functions of two large leasing businesses, and held manufacturer managerial roles in aftersales, product marketing and sales planning.

On page 50, Rachael speaks to former Formula 1 engineer Gordon Murray.

Dr Paolo Beconcini Partner, Carroll, Burdick & McDonough LLP

Paolo specialises in international and Chinese intellectual property and product liability. Having resided in China since 2001, he advises and counsels German and multinational firms in intellectual property matters such as patent and trademark portfolio structuring, patent prosecution, IPR and technology transfer and licensing, IP due diligence in M&A, patent litigation and brand protection.

Prior to being appointed as Strategic Marketing Director at St Ives, Scott worked on data management and marketing solutions for British Aerospace, Bank of Scotland and Occam.

6 | Megatrends

Anna-Marie joined BMI in September 2000, straight after graduating from the University of Liverpool.

Gareth joined JATO in 2010, continuing a strong career in the automotive industry that has spanned over 15 years. Gareth’s role sees him determining what and how information is researched, and providing the supporting processes, systems and central services that enable field research teams around the world to deliver quality data.

Dr. Wolfgang Bernhart is a Senior Partner at Roland Berger Strategy Consultants.Working within the Global Automotive Competence Center, he leads global automotive innovation and product creation competence.

As the newest member of the Automotive World news desk, Rachael has brought a wealth of varied experience to the team.

Having been an industry follower for many years, she is interested in the future of automotive HMI, developments in alternative powertrains and safety. Rachael is originally from Cheshire, UK, and has completed postgraduate studies in magazine journalism at the Cardiff School of Journalism.

www.awmegatrends.com

THE BIG PICTURE

SEAMLESS CONNECTIVITY I

s this the end to the built-in versus brought-in debate? MercedesBenz has been working on a new navigation programme that will let drivers seamlessly navigate to their destination using Google Glasses.

Mercedes’ Door-to-Door Navigation system relies on a smartphone connected to the car’s dashboard tech and the glasses: when leaving home, a driver simply needs to enter an address through their Google Glasses. Then, when they enter the car and plug in their phone, the destination is transferred to the built-in navigation system. When the driver reaches his destination and unplugs the smartphone, the system transfers back to the Google Glasses so that they can get from parking space to finish line.

“We definitely see wearable devices as another trend in the industry

8 | Megatrends

that is important to us,” Johann Jungwirth, President and CEO of Mercedes-Benz R&D North America told Wired. “We have been working with Glass for roughly six months and meeting with the Google Glass team regularly.”

The potential for distraction is not being ignored, and Mercedes’ early efforts for integration are well-placed. Legislators in US states Delaware, New Jersey and West Virginia, for example, have all introduced bills that would ban drivers from wearing Google Glasses in the car if passed; a Californian driver, originally stopped for speeding recently, was also given a citation for driving “with a monitor” in violation of state law on Interstate 15 in San Diego.

Although Google’s wearable head-up display are still only in ‘explorer’ testing phase, Mercedes’ solution is quietly proving the OEM has the foresight to thrive when it comes to in-car tech.

www.awmegatrends.com

THE BIG PICTURE

www.awmegatrends.com

Megatrends | 9

DEEP UNDERSTANDING AND PATENTED PRODUCTS WHICH DELIVER IMPROVEMENTS IN EMISSIONS AND FUEL EFFICIENCY YOU CAN SEE OUR THINKING

Norgren recognises the importance of fuel efficiency and environmental protection as well as the importance of reducing and eliminating leakage in air braking and auxiliary systems.

We are committed to pioneering solutions which enable truck manufacturers to meet these aims.

ENGINEERING ADVANTAGE

Exhaust brake control

Engine controls

Inlet throttle

For further information write to us at cv@norgren.de or visit us at www.norgren.com/cv

NAVIGATION

Streets ahead Can a map be independent of the roads? Inrix certainly seems to think it should be. Dan Woolard,Vice President of Business Development at the traffic information supplier talks to Rachel Boagey about the company’s new XD service

Inrix is launching what it believes is one of the biggest advances in navigation in a decade: what makes it better than existing navigation technologies?

If you listen to traffic reports on the radio, you will definitely have come across Inrix before. Many traffic services have historically been tied to the map database, particularly in early navigation systems where the location referencing methodology was tied to the map - be that on DVD or hard disk drive in the vehicle. Even connected services now are still very tied to the digital map.

What we have done is to make Inrix XD Traffic map agnostic.The big advantage is that we are able to report traffic information and data about specific events, whether it's congestion or incident data. We are able to collect, process and disseminate that data to a much higher level of granularity, giving far more precise detail. This enables us to provide a broader coverage of traffic data, with something like a 25% increase over traditional systems, which are based around major freeways, motorways and arterial roads. What that means for the user is systems can now provide far more accurate traffic routing information, therefore saving

time, money, CO2 emissions and all the additional benefits that go around it. It's a fairly major step forward in the way that traffic is gathered, processed and disseminated.

Have you had any input from OEMs?

Out of all ten automotive manufacturers that support connected vehicle programmes today, we are providing our services to eight - that includes BMW, Audi, and Ford.

How does INRIX's advance give manufacturer a competitive advantage over those that may not choose to install it?

From a HMI and mapping perspective, it offers the ability to provide far more granular information on denser networks. When you're driving through a town and following a map, you can avoid the traffic hotspots. But when you're navigating, the big advantage is, based on the additional coverage that we are able to provide, the system will end up with a knowledge of the ability to route around problems when a destination is chosen, including on minor roads, which has not been possible to date. From a connected

navigation point of view, you have far more efficient routing.

Why is it important for automotive manufacturers to break free from traffic message channel?

TMC, as a technology, is now probably coming into its third decade, and has a number of restrictions. The first one is that it has a very big bandwidth restriction, so you're only able to report incident-based information - whether that's on roadworks, closures or accidents, or even flow - partly because of the bandwidth restriction, partly because the TMC referencing is tied to the map. With XD Traffic, you are totally free of that restriction. Typically, connective systems use 3G and 4G networks, so the bandwidth issue goes away.

Secondly, you're no longer tied to the map, offering two advantages. You can report information down to a sub-intersection level.

So, if there was a section of road that was only a few hundred metres long, we would be able to tell you about that. Secondly,TMC is governed by how many TMC points are being reported off, that restriction is lifted with XD Traffic because we can report off the TMC networks.

What is the importance of OEMs being able to easily integrate the software into their navigation systems without the need for map licensing or location referencing?

Obviously, you still need a map within the vehicle, primarily for display purposes. But the one thing it does is break this cycle that we've had in terms of having to create TMC codes, send those codes, get them approved and integrated into the digital map that will then be used by the OEM. We can provide updates to XD Traffic far quicker, against whatever map the client or customer may be using, so it speeds up the update cycle.

www.awmegatrends.com

Megatrends | 11

MEGATRENDS EUROPE ‘13

Hello Euro VI, buy buy Euro V Martin Kahl

E

uro VI formally comes into effect on 1 January 2014, and it’s a “landmark technological achievement in emissions reduction”, delegates were told at Automotive World’s Megatrends Europe ’13, which kicked off in Brussels on 12 November. Day one was devoted to Commercial Vehicles, and the message was that there’s more to come, both from the industry and from the regulatory side.

So, what is on its way? With Euro VI as good as here, what will be regulated next, and how will any additional regulations be met? OEMs and fleets alike are concerned about investing in alternative powertrain technology, not only because of the up-front cost and uncertain return on investment, but also the resale value, the as-yet unproven long-term benefits, and the limited use cases.

Electrification and fuel cell technology may be suitable in some circumstances, but these are restricted to particular applications, and the business case has yet to be made for hybrid technology. Natural gas could stand a chance, but the best way of getting CNG and LNG vehicles onto the roads is, of course, to get them onto the roads.

And the hesitation to invest in new technology is not limited to alternative powertrains: thanks to the considerable upfront and long-term running costs of Euro VI www.awmegatrends.com

trucks, many OEMs are seeing pre-buy orders filling their books. One OEM suggested off the record that 50% of its current orders are for Euro V trucks.

The European Commission says it develops its regulations in partnership with OEMs, suppliers, and operators, consulting even at trade union level; yet private discussions with fleets, manufacturers and suppliers suggested that the level of dialogue is far from where it needs to be. As a result, attempts are being made to stimulate pan-industry debate, with a view to creating a ‘voice of the industry’ to work with the European Commission in order to help shape legislation, rather than fight against it.

One size doesn’t fit all when it comes to regulation, and there was some agreement that usage-based and duty cycle-related assessment should be considered, instead of broadly-applied legislation. And although fuel efficiency, emissions and air quality are global problems, solutions are not being developed and applied on a global basis. Regulations are regional, and so are standards, yet some of the products to which they apply - vehicles, fuels or lubricants - are sold globally.

There may not be global standards, but there are themes that appear to be standard, globally: energy efficiency needs to be

tackled, with a focus on the considerable heat and braking energy losses; the makers of lubricants, fuels and additives say they can all deliver almost instant benefits, as can tyre technology; and there’s a crucial role for telematics, both to monitor and assess driver behaviour, and to improve on-road freight movement.

Indeed, before any more work is done on trying to improve vehicle efficiency through technology, major improvements need to be made in process and management: smart loading and smart deliveries are not just smart terms, they are concepts necessary to address the fact that up to 30% of the trailers on Europe’s roads are running empty.

Perhaps the industry should stop beating itself up, said one speaker: Euro VI may be widely regarded as a major technological step forward in terms of emissions, but it is here and yet even if every truck on the road was replaced with a Euro VI vehicle, there would still be an air pollution problem in Europe’s cities. Now that such advances have been made in truck technology, the commercial vehicle industry might be in a strong enough position to demand a similar level of improvement from other high polluting sectors, ranging from construction, aviation and marine, right through to passenger cars.

Megatrends | 13

MEGATRENDS EUROPE ‘13

Education, education, education Martin Kahl

E

ducation, education, education.This was the underlying message in the presentations and debates during the passenger car day at Automotive World’s recent Megatrends Europe ’13 event in Brussels.

Education is needed for smart technology to reach meaningful levels of penetration in the automotive industry. It is an issue which affects suppliers and OEMs in the fields of powertrain, safety and connectivity, and all parties need educating on what is best for them to make, sell, buy and use.

Development in advanced driver assistance systems (ADAS) has been rapid, and was the subject of much of the debate in the safety stream. Interestingly, there is increasing potential for confusion over ADAS technology.

Drivers need to understand the benefits of it, but ADAS is a catch-all term used to describe a multitude of driver assistance technologies, each developed for different real-world situations, said Euro NCAP’s Secretary General, Michiel van Ratingen.You cannot buy an ‘ADAS’, but you can buy things like ESP and ESC, or LDW and LKA - a real spaghetti soup of acronyms, some of which sound alike but do different things, others which sound different but do the same thing.

This was echoed by BMW’s Klaus Kompass, who underlined the difficulty of “selling” optional safety technology like ADAS to the public. Consumers need to understand exactly what ADAS technology they may be about to buy, or indeed already have in their cars.

Whilst safety technology has advanced, the industry needs to move on from analysing crash data to analysing data on avoided collisions said Kompass and Casto Lopez Benitez, Policy Officer, Road Safety Unit, DG MOVE at the European Commission. A successfully avoided collision currently does not show up in any data, making it difficult to correctly assess the performance of collision avoidance technology.

14 | Megatrends

Vehicle connectivity and driver distraction go hand in hand. Some say drivers have always been distracted; others say it is becoming worse with the advent of brought-in devices.

Discussion in the connectivity stream focused on the topic of distraction and the builtin/brought-in/beamed-in debate. A clear majority of cars on the world’s roads are not connected, and that is likely to remain so for some considerable time. Of those with connected vehicle technology, many users still need educating on how to pair their broughtin devices; they also need to be taught the benefits of not only the entertainment aspects of infotainment, but also the genuine information: communication, traffic, smart route planning and navigation, or vehicle status.

It is down to the relevant players to guide owners on how to use their systems. Humans are the best adaptive system, far better than any electronics. But let us not forget how clever cars can be, said one of the panels in a stream that included Clint Steiner of Garmin, Emil Dautovic of QNX and Nuance’s Luc van Tichelen: cars already come equipped with a high number of sensors, and we should make more use of them.Why not design in the ability to decide what information to present to the driver and when? Approaching a complex junction is hardly the time for the car to be informing you that you have a new message.

This led on to a discussion about the possibility of age-related HMIs, the idea being that displays and features are designed to be appropriate to the user: remove the more youthful apps and services from displays used by older drivers, and add in - or perhaps even disable - those same apps for younger drivers.

Enforcement is an issue. But how smart should a car be? If it is smart enough to detect that a driver is fatigued, should that car even “let” the driver drive?

Discussion about infotainment was not exclusive to the connectivity stream, however:

infotainment technology should also be developed such that it provides drivers with safety information as well as “comfort and communication” said BMW’s Kompass. The idea of designing into the car the concept of not distracting drivers, and delivering only what is needed, was supported by the EC’s Benitez.

But, on the other hand, the need for education is not limited to infotainment and ADAS. Drivers unused to vehicles equipped with “interventionist” technology, ranging from AEB to LKA, may panic when their vehicle responds in an unexpected way. The potential risk of leaving a driver to figure out how, when and why such technology works could be just as high as not having it in the vehicle at all.

Much of the debate about how to improve fuel efficiency and reduce emissions naturally centres on engine downsizing - a matter restated by Ford’s Carsten Weber in his presentation about Ford’s EcoBoost engine.

Nonetheless, delegates attending the powertrain stream also heard about improvements that can be made through lubricants and transmissions. Indeed, at a time when suppliers and OEMs are considering upwards of 8-speed gearboxes for the mainstream cars of the future, AVL’s Stephen Jones threw down the concept that four gears might just be sufficient.

The convergence of topics across the event’s three streams was clear, with Castrol illustrating just how diverse the automotive industry has become, by appearing in the connectivity stream. Tasked with defining the Castrol of the future, its Innoventures division is looking at all aspects of the industry, from fuels and lubricants to the connected car.

There may be a lesson in there for all automotive industry stakeholders. Indeed, Megatrends Europe ’13 proved to issue something of a call to arms for the industry: it’s time to educate. www.awmegatrends.com

CASTROL EDGE

OUR STRONGEST OIL RECOMMENDED BY LEADING CAR MANUFACTURERS

www.castroledge.com

Making innovations relevant.

Protecting the environment is a commitment we help support with our powertrain systems, which reduce CO2 emissions and improve fuel economy; aluminum wiring systems, which reduce weight and conserve precious resources; and HEV/EV systems, which are ready for the vehicle of tomorrow. delphi.com

COMMENT

Beyond the aesthetics of CV design Ruth Dawson

A

t the end of October, the UK-based

should take into account any technologies

trucks should be the way they share the road

to truck design are too slow, it cried, and FTA

No short order from Bernhard then, but

“We can make the trucks better and better,

thousands to retrofit cabs, improving

now is the time to look at the vehicle as one

Dorfer said. Truck-to-truck communication

Freight Transport Association sent out

a resolutely frustrated press release. Changes members

are

spending

hundreds

of

aerodynamics and safety elements which

could, in theory, be standard on the vehicles available today.

Surely it should not be the case that in 2013 fleet owners are spending a hefty slice of

their budget to make sure their trucks have what many would regard as basic features if

applied to the European passenger car market.

Soon after the FTA commented on Europe’s worryingly slow design progress, Dr Manfred

Schuckert, Head of Global Regulatory

that have yet to be invented.

clearly he is not the only one to think that whole unit. However, achieving a high truck standard - whether it is through design or

regulation - is only part of the problem.There needs to be more cooperation between

but what we really need is intelligent traffic,”

should be possible - it should not just be passenger cars which benefit from V2X communication systems.

North America and Europe, to homogenise

Despite many, including Frost & Sullivan,

Bernhard believes that the removal of tiny

become more technology conscious -

regulations between the two markets, and variations would do wonders to simplify business standards for global OEMs.

This holistic approach to the future of commercial

vehicle

developments

and

markets is not solely an OEM ideal, however.

Also speaking at Megatrends Europe ’13, Franz

Strategy, Commercial Vehicles, at Daimler

Dorfer, General Manager of the Engineering

Megatrends Europe ’13 conference.

prime consideration for energy efficient

took to the stage at Automotive World’s

with other vehicles.

Center Steyr at Magna Steyr, said that a

predicting that the market as a whole will

adopting more safety systems, increasingly

considering ABS, stability control systems, tyre pressure monitoring, vision-based systems and advanced telematics - it looks

like regulation, as ever, will be the biggest

driver behind any developments. Whether the traditionally slow pace of legal debate and subsequent change can keep up with the

rate of tech development, however, is another matter.

“We are not done in Europe yet,” Schuckert

said firmly. For Daimler, Euro VI is not the

be all and end all for European truck emissions legislation, and the OEM has some

very determined plans for the future.

Speaking at October’s American Trucking Associations

conference,

Wolfgang

Bernhard, Chief Executive of Daimler Trucks Division, called for a new approach to

emissions regulations, one which takes into account the savings that can be made across

the whole vehicle, not only on the engine.

Furthermore, he commented, legislators www.awmegatrends.com

Megatrends | 17

MILLENIALS

!The millennial conundrum!

Millennials, Gen Y, under 30s - whatever you want to call them, this demographic’s lack of enthusiasm for car purchasing is causing serious concern. Rachel Boagey investigates

2

013 has been the year of the millennial.

Across all business sectors, their attitudes and habits have been carefully monitored but none more so than in the automotive industry. Younger buyers are a lucrative segment for OEMs and although they may not have much money just now, they will in a few years and at that time they will be looking for a brand they trust. The key is to target them early and build manufacturer loyalty.

At the Centre for Automotive Research’s Management Briefing earlier this year, General Motors’ lead economist, Mustafa Mohatarem warned that millennials are becoming increasingly disinterested in buying cars - or even having driving licences.

The surge in consumer electronics, including smart phones and tablets, is a cause for concern for many sectors of the consumer market, but the possibility that the recent absence of young people in the new car market may have something to do with a greater interest in communicative technology is one which has comes as quite a surprise for the automotive industry.

Data from the University of Michigan’s Transportation Research Institute (UMTRI) suggests that young Americans are much less interested in car ownership than their older siblings, parents and grandparents: consumers

18 | Megatrends

in the 35-to-44 demographic were the most likely to be purchasing new cars four years ago, today it is the 44-to-65 baby boomers buying cars with the most frequency.

From 2007 to 2011, the share of US sales to car buyers aged 18 to 34 fell nearly 30%, and, based on figures from January through August 2013, the percentage of new cars bought by millennial buyers has fallen to 11.4% from a short-lived 12.6% in 2012.

Money troubles

So why is there a decline in young people buying new cars? Edmunds.com Chief Economist Lacey Plache believes employment is the main factor at work here. In 2012, the US economy created an average of 30,000 new jobs each month for older millennials (those between 25 and 34). But in 2013 (to August), there were only an average of 4,000 new jobs created for this age group each month.

The slowed housing market is also at work.

The US averaged just 500,000 new households formed per month in the first half of 2013, compared to 1.4 million new households per month in 2012. Younger adults are living at home with parents or with roommates, and these situations result in less call for a vehicle, making it easier to share with others in the household. "But young

adults living on their own are more likely to need their own cars, and they're more likely to be able to afford them," noted Plache.

Another reason highlighted by Mohatarem, was the suggestion that, “Despite the improvement in the overall auto market, young people are not as active as they typically are. Some people have suggested socio-economic reasons for that; you’ve probably heard them say that young people are much more into Facebook and using their phones to communicate.”

In his CAR presentation, Mohatarem highlighted the different factors affecting young people purchasing new cars in the US, drawing specific attention to the levels of unemployment recorded in May 2013 : 24.5% for 16-19 year olds is a rather worrying figure, considering unemployment levels for this age bracket were closer to 15% in 2006.

He continued, “When I look at the numbers, what stands out is...unemployment for young people, it is really higher than it has been in recent history. Young people just aren’t working in the numbers that they typically would be, they are having trouble getting jobs.

So that is a number one reason why they aren’t participating in the vehicle market.”

Mohatarem did however attribute the slowdown in car purchasing to temporary www.awmegatrends.com

MILLENIALS economic causes rather than a permanent shift in demographics: “It’s not a permanent withdrawal from the market, it’s more of a delay.”

But this little glitch has not stopped GM from trying to keep young people interested in purchasing cars in recent years, continuously attempting to attract 18-to-34-yearolds through a blend of social media campaigns, video game placements and peer-to-peer advertising. At the Detroit Auto Show in 2012, General Motors also introduced two Chevrolet concept vehicles, the Chevrolet Tru 140S and the Chevrolet Code 130R, in response to extensive research into the mindsets of young car buyers.

But while some may assume that a millennial would only be attracted to low-cost, smaller cars, Clemson University analysis has found that, when a group of students were asked to design their ideal concept car, less wealthy Gen Y consumers do not necessarily like entry-level or bottom-of-the-line cars, but want more expensive cars - even though they may not be able to afford them.

The disinterested generation

However, some OEMs have accepted the idea that millennials may be uninterested in buying cars due to a bigger interest in spending their money on the latest technology. BMW is a prime example: its recently released Genius programme uses artificial intelligence to interact with potential customers of the BMW i3 EV or i8 PHEV in a live question and answer format.The system works on a mobile platform in the UK, a potentially appealing feature to young buyers seeking the latest technology in their new car.

Similarly, Scion has announced a standard touchscreen audio system in all new models.

According to Vice President Doug Murtha, “a standard touchscreen audio system across the entire Scion line-up stays true to the brand’s innovative nature and responsiveness to the desires of its youthful drivers.”

Thankfully, sitting up and taking notice of millenials is having positive results: according to President of Infiniti Johan de Nysschen, the compact crossover segment is being driven by the demographic.

“The new millennials are driving growth in the premium segment, but particularly in this segment. These young people have grown up, www.awmegatrends.com

if not in affluent homes, at the very least in upper middle class homes, accustomed to premium brands. Whether it’s electronics, technology, fashion or purses, it doesn’t matter. And their parents may well too have been driving some kind of premium automobile brand. But now, as they venture out into their own world, they don’t really want to compromise any of these attributes.

Since many of them will be early in their careers, they may not have immediately disposable income to go for the very top tier of those brands. That is why manufacturers recognising this trend are creating vehicles that, in all the product attributes, exhibit premium brand qualities but at a price point that is more accessible to these new buyers.”

Indeed, AutoTrader.com’s recent study on the next generation of car buyers confirmed de Nysschen’s observations, revealing that millennials are highly aspirational and image-conscious, more open to import brands, and certainly do have an interest in vehicles and driving.

“This generation represents the future of our industry, so it’s essential to have a deep understanding of their wants and needs,” said Isabelle Helms, Senior Director of Research and Marketing Analytics at AutoTrader.

The AutoTrader.com study also discovered that a slowdown in car purchasing has not drastically affected figures of Millennials buying cars, showing that they make up 75m of the US population, and in fact purchased 25% of all vehicles in 2012.

Mobility alternatives

It is still true to say, however, that young drivers have started to move towards cheaper ways of motoring, due to increasing

car prices and sky-high insurance for drivers who have recently passed their test. Britain’s largest independent car club, The City Car Club, has noticed a significant rise in users under the age of 30 joining their ‘book in, jump in, drive away’ scheme, with 15% of their membership now under 30, compared with 11% in 2011.

“We’ve been operating in the UK for eight years now and have definitely seen an increase in the number of members who are under 30,” a spokesperson said. “It helps that we allow anyone with a year’s licence to join our club and drive any of our vehicles, including vans, where most ‘traditional’ rental companies have age limitations of either 21 or 25. Add the significant increases in insurance costs this age group is facing for their own vehicles, and it’s easy to see why we’re becoming more popular.”

Although the millennial generation’s interest in buying new cars has declined, younger people have certainly not lost their interest in cars altogether. The annual US sales rate for 2013 is at 15.4 million, and is only set to climb in forthcoming years.

The future direction for this demographic will hinge on economic developments. On a promising note, the US economy is expected to continue to expand at a moderate pace over the next two years. “If the government can make progress on its outstanding fiscal issues, the key remaining drag on the economy, millennials could find more job opportunities, enabling them to set up more new households and buy more new cars," concluded Plache.

Megatrends | 19

Always adapting

Products You You Can Depend On. Every Cummins Euro 6 engine comes with a pedigree of over 90 years of engineering exper tise. They are adapted for each application, benefiting the operator and the environment. The engines deliver the best possible per formance, reliability and fuel consumption whilst meeting near-zero emissions levels. This makes Cummins your natural choice for Euro 6. Visit www.cumminseuro6.com for more information.

COMMERCIAL INDIA

Interview: Dr Ajit Kumar Jindal, Head of Technology, Commercial Vehicle, Tata Motors Rachael Hogg

D

espite the Indian commercial vehicle market falling into a downward spiral only 53,533 CVs were sold in October, compared with sales of 66,722 vehicles in the same month a year ago - Dr Ajit Kumar Jindal, head of commercial vehicle technology at Tata Motors remains upbeat.

"The commercial vehicle industry is, of course, passing through a very tough challenge," Jindal commented. "But we believe that the basic economic indicators are still very strong. It’s only because of noneconomic reasons that the market has gone into a phase of degeneration. Once the other conditions become stable then the market has got a huge potential to grow."

But what of the future for Tata's commercial vehicle division? In this recent interview, Jindal talks about the OEM's plans and view of the Indian market going forward.

What do you think will power the future commercial vehicles in India?

We already have a CNG vehicle on almost every platform and, as probably you know, in some parts of the country like Delhi, it is mandated that some commercial vehicles and buses have to be CNG. In Delhi, Tata have the largest fleet of public transport buses running on CNG. I think it is possibly the second largest CNG bus fleet in the world.

We have also developed both series hybrid as well as parallel hybrid technology: the series hybrid vehicles was developed for one of the European customers in Spain and, of course, we are already working on making this technology more cost effective to make

it more viable for the domestic operators of the public transport buses.

Though as of now the momentum on LNG is not that great - because of future energy security - the Indian government is placing a lot of emphasis on it. In short, this is likely to be a future fuel so we are also working on bringing this technology into the country.

In Europe there have been numerous campaigns and developments around making commercial vehicles safer for cyclists. Are there any specific safety issues that Tata is looking to resolve in India?

We are very much attuned to the various market trends which are happening towards improving commercial vehicle safety. For example, all of our vehicles have ABS as an option. As of now there’s no mandate per se on ABS, but we are working to bring it in as a standard fitment through various suppliers, and by making customers more aware of the safety concern. We are also looking at incorporating technologies like ESP, advanced braking systems and adaptive cruise control.

All of these technologies have been tested and we are now looking for the right opportunity to introduce them.

Which emerging markets do you think will be the most important for Tata commercial vehicles in the next ten years?

We are very actively looking at markets like Brazil and Russia. We are present in Russia and Ukraine - the old CIS countries particularly in the bus and light truck markets, and now we are looking at heavy

Tata is running the largest fleet of CNG public transport buses in Delhi

www.awmegatrends.com

duty. We are also now expanding into places like Indonesia, Malaysia,Vietnam and Australia.

We very recently launched our pickups and passenger vehicles in Australia, and in Indonesia we launched our passenger products and will very soon be launching our commercial vehicle products.

Automated manual transmission is currently regarded as the next transmission shift for Indian commercial CVs - is this going to be the case at Tata?

Yes, we are already in the process of developing AMT with partners and very soon will be able to launch in the Indian market. I think a shift from manual will happen, but it will be gradual: customers need to be taught of the advantages and what can be achieved.

There has been increasing competition from the likes of Ashok Leyland and Mahindra in the mini truck segment an area that Tata has dominated with its Ace line. Do you see that as a threat at Tata?

I don’t think we have lost any market share because of the introduction of these competitor vehicles. Obviously, at one point we had 100% market share, which you can't really maintain in a competitive environment.

Today we hold a very healthy market share in this segment and have a lot of updates and new developments on these platforms, so we are very confident of maintaining our market leadership.

In general, commercial vehicles in India are expected to see an increase in power density over the next five years.

Do you think that the Indian infrastructure is ready for this?

This shift to higher power density vehicles was expected maybe half a decade ago, but it has not happened to the extent that was expected. There has been a shift from, say, a low power of 140, 160, to 180 and it is slowly inching towards around 230. There are some segments in which even high powers have already been introduced and they are getting accepted, but what we see is the infrastructure growth not living up to expectations.

Megatrends | 21

DESIGN

Are Chinese OEMs still copying western car design?

Paolo Beconcini

A

t the 2013 Frankfurt Motor Show, Chinese OEMs displayed much more innovative design concepts than in the past.

Constantly accused of ‘copycatting’ western OEMs’ vehicle design, China’s car manfacturers have finally proved their design prowess.

This effort has been compounded by a recent wave of foreign car designers being hired by Chinese companies. This is no doubt a virtuous trend but it may still take many years before the copying of car designs will reduce. Meanwhile we have been left to ask whether design theft is over for good: are Chinese companies moving into a new phase of R&D?

22 | Megatrends

Taking a more critical view of things, it is true to say that what happens at motor shows does not necessarily reflect what is subsequently seen on the roads. Although it may well be true that full copies of another car’s outer design are not as frequent as before, other vehicles do remain a major source of inspiration for domestic OEMs. By simply observing what is driving on the Chinese roads, it seems that the creativity of Chinese car makers is more focused in engineering patchwork copies, i.e. cars which are a ‘patchwork’ of different existing designs.

So why are Chinese car manufacturers still copying the body design of western cars and how can this new trend be explained?

This question must be contextualised: the vast majority of Chinese OEMs produce and sell cars for the Chinese market only. Few have ventured, and will venture, in the next few years into other more economically and legally complex markets such as the EU and the US. At present, Chinese consumers are not technically as mature and demanding as western consumers, cars are first and foremost a status symbol, the gateway to the www.awmegatrends.com

DESIGN middle class. Therefore, these purchasers focus more on the outer design of vehicles than technology, safety and performance.

Given that not all buyers can afford foreign brands - and half of all purchasers are first time buyers - most consumers seek something from the domestic market which may still recall the glamour of western brands.

Culturally speaking, a Chinese consumer does not feel ashamed by driving an ugly version of a renowned car brand and model.

Pushed to imitate

Imitation may be the sincerest form of flattery but Chinese OEMs do not perceive this as being in any way a bad thing. They do not necessarily copy in order to trick consumers; often, the company website states with pride that their designers had conceived the model after having diligently absorbed and digested technical learning from western companies. For the original designers, it is a blatant admission of having been copied, for the secondary OEM, it is a statement of their business philosophy.

It cannot be denied that Chinese manufacturers have no own tradition of R&D in the automotive sector. Based on their history, and on the cultural principles stated above, copying outer shapes of cars is indeed a way for Chinese OEMs to gain know-how and experience in car design. A developed R&D department in the design field is the sign of a reached maturity for a car company but Chinese OEMs are simply not yet there. From their perspective, looking at what others have done is surely a way to gain that much needed knowledge of proportions and lines - although it is indeed

www.awmegatrends.com

an illegal way of going about things.

But competition and consumer demand, requiring the launch of new models at a faster rate, may also be to blame. Companies without their own R&D traditions can cope with this pressure by exploiting what others have made, and save a lot of time and money in the process. However, consumer and competitive pressures are not the only factors plaguing domestic OEMs: the Chinese government’s five year plan for the automotive industry, issued in March 2011, requires manufacturers to account for 50% of sales in the internal market. In truth it is estimated that Chinese cars now make up for almost 40% of the country’s sales. OEMs are being pushed to increase the tempo but, instead of building up their own R&D, they are simply exploiting and combining what is already popular on the market.

A sense of impunity is also holding domestic OEMs back from not copying.This may very well be due to the fact that copiers are often partners of the copied: the foreign joint venture partner will often be reluctant to seek a hard confrontation with the much needed local partner for many reasons. Even if a hard stance is taken against them, it is highly likely that the foreign company will be forced to accept compromises.

On the other hand it may be due to the law itself: aside from a few exceptions, most western OEMs do not succeed at pressuring enforcement in China. While many have blamed conniving judges and politics, in reality, legal mistakes by foreign companies have given an excuse for courts to issue judgments that were indeed unfair, but were actually formally correct from a legal point

of view. Forgetting to register suitable and proper IP rights for a design is a mistake that many still make. Differences between legal systems are often overseen, creating patent weaknesses and the risk of invalidity declarations.

Change afoot

Recent auto shows, like Frankfurt and Shanghai, have certainly given reason for foreign OEMs to be optimistic: they can take confidence in the fact that some Chinese manufacturers have decided to show the courage of displaying original designs.

However, this trend appears to be clear evidence of an increasing bad faith of Chinese car manufacturers, rather than the oft-quoted sincere flattery statement.

While the design copycat issue must be gradually overcome in the coming years, other IP infringement issues are already of a more pressing nature: top of the list is the counterfeiting of spare parts. This has been an ongoing problem and is surely of bigger concern to foreign car manufacturers due to the gross safety implications. Trademark grabbing and illegal exploitations are also an ongoing problem for many OEMs, which may cause more damages on a daily scale than a once in a while copycat car.

As for the future, once the Chinese have reached their outer design maturity, and consumers are more educated and demanding, the battlefield will move from outer design to patent disputes on in-car technology.

Paolo Beconcini is a Partner at Carroll, Burdick & McDonough LLP

Megatrends | 23

CAPTIVE ENGINEERING CENTRES

R&D localisation in emerging markets

The need for western manufacturers to localise their R&D activities in emerging markets is ever increasing. Primarily due to a shift in production and sales volumes, it has been intensified by the necessity to address local market requirements Roland Berger’s Dr Wolfgang Bernhart, Dr Wilfried Aulbur, Ludwig Fazel and Junyi Zhang discuss the success factors for captive engineering centres

I

n the future, the majority of the increase in global passenger car sales will take place in emerging markets. This will have a significant effect on the expected sales distribution of western OEMs: both European and US manufacturers will see their share of sales generated in the BRIC countries shift from the current 21-28% to 27-41%.

In addition, the importance of western markets as production hubs will decline

steadily: the volume of passenger cars produced in Europe as a share of global production has already decreased continuously from 22% in 2009 to an estimated 16% in 2013, and will reach around 15% in 2019. A similar picture can be observed for production volumes in the US, which will drop from an estimated 13% in 2013 to 11% in 2019. At the same time, the production share of the BRIC countries will increase from 22% in 2009 to an estimated 40% in 2019.

Figure. 1: Global passenger car sales progression

To participate in this development, and the resulting sales growth shift towards emerging markets, OEMs must adapt products and engineering processes to local requirements.

This process of localisation and customisation of products to emerging market needs can be implemented in 4 steps.

The first comprises the de-contenting of global products, combined with low-cost production and purchasing.

Step two requires a global platform with local components, offering the possibility to realise further cost-saving potential. The next stage combines designated concepts for low cost markets with the integration of local suppliers. Very often, partnerships and/or joint ventures with local companies pave the way for a fast and effective realisation of such a low-cost product.

Finally, the fourth step requires the establishment of a product creation process, specifically tailored to the requirements, needs and capabilities of emerging markets.

This low cost development process must be backed by additional low cost processes within the organisation, for example adjusted testing and validation. This can help cut product costs by 20-30%.

24 | Megatrends

www.awmegatrends.com

CAPTIVE ENGINEERING CENTRES Implementation

The reasons for OEMs to increase their presence are manifold. On one hand, emerging markets have become major global automotive powerhouses and are increasingly gaining importance as hubs for innovation. On the other hand, emerging markets strongly differ from established western markets and are characterised by specific requirements, resulting in the need for local adaptation and customisation. At the same time, western OEMs are facing increasing cost pressure in emerging markets due to the rapidly improving ability of emerging market players to compete for customers. Furthermore, greater complexity and increasingly shorter product lifecycles make it necessary to adjust products to specific customer needs in emerging markets over a short period of time. Local regulations also demand market-specific product offerings, and have significant impact on the required flexibility of the global R&D organisation.

All of these factors are pushing western OEMs to establish local R&D activities in emerging markets. Generally, this can be done in two ways: through collaboration with engineering service providers or via the setup of a captive engineering centre. At least at first, collaborating with an engineering

service provider might be a fast and costeffective way to cover local market needs.

However, some severe risks arise in the midand long-term. The security of critical knowhow cannot be guaranteed when partnering with a local engineering service provider.

Knowledge, especially in R&D, will become ever more important as a competitive factor for differentiation, and so this lack of security poses a significant risk for OEMs. Moreover, working with an engineering service provider does not offer the same opportunities that a local R&D organisation can with regards to building up and sharing knowledge with the global company. Only a wholly-owned local R&D organisation will pave the way for global knowledge sharing with emerging markets and provide an adequate link to global structures. For these reasons, establishing a captive engineering centre is clearly the better way for western OEMs to localise R&D activities and build up know-how in emerging markets.

Clarification

The business scope of the local R&D activities must be clearly defined and aligned with central R&D, as well as other global R&D departments. This makes it possible to clearly allocate responsibilities and avoid duplicate work. After defining the business scope for local R&D activities, a specific R&D

Figure. 2: western OEMs sales distribution and global production origins

centre setup should be fleshed out.The steps required to establish a local R&D centre must be identified and a concept for the overall organisational structure must be developed, which also includes the specific functions to be covered by the local engineering centre.

Furthermore, the position and role of the R&D centre must be clearly defined. This includes its positioning in the OEM's global network as well as its integration into the global R&D organisation. Dedicated functions should be installed to support this integration of local R&D, for example, assignment of expatriates and roadmaps for knowledge transfer. Finally, a detailed roadmap for the implementation of the local R&D centre must be developed.

Companies setting up local R&D organisations have to face some serious challenges. However, these can be countered by bearing in mind several success factors.

One major challenge is the historically grown R&D footprint of western OEMs with a clear focus on headquarters.This leads to a lack of focused capacity and competence built up in low-cost countries. OEMs therefore need to transfer respective research capacities to emerging markets in order to effectively utilise low-cost engineering locations and thereby balance their R&D capacity on a global level.

Moreover, an insufficient differentiation between core and non-core competencies can often be observed. By analysing and adjusting core competencies to optimise development depth, cost advantages can be achieved and capacity can be made more flexible.

Additionally, a homogenous setup of OEMs' global engineering units with similar functions means that efficiency levers cannot fully be exploited and work may be duplicated. This can be overcome by creating global competence centres with clearly assigned responsibilities and leads for specific development fields.

Figure. 3: Localisation and customisation in the Indian CV market ADVANTAGE Cost saving potential [%]

LOW-COST ENGINEERING > Low-cost PCP > Low-cost processes

DEDICATED LOW-COST > Adjusted testing/validation PRODUCT GLOBAL PLATFORM/ MODULAR KIT LOW-COST FOOTPRINT/PURCHASING

> Global platform with local components > Engineering in HQ

> De-contenting global product > Low-cost production > Low-cost purchasing

www.awmegatrends.com

> Low-cost concepts > Integration of low-cost suppliers > Partnership/JV

> Product creation process (PCP) and processes adapted to customer expectations per country (e.g. for India) can reduce product costs by 20-30% > Apart from a global platform, dedicated lowcost products are required (e.g. low-cost exhaust gas after treatment)

OEMs establishing local R&D capacity also have to contend with a lack of clear structures and processes for transferring global R&D know-how to the local organisation and vice versa. Implementing the right set of processes enables the rapid and effective set up of local R&D activities, as well as leveraging both regional and global know-how.

Dr. Wolfgang Bernhart is Senior Partner of the Automotive Competence Center; Dr. Wilfried Aulbur is Managing Partner - India; Ludwig Fazel is Senior Consultant at the Automotive Competence Center; and Junyi Zhang is the Principal of the Automotive Competence Center at Roland Berger Strategy Consultants.

Megatrends | 25

CAR HACKING

Car hacking: a real threat?

As cars become ever more connected, security experts are warning of a new form of cybercrime: car hacking. Here, Rachel Boagey questions whether the latest buzz word for safety worries in the ‘smart’ car is a problem

W

hen ‘hacking’ is brought up in conversation, we invariably imagine a traditional computer system, wired up to a wall, infected by a virus usually downloaded from the internet. However, as the connected car becomes more intelligent, and OEMs pursue both autonomous and semiautonomous functions, car hacking is starting to be considered a real security threat.

Hacking occurs when the car’s computer system is accessed illegally via its connectivity functions. The outcome could be anything from data and/or vehicle theft to vital safety functions being deactivated.

Take the example of Megamos Crypto: this security system is used by several luxury brands in the Volkswagen Group, including Audi and Porsche, to pair a key with each car.

It works through a coded algorithm transponder built into the car’s keys, which uses radio-frequency identification (RFID) to transmit an encrypted signal which in turn activates and deactivates the vehicle’s immobiliser system. Previously presumed safe, Megamos Crypto was hacked this year by a UK-based computer scientist, who has since been banned from revealing the compromising codes by High Court injunction - at the risk of millions of vehicle thefts if the material was to be published.

26 | Megatrends

But, said Alex Fidgen, Director at IT security company MWR InfoSecurity, vendors are unwise to block security research: “they should work together with researchers to understand the nature and potential consequences of the threats they are facing.

Technology Roadmap: Connected Vehicles

“It is feasible that an exploitation of any number of embedded devices within a car might allow an attacker to gain control. For instance, this would have serious consequences if the brakes were applied at high speed.”

Indeed, veteran hackers Charlie Miller and Chris Valasek recently discovered a way to force a 2010 Toyota Prius to stop suddenly at high speeds or accelerate without the driver’s foot even being on the gas pedal. Likewise, they claim to be able to disable the brakes of a 2010 Ford Escape at very low speeds.The duo had to be seated in the car with their laptops hardwired into the vehicle to access the car’s system, but it is nevertheless a worrying fact for OEMs - not to mention drivers.

Remaining stoic, Ford responded to the hacking by saying that since the attack was not “performed remotely” but required “highly aggressive direct physical manipulation of one vehicle over an elongated period of time,” and it most likely did not pose “a risk to customers and any mass level”.

In a 2013 Automotive World Technology Roadmap, researchers found that 79% of survey respondents thought that connectivity, safety, security and data privacy in the connected car are compatible. However, 16% of those surveyed qualified this with comments that clearly indicated this is an achievable ideal, rather than a current reality, with some referencing the security systems available for personal computers and mobile phones, which are largely still vulnerable to enterprising hackers. www.awmegatrends.com

CAR HACKING Despite this, Fidgen commented, “Manufacturers do not seem to have considered the security threat when using embedded computer systems. Cars are becoming increasingly more computerised, particularly supercars which sell for hundreds of thousands. But not enough thought appears to have gone into securing the systems which leaves the cars wide open to theft and the misuse of computer information.”

Privacy goes public

Safety is not the only concern here: a team at the University of South Carolina and Rutgers, found that, using the RFID tags in tyre pressure monitoring system, a car’s journey could be tracked, compromising the driver’s privacy. In a similar investigation in 2011, researchers from the University of California, San Diego, and the University of Washington were able to use Bluetooth and Wi-Fi to hack into a vehicle’s connectivity systems from a limited distance. The latter group decided to withhold details of which cars they were able to “own” for fear of the knowledge would be used by criminals.

However, that is not to say that any great amount of data would necessarily be stored in the car - as it would on a computer or smartphone, available for hackers to access.

Speaking to Autoline, Nick Cohn, Senior Business Developer at TomTom reassured that “All of our systems are engineered so that there is no individual information or connection possible by anybody externally or even internally. [Security] is high on the list but more in terms of protection than specifically hacking.”

In truth, some compromises might be necessary to achieve the effective operation of safety and security functions. In August 2012, a Harris Poll of US drivers saw 76% expressing fears about connected vehicles, with 62% concerned that connectivity might compromise their privacy through, for example, monitoring where they drive and having insurance premiums increased

www.awmegatrends.com

“

Connectivity, either between vehicles, or between vehicles and smartphones, opens the door to hacking, either for motives of theft [stealing owner data] or malice [altering the function of the car].

We do not allow passengers on planes to sync with the aircraft’s computers. Are we sure we want to do this with cars? A hacked smartphone is an annoyance. A hacked car is a death trap

”

- Glenn Mercer, President of GM Automotive through insurers monitoring their driving habits. While signing up for pay-as-you-drive, or pay-how-you-drive, policies is optional, if the security of GPS data cannot be guaranteed, surveillance may be possible.The fact that TomTom reportedly sold driver behaviour data to Dutch police, helping the latter target locations where there were often speeding vehicles, will be of no comfort to those concerned about privacy - despite the fact that the TomTom data did not actually identify individual vehicles.

The potential danger of car hacking and its use by criminals has not been lost on law enforcement bodies in both Europe and the US. The National Highway Traffic Safety Administration (NHTSA) has launched a cyber-security research programme investigating car hacking, and hopes to set up a taskforce focusing on V2V technologies which share information such as traffic conditions to other drivers.

Regardless, it seems that even the existing technology which drivers take for granted such as remotely unlocking a car - is still a cause for concern. If cars can be hacked into by researchers like Garcia, the concern that real life hackers with malicious intentions will have no problem accessing vehicle control systems is completely founded. But, given that the most successful attempt so far was by two experts who were inside the vehicle, OEMs like Ford are safe for now with a relaxed attitude.

But, warned Fidgen, now is the time to start working on connectivity security. “Car manufacturers continually try to upstage each other with the latest computer gizmos for vehicles. They are on a never-ending treadmill to try and keep ahead and offer their customers the latest technology.

However, they now need to take a step back and look at how security should be embedded into that technology.”

Megatrends | 27

ICE EUROPE

A frosty future for the ICE? Ruth Dawson

I

n 2011, Siim Kallas, European Commission Vice President and Commissioner for Transport, outlined proposals to ban gasoline and diesel-engined cars from city centres by 2050.

Designed to cut reliance on oil and reduce carbon emissions by 60%, the plans would see the use of conventionally-fuelled cars being halved in urban transport by 2030, before being banned entirely by 2050.

At the time of Kallas's announcement, the

UK was one of several countries to state firmly that it would not be supporting the EC's intended rule. UK Transport Minister Norman Baker was very quick to say that the Commission should not be "involved" in the transport choices of individual cities.

"We will not be banning cars from city centres any more than we will be having rectangular bananas," Baker told the BBC.

Although largely forgotten about since, the EC's idea was again brought to light in

THE PANEL

August, when UK political party the Liberal Democrats announced proposals to allow only electric vehicles and ultra-efficient hybrid cars on the country's roads by 2040.

Gasoline and diesel commercial vehicles would still be allowed, however.

But while legislators may be keen to implement this strategy, the industry has been left to wonder just how such a rule would affect the European automotive industry. Here, six experts discuss the future of the internal combustion engine in Europe.

Anna-Marie Baisden is Head of Autos Analysis at Business Monitor International.

Ian Henry is Director of UK-based independent research and consulting company AutoAnalysis.

Greg Archer is Clean Vehicles Programme Manager for policy and campaign group Transport & Environment.

Dr Wolfgang Bernhart is Senior Partner in the Automotive Competence Center at Roland Berger Strategy Consultants.

Yeswant Abhimanyu is a Senior Research Analyst in Automotive and Transportation at Frost & Sullivan.

Dr Colin Herron is Managing Director at Zero Carbon Futures.

These measures are designed to help cut carbon emissions but is it really necessary to take such a radical step?

Dr Wolfgang Bernhart: Definitely not. I would rather have expected an argument like cutting fine particle emissions or similar.

On the other hand, I would expect a very high degree of plug-in hybrids or battery electric vehicles to be operated in city centres [by 2050] anyway.

28 | Megatrends

Ian Henry: The EU is, in my view, trying to set the bar excessively high now, to settle on something a little bit lower once they have had negotiations and so forth.

Anna-Marie Baisden: Looking at city centres, there are a number of things to take

into consideration - what the public transport system is like, for example; whether it is feasible for people to get into the city centre by another method. Just an outright ban is probably not necessary, and with it being so far into the future, it's kind of hard to see how things will change by then.

www.awmegatrends.com

ICE EUROPE

Would it be possible to do this or will there always be a place for the internal combustion engine in passenger cars?

AMB: Developments at the moment show that there is still a place for the ICE. There was talk at one point that everything will be electrical - hybrid at the very least - but I think that there have been so many investments made in developing powertrains and engines, that so far OEMs are doing a good job of improving fuel efficiency without having to make these alternative fuel shifts.

WB: It is, of course, possible, it's just a matter

of costs. The ICE will be complemented at first by hybrids - and here CNG could also play a bigger role in the future.

A complete replacement of the ICE is only possible if at least one of these conditions apply: development of new rechargeable battery chemistries, or replacement of platinum as a catalyst in membrane electrode assemblies. Currently both developments are in early stages and might need any time from 15 to 50 years to be usable.

Yeswant Abhimanyu: Quite honestly, I think we are starting to look at trends wherein dependency on the ICE is reducing. If we take gasoline engines, we're seeing downsizing...a trend towards reducing dependency on the ICE but whether or not it will be replaced or completely banished, we will have to wait and see. The crux of the matter is that whatever is being done in terms of products and solutions, it's all being aimed at sustainable mobility.

Does the European industry need this kind of push or could OEMs achieve this target by 2050 anyway?

Dr Colin Herron: By 2050, the technology will have already advanced sufficiently to address the issue of internal combustion engines polluting city centres.

It’s a very safe ban to propose as, in the timeline outlined, city centres will be full of predominantly electric-driven commercial vehicles - not due to a ban, but because they will deliver the best transport option.

It is not a question of fairness, as the situation is driven by a worldwide requirement for reduced emissions.

However, cities will have to provide a safety net for long haul drivers - perhaps a simple edge-of-city hire system in a similar way to Paris’s Autolib’ scheme.

Greg Archer: A simple ban would be a...technology specific policy and as such would not be smart regulation. But it is entirely reasonable to specify that vehicles used in cities should meet environmental standards. If an ICE can meet these standards they could continue to be used in

cities - but whilst technically it would be feasible, there will almost certainly be cheaper options.

AMB: Developments at the moment with incremental standards are pushing OEMs in the right direction anyway and car makers are seeing for themselves that there is definitely a demand. Look at fuel prices - it’s just one factor but that is what people will be taking into account: they will want cleaner engines for themselves, for their lifestyle choices.

How do you think such a regulation should be implemented?

WB: Only a scenario when emissions legislation is gradually hardened and local legislation is used is realistic. A ban on development of new petrol or diesel models would not be in line with freedom of industry, and other markets - which are much larger than the EU27 markets - would still be allowed ICEs.

AMB: You need to give the industry and consumers a period of time to get used to it, so I don’t think it could be an outright ban.

They would have to do something incrementally and back it up with other measures in terms of trying to promote public transport or some other form of mobilisation.

www.awmegatrends.com

GA: The best approach would be a progressive tightening of the environmental standards vehicles must meet to enter cities.

Low emissions zones already exist, such as in London for trucks.This could be extended to cars with standards progressively tightened to ban the most polluting vehicles; it is entirely feasible to conceive a system which, in parallel to banning the most polluting vehicles, raises the costs for moderately polluting vehicles with discounts for cleaner ones. Knowledge of a future cutoff date for polluting vehicles would make these an increasingly unattractive purchase, and residual values would decline as the

market contracts, making clean vehicles a better initial purchase.

YA: It really is very dependent on legislative emissions in place in any particular region.

Gradual transition is the best way to go about it: if we take the examples of Euro V and Euro VI, and the ACEA approach, it’s gradual. Having said that, even if it’s going to be a jump, the stakeholder who can enforce that is the government and legislative bodies; they drive the uptake of different technologies and fuel types. That is one of the key reasons why we see so many differences between the European and North American regions.

Megatrends | 29

ICE EUROPE

Will a downsized engine ever be good enough to compete with a hybrid engine?

IH: They already are. Look at Ford Ecoboost engines: they are getting comparable [to hybrids]. And if they’re not there already, they will get there at some point.

CH: Downsizing can compete to a degree, but there comes a point when you are fighting an unwinnable war against the laws of physics. An internal combustion engine ultimately relies on the burning of fuel, whereas day-to-day running efficiency of low

carbon vehicles is just the tip of the iceberg.

With EV technologies, more efficient forms of manufacture, optimisation of supply chains and low carbon energy production are all areas which can be further explored to reduce the overall ecological impact of commercial and domestic vehicle use.

YA: It’s two different concepts: as of today we’re seeing turbocharging and downsizing as a trend. Emissions norms are just making it

challenging for the IC engine to be cleaner, greener and so on.The driver here is emissions norms.The key reason why OEMs are spending on this is primarily to evade any fines or fees that they will probably have to pay if they are not compliant with these norms in the future.

Now, hybridisation and electrification of powertrains is another strategy OEMs are adopting. We’re seeing hybrids as a good bridge, a transition from the ICE to increased use of battery technology in electric vehicles.

“Cities will have to provide a safety net for long haul drivers - perhaps a simple edge-of-city hire system in a similar way to Paris’s Autolib’ scheme.”

- Dr Colin Herron, Managing Director, Zero Carbon Futures

What would this rule, if implemented, mean for OEMs and the market in general? Would there be a new wave of alternative powertrain players gaining more ground? Could established OEMs keep up?

YA: OEMs have already taken that step towards investing in alternative powertrains for the future. The investments for CNG, for example: the move towards and investments in renewable sources like wind energy, and reusing and saving surplus power. These are important steps that OEMs themselves have started making today in view of providing alternative powertrains in the future.

Whether it’s electric or hydrogen based, bio based or natural gas, OEMs have already started to take that very seriously and are all moving in that direction in Europe.

IH: There are always going to be companies on the fringes of this sort of thing introducing

30 | Megatrends

all sorts of new technologies and trying to muscle in on it. Once something goes massmarket, scalable, then I would have thought a major player is going to buy them up.

GA: New entrants are unlikely to develop a substantial market share, but OEMs could find themselves being a simple supplier to other new mobility companies - like Google, Microsoft - who would buy vehicles from them as a commodity. Urbanisation and standardisation, together with a growth in shared use vehicles will inevitably mean fewer players and lower sales. The premium sector will probably survive, but mainstream suppliers would find increasing competition, squeezed

margins, and a loss of customer base as they are driven into supplying a commodity.

WB: Because of the higher cost burden, and existing - and remaining - overcapacities in the EU market, fierce competition will stay.

The increased complexity of the technology portfolio will also raise the bar regarding a minimal critical size of OEMs; smaller players will only survive in partnerships to gain economies of scale. Alternative powertrain players will even face tougher challenges, since they do not have the economies of scale in all other systems as well - for example, connectivity, advanced safety systems, new lightweight materials and so on.

www.awmegatrends.com

WHEN ONLY PERFECTION WILL DO. SHELL LUBRICANTS, TRUSTED BY FERRARI. KEEPING YOU GOING, WHATEVER THE CHALLENGE. www.shell.com/lubricants

WORKS HERE.

Automotive Energy Efficient Lighting Solutions

1&9 [[[ +LJK (IĂ€FLHQW /('

'ULYHU IRU )URQW /LJKWLQJ

16, [[[ &RQVWDQW

Current Regulator

1&9 6LQJOH ,& 6ROXWLRQ

/,1 &RQWUROOHU 5*% /(' 'ULYHU

NCV7680: Linear Current Regulator & Controller

1&9 [[ $)6 6WHSSHU 'ULYHU

Target Applications:

Focus Technologies:

Complete Solutions:

Advanced Front Lighting

LED

Single Chip LED Drivers

Glare Free High Beam

LED Pixel Light

Constant Current Regulator

Marking Light

Xenon HID

HID Ballast Controller

RGB Ambient Lighting

Halogen

Stepper Motor Driver

Interior Lighting

Stepper Motor Control (Leveling and Swiveling)

Exterior and Rear Lighting

www.onsemi.com

SAFETY

“We will witness the end of cars as we know them before the end of this century” Peter van der Knaap, Managing Director of The Netherlands’ Institute for Road Safety Research, discusses three hot safety topics with Rachel Boagey

T

he market for crash prevention technologies is set to become much more competitive in the next few years. Although the sector’s focus is currently on autonomous emergency braking (AEB) - which promises to have the greatest impact on collision numbers to date - there is still a long way to go before this technology can show its full potential.

As Managing Director of the Institute for Road Safety Research (SWOV), Peter van der Knaap has no routine. “Excellent research starts with useful curiosity,” he says. It is this innate passion that brought van der Knaap to SWOV after a career in policy analysis and evaluation research with the Netherlands Court of Audit and the Ministry of Finance.

Founded in 1963, SWOV is the centre point for road safety research in the Netherlands.

The Institute’s objective is to contribute to and improve all aspects of road safety, including infrastructure, maintenance and technical transport developments.

Safety assessment

According to van der Knaap, the safety goals of European OEMs are a “race to the top”, with manufacturers pushing independent car safety assessments to rank with four or five stars. Although certainly a positive for automotive safety now, in the not too distant future it will become difficult for vehicles to achieve a five star rating without AEB.Another downside is the fact that the rating system may soon start to lose its value,“It’s no use if every car gets the highest score, the incentive to improve safety further is lost, as is information to the car buyers,” says van der Knaap.

But van der Knaap does not believe that creating a new rating above five stars is necessarily a good idea: “Instead of creating a new category, we should continue to push the ambitions for safety further and further. That means we must continue to set higher and higher standards and ever more comprehensive rating schemes for crashtesting cars,” he comments.

Of course communication is important for www.awmegatrends.com

car manufacturers and consumers alike, so if a model passes a more sophisticated crash test, the OEM should, in van der Knaap’s book, deserve the credit. “A good example is the new Euro NCAP Advanced initiative, a new reward system for advanced safety technologies, complementing Euro NCAP’s existing star rating scheme.”

Euro NCAP introduced its advanced initiative scheme in response to the rapid development of new technologies for which there are currently no independent assessments. By rewarding advanced technologies, the safety organisation is now providing an incentive to car manufacturers to accelerate the standard fitment of important safety equipment across their model ranges.

An important recent addition to Euro NCAP ratings is the aforementioned AEB, but, says van der Knaap, it is just one of many measures needed to improve the safety of our cars and roads. “The next thing that should perhaps be looked at is the way car makers make sure new safety systems will not lead to less alert drivers.”

Global view

Halfway through 2013, Global NCAP chairman Max Mosley wrote to the heads of Renault-Nissan, General Motors and Suzuki, urging them to apply the UN’s minimum crash safety standards to global passenger car production. Despite this, best-selling global brands continue to provide substandard safety protection, outside of Europe. In South America, the Renault Clio Mio scored zero stars and zero points, proving unstable in crash tests with an unacceptably high force on the dummies’ heads.The Nissan Tsuru, Suzuki Alto K10 and Chevrolet Agile all also failed to gain any points or stars in testing.

Improvement in car safety across the world is crucial, and van der Knaap expects these requirements to keep developing as the world becomes more interconnected.

“People will expect their cars to be up to standard in every part of the world. And that includes places such as South America and Africa,” he states. “Yet there is always a price tag connected to safety, and it is only rational that we also look at local road infrastructure, awareness, training, and education and emergency response systems. Improving road safety depends on all of these elements. We need safe cars on safe roads, driven by responsible drivers. That is vital.”

Autonomous vehicles

Self-driving vehicles have certainly generated a lot of buzz in the automotive industry this past year, and van der Knaap predicts that driverless cars will present many advantages in time saving, cost, the environment, space and, of course, safety. “I predict we will witness the end of cars as we know them before the end of this century,” says van der Knaap. “It is only a logical development.”

Yet without proficient safety measures, there is a bumpy road ahead. The transition period to autonomous cars presents many challenges.

Van der Knaap’s main concerns are with the reliability of systems such as M2M technology: “If you are warned 50 times for an unexpected pedestrian through car-to-phone technology, what will that mean for the 51st person that happens to walk around without a cell phone?”

Despite this, van der Knaap believes that autonomous cars will be accepted onto European roads, just like the driverless public transport systems already available in other parts of the world. Before this can become a reality though, van der Knaap suggests that two things are absolutely vital. “First, there must be 100% safety. Research shows that people are less willing to accept risk if they have to surrender themselves to a system or to technology. Paradoxically, we feel safer when we ourselves are behind the steering wheel.Talking about that steering wheel, that is the second thing: we need to get accustomed to cars without steering wheels and gas and brake pedals. You truly have to surrender yourself to the machine.”

Megatrends | 33

CO2 EMISSIONS

Are we nearly there yet?

The past ten years have seen the motor industry make significant advances in the race for better fuel economy. Since 2003, the average CO2 emissions of new cars have fallen by over 30g/km; overall, the 2015 whole-market target of 130g/km is within reach for many manufacturers. The latest analysis from JATO Dynamic’s annual CO2 report shows that most of this progress was achieved over the last few years. Putting this into context, this happened during a time when SUVs became the third largest segment in Europe and a global recession gripped many markets.

Gareth Hession takes a look at the latest developments and the biggest brand, segment and country successes in the race for CO2 reduction

T

he industry-wide 2015 European CO2 emissions target of 130g/km is used as an overall average with each manufacturer having individual targets based on the average kerb weight of vehicles they produce. Despite this adjustment, some manufacturers are closer than others to achieving their goals.

PSA Peugeot CitroĂŤn is currently ahead of any other volume manufacturer in the race to meet the 2015 goal: it has already achieved its target by a margin of 3.5%, and could avoid fines with no further development, provided it keeps selling the same mix of cars that it did in 2012.

This result can be attributed to their efficient eHDi and Hybrid4 technology, the success of the Peugeot 208 and its new small petrol engines, and sales of electric cars.

34 | Megatrends

The latest hybrid, fuel-saving and efficient technologies of Toyota and BMW have also helped both manufacturers exceed the 2012 and 2015 targets. Toyota has over-achieved on its 2012 target by the greatest amount of any manufacturer, beating it by 21%, leaving a 2.5% margin over 2015; BMW has exceeded its 2012 target by 12%, and has a 0.03% margin over 2015.

Geely Group, Renault, Volkswagen Group, Ford, Daimler and General Motors are also well on track to meet the 2015 targets: all require improvements of less than 3% on average.

www.awmegatrends.com

CO2 EMISSIONS Although the Fiat brand recorded the lowest emissions in 2012 out of the top 20 volume brands (at 119.8g/km), Fiat-Chrysler as a group still need to make a 3.7% improvement for 2015.

At the other end of the spectrum, some OEMs will have to take other measures to avoid hefty fines in 2015. The European Commission has acknowledged that some low-volume manufacturers are not suited to the kerb-weight based system, allowing them to pool with other manufacturers for a combined target, apply for a target based on a 25% reduction in emissions compared to 2007, or agree on an individual goal with the EC.

Tata Motors, Porsche and Subaru will be able to avoid fines if the OEMs apply to meet the 25% reduction but this method does not work for all; Honda, for example, beat the 2012 target based on kerb-weight by 3.1%, but they would have failed by 6.2% if they had used the 25% improvement as a target.

Segment shifts

Last year, JATO’s CO2 report highlighted the difficult balancing act between lowering average emissions and profitability. Lowemission cars tend to be smaller, lighter vehicles which are cheaper to buy and have lower profit margins. Although it still remains a challenge, manufacturers are making progress in improving the emissions of both larger and premium cars.

In 2012, the luxury segment made significant progress in bringing emissions down. With average reductions of 10.8g/km, it has

achieved the biggest improvement in emissions between 2011 and 2012 of any segment. This improvement came primarily from the 3-litre diesel versions of the BMW 7-series and Mercedes-Benz S-Class.

Behind B- and C-segment cars, the two largest-volume segments in Europe, the SUV

segment was the third biggest market in 2012.The segment’s jump from just over 5% in 2003 to 12.7% in 2012 is the largest increase in market share over the last decade. Despite increased sales of these stereotypically thirsty, heavy vehicles, overall emissions have continued to fall, highlighting the industry’s hard work and progress.

Consumers have been drawn to the SUV segment as developments have aimed to counter traditional compromises in performance, handling and fuel consumption.

The latest generation of crossover vehicles are a prime example, offering similar benefits to full size SUVs, but they are smaller, lighter vehicles, with eco-friendly options such as two-wheel-drive only.

Other brands in the luxury segment are also making impressive progress. Somewhat surprisingly, Bentley has made the most progress of any brand.The introduction of new and updated models featuring fuel-saving technology has reduced the brand’s average emissions by over 100g/km compared to 2011.

Diesel driving progress

The continued popularity of diesel vehicles is also playing an important role in how countries in Europe reduce CO2 emissions.

In 2012, diesel was again the most popular fuel choice among new car buyers in Europe, accounting for much of the reduction in CO2 emissions over the course of the year. Diesel-fuelled cars accounted for 54.6% of the European new car market in 2012 and have seemed to recover from the scrappage-affected market of 2009, which saw a spike in small petrolengined cars.

Portugal took the top spot again in 2012 as the country with the lowest average CO2 car emissions; it is little surprise that over 70% of the country’s cars are diesel.

Greece recorded the most significant fall in average CO2 emissions for the third year in a row. This is the result of several factors: a struggling economy that has severely reduced sales of larger cars, significant improvements to the efficiency of smaller petrol-powered cars and diesel penetration of the market rising from less than 3% in 2009 to over 40% in 2012.

This huge rise in diesel-fuelled cars is the result of a ban being lifted which prevented the fuel being used for private vehicle use.

However, with continued improvements in petrol car efficiency resulting in better fuel economy, low emissions and, as a result, low cost - or in some cases free - road tax, consumers are still being drawn to smaller petrol-run cars. The question remains whether diesel will continue to dominate the European car market in the future.

2015 and beyond

The majority of car OEMs and European countries appear likely to meet their 2015 targets. All high-volume manufacturers have achieved the legal target for 2012 and all the medium-volume manufacturers have reached either the main or optional target.

It is encouraging to see that the new generation of eco-friendly and low emissions vehicles are quickly becoming the norm, and that local governments are continuing to work with consumers and manufacturers to encourage the purchase of cars with lower CO2 emissions. The success of EVs will also continue to play an important role in bringing down emissions overall.

However, with some manufacturer groups still at risk of missing their individual 2015 targets, the industry cannot afford to rest on its laurels. As economic uncertainty remains, it will be interesting to see how the industry continues to improve emissions and draw in consumers, and how they will respond to changing government car tax policies. But one thing is certain: this momentum of change must be sustained if the EU targets are to be achieved in 2015 and beyond.

Gareth Hession is Vice President of Research at JATO Dynamics www.awmegatrends.com

Megatrends | 35

WORKS HERE.

THE FINEST MACHINES DESERVE THE FINEST PROTECTION. SHELL LUBRICANTS, TRUSTED BY FERRARI.

KEEPING YOU GOING, WHATEVER THE CHALLENGE. www.shell.com/lubricants

INTERVIEW

Fifteen minutes with...

Ian Taylor, Shell Rachael Hogg discusses developing lubricants from the word go with Shell Lubricants’ Senior Technologist

hy is now the time to invest in low viscosity lubricants?

W

Primarily to get better fuel economy, but there has also been a realisation that, in the past, lubricant viscosities were on the conservative side. In Japan, OEMs have gone to much lower viscosities than in Europe or the US, there have not really been any detrimental effects but there have been benefits in terms of better fuel economy for Japanese vehicles.

How has the move from Euro V to Euro VI affected lubricant development?

There is an interesting side to this: the rest of the emissions legislation is focused more on after-treatment devices and we have to take some useful additives - sulphated ash, phosphorous and sulphur (SAPs) - out of oils, some of which provided wear protection. So when we go to a lower viscosity oil for better fuel consumption, we have to find some additives that still give wear protection but don't contribute to this SAPs level, which affects the after-treatment compatibility.

Shell has been trying to change public perception of low viscosity and synthetic lubricants - how is this progressing?

Some are put off the use of synthetics by the price, or the worry that there may be other issues with them, but we have quite a lot of demonstration material which shows the benefit of synthetics in terms of fuel economy. In the past, 'synthetics' generally meant poly-alpha-olefins, which are quite expensive. There are a large number of alternatives now appearing like group two and group three based oils, which are more cost effective. Certainly in Europe for passenger cars, a lot of OEMs recommend synthetics or semi-synthetics, whereas 20 years ago it all used to be mineral oil.

www.awmegatrends.com

There's been a big shift, certainly in Europe, towards synthetic oils and there is enough data to support that they do what we think they do, and that's before the potential of fines for OEMs comes in - that will change the economics even more in favour of synthetics.

How do reactions to low viscosity lubricants vary from region to region?

Japan has led the way in lower viscosity engine oils.To some extent, in the US they've gone to lower viscosity engine oils. In Europe, we've tended to go to lower viscosity oils but not quite as low as the US or Japan, primarily because certain markets have very demanding driving conditions. We have a lot of diesel cars in Europe, so we tend to have quite a lot of additives to give the required protection - and that tends to make the fuel economy performance slightly worse.

How have new low emission engines affected lubricant development?

We've seen a move to a lot more downsized 3-cylinder engines: having a smaller engine with the same power tends to put a lot more stress on the lubricant, so you need to put more antioxidant in the lubricant, and again think about protecting against wear.

Some solutions coming out are likely to make it even more difficult to lubricate the engine, which is going to make it more of a challenge to develop lubricants which work in these components.

The other thing which may happen is, particularly in Europe in 2020, CO2 limits of 95g/km are so severe that you may get different OEMs coming up with different solutions. We'll need to be fairly nimble to be able to lubricate these different hardware solutions, which may appear in the marketplace.

How is Shell working as a design or development partner?

Many OEMs have realised that the lubricant, rather than just being an afterthought, is actually an essential design element. One problem that has happened in the past is that when OEMs design a new engine, they generally design it using the oil they currently use, so when the engine is launched years later it has effectively been developed on an oil which is out of date. If the OEM works with a lubricants company to develop both the engine and the oil at the same time, they potentially can get bigger benefits than if they just designed the engine. To a certain extent we can help design a lubricant which can get more out of their engine or transmission.

But it's not solely OEMs that Shell is working with: we are involved with the Energies Technology Institute, a government private partnership trying to improve the fuel economy of transport fleets in the UK by 30%.The OEM involved has completely redesigned the truck as a system, allowing the lubricant temperature to go up to 120 degrees Celsius, because they can then do away with all the coolers and fans which take up quite a lot of fuel.They're coming up with different solutions which help to improve truck fuel economy but if the end solution involves an increase in lubricant temperature then we need to make sure our lubricants survive.

What do you think will be the biggest trend that will affect lubricant products?

There are more and more novel materials being used in engines: in the past we only had to lubricate steel against steel, nowadays we're seeing lots of coated components with ceramic or diamond-like carbon coatings which respond differently to lubricants, so we're having to find the optimum product for these different materials.

Megatrends | 37

MOTORSPORT

Race on Sunday...

Richard Harrington speaks to motorsport experts Prodrive about how social media, globalising vehicle brands and dramatic cost reduction are breaking a new dawn for what used to be a mainstay of vehicle promotion

‘W

in on Sunday, sell on Monday’ neatly summarises the sales strategy that led to a golden age for motorsport in the second half of the twentieth century. Running cars that were often closely related to their road going sisters, brands from the esoteric to the everyday forged powerful reputations on the track. But as the new century blossomed, motorsport became less relevant to the volume car buyer and factory support was gradually withdrawn.Today, performance is measured in grams of CO2 per kilometre not in mph, and the reassuring safety of raceproven disc brakes has been replaced by electronics that will never be seen on track.

Richard Taylor is clear that now is the time to reassess the potential of motorsport.

Taylor is Motorsport Business Director at Prodrive, one of the world’s most successful motorsport companies and the only one with victories in every major global formula.

Having spent 20 years at the company including a period leading the Subaru World Rally Team that put a blue Impreza Turbo on so many a young man’s most wanted list Taylor understands the synergies between motorsport and brand development. Sitting in his office in Banbury, UK, he produces a compelling argument for a renaissance in OEM support for motorsport, but not as we know it today.

Taylor starts by taking Formula 1 out of this conversation: “It dominates the media, is outrageously expensive and immediately

38 | Megatrends

shifts people’s perceptions. Mention motorsport to brand directors and because of Formula 1, they put up barriers,” Taylor says. “Take that out of the equation and we are left with a fast-revitalising industry with tremendous potential for customer engagement at a cost that is dramatically less than most OEMs realise.”

The foundations of his confidence are built on far more than reviving old glories. At the heart of this rebirth are fundamental shifts in both the structure of the automotive industry and in the promotional tools available. Newly globalising vehicle manufacturers, growth in developing markets, and the remarkable potential of social media are transforming how brands engage with their target audiences. Motorsport isn’t the only solution, but if Taylor is right, it offers tremendous potential for those OEMs with the vision to do things differently.

Challenger brands

When a brand is coming from behind, it has different objectives to established leaders: imagine Porsche or Ford taking part in motorsport without a commitment to win. But for a rising brand, simply being on the podium challenging these names is a tremendous accomplishment that will immediately lift global perceptions and associate the company with the highest levels of achievement, sprinkling a touch of the motorsport glamour that most manufacturers think they can no longer afford. www.awmegatrends.com

MOTORSPORT

tweet on Monday

www.awmegatrends.com

Megatrends | 39

MOTORSPORT “I think of these new OEMs as challenger brands,” says Taylor. “Many have excellent products, but they have a long way to come in people’s perceptions. They need to make up ground very quickly so they can increase volumes and push up margins. Motorsport can validate values of quality, technology and durability at an astonishing pace - and it doesn’t have to be expensive. The clever strategy for challenger brands is to aim for an appropriate level of success.The difference in cost between going all-out to win and aiming to be on the podium alongside the big-budget teams is dramatic.”

The real key to success, however, is how motorsport is used in vehicle sales and marketing. “It’s about finding new ways to take the brand values to the buyers, using motorsport to wrap them in exciting, compelling stories that create engagement,” explains Taylor. “Social media is made for motorsport. The excitement of everything from testing and travel to the race itself provides the stories and materials that bring a brand to life.”

Has anyone not heard of Nissan’s adventures with the advanced DeltaWing endurance racer? This very low cost programme cleverly delivered messages about innovation and environmental sustainability, using a mix of traditional, online and social media to great effect. It also helped with the challenging recruitment of engineers, by improving their perceptions of Nissan as a stimulating place to work.

Social engagement

Having a robust strategy for delivering value from the programme is absolutely critical. In purely motorsport terms, the Lancia Integrale with 46 WRC victories was substantially more successful than the Audi Quattro with 23, but Lancia failed to tell their market. One of the most exciting aspects of today’s new motorsport opportunities is that they are being developed to complement social media, which is revolutionising customer engagement.

Land Rover’s social media pre-launch of the Evoque, a textbook success story that burst

through their already ambitious targets, just shows what can be achieved if the right approach is employed.

“Motorsport is visually dramatic, it’s populated by colourful people doing heroic things, it tells a story and it can be localised. That makes it perfect for online customer engagement,” says Taylor. “Local sales organisations can develop a strong following for their local heroes, who can be drivers, designers, anyone with an interesting role in the team. Social media can take the excitement of the motorsport story into everyone’s home.”

Moving forward

But even this is now yesterday’s technology.

The very latest social media campaigns allow customers to race against their heroes, alongside top drivers on the same circuits.

“Motorsport is data rich,” says Taylor. “We can track the driver’s heart rate, the car’s power output, the cornering forces - and you don’t even have to be sitting at a PC as it can all now be delivered to a phone. With this level of customer engagement, visits to dealerships by motorsport cars or drivers can attract large numbers of potential buyers, as well as local press coverage.

“It’s about making everything work synergistically, using carefully chosen motorsport activities to feed customer engagement materials into a wide range of communications channels.”

Prodrive’s budget for running the allconquering Subaru team is reported to have been around €25m (US$33.68m) each year.

Today, Technical Director David Lapworth believes they could achieve similar results for just €10m (US$13.5m) a year. “Part of that is due to the new modelling systems that Prodrive has developed to drive cost out without affecting performance, but it is also a huge compliment to the FIA for their commitment to eliminating many of the excesses of past decades,” he explains.

“Engines are a good example: in WRC, the top teams would run one engine per car per race and the engine design would be heavily

bespoke.Today, engines are much closer to the road car units and each car is allowed only two per season.” Driver salaries are also not prohibitive.“Today, most top drivers come with their own sponsorship and are not a major part of the cost equation,” confirms Lapworth.

So what are the rising races that OEMs should be evaluating? Taylor says there are four fast-developing series which offer attractive cost/benefit equations: the new FIA Formula E Championship for open-wheel electric race cars; the Dakar endurance championship for off-roaders; the revitalised Rallycross series with its clever local participation and media options; and the FIA World Rally Championship, which is very strong in many developing markets.

Dakar, for example, already has five million live WRC spectators and a TV audience approaching one billion across 190 countries.

Online streaming adds another five million just from YouTube. Rallycross is a completely re-modelled sport packaged specifically for TV with short races and wheel-to-wheel action. It attracts a young audience with local heroes, most notably in the US, Europe and Brazil. It is ripe for local engagement through social media and already attracts major global brands like Monster.

“The key point about these series is that, following the loss of tobacco and banking sponsorship in the major markets, they are being re-engineered with OEM benefits in mind,” says Taylor. “We are on the cusp of a new era in professional motorsport where the series owners design their events around the benefits needed by a new generation of savvy vehicle manufacturers, and affinity brands who understand how to use the materials it generates to engage with their audiences.”

But what is the likely cost? “We could develop a competitive rally cross car and run a two car team in ten events, covering the US, European and Brazil, for less than €2m [U$2.7m] a year,” says Taylor. A competitive Dakar entry, with events in Russia, South America, the Middle East and the US, would come in at around €6 million (USS$8.2m)

Prodrive delivered BMW’s MINI WRC programme for around half the budget of previous programmes, yet the team achieved three podiums in its first seven outings.

40 | Megatrends

www.awmegatrends.com

TOMTOM AUTOMOTIVE Connected Navigation System STATE-OF-THE-ART

EASY TO INTEGRATE

HAROLD GODDIJN CEO TOMTOM ‘When it comes to creating a unique in-vehicle infotainment system, TomTom is the ideal partner for Car Manufacturers and System Vendors. We offer an independent set of open, fit-for-use and easy-to-integrate, NDS-based Connected Navigation System components.’

AUTOMOTIVE.TOMTOM.COM

FIT-FOR-USE

MODULAR

THE BIG PICTURE

From EV to CV T

his quarter has seen Nissan push ahead with efforts to take its EV technology from the Leaf into the commercial segment.The OEM announced in September that its second all-electric mass production model based on the NV200 van, the e-NV200, is set to launch next year and will be targeted at the urban delivery segment.

The van has been undergoing trials at several large commercial fleets over the past few years - most recently announcing British Gas and has, so far, received positive feedback.

It has been a year of ups and downs for the NV200: in October, Nissan lost a lucrative deal with the city of New York which would have seen the next generation of taxis being solely NV200s. The Taxi of Tomorrow initiative would have ensured around 13,000

42 | Megatrends

units made up the city’s fleet, netting the OEM up to US$1bn.

Despite the positive feedback received from the commercial sector for the electric NV200, the Nissan taxi project was met with opposition from the start. Perhaps most damming, the Supreme Court ruled in late 2012 that the New York City Taxi & Limousine Commission had wrongly awarded the contract to the OEM, as the original mandate had called for a hybrid vehicle.

But things are not as bleak as they may seem: although Nissan’s Taxi of Tomorrow ambitions have been crushed, praise for the eNV200 has been such that Nissan is now developing a model that will take its EV system into the light truck segment: the e-NT400.

www.awmegatrends.com

THE BIG PICTURE

www.awmegatrends.com

Megatrends | 43

Whether the vehicle covers 50 or 500 kilometers a day and makes 50 or 500 stops, it needs to handle the stress of constant use. Eaton technologies offer reliable operation, greater operator comfort and productivity, better fuel efficiency and less noise. The world’s largest manufacturers of commercial vehicles, as well as fleet services and municipalities, trust Eaton solutions and systems to provide reliable results.

Eaton is a global technology leader in power management solutions that make electrical, hydraulic and mechanical power operate more efficiently, effectively, safely and sustainably.

www.eaton.com

VOLVO TRUCKS

Peak optimisation OEMs are increasingly looking outside the engine to improve vehicle efficiency, and Volvo Trucks’ North American arm is no exception Rachel Boagey

M

eeting the 2014 US fuel efficiency and greenhouse gas emissions targets is clearly a challenge for all commercial vehicle manufacturers, but Volvo Trucks North America (VTNA) has a plan: all of the OEM’s MY2014 engines will offer fuel efficiency improvements as a result of optimised and enhanced engine componentry. But they will not be stopping there: according to Ed Saxman, Alternative Fuels Product Manager, Volvo Trucks North America, an engine can only operate efficiently if all other constituent parts of a truck - such as the aerodynamics of the cab and trailer - work efficiently too, and by factoring in these optimisations,Volvo Trucks North America can be ahead of the game when it comes to US regulations.

“Volvo Trucks is proud to say that in meeting 2014 regulations, there is no need for our products to incorporate a mandatory idle shutdown or the mandatory road speed limiter,” declared Saxman, “due to the inclusion of all these other parameters in development of our engine technology.”

Although still somewhat controversial, Volvo Trucks regards alternative efficiency solutions such as lower viscosity and synthetic lubricants an important factor to the maintenance of their vehicles. VTNA works with major lubricant providers on an ongoing basis to develop new and innovative solutions

for fuel efficiency, without sacrificing durability or reliability targets. “We believe that these materials help trucks to use less fuel and energy, while enhancing durability and prolonging engine life,” Saxman commented.

One size: not for all

It may be too early to predict the penetration levels of unconventional powertrains at Volvo Trucks in forthcoming years, but Saxman is sure that truck buyers and fleet operators are going to be interested in natural gas, hybridisation, or other alternative technologies, saying that, “Initial interest has been very strong and will continue so long as there remains a strong price difference between diesel fuel and its alternatives.”

However, Saxman emphasised that alternative fuels are by no means “one size fits all”, and that VTNA is focused on offering a range of solutions that take into account the wide variety of trucking operations in North America.“Alternatively-fuelled vehicles offer a strong opportunity for some motor carriers, but we believe diesel will remain the most prominent commercial motor fuel for the foreseeable future.”

Alternative powertrains are not only beneficial to the OEM: customers purchasing

Volvo plans to introduce a proprietary Volvo D13-LNG compression ignition engine for use with LNG (pictured: D13 dual clutch)

www.awmegatrends.com

a Volvo truck equipped with a 2014 Volvo D11, D13 or D16 engine will see an increase in fuel efficiency ranging from 2-5%. Saxman said, “This will offer a significant return on investment for fleets and owner-operators choosing Volvo.”

The 2014 Volvo trucks are just the most recent powertrain improvements that have resulted in fuel efficiency benefits for customers. The introduction of advanced aerodynamic components - including redesigned mirror heads with aerodynamic shrouds and arms, redesigned hood mirrors that increase visibility, and additional ground effect features below the bumper and side fairings - have already improved the efficient design of Volvo VN model highway trucks.

In the long term, VTNA will remain focused on providing solutions to address a wide range of customer needs, adapting to growing demand by building natural gaspowered versions of its VNM and VNL models. The OEM also plans to introduce a proprietary Volvo D13-LNG compression ignition engine for use with LNG, along with other potential renewable fuels and inexpensive diesel alternatives. “We announced in June 2013 that we plan to commercialise trucks powered by dimethylether,” Saxman added.

In October this year, Gӧran Nyberg, President of Volvo Trucks North American Sales & Marketing, welcomed the move towards fuel sustainable fuels, saying that the OEM, “is committed to designing and engineering fuel-efficient technology that offers our customers solutions to reduce their fuel consumption and positively affect their bottom lines.Volvo Trucks is equipped with 2014 engine technology and will deliver substantial fuel efficiency benefits, while also providing the power and performance customers expect from a Volvo powertrain.”

Megatrends | 45

DATA CENTRES

From i3 to IT As cloud computing becomes an established concept in the automotive industry, OEMs are starting to take control and ownership of their data centres Martin Kahl

BMW is not an IT company, and yet it has confirmed that it is building its own data centre in Iceland. So why would a car company make such an investment? Would it not be easier to pay for a 24/7 environmentally-friendly managed service offered by one of the major experienced data centre providers?

Mario Müller grins. Were it so easy, says BMW’s Vice President of IT Infrastructure, the OEM would be happy to do that. “But our requirements mean we need to have our own data centre right now,” he explains. “Of course, we’re not an IT company! We build, develop and sell cars and motorbikes. And we have a great financial services organisation.We currently have more than three million cars connected to our IT infrastructure. I think it will be more than ten million by 2020.We give our customers real time traffic information. That means every three minutes all our cars receive an update.This really takes those of us from the IT side into the end-user business, instead of only serving the company’s internal IT needs.

Sales are going pretty well so we're happy about that. The customers like our products and the service that we offer them. More than 95% of our new cars will have built-in technology to get them online and connected, so it depends then how many cars we sell.”

BMW currently operates an enterprise data centre in Munich, Germany. It also has regional data centres in Spartanburg, South Carolina, Oxford in the UK, and in South Africa to support its manufacturing

46 | Megatrends

operations. “You need equipment on the plant side for latency reasons,” he explains.

In 2012, BMW had around one million connected cars on the road, and was receiving over one million data requests each day. At the time, this was equivalent to 600MB of data per day. The company now has three million connected cars on the road, and looking beyond 2018, it is expecting to have 10 million connected cars making over 100 million data requests each day.That equates to 1TB of data every day, and it is because of this growth in ConnectedDrive and other services that BMW is so keen to create what it calls its own 'Private Cloud'.

Carbon-free clouds

The OEM has already been using Verne Global’s data centre on a former NATO base in Keflavik, Iceland - the host country of its future data centre. The Keflavik site currently hosts high-performance computing (HPC) applications such as crash test simulations, CAD/CAE, and aerodynamic and liquid fuel calculations.

The OEM is now building its own data centre near Reykjavik, where it will host its Private Cloud. This will be capable of accommodating the existing crash test and other simulations, as well as the rising demand for connected car-related data.

“We have a green energy data centre in Iceland where we are currently running five high performance computer cells. Each cell has approximately 130 servers. We're expanding that up to ten cells by the end of 2013. The data centre there is 100%

carbon free, and that is important if you're talking about carbon emissions, especially for an auto company.”

A cold climate and an abundance of environmentally-friendly energy sources make Iceland an ideal location for data centres; natural air is used to cool the servers, and electricity is 100% carbonneutral thanks to hydro and geothermal power. Ten HPC cells consume 6.31GWh of power annually, says BMW; running such cells in Germany would create 3,570 metric tons of CO2 emissions.

Once the new data centre is in place, will BMW’s investment in cloud computing be noticed by its customers? “I hope so, because one of the biggest challenges that we have, whether it's for the company itself or for our customers, is for our solutions to have the best possible resilience. We have pretty good quality in the company on the IT side. For instance, data availability in 2012 was above 99.96% of the entire availability around the world.

That's a very good result from my point of view. On the other hand, our plants are running at 120% capacity right now and it's pretty hard to get downtime for any maintenance or patches that are necessary, so we need solutions that do not require any maintenance.

Maintenance is a planned incident, from my point of view, because IT availability is not there for a given amount of time. The solutions that we have to build have to be more resilient, with real zero downtime, and always up for the customer, whether internal or external.”

www.awmegatrends.com

DATA CENTRES Car companies are notoriously slow at catching up with technology that may not be directly related to the vehicle, and Müller wholeheartedly believes that the industry must keep up.

“I think you could always be further ahead!

Agility and speed will be more and more important in the future. You have to be fast.

You have to offer what a customer wants, and get it implemented without working 12 or 24 months to get something done. The technology that we see right now in the car environment gives us this opportunity to develop our products much faster.You just get the infrastructure online and in a minute everything works. You can do the test there, get an implementation, and it's horizontally scalable. It gives you the resilience that you need. Besides that, in the BMW Group, we also have financial services. That's a different environment from the manufacturing, development or sales environment, so we have to cover everything. It's a wonderful situation because we get information and ideas from other colleagues across the company, and it's easier to understand their needs, and what we have to implement to serve them.”

Cloud computing is growing rapidly. GM has recently invested in a large data centre in the US, and is constructing a second. Long term, OEMs' ownership of cloud data storage could potentially change the way cars interact with their drivers, and other vehicles.

www.awmegatrends.com

BMW: the only automotive OEM in the ODCA

The Open Data Centre Alliance (ODCA) was established in 2010, to speed up the migration to cloud computing and to provide pan-industry support for the world’s rapidly growing data centre and cloud computing requirements. The ODCA now has over 300 member companies, and is led by a Steering Committee comprised of 12 global IT leaders: BMW, Capgemini, China Life, China Unicom Group, Deutsche Bank, JPMorgan Chase, Lockheed Martin, Marriott International, National Australia Bankl,Terremark, UBS and The Walt Disney Company.

BMW is currently the only automotive company in the ODCA, but Mario Müller, BMW’s Vice President of IT Infrastructure and Chairman of the Open Data Centre Alliance (ODCA), says he expects other OEMs to join in the near future. “We are working together with other car companies around the world, and I think one or the other will join us in the next few years. Working together, sharing our experience is important for everybody. It's also great for us to work with other industries.” OEMs and suppliers, says Müller, “are happily invited to join us and will help us to work together, especially in the IT area, and bring us the solutions that we need.”

Interoperability is one of the key drivers in the Open Data Centre Alliance. “It's a vibrant organisation. It's growing. And the output is there - it's not just an organisation where we drink great coffee. There is work involved. People work together in groups and the tech groups develop documents and share information.They're doing all the tests there, and sharing results. We also appreciate the role that Intel has in the Open Data Centre Alliance, as a technical advisor to all member organisations.”

“The benefit of being a member for BMW is that we get great information from our colleagues working together with us," says Müller, "that we define and specify the usages together; and that we will get solutions from providers based on the ODCA’s requirements.”

Megatrends | 47

DATA CENTRES “The BMW Group is leading edge. All the other OEMs will have to do it sooner rather than later. That will lead to greater enhancement in the future. If you think about highly, or even fully autonomous driving in the future, you need much more capacity in the back-end and it is not possible to host everything in the car. That might be too expensive for the customer. So IT working together with colleagues in the development department on the electronic side is the future, from my point of view.”

Server capability

The rapid rise in connected car data requests raises the question of whether the server capacity exists to support the growing number of connected cars and the vast quantities of data that are expected to be transferred in 2015 and 2020. “Right now, I think we are pretty well prepared to handle everything through to 2015 or 2016. But there will come a time, if you're thinking about highly autonomous driving, when you need more capacity around the world, so we have to think about how that will work for us in the future.”

Autonomous cars have added a new dimension to the number and type of automotive data requests. There is growing industry acceptance that, from 2020, we will see cars with some autonomous driving capability on our roads. This will require considerable on-board and off-board computing power. Müller believes the company has sufficient server capability for the ConnectedDrive services that BMW currently offers; however, when it comes to autonomous driving, he says changes and new technology will be required to support such functions

“For BMW, both [autonomous driving and the driving experience] are important. First of all, if you would like to drive yourself, you should have a great car with great acceleration and great handling for real driving pleasure. On the other hand, there are situations, maybe in heavy traffic in the morning, when you don’t want to drive yourself, and you would like other solutions.

BMW is leading edge in technology. You will see something in the future from us in autonomous driving.”

At the GENIVI Alliance’s recent event in San Diego, Open Automotive 13, John Ellis, Ford’s Global Technologist and Head of the Ford Developer Program, called Ford an IT company.

Look at the IT activities at some of the major OEMs, and his comment might soon apply to the broader automotive industry. Contract IT staff are being hired as salaried staff; IT departments are being moved from the backroom into the customer-end of the business; and OEMs are beginning to see data centres as profit centres rather than cost centres.

Centering on data

GM opened its first in-house data centre in 2013 in Warren, Michigan, with an investment of US$130m; construction of a second US$100m data centre expansion in Milford, Michigan began in the summer of 2013, and is expected to be operational by 2015. The investments are part of GM’s 'digital transformation' strategy, designed to give the OEM full control of its IT by consolidating its 23 previously outsourced global data centres into two by 2015.

Air flow, temperature control and energy consumption are key issues for any data centre. GM’s investment has been designed to reduce the OEM’s enterprise IT infrastructure energy consumption by 70%, and the OEM’s focus on environmentallyfriendly construction at the GM Warren Enterprise Data Center resulted in a LEED gold award. Likewise, Honda’s North American Data Center in Longmont, Colorado is able to use outside air around 40% of the time to cool equipment.

BMW and GM are investing heavily in data centres, but they are not alone in making major IT changes. Others include Ford Motor Company, which is in the process of consolidating six enterprise data centres into two; and Audi, which opened a new 9,000 square metre data centre at its Ingolstadt, Germany facility in 2012.

Nissan has promised to launch self-driving cars by 2020. Daimler’s Dieter Zetsche was driven on stage at the 2013 Frankfurt motor show (IAA) by an autonomous car, and MercedesBenz has run the S 500 Intelligent Drive autonomously over 100km through normal traffic in Germany. Despite testing such technology, BMW, an OEM which prides itself on the driving experience, has so far been quiet on plans to launch autonomous cars.

48 | Megatrends

www.awmegatrends.com

Always supporting

Support You You Can Depend On. For Euro 6, Cummins’ engineers are working as part of vehicle manufacturer’s teams to deliver both environmental and operational benefits. The result is optimum levels of performance and running costs with near-zero emissions. In service, our trained technicians will provide responsive support for all Cummins Euro 6 powered vehicles, maintaining the highest levels of availability. This makes Cummins your natural choice for Euro 6. Visit www.cumminseuro6.com for more information.

THE AUTOMOTIVE ARCHITECT

The automotive architect In this exclusive interview, former Formula 1 designer Gordon Murray discusses his innovative iStream manufacturing process, industrialised housing and supercar dreams Rachael Hogg

G

ordon Murray’s ten-year-old smart Roadster sits in pride of place outside Gordon Murray Design (GMD) in Shalford, Surrey. The head of the company, famous for designing and building the McLaren F1 road car muses that he has never been able to buy anything better, in terms of driving experience and relatively low cost. But all that could now change, thanks to Gordon Murray Designs’ unprecedented new iStream manufacturing process.

The automotive industry has always been evolutionary, but iStream really is a revolutionary process. “We still make cars today exactly the same way, yet we've got a

50 | Megatrends

lot more automation and efficiencies but we still, fundamentally, get a sheet of steel, stamp some panels, weld them together, paint them, put the bits on and that's your motor car,” says Murray. “So this is very disruptive technology. It's tearing up the rule book and starting again.”

At the 2013 Toyko Motor Show, after months of speculation, the first company went public about its partnership with GMD and its plans to utilise iStream. That company was Yamaha.

Not traditionally associated with the passenger car industry, Yamaha presented its new Motiv.e city car alongside images of seven other potential vehicles and the first

look at the iStream process, which had until that point only been shown under nondisclosure agreement to potential customers.

Gordon Murray has been working on iStream since his days at McLaren. “I set myself a task while I was still at McLaren of coming up with a composite system of materials and a way of industrialising that and fixing the point loads to it, to achieve the two main advantages, which were to reduce weight and reduce capital investment.” Most of Murray’s McLaren team subsequently joined him at GMD, which he describes as, “Really just the same team with a different name on the door.” www.awmegatrends.com

THE AUTOMOTIVE ARCHITECT

There are a number of direct and indirect benefits of the iStream manufacturing process compared to the traditional method of metal-stamping - the first of which is weight. Generally, OEMs save weight by adding more money, switching from steel to aluminium, magnesium casting or carbon fibre - all very expensive options. iStream, however, employs a separate assembly process: major components, the powertrain, wiring harnesses, brakes and suspension can be directly fitted onto the chassis before the pre-painted body panels are fitted near the end of manufacturing.

Flexibility

iStream uses manipulated tubes and a monocoque panel which are both low cost, but also allow flexibility. “If you want to plan to make a car in three different lengths or two different widths, it's largely just rewriting software,” says Murray, “because the honeycomb panels are very stiff and stable, we can create great big openings in the structure, which means that we can build one motor car that will take several powertrains; with stamped steel it's very difficult to do that. Normally a hybrid car and a petrol car are two different architectures.”

A side advantage of iStream is durability.

Murray explains, “With a continuously bonded structure like iStream, you have something that's much more durable. So, not only will it not start rattling and squeaking, but it will retain its crash-ability for much longer into its life.”

The vehicle is therefore much safer and “you get a much stronger, stiffer vehicle. Or safety cell, like a racing car. I'd like to see many more cars out there being safer and more efficient,” says Murray. The structure also offers other perks such as the reduction of vibration and harshness, and a structure which is “self-damping”.

One limitation of the iStream process is capacity. While “a typical iStream model is 30,000 to around 120,000 a year,” if GMD was approached by someone who wanted to www.awmegatrends.com

mass produce 400,000 low-cost vehicles a year, but was not necessarily interested in weight-saving, “you wouldn’t entertain iStream.” Yet there is also a limitation at the other end of the scale. Murray suggests that if someone was making less than 10,000 vehicles, it would be easier to hand-make, “like the specialist sports car companies do.

But those are very expensive products.”

Initially GMD perceived problems with manufacturing larger vehicles such as B- and C-segment cars due to the use of plastic panels.Typically, the outside iStream panels are not part of the monocoque and generally injection moulded plastic would be used.

However, as the size of a vehicle is increased, the flush and gap quality is more difficult to control within a plastic panel.“We're working on a bigger product now which has got aluminium skins on the outside - nonstructural, but aluminium,” says Murray.“They get away with that product. So a limitation we thought was there probably isn't any more.”

Two seats to three tons

While there has been much talk about iStream being used to create smaller vehicles, GMD is working on an entire range of products, from a two-seater city car, to a three-and-a-half ton truck. And, as Murray says, “We're a bunch of designers, so if a customer comes along with a product we think could be suitable, we tend to come up with solutions for them, because that's what we do.”

So what is the potential for iStream over the coming years? The iStream relationships are long-term, so the business would only need two or three contracts to ensure success.

However, having made a conservative scout around the world - except in China - Murray is positive that GMD could sell 35 licences.

In established markets, iStream offers OEMs something to combat emissions legislation fines. “It's an absolute antidote for fuel consumption and CO2 in established markets, and it increases levels of safety while it's saving weight,” Murray says proudly.While OEMs are exploring multi-niche vehicles, wanting to create a variety of powertrains, iStream can achieve this on the same production line and on the same platform. “Who is going to win the powertrain race? Or the fuel race? People don't really know.And, with all that uncertainty and change, we can supply a very flexible solution to somebody that doesn't quite know who the winners are going to be, rather than investing £2bn (US$3.2bn) in a new stamped steel platform and be stuck with that.”

For emerging markets, the main benefit of iStream is increased safety.“There's a big push for Global NCAP to bring up the safety levels in developing countries and developing markets.And just by its nature, iStream will be a much safer vehicle in those markets,” Murray comments. The capital investment is also lowered and gives manufacturers the chance to “dip a toe in the water” by spending a fraction of the cost of a metal stamping plant.

Megatrends | 51

THE AUTOMOTIVE ARCHITECT

“

I've probably got one more supercar left in me

Crossroads

The turning point for GMD was 2008.When the business opened in 2007, there was huge concern about how the team would convince OEMs of the benefits of iStream. However, fuel prices rose, the financial crisis hit and, Murray says, OEMs finally sat up and paid attention: the old method of producing a car for ten years with two variants and recouping the investment back in six years no longer worked. People stopped buying cars, the attitude of younger buyers changed and brand loyalty was nowhere near as strong.

Although GMD did not expect to develop partnerships with more start-ups or those not involved in the automotive industry, like Yamaha - because “iStream gives a newcomer a chance to leapfrog OEMs, so for them, not only are they catching up, they have a structure that’s lighter, stiffer, more durable, safer and more flexible from the point of view of product strategy” - the opposite happened. GMD is now working with seven OEM projects and two start-ups, which Murray cannot currently discuss further. “It's so frustrating not to be able to talk to people about it, but it's entirely a customer programme and it's entirely up to the customer when they go public.” He did however hint that there may be one or two more partnership announcements in 2014.

”

While interest from OEMs may have been surprisingly high, Murray says GMD has “a full suite of tools, to help somebody get from an idea on a bit of paper to the cars coming off the line. We could very, very simply make an Apple or a Google or a Sony or anything like that. And because iStream doesn't need the massive investment that stamped steel does, the risk - there will always be a risk - is but a fraction of what it would be if they tried to do it any other way.”

Gordon Murray has consistently managed to turn his personal ambitions into successful businesses and found just the right gaps in the market. Most recently, his attention has been focused on the “huge gap in the market, in Europe in particular, for a low cost simple sports car,” similar to the smart Roadster, “a car delivered in fun,” but better connected. iStream would be perfect for this, says Murray. “Roadsters are notoriously difficult to make stiff and strong enough with no roof.

With iStream, once the monocoque is bonded into the frame, we can have all the strength, if we want to, in the lower part of the car so it's absolutely perfect for a little lightweight roadster.” He was keen to stress that this would not be another Porsche Boxster, but something most people could afford as a little car - and fortunately, he already has some customers talking about such a vehicle.

Planes, trains and automobiles

Murray also believes that iStream could be used to manufacture industrialised housing, planes or railway coaches, but was keen to stress that GMD’s main focus would remain in the automotive sector because it is “what we know”. In fact, the company has already been working with the Brazilian government on applications across other sectors. Murray says, “The one that particularly interests me is industrialised housing; I think there's a lot of future there.”

In Brazil particularly, GMD plans to look at the materials and waste produced there; see what composite technology could be applied, and how resources could be used effectively. “We need to look at how you can take a country's waste, or by-products from production, and turn them into something useful. Brazil's a fascinating market. Outside China it's probably the biggest opportunity for growth and new ideas and concepts.”

With several other projects already well advanced, including one ahead of Yamaha, iStream products will hopefully be seen on roads in the next few years, perhaps even as early as 2016, says Murray. “The next big hill to climb is to actually get some signed contracts and iStream products on the market. My next target, before I get diluted with houses or aeroplanes or anything else, is to see people driving around in iStream vehicles and as many as possible, safer, lighter, better handling, all the benefits.”

For Murray, a man who constantly craves a new challenge, what will be next after he successfully gets iStream vehicles on our roads? “There's another personal ambition.

I think I've probably got one more supercar left in me. When we've got iStream up and running, I might take a selected bunch from here, because I've still got a lot of people here that did the McLaren F1 with me. We were such a powerful team and we still are.

So I think I’d like to do the supercar, and it won’t be anything like these 1.5 ton complex things out there. It’d be another bit of art really.”

52 | Megatrends

www.awmegatrends.com

I N N OVAT I O N I N T H E A I R , N O W S TA N DA R D O N T H E G RO U N D. Garmin, the global leader in satellite navigation, now extends our aviation and marine OEM engineering expertise to the automotive industry. From simple removable solutions to full vehicle infotainment systems and rear seat entertainment, Garmin can develop and manufacture a system that meets your specifications. Garmin software and hardware infotainment platforms not only provide best-in-class navigation but can also include audio and climate control functions, digital instrumentation and smartphone integration.

To learn more about Garmin solutions customized for your business, contact your Garmin Automotive OEM Sales Rep, visit Garmin.com/infotainment or email Mkt.Autooem@garmin.com

Š2013 Garmin Ltd. or its subsidiaries

LONG TERM EVOLUTION

Looking down the road: the LTE-Connected Car Olivier Pauzet

M

ajor brands such as Audi have already recognised that LTE is the future of mobile connectivity, by planning to bring LTEconnected vehicles to market as early as 2014. With improved range and connection speeds up to 100 times faster than 2G and 3G, LTE is set to enable unprecedented applications in the vehicle.

However, from an engineering perspective, LTE still presents some significant challenges.

To design an effective LTE-connected car system, the industry needs to understand where LTE networks are today, where they’re going and what attributes in-car systems should have to bridge that gap.

With the ability to connect cars over LTE networks - effectively bringing wired broadband speeds to the wireless automobile - a wide range of new applications will become available in the vehicle. Services like Internet-streamed video, music and even video conferencing (used from the passenger seat or backseat, of course) are just the first that spring to mind.

54 | Megatrends

These applications will benefit not only from the supercharged capacity and range of LTE, but from the much lower latency of LTE systems - latency often being the most critical factor in delivering a high quality-ofexperience to the user. But the potential for LTE-connected car applications goes beyond entertainment and consumer communications. For example, superfast communications could enable new safety services, such as the ability to stream video of road conditions recorded from other vehicles in real time, or receive alerts when cars ahead stop suddenly. In theory, the LTEconnected car could become a portal for all sorts of new services.

These, and other possibilities, are generating tremendous excitement across the industry.

But, whilst we may be close to realising the potential of LTE-connected applications, some important barriers remain. The biggest obstacle is the fact that it will be a while before LTE coverage catches up with LTE devices and applications. Operators around the world are busy deploying LTE networks

and, according to the Global Mobile Suppliers Association (GSA), 456 operators in 134 countries are now investing in LTE, making it the fastest-growing mobile system rollout in the history of the industry.

Sporadic coverage

For a while to come, there will be plenty of regions where LTE is restricted to high-density pockets of coverage, separated by large areas of 3G or even 2G service.Vehicles frequently cross borders and therefore may need broad roaming capabilities to avoid losing connections.Thus an LTE-connected car needs advanced multi-mode capabilities, - this means radios for 2G, 3G and 4G technologies, usually in multiple band combinations.

These multi-mode systems also need to be intelligent. It is not enough just to have different cellular radios. The LTE device needs to be smart enough to know which one represents the best possible option at any given moment and as the vehicle travels at speed. www.awmegatrends.com

LONG TERM EVOLUTION

Another complexity that designers need to address is how to maintain a good connection, even with less than optimal coverage. Under the best circumstances, LTE requires a more sophisticated antenna system than 3G and 2G. LTE uses multipleinput multiple-output (MIMO) antennas, for which antenna placement, coherent distance (i.e. separation) polarity and other factors are extremely important.

In many regions, LTE operates at lower frequencies, below 1GHz. The ability to deploy LTE at lower frequencies is a major benefit for operators, as it provides improved range over most 3G services, and allows operators to ’re-farm’ their existing 2G or 3G spectrum and cell sites for LTE.

The flip-side, however, is that lower frequencies tend to be much noisier. So, not only do LTE system designers have to address more complicated antenna requirements, but they also have to address them in a more difficult environment. In addition, since many operators are rolling out LTE services using their existing cell sites, the placement of those sites may not be as ideal from a coverage standpoint as a cellular network built from the ground up for LTE. Put it all together and you have a big warning sign for LTE connected car designers: fail to devote the proper time and resources to antennas and your users will absolutely notice.

Beyond these considerations, it is important to understand that, while LTE is clearly the technology of choice for next-generation cellular services, it is still very much an evolving technology. For example, attention is already beginning to turn to the expansion

www.awmegatrends.com

of LTE services, including LTE Advanced, to deliver even faster speeds.

What this means is that you cannot build a solution designed specifically for LTE networks as they exist now.You need to build in flexibility to adapt the solution as LTE technology itself continues to evolve, in addition to how the coverage of LTE services changes over time market by market.

Building a better connected car

Clearly, some challenges remain before we will see the full-scale vision of the LTEconnected car realised in every driveway. But the promise and momentum of LTE are too great to ignore.

As system designers evaluate LTE devices and vendors in the coming months, there are several words of advice they would be wise to adhere to: choose cellular vendors with proven expertise building LTE, 3G and 2G devices that operate successfully in realworld multi-mode environments; look for wireless providers with expertise in the often overlooked field of antenna design and

testing, and that have proven successes delivering different types of devices - USB modems, hotspots, networking devices - in many parts of the world; seek out programmable wireless solutions with operating system-like capabilities, if not actual lightweight operating systems. You will need this headroom to keep pace with evolving requirements; select wireless solutions that can be maintained and upgraded over-the-air to always keep communication devices up to date; choose partners who have close relationships with operators in markets around the world and experience certifying solutions for multiple networks. This expertise will be extremely important as you shepherd your system through the sometimes difficult certification process.

There can be little doubt: LTE is the future of in-vehicle connected services. By making smart choices now, system designers can be confident that their solutions will fulfil the full promise of the connected car - in 2014 and beyond.

Olivier Pauzet is VP of Marketing and Market Strategy at Sierra Wireless.

Megatrends | 55

3 Streams / 48 Expert Speakers / 350+ Delegates

March 18th 2013,

The Henry, Dearborn, Detroit, Michigan

Tickets from $Free!* The third annual Automotive World Megatrends USA summit will feature three separate streams focusing on today's hottest automotive topics: Fuel Economy & Emissions Reduction, eMobility and Connected Vehicles.

Cutting-edge topics, expert speakers and fantastic networking opportunities will once again make this a must-attend event.

Speakers confirmed so far include:

Jim Nardulli, NNG

John Traynor, BSquare

Mike Tinskey, Ford

Mike Bauer, The Carpage

Bruce Belzowski, University of Michigan

Richard Wallace, CAR

Lisa Whalen, Frost & Sullivan

Dave Hurst, Navigant

Andy Gryc, QNX

John Waraniak, SEMA

Joel Hoffmann, Intel

John German, ICCT

Matt Jones, Jaguar LandRover

Kyle Walworth, Teleca

Dr Ann Marie Sastry, Sakti3

Stephen Tarnutzer, DGE

Meridith Guerriero, Google

*Automotive World Single-User (max 1 ticket) and Company-Wide (max 3 tickets) Site License customers are eligible for free passes to this event. Employees of vehicle manufacturers are eligible for free passes to this event (max 5 per company).Full ticket prices can be found at http://megatrendsusa.automotiveworld.com/register Terms & conditions apply.

Sponsors

Can tech companies build cars?

CE MEETS OEM

Martin Kahl

T

he idea of a non-traditional automotive company launching a car is something that delights analysts, worries the traditional industry, and is treated by the public in equal measures of fascination, concern and apathy.

For years, there has been talk of Apple launching an ‘iCar’, something that Steve Jobs reportedly dreamed of doing. The company has been quiet on such an idea for some time now, but it is openly developing and launching in-car technology, for now within the area of infotainment. In late October this year, Berenberg analyst Andaan Ahmad suggested in an open letter to Apple that it should buy the EV manufacturer Tesla. Music to Elon Musk’s publicity-conscious ears, but could the car company - once referred to as the Apple of the automotive industry - really end up becoming Apple’s offering in the car world?

Or might Apple try a more organic approach, www.awmegatrends.com

perhaps using a contract manufacturer to build its self-developed cars?

Another household name with the automotive industry firmly in its sights is Google, which has for some time been testing ‘self-driving cars’ in Nevada, guided by its own Google Chauffeur software.Whilst these cars have to date been heavily-equipped versions of mainstream cars like the Toyota Prius, it is not inconceivable that Google would develop its own product. Again, production could be outsourced to a contract manufacturer, like Valmet or Magna Steyr, or to a traditional OEM with spare production capacity - and there are certainly many such opportunities in Europe at present.

Mercedes-Benz is the oldest car brand in the world and, in 2011, celebrated its 125th anniversary. Head of Mercedes-Benz Cars Dr

Dieter Zetsche believes that the notion of a non-traditional car company entering the mainstream automotive industry is far from inconceivable.

“We have seen industry examples where exactly that has happened. Take steam locomotives being replaced by diesel and then electric locomotives: not a single manufacturer providing the first technology was around when the new technology came around,” says Zetsche. “It would certainly be stupid to believe that because of all the know-how on your side, nobody else from outside the industry can ever challenge you.

This is not our position and I think it can be proven by the fact that we have invested in Tesla, for instance. And I very much appreciate this tension and complementary action between a start-up and the oldest auto manufacturer.”

Megatrends | 57

CE MEETS OEM As well as investing in “a start-up”, Zetsche says that Daimler takes seriously any potential challenges from an industry outsider, and is working hard to demonstrate that it can develop industry-leading technology in-house. Look at what Daimler has shown with the S 500 Intelligent Drive, a modified version of the S-Class, he says.

“Using the production car’s existing sensors, just a few more of them, with some storage and some software and algorithms, and the brains of our engineers, we drove 100km [autonomously] through normal traffic nobody else has done that. And me driving on stage [at the 2013 IAA] from the rear seat is not what the other car manufacturers will do tomorrow either.

“So, including Google, I think we are in a very, very competitive position there. I would dare to say we are ahead of everybody else.”

Daimler’s 4.3% stake in Tesla illustrates how a traditional OEM might respond to challenges from ‘outsiders’. Indeed, Daimler’s Chief Financial Officer, Bodo Uebber, recently indicated Daimler’s intention to increase its co-operation with the electric car company.

Supplier perception

But how would traditional automotive suppliers respond to the idea of delivering not to BMW or Daimler, for example, but

58 | Megatrends

instead to a non-automotive company that might launch a car in the near future? The European organisation which represents automotive suppliers is Brussels-based CLEPA. Its President and Chief Executive is Jean-Marc Gales who, before joining CLEPA, was head of brands at PSA Peugeot Citroen.

“We are not yet at that stage, because such a company would probably operate by dividing competencies,” says Gales. “BMW has the competencies, for example, for the cars. Suppliers have the competencies for automotive systems. And [a technology company like] Google provides the software and the interconnectivity. Probably the smartest way of moving ahead would be through alliances and joint ventures. I don't see a company like Google building up all the necessary competencies and factories, but I see a lot of scope for working together on very defined areas. I think that's how it's going to develop, because I don't know any venture capital company that really wants a large manufacturing plant.”

Gales is convinced that technology companies will grow their automotive industry presence, and that a company like Google could eventually host a stand at an international motor show like the Frankfurt IAA. Google did not have a stand at the 2013 IAA, something which surprised him. “Look at the development of stands at the IAA: there are a lot of electronics companies, and

two years ago suppliers had about 300 stands. This time it was 370. It's really growing. There's a lot going on, with many new companies emerging, and there is considerable new venture capital going into those companies.”

In addition to potentially bringing new - and disruptive - products to market, companies like Google are conducting research in areas that perhaps the mainstream automotive industry is not. “I'm very interested in that,” says Delphi’s Chief Technology Officer, Jeff Owens. “I think they're really moving the mindshare space of what could be possible, and I'd like to work with them to help figure it out, or learn as they learn what the opportunities are,” says Owens. “They're taking an incredible amount of data, and it would be great to learn even a portion of what they're learning as they figure out what works and what doesn't work, the use cases that are appropriate, the use cases that aren't appropriate.And if that means we're supplying product to them, I'm good with that.”

From a supplier’s perspective, could Owens imagine a time in the future when Delphi might supply to a non-traditional vehicle manufacturer? “Well, we do supply to Tesla but that is at least a traditional vehicle company with a non-traditional idea. We're working with Google on driverless vehicles, as are many of our colleagues. Our radar

www.awmegatrends.com

CE MEETS OEM

“

It would certainly be stupid to believe that because of all the know-how on your side, nobody else from outside the industry can ever challenge you

”

Dr Dieter Zetsche, Head of Mercedes-Benz Cars sensors, for example, could bring value to them [Google] in terms of how they satisfy their environmental stance. But yes, I don't know if they will be a car company.”

Face value

Success and failure in the automotive industry, perhaps more so than any other industry, is built on brand reputation.Anyone coming into the automotive industry from outside would need sufficient brand firepower to compete with well-established names. Myles Kovacs, President and Co-founder of DUB magazine, sees cross-industry collaboration as the way forward. “The future of automotive is a computer with wheels, so the computer companies should lead this industry in the

future, if they want to and if they’re dedicated to do it. The collaboration between a powertrain company and a computer company would be the ultimate collaboration.”

Sascha Gommel, an analyst at Commerzbank, agrees. Rather than building their own cars, Gommel believes technology companies like Apple and Google “will just need prototypes to develop and test their software and services. I think it’s more likely that they want to sell their software and services to the established OEMs.” The idea of cross-industry collaboration is one with which Daimler also appears comfortable: “We will be fine to cooperate with Google,” says Zetsche.

Interestingly, it is in the area of self-driving cars that ‘industry outsiders’ currently appear to stand their best chance of success.

Although Daimler has launched self-driving technology, it has done so in its top-end SClass, well out of the reach of most car buyers. While GM and Nissan have both confirmed plans to launch autonomous cars by 2020, Google has been running its selfdriving technology in a Toyota Prius, showing that such technology can be put into mainstream cars, and that it is already available, at least in prototype form.

It is for this reason that Mercedes-Benz is targeting technological leadership in this area. “We have been pursuing, for decades, a vision of accident-free driving,” says Zetsche.

The focus for safety technology has shifted from passive to active safety, and “the new SClass has taken us very close to the execution of this vision already,” he notes.

“All these assistance systems, as a side product, provide autonomous driving. So it was not our prime target, but it goes along with our objective of accident-free driving,” and underlines “our brand's safety superiority over any other car brand.”

Autonomous driving, he says, shows Daimler’s capability “where again we are far ahead of anyone else”, and helps “increase the perception of the brand’s innovative capabilities”.The S-Class has famously been the car on which many technology firsts have appeared, before trickling down to the mainstream market.

www.awmegatrends.com

One of Daimler’s close industry partners is the Renault-Nissan Alliance. The two companies are exploring numerous collaborative projects, including, at the high end of their ranges, a likely joint manufacturing project that is expected to see an Infiniti model using the Mercedes-Benz MFA platform; at the small-car end, Renault will build a four-door smart for Daimler.

Daimler has shown it can make self-driving cars; as mentioned above, Nissan has said it plans to launch a fully autonomous car by 2020. The economies of scale in manufacturing and technology development are all too apparent.

Back to the more general subject of nontraditional companies selling cars: whilst the industry prepares to accommodate - if not welcome - outsiders, those outsiders have much work to do to lay the foundations of a successful non-traditional car company business model. Tesla appears to be succeeding where the likes of Fisker and Coda failed, but as Delphi’s Jeff Owens said, it is doing it in a fairly conventional way.

Consumer reaction to the idea of outsiders selling cars varies from, “They don’t know anything about making cars” to curious interest. A recent report by KPMG concluded that consumers would trust technology companies like Google and Apple over mass-market OEMs such as Nissan to produce an autonomous vehicle. Asked to rank their trust in companies producing an autonomous vehicle, and their willingness to drive one, respondents scored Google and Apple highest, closely followed by MercedesBenz, with Nissan and Chevrolet trailing lower down the scale. But ask consumers whether they would trust a technology company or a traditional vehicle manufacturer to make a family hatchback or a high performance sports car, and the answer would probably be very different.

Megatrends | 59

AUTONOMOUS VEHICLES

Who should be driving your car?

Prana Tharthiharan Natarajan

D

espite a strong start, the National Highway Traffic Safety Administration (NHTSA) has declared that the permissions which prevail in Nevada, Florida, and California for automated vehicles will only be applied for testing purposes and none other, until proven completely safe. For the same reason, European legislation - and the various disparate versions in each member state - has thus far not taken a call on what sort of automated vehicles can be permitted on public roads for personal use. Although the purpose of the automated driving initiative is aligned with taking road safety to the next level, the biggest nightmare for all stakeholders involved - OEMs, suppliers and legislators alike - is the accident liability in the

60 | Megatrends

event of an automated vehicle colliding with a pedestrian or another vehicle.This could be caused by various factors: glitches in various ECUs, false-negatives (missed warning), hacking and related cyber-security threats, wrong override by driver, and failure to recognise a corrective override command from a driver are just a few such examples.

As a matter of fact, these convolutions have already delayed OEMs from launching automated vehicles. Some, including Mercedes-Benz and Audi, have developed production-ready driverless cars, but have chosen to disable the functionality due to the legislative and real-world imperatives.

Consumer appetite for vehicle automation

can be classified in terms of what extent of vehicle automation they may digest. When offered freebies worth a few thousand dollars, some consumers opt for infotainment features, some for safety, others for extended warranty, while another set of consumers prefer a mix of all of these. In the most general case, it is only logical to state that a large fraction of people will still like to drive their cars, letting it drive itself only under certain conditions - and one can apportion anywhere between 10-90% of driving time to the term ’certain conditions’.

The Mercedes-Benz E- and S-Class vehicles of 2014 have proven that they can drive themselves in adverse conditions without the www.awmegatrends.com

AUTONOMOUS VEHICLES

leveraged to leave no stone unturned. At the risk of sounding too generic, real-world challenges require smarter in-vehicle systems - both for ADAS and connectivity - to make the vehicle see, feel, and decide like a real driver would. A classic example of this would be speed-bumps and potholes: while speedbumps and ramps can be recognised with a smart forward-looking camera aided by radar or ultrasonic sensors, potholes, an open manhole or any other dug-up area in the path of the vehicle may not occur to the vehicular sensing systems so very readily.

Google it presence of a physical driver inside. BMW's automated vehicle will also ensure that you are pulled over to a hard-shoulder if you faint or fall asleep while behind the wheel.

Volkswagen's Temporary Auto Pilot (TAP) expects the driver to pay complete attention to the road, even if not actively driving the vehicle, expecting the driver to take over at any point, when prompted. Audi's piloted www.awmegatrends.com

driving feature will let you get out of the vehicle, right in front of the lobby at a hotel, while you can use a smart-phone app to park and retrieve it. The same feature is extended to a piloted driving mode, when the driver hands over the driving tasks to a virtual copilot, i.e. the vehicle itself. Most of these innovations can be done if state-of-the-art ADAS and connectivity features are

Much has been said and written about the Google Self-Driving vehicle project.

Impressive, as it is, for a non-automotive participant to gain sufficient attention for a project outside of their core competence, one would wonder whether consumers would trust the likes of a Google in any manoeuvre other than navigation, app-based POI information etc. Although traditional OEMs such as BMW, Audi, Mercedes-Benz, Megatrends | 61

AUTONOMOUS VEHICLES General Motors, and others are yet to make a firm statement on the confirmed launch of such vehicles at a decided price, the industry is left wondering what exactly Google is doing here. Traditional OEMs are intent on semi- or highly-automated modes while Google is going all out to create vehicles that do not need a driver inside.

For Google, it is clearly about connecting the dots. They have connected navigation and location-based services either through Google Now and Google glasses. They have the ability to liaise with channel partners to put the internet into cars and ensure that occupants spend more time using some sort of Google application. All it takes is a vehicle that can drive itself so that people maximise their time using Google's other products.

Take the example of Google Glasses: wearing them while driving is a punishable offence in the UK. So Google is trying to shift the driving responsibility from the driver to an automated driving module, so that the human driver is downgraded to an occupant of the vehicle, free to use Google Glasses, at least in the eyes of the current law.

Legislators and OEMs may be trying to ensure that self-driving vehicles reduce the probability of road crashes, but Google, on the other hand, is looking at the same as a potential business opportunity.

The best business case for a Google vehicle is to partner with an OEM that does not have an action plan to launch an automated driving vehicle in the near future, or with a manufacturer that does not boast the best ADAS and connectivity systems. Google's solution should be a packaged bundle that takes a two-pronged approach in both active safety and in-vehicle connectivity. One possibility is to fit an optional Google-X add-on to a capable vehicle model, on the condition that the OEM would avail of an infotainment package from Google. The much ado about software-over-the-air and firmware-over-the-air need not result in nothing, if this proposition is a reality. Thus, the idea would be one of Google making Android-like automated driving modules,

62 | Megatrends

compatible with a specific list of cars.

Should all pieces fall into place, the future will see a set of OEMs who offer proprietary automated cars and the likes of Google fitting certain other cars with an automation module and Google-powered infotainment unit, lest the occupants be bored to death.

No one will be surprised to see Apple entering this space, considering the popularity of the iPhone in markets where automated cars are likely to be launched first. Indeed, the computer giant has already established an automated vehicle research arm.

Google and Apple are two of the biggest names to have revolutionised digital media and now both are likely to provide an ‘infotaining’ environment on the move. In the automated driving space, much like their electronic advent, one can expect Google to be hardware-agnostic, creating adaptable platforms - perhaps even open source whereas Apple may be looking to leverage its technical prowess in sleek hardware development and purpose-built software.

Capable driving, responsible driver

‘Can I order a vehicle online and expect it to drive itself to my garage?’ has been the question in the minds of many consumers.

Such a scenario may not be possible in the foreseeable future, but what one can expect in the next five years is a vehicle which is capable of driving itself but still holds the driver responsible for the driving task. Fullyautonomous cars do not require a human to be present inside to drive the vehicle. Such a vehicle will then not need the same architecture as a vehicle of the present day: steering wheel, brake-pedal, throttle, gearshift etc., can all be removed and the vehicle would have more space for comfort, convenience, and infotainment features throughout. And if such a vehicle would not need a driver inside, should there be one outside? This is likely to pave way for a whole new business model for driving-as-a-service.

Similar to software-as-a- service, which works on a thin-client mode, hardware at a

remote site needs to be compatible only with the interface rather than capable of running the background codes - thus vehicles of the future may only need to provide inputs to a driver seated outside of the vehicle.

But what is the business case for such a model? Governments are still not sure if they should allow autonomous vehicles for public use. Consumers themselves are divided on whether they would feel comfortable making their child sit in a vehicle that drives itself. While insurance companies should ideally support the idea of automated driving - as such vehicles are lesser likely to be involved in a crash - there is no single definition of automated vehicle architecture or a set of type-approved vehicles that are automated. The overall sentiment is that human drivers are more trusted by one and all, rather than machinevision driving a vehicle. In such a case, as mentioned above, the driver need not even be present inside the vehicle to drive it.

Stakeholder cooperation needed for such a scenario would include road-operators, infrastructure providers (smart-grid, V2X, among others), telecom operators, telematics service providers, insurance companies, and fleet operators. When these entities come together and help the legislation formulate the most practical and most appropriate set of regulations, we will then have cars that drive themselves, under someone's monitoring.

Even in tunnels, such vehicles can follow non-automated manually driven vehicles, if concerns exist about connectivity losses.

Whatever may be the outcome, there needs to be multiple redundancies such as duplicate telematics boxes, dual connectivity modules and V2X on top of telematics and ADAS, to name a few.

Prana Tharthiharan Natarajan, is Team Leader Chassis, Safety & Driver Assistance Systems, Automotive & Transportation, at Frost & Sullivan.

Frost & Sullivan works with MIRA to study the market and technology for autonomous driving.

www.awmegatrends.com

THE BIG PICTURE

Personalisation pays off (or does it?)

O

ne of the biggest manufacturing trends of 2013 has been personalisation: the Opel Adam, Mini’s offerings and the Fiat 500 are all available with a wide variety of interior and exterior options, so that a driver can make their car truly their own.

Having initially been seen as a something of a gamble for Opel, the Adam has in fact proved to be quite a safe bet. In September, the OEM announced plans to invest a further €8m (US$12.5m) in the paint shop and other manufacturing areas at its Eisenach plant, where the Adam is built.

The additional investment has arisen from the unexpected popularity of the two-tone colour finish on offer: in fact, two-thirds of all orders call for a two colour finish.

The newest Opel was built around personalisation from the very beginning, offering an individualised look for each buyer, with 61,000 exterior variants in total, and nearly 82,000 for the interior.

64 | Megatrends

“Opel/Vauxhall has no history in lifestyle but that’s good because it meant we started from a blank canvas. We could prove that we could innovate and look to the future and not have to change past perceptions,” said Katie Purcell, European Product and Marketing Manager for the Adam, at the Geneva Motor Show in March.

However, not all OEMs believe that personalisation is best: Kia for one is bucking the trend, and opting for functions over fashion.

Speaking to What Car? in October, Yaser Shabsogh, Commercial Director at Kia Motors UK, said that the brand would not be offering a customisation programme because it takes up too much delivery time, and will instead be opting for better technology in the car.

But Shabsogh is clear that Kia is not losing out to models like the Adam by taking a different approach: “We track lost sales, but we have never had an issue because people have said ‘we wanted to do X,Y and Z and we couldn't do it."'

www.awmegatrends.com

THE BIG PICTURE

www.awmegatrends.com

Megatrends | 65

Car sharing: the new proving ground

CAR SHARING

Megan Lampinen

A

s global emissions standards grow ever more stringent, OEMs around the world are scrambling to develop new technology in order to stay competitive - but it is still unclear where it is all headed.

However, a new report by McKinsey, The road to 2020: what’s driving the global automotive industry?, has predicted a rising trend towards investment in electrical and hybrid powertrains, lightweight construction and aerodynamic technologies. No surprises there, as we can already see this happening. But, while EVs could ultimately emerge as the solution to the future mobility dilemma, McKinsey expects it to be a gradual transition, with internal combustion engines still accounting for 90% of car powertrains by 2020. According to McKinsey, ICE development will be prolific, with cylinder deactivation or variable valve timing and lift available at the same time as alternative powertrain advancements.

“As the core future powertrain technology has not yet crystalised, OEMs have to face two challenges: acquiring, developing and managing all the required knowledge; and managing the investments and financial risks behind this portfolio play, given the technological and feasibility risks and consumer adoption uncertainties,” said McKinsey Senior Partner Hans-Werner Kaas.

The report also suggested that car sharing could prove to be a useful testing ground when introducing new technologies to the market, offering customers a low-risk opportunity to become familiar with the next generation of technology. The car share 67 | Megatrends www.awmegatrends.com

segment has already emerged as an established realm for EVs: the Paris Autolib’ electric car sharing programme, for example, now has 40,000 subscribers; Daimler’s Car2Go scheme currently offers electric versions of the smart fortwo in several markets; and in California, Zipcar offers the Honda Fit EV. “Car sharing allows OEMs to divide the required interest per car across a higher number of users,” Kaas explains. “As car sharing is mainly used for local transport within a defined range and usage pattern and, as such, has a higher usage utilisation investments in new infrastructure are predictable and more containable.

“These usage conditions also apply for fuel cell-based powertrains and could open this opportunity. Yet the technology race between different powertrains is not yet decided and leaves the decision on fuelcelled car sharing open.”

Potential

The global car sharing marketplace is evolving rapidly, with increased membership numbers around the world and expansion into new segments such as peer-to-peer. In fact, a recent analysis by Frost & Sullivan on car sharing in Germany, France and the UK highlighted that although the P2P car share market is at present in a nascent stage, it should continue to co-exist alongside traditional car sharing.

The overall market for car sharing, including P2P and traditional systems, has a

tremendous growth prospect: between 2008 and 2012, membership numbers grew more than 90% to 940,000. Frost & Sullivan expects to see continued growth, but only if marketing activities are stepped up.

“There needs to be a lot of promotional activity…to create interest levels which will lead to higher uptake rates of this service,” said Frost & Sullivan Programme Manager Mohamed Mubarak.

Frost & Sullivan maintains that in Europe alone the car share market has the potential to attract more than 15 million members by 2020, “but there is a lot of education and behavioural change amongst consumers’ mobility patterns that needs to take place to achieve such growth,” cautioned Martyn Briggs, Frost & Sullivan Mobility Programme Manager.

The market’s main draw centres on cost and convenience. The leading reason which McKinsey respondents gave for their interest in car sharing was that it was more cost effective compared to owning a vehicle. This was followed closely by the fact that it avoided the hassles of car ownership, and that it was more convenient than public transport.

Despite this, Kaas warned that the “profitability of the car sharing business model is, on average, still challenging, but on the move.

Nevertheless we see more and more applications and pilots, suggesting at least the willingness to further test the viability of the business mode. Ultimately the economic viability depends on well-defined local usage patterns, convenience and ease of use.” www.automotiveworld.com Megatrends | 67

LIQUID AIR

The internal steam engine Rachael Hogg

It took Peter Dearman 30 years to develop his liquid air engine, tucked away in a tiny garage workshop in Hertfordshire, UK. But it only took Toby Peters, the Chief Executive of the Dearman Engine company, a tiny fraction of that time to decide that he wanted in. Not letting his initial excitement get the best of him, Peters took the technology to the University of Leeds to see if the science stacked up. Delighted with the positive results, he and Dearman teamed up and the Dearman Engine Company was born.

How does the Dearman liquid engine work?

That then drives the piston down, which drives the engine. It exhausts the air to atmosphere and recycles the heat exchanging fluid. Peter's invention was actually what Andy Atkins [Chief Engineer of technology at Ricardo] describes as an ‘internal steam engine’ by using this heat exchange fluid.

The clever bit is that by using heat exchange fluid we can integrate the engine with other engines. So although you can use this as a zero emission powertrain for zero emission

vehicles, this is where it becomes really exciting. We can actually integrate it with a diesel engine and harness the waste heat of the coolant loop rather than the exhaust the coolant loop is at 90-100 degrees Celsius and our tank is -196 degrees Celsius.

We can broadly put this alongside a diesel engine, harnessing the waste which could, on a bus, reduce fuel consumption by about 25-30%; 30% of every litre of diesel is lost out of the radiator, let alone what goes out the exhaust.

The basic principle is if you take 710 litres of air and liquefy it, you get one litre of liquid air, which you store at atmospheric pressure.

You just have to keep it cold, at -196 degrees Celsius, you don't have to keep it under pressure. By introducing ambient heat, the liquid air boils and turns back into gaseous air: it expands 710 times and you can use that to drive an engine.

Historically, it was treated like a steam engine: you boiled a tank of liquid air and used the head of steam to drive the engine.

But Peter came up with this very clever idea which was to keep it as a liquid and inject it into the piston. The void at the top of the cylinder just above the piston is filled with a heat exchanger - water and glycol mixed into which a small droplet of liquid nitrogen is injected to get very rapid and instantaneous expansion inside the cylinder.

68 | Megatrends

www.awmegatrends.com

LIQUID AIR The beauty of it is that the actual broad infrastructure for manufacturing, the supply chain, is already in place. This is a piston engine, so you can build the first engine's early development and first commercial deployment using existing supply chains.

And, although we talk liquid air, ‘liquid air’ is changeable with liquid nitrogen; air is 78% nitrogen. And liquid nitrogen is readily available from industrial gases. That means that, rather than having to put in infrastructure, to run a first commercial deployment, you can use the excess nitrogen capacity within the marketplace. There is already a distribution network for liquid nitrogen transporters all around Europe, because it's used in many processes. You'll find it at hospitals, factories, everywhere.

Would you say that is one of the main benefits of liquid air EVs and hybrids?

We can also use it for cooling. If you think of the massive amounts of refrigerated vehicles on the roads, about 15-20% of the diesel consumption is to drive the cooling unit. We can use the liquid nitrogen as a far more efficient and zero emission way of providing the cooling, thereby reducing the diesel consumption in towns.

Does the engine work better as a liquid air-diesel hybrid, or are you planning to launch 100% liquid air engines?

We’re doing three applications, starting off with the cold and power engine: we've got a government grant and are working with MIRA on air products in Loughborough University; we will have a test vehicle operating next year. We can make significant savings on diesel consumption and have zero emission cooling. Equally, modelling shows that it's quite cheap, so it's got an economic case as well as an implemental case.

Application number two will be a waste/heat recovery engine alongside a diesel: we're starting work on that and see it going on to test beds in 2015. So it's not a case of either/or. We're looking at all three because we think they are an opportunity. We're not saying this is a silver bullet, we're realistic. I'm not saying we're going to be driving around in passenger vehicles in the next ten years driven by liquid air.

We do think that the zero emission application has some interesting off-road www.awmegatrends.com

markets - mining vehicles, forklift trucks, those sorts of applications, which are still very big markets. But the waste/heat recovery, if you look at buses, heavy goods vehicles, is very interesting. In Hong Kong, 25% of the diesel consumption on a bus is to drive the air conditioning, so if you can replace that with a zero emission solution where you're also harnessing renewable energy to replace the diesel, it becomes quite appealing.

Do you have any plans to invest in Hong Kong or similar markets?

Obviously cold refrigeration and power is a globally growing market. Once you go into Africa or Asia, it's under massive, growing demand both for the transport of food and people. We see Asia as a prime opportunity for this technology.

I'd like to see the UK maintaining the lead.

The government is investing very heavily in liquid air technologies: it has funded a new Centre for Cryogenic Energy Storage at Birmingham University so we've now got a centre for development. It is also funding a number of research projects and our demonstration project. We don't want this technology to slip abroad. Whilst we're absolutely targeting a global marketplace, we want the technology and the manufacturer and the IP very much to remain in the UK. Would there need to be any infrastructure in place to make it work?

Every technology has its own strengths and weaknesses, so I don't think it's a case of this is better or worse, it is different technology.

But I do think that a really big advantage of this technology is that you don't have to invest in infrastructure. We don't have to spend £1 million [US$1.6m] on a different filling system, or whatever it is. Equally, with EVs, if you put too many down then you've got to reinforce the grid.We don't have those problems. I don't want to start coming out and saying that we see liquid air as replacing EVs or hydrogen. We don't. We see it having a role within the whole strategy.

Would the engine require any extra safety reinforcements?

Liquid nitrogen is already actually put on vehicles and used in some instances as a cooling solution so its management and safety is already quite well understood. The engine itself is going to be operating at relatively low pressure. It's not a massively high pressure engine. It's appropriate in diesels. It's all within the bounds of known engineering. Clearly, it's going to be a new engine and it will require certain forms of certification but we're already starting to think about those.

Are you currently working with any OEMs or suppliers?

We're working with MIRA and Air Products on engine number one. We're working with Loughborough University, University of Birmingham, and we are in active engagement with a number of other partners in the project. At the moment, we are building the first commercial demonstrator, to get test data and then really start talking to the OEMs. We're getting a lot of interest from end users because clearly they are the people who, if you can deliver economic savings and environmental values, environmental impact, are going to benefit.

Megatrends | 69

HARMAN´s new, fully connected, scalable infotainment platforms offer a whole new level of driver satisfaction, providing state-ofthe-art technology across all vehicle segments and – together with the HARMAN Cloud Platform – a wide range of innovative services.

A new dimension of in-car sound experience makes infotainment even more enjoyable.

For more Information: http://www.harmaninnovation.com/dashboard/

DEVELOPMENT

Simulators: the final frontier?

Chris Hoyle,Technical Director of rFactor Pro, argues the case for replacing prototypes with simulators to Aaron K Warner

T

he ever increasing number of global vehicle platforms is pushing OEMs to develop and validate a growing amount of variants: although global in a sense, each platform must satisfy diverse regional requirements, and be tweaked to suit local specifications. At the same time, it is getting more and more difficult for manufacturers to get systems integration right the first time.

The potential for simulation to replace hard prototypes has been debated for many years, with the boundaries being rolled back as increasingly sophisticated software and faster hardware continually make new applications feasible. The most tangible aspect of this trend has been the increasing use of vehicle simulators which allow engineers to experience a vehicle virtually, long before a prototype exists.

Unfortunately, meaningful simulation of a vehicle’s dynamic properties has been held back by the evolutionary route taken by the

simulator industry, says Chris Hoyle, Technical Director of UK specialist software company rFactor Pro. “Simulator platforms have their origins in the aerospace industry,” he comments. “However, the rate of turn of even a modest family car in an emergency manoeuvre is much faster than a fighter aircraft.To provide effective Driver-in-the-Loop simulation, we need a different approach with greater emphasis on the speed of response.”

Most simulators are effective for low bandwidth, low frequency applications such as man-machine-interface development and human factors studies, but their high mass and poor latency (the time taken to close the feedback loop) - often exceeding 100 milliseconds - limits the range of application.

To provide realistic simulation of vehicle handling, dynamic safety systems and other high performance activities requires latency of less than 50 milliseconds, with high bandwidth communication between the vehicle model and the road surface model.

The leading vehicle modelling tools used to study vehicle dynamics are already at the necessary level to allow Driver-in-the-Loop simulation. But the missing links have been suitable high-bandwidth software to close the loop quickly enough through the driver, and motion platforms with lower inertia to provide quicker responses.

Using lessons learnt in the highest levels of international motorsport, the latest generation of motion platforms are significantly more dynamic, assisted by offplatform mounting of the entire vision system.

The new approach, complemented by recent advances in software that speed up the visual, aural and other cues to the driver, could usher in an era of unprecedented progress towards the full simulation of vehicle dynamics.

“The potential benefits for the automotive industry greatly outnumber those for motorsport teams,” explains Hoyle. “By supplementing engineering data with subjective ‘feel’ in the early concept stages of a new vehicle programme, years before real vehicle hardware is available to test, better decision making becomes possible, avoiding costly revisions later.”

The complex interactions between dynamic systems, such as passive chassis behaviour, electronic stability control and driver workload management can be studied more effectively, in complete safety, with a level of repeatability not possible in ‘real world’ testing. For example, the evaluation of SUV roll-over stability would be transformed by the freedom to repeat limit manoeuvres, time after time, without variations in tyre grip, cross wind and other conditions.

“Such is the fidelity now available, even the cabin NVH levels of alternative driveline mountings can be evaluated or the effect, on handling, of long term deterioration of suspension bushes,” added Hoyle. “Imagine the improvement in major purchasing decisions made possible by virtual testing of the alternative technologies from competing suppliers, early in the concept stage of a new vehicle programme. The benefits of different solutions could be compared and ranked prior to any hardware investment, allowing a more optimal selection to be made, based on much higher confidence levels.” www.awmegatrends.com

Megatrends | 71

You Y ou ma mayy ha have ve know known n us as NAV NAVTEQ NA VTEQ or Nokia Maps

Intr Introducing oducing HERE, our new br brand and for for the best map in the world With over over 25 years years of of experience experience in location, location, HERE delivers delivers the best, most rreliable eliable maps in the world. Our vision is tto o create create maps for are for life—maps life—maps that ar e richer and more more dynamic than ever you ever and are are built for for how you you live, live, who you are are and what you you care care about, wherever wherever you you go. go. here.com e.com her

Maps for Life Life

COMMENT

Mirror image Ruth Dawson

W

hile most safety technicians are concerned with the road ahead, Tesla is looking back. Ever the innovator, the young OEM is trying to change our view of the car - or rather our view in the car - yet again.

The electric vehicle company wants to build its models without side mirrors, replacing them with cameras and internal displays, making the body more streamlined, and thus more energy efficient.

Removing the side mirrors is no new idea but it has not yet been found in real world application. Several motorshow concepts have featured cameras instead of side mirrors - in fact, the original Model X design had cameras built into the doors with video displays inside for the driver to see the road behind.

However, safety concerns have constantly held back this push towards mirror-less cars: by the time the North American International Auto Show in Detroit rolled around this year, Tesla had conceded that its design did not meet government standards and so the mirrors were back again.

But what benefit can going mirror-less truly have? Several commentators have suggested that side cameras with night vision would do wonders for safety. This writer, however, is slightly more sceptical: surely another vehicle’s lights behind a car are enough to gauge distance and timing. Evidently it has worked well enough until now so introducing a new system seems a little frivolous, especially when cameras are far more likely to develop an electrical fault than a simple reflective surface.

In a world where EV sales revolve around battery life, there clearly is a benefit to www.awmegatrends.com

making a vehicle more streamlined but wouldn’t Tesla’s efforts be better focused elsewhere? Yes, removing side mirrors can give up to a 6% boost in energy efficiency, and seemingly add a little extra style to the Tesla range, but some would say the OEM is better off focusing its extensive resources on the matter of the battery itself.

Volvo has just completed a three and a half year European Union research project in partnership with Imperial College London and nine other participants - none of whom were car manufacturers. The conclusion was a “revolutionary concept” which saw body panels serving as batteries, charged through brake energy regeneration and by electrical grid. Volvo believes that the complete substitution of existing EV components with this technology could cut weight by 15%, boosting overall efficiency at a rate much more impressive than the mirror-less 6%.

That’s not to say that Tesla’s battery system as it is today isn’t impressive, but it just isn’t its style to work the way Volvo is, researching publically, working with other

electronics experts. In the consumer electronics world, companies like Apple, Google and Facebook thrive by being secretive and cool. By adopting a similar tactic,Tesla’s PR department has, some would say, been truly wise: from the beginning, each model has been all about being impressive, and a mirror-free, super streamlined car certainly would be just that. Even its charging stations aren’t just chargers, they’re superchargers. The style, the range, even the name are all very cool.They want to be a cool brand. So it is no surprise that it recently brought Apple’s former Vice President of Mac Hardware Engineering Doug Fields on board to deal with new vehicle development - and to no doubt bring a bit of Apple’s strong image along with him.

However, there is that old adage about looking after the pennies and the pounds will look after themselves: Tesla may be wiser taking a leaf out of a more established OEM’s book, and building consumer confidence through proven technological offerings - or risk going the way of so many tech - and EV - companies and falling out of favour with the masses.

Megatrends | 73

DRIVING THE DRIVING T HE FUTURE FUTURE OF OF AUTOMOTIVE A UTOMOTIVE SO FTWARE SOFTWARE

EB CONNECTED CAR

EB EB Automotive Automotive C Connecting onnecting You You tto oW What hat M Matters atters Addressing Driver's Connected onnected Navigation Navigation A ddressing D river's needs needs through through C IInfotainment nfotainment Driver Assistance D river A ssistance Vehicle V ehicle tto o X Communication Communication A utonomous D riving Autonomous Driving

automotive.elektrobit.com sales.automotive@elektrobit.com Download our Navigation Brochure

TELEMATICS

Big Data, bigger opportunities Now is the time to make the most of the data already coming out connected cars and improve customer experience, writes Scott Logie

C

ars are becoming more intelligent, that is certainly clear.The average family saloon now has more computing power than Apollo 11, the shuttle that first took man to the moon.

One major aspect of this ‘intelligence’ is how the information a car gathers is transported to the manufacturer and stored. This data is primarily used for logging drivers’ habits for insurance companies, tracking how vehicles perform for product development and providing early warnings of any problems with parts. However, there is now an evolving usage of data in other areas - such as marketing and customer management - that could turn out to be highly valuable for manufacturers and dealerships.

This is not just about what motorists should buy next based on how they drive, knowing when and where they drive, and how long they spend behind the wheel, opens up huge opportunities for the industry to build a more relevant and meaningful relationship with customers.

The amount of information our cars now store, and transmit, is enormous. Every second, a telematics device will produce a data record including information such as date, time, speed, longitude, latitude, acceleration or deceleration, cumulative mileage and fuel consumption.These data sets can represent approximately 5MB to 15MB annually per customer.With a customer base of 100,000 vehicles, this represents more than 1 terabyte of data per year.

For large manufacturers, dealerships and fleet management businesses, all of a sudden a Big Data challenge has arisen, with many left wondering how this data should be stored, accessed and used. But while some may be puzzling over this, others are www.awmegatrends.com

reaping the rewards of one of the main benefits of telematics data: improved customer experience. For example, in terms of location, vehicles can already provide information on what is local to the destination on any journey; this is already being expanded to provide link-ups with hotels and restaurants, with the intention of supplying offers and booking advice either en-route or prior to journey.

Customer convenience could also benefit: by using car location information and data from car park owners, the vehicle can find the nearest car park with spaces and provide costs.

Manufacturers can use this extension of the vehicle to build a longer term, more interactive relationship with drivers, helping to persuade them to stick with the same brand. Research from St Ives Group has shown that on average it takes between one and four months after a customer has decided to change their car to actually reach the point of purchase, with half of that time spent committing to the decision to buy a new car. With average car ownership around three years, an OEM has at least two and half years ‘alone’ with the customer to influence their next buying decision. However, only 27% of consumers reach the trigger phase of knowing the exact details of the make and model they want to buy. So there can be no doubt that a lot of work is needed by brands to build longer-term loyalty, and data can play a huge part in this.

Of course, it is not just the manufacturers who will benefit from telematics in cars, as the way in which we buy cars changes, so will the role of the dealership. Using data gathered in-car provides an opportunity to create a dealership experience that is interactive and engaging too.

Already, specialised systems are available to help buyers configure all infotainment options in a vehicle to specific requirements; it seems only a matter of time before this is extended into a full dealership concierge service. If the dealers have access to the correct data, they could pre-empt service dates, set up and have a courtesy car ready for you, and ensure you are looked after while at the dealership itself.

By building this more enjoyable, personalised and hassle-free experience, dealers can create a lasting relationship with purchasers.

This, of course, creates an interesting dilemma for the manufacturer: the dealership building a good relationship is only beneficial if its brand is the one being sold. If the dealership has a range of options to sell, that creates a clear and present danger for the manufacturer.

Another stumbling block to the benefits of telematics data is the fact that it is still unclear who actually owns it, and how it should be shared. The data will automatically be sent back to the manufacturer from the car, but the data in itself it is not as interesting or useful as it would be if the OEM was aware of who drove the car. But the dealership can help complete this loop, both in terms of who initially buys the car, and also who brings it back for a service or buys it on re-sale.

Looking across the market, use of telematics data will continue to increase as vehicles get smarter, revolutionising the way that brands interact internally and with customers.

Potentially it is only a matter of time before the car could directly compete with the phone and tablet to become the biggest ‘smart’ industry. Inevitably there will be issues of trust and data security, but man did not set foot on the moon by keeping it a secret now did he?

Scott Logie is Strategic Marketing Director, St Ives Group

Megatrends | 75

CES

Silicon Valley, MI Gary Shapiro, Chief Executive of the Consumer Electronics Association talks to Martin Kahl about the importance of the two-way relationship between the automotive and CE industries, and the key role that automotive OEMs and suppliers play at CES

76 | Megatrends

www.awmegatrends.com

CES

T

he consumer electronics and automotive industries have finally begun to converge in the cockpit. Are you surprised it has taken this long for it to happen?

I am thrilled that it is happening. Consumers are looking at the technology in cars and it is a very influential part of their buying decision.

People want what they have in their homes on the go - they want it in their car and also tied into safety features and everything else.

There has been talk of an emerging gulf between Silicon Valley and Detroit.

Do you agree?

I have a home in Detroit and travel to Silicon Valley; I am also leader of the Consumer Electronics Association, and the CES, and I see those two cities and philosophies growing very close together. Silicon Valley sees its future as mobile; part of being mobile is the automobile.

Just about every car company has established a presence in Silicon Valley, and Silicon Valley travels to Detroit, so to speak. There is no question that there is a conflict: where consumers used to want to know about 0-60, now they want to know about the technologies in the car, how they can take their home and mobile environment with them.

The ability of car companies to allow their innovation cycles to integrate the latest technology is a challenge. It used to be a war, now it is a symbiotic relationship where technology companies are working with car companies to ensure their cars are upgradable.

And instead of being enemies, there is no question that car companies and technology companies are strategic partners now. There has been a dramatic shift, from a quasi-hostile environment ten years ago, to car companies now being unable to innovate in the cockpit as quickly as aftermarket companies.

www.awmegatrends.com

Many new companies coming into the automotive industry are nontraditional suppliers, particularly in the infotainment market. Do you see them struggling to win business from OEMs, or are OEMs ceding control and allowing them in?

I would never say that car companies are ceding control. Car companies want to ensure that they can make money, and create products that consumers will buy, maintaining the integrity and safety which they need to provide. They also want to be viewed as welcoming of innovation and technology and that is why there are strategic partnerships forming.There are great companies out there saying they want to be technology leaders.

They are global companies, innovative, sensitive to cultural and market differences whether in terms of the design or the colour scheme or the icons. This is a great opportunity for technology companies and car companies to come together.

There is clearly plenty that the automotive industry can learn from consumer electronics. Is there anything that consumer electronics can learn from the automotive industry, or is it a one-way street?

Oh, it is definitely a two-way street. Over the next 20 years, we will see a technological transformation to driverless vehicles, and that has many ramifications. If you have driverless vehicles, you have essentially a home environment in the car that could be used for all sorts of consumer electronic products. There are ramifications that affect the fundamentals of an economy, from the insurance industry to car ownership concepts; the effects of shift to driverless cars are huge, and it is going to require a partnership between the automotive industry, the technology

industry and all other stakeholders that are out there to get to this destination. The destination is, clearly, an environment where people can get to where they want, have a great experience along the way, and they can do it in total safety.

In order for that to be successful, it needs to happen across the vehicle parc, and the majority of cars in any country are not connected - and cannot be connected - opening up opportunities in the aftermarket.What role will vehicle manufacturers and the big suppliers play in the aftermarket?

Traditionally, the aftermarket has been the pacesetter. Smartphones got into cars through the aftermarket. We are going towards a future that will certainly involve the driverless car, with greater levels of safety and collision avoidance. There is a clear path from passive to active collision avoidance, alerts and autonomy. It will be a combination of aftermarket and OEM, and it will be in ways we cannot predict - but it will almost certainly involve collaboration. Governments will step in with mandates; as long as that is done in a positive way which does not force us to freeze or regress technology, I think we are okay.

The great debate in the US today is over backup alert systems. A generation ago it was about airbags, and a generation before that it was about safety belts. These become technologies that you come to rely on.

In the past, you would learn about things through rental cars, but I do not think that is the case anymore. Take the example of a rental company charging you per day for navigation: it is free on your smartphone!

Fleet car companies are no longer a way of introducing technology. The aftermarket and the car companies themselves have leapfrogged beyond that.

Megatrends | 77

LUBRICANTSLUBRICANTS

“Lubricants can be technology enablers, not just commodities” As global pressure to reduce CO2 emissions increases, conventional powertrains are being heavily revised to improve efficiency. A key enabler for each leap in technology is the correct choice of lubricant, but in many cases, the choice is made too late in the design process.

Aaron K. Warner speaks to Nevil Hall, Joint Managing Director at UK-based Millers Oils

“W

hy don’t powertrain engineers consider the lubricant specification at an earlier stage of the design?” asks Hall. “An optimised design cannot be achieved without matching the load, temperature and durability requirements to the available lubricant properties. The alternatives are inefficiency through overdesign, or early failure through underdesign.”

Hall is just one of many lubricant specialists who believes that the potential exists to improve performance throughout the powertrain and driveline, including engines, transmissions and axles. “All the new technologies tend to push up loads by increasing torque levels, but the available package space is shrinking at the same time,” he says.

Hall cites hybrid vehicles as a prime example of these trends: “The addition of an e-machine between the engine and transmission, to create a hybrid powertrain within an established vehicle, squeezes the package space available for the transmission yet increases the torque input by as much as 30% in some cases.

“The right oil can make a more compact transmission feasible, despite the higher torque.”

78 | Megatrends

www.awmegatrends.com

LUBRICANTS

The ‘right’ oil in such circumstances would have higher film strength to provide greater protection of the loaded metal surfaces which would otherwise be forced into contact. “Under very high loads, it’s more about surface chemistry than conventional lubrication,” he explains. “When a fully laden EV, such as a delivery van, pulls away from a standstill, the maximum motor torque is available from zero rpm and is carried by a single pair of meshing teeth at the final drive.

The contact stresses won’t break the teeth, but without suitably formulated oil they will lead to micro-pitting and, eventually, cracking.

Developments like nanotechnology are allowing oils to be created that adhere more tenaciously to the metal surfaces, protecting them under more extreme loads.”

The superior load capacity of the latest oils also helps OEMs to minimise the overall size of the final drive assembly, helping to satisfy underfloor packaging requirements. The traditional approach to propshaft packaging offsets the shaft some distance below the differential centre line, creating gear geometry with high levels of sliding at the mesh. By adhering more strongly to metal surfaces, the best oils can provide greater wear resistance and lower friction under conditions of sliding contact.

The search for improved efficiency also leads OEMs towards reduced oil levels in transmissions and differentials, as churning losses are directly related to the depth of immersion of the rotating gears. Cooling

www.awmegatrends.com

becomes an issue if the oil level is set too low because the lubricant is the primary means of managing the temperature of the meshing gears.

Downsizing quality

Hall makes some interesting revelations about the latest engine technologies, too, beginning with the trend towards stop-start operation, now widely used. “Most people are aware of the effect of oil viscosity, in that efficiency is reduced at lower temperatures because the oil is thicker, but few realise that film strength is also affected by temperature,” he explains. “Many oil additives only react chemically from around 70 degrees Celsius upwards, so they don’t offer the same protection when cold. In developing oils with a consistent film strength across a wide temperature range, we have benchmarked some examples with quite obvious shortfalls in film strength at certain temperatures. This could be an issue when temperatures fluctuate, such as in stop-start operation.”

Downsizing strategies present a range of challenges for lubricating oil, as a result of the increased thermal and mechanical loads associated with a higher power output per litre of displacement. Engines with fewer cylinders typically also have smaller sumps with lower oil capacity, yet longer drain intervals are required by the market. At the same time, OEMs require thinner oils to reduce viscous friction within the engine.

“Even the shift from port injection to direct injection on a petrol engine can cause a 30% increase in bearing load,” Hall comments.

“When you add the effect of turbo- or supercharging, cylinder pressures can double with higher torque across a wider rev range.

When a four cylinder engine replaces a six, the number of bearings is reduced but package limitations constrain any increase in bearing width.”

For large multi-cylinder engines, deactivation of several cylinders at times of light load operation is a well-established method for improving efficiency, but according to Hall there are consequences for the engine oil.

“Normally the oil film on the bore in a firing cylinder is 0.5 to 1.0 microns thick,” he explains. “In a motored cylinder it increases to as much as 30 microns and is expelled in a single firing event once the cylinder is reactivated. In order to avoid poisoning the catalyst, oil with a low sulphur, ash and phosphorous content - low SAP - must be specified.”

For Hall, the answer is clear: powertrain and driveline developers must consult lubricant specialists early in the design process to establish what can be achieved.

“It can make the difference between a robust design that handles the maximum loads within the minimum package envelope, or a compromised solution that is not fully competitive,” he says.

Megatrends | 79

2 Days / 32 Expert Speakers / 350+ Delegates

February 25-26th 2013, ITC Grand Chola, Chennai, India

Tickets from $Free!* The fourth annual Automotive World Megatrends India conference will bring together leading stakeholders to discuss the technologies and trends that look set to shape India's passenger car and commercial vehicle industries over the next decade and beyond. Cutting-edge topics, expert speakers and fantastic networking opportunities will make this a must-attend conference.

Speakers confirmed so far include:

Joginder Singh, Ford India

Dr Wilfried Aulbur, Roland Berger

Peter Bolesza, NNG

Mayank Bansal, A.T. Kearney

Rajiv Bajaj, Roland Berger

Anders Grundstromer, Scania

A Ramasubramanian, AMW Motors

Marc Llistosella, DICV

Krister Thulin, Scania

Dr Ajit Jindal, Tata Motors

Philippe Divry, Volvo India

Erich Nesselhauf, DICV

Rakesh Batra, EY

Divyendu Pundhir, A kzoNobel

Sirish Batchu, Mahindra & Mahindra

Prasad Basappa, Continenta;

Gert-Jan Vogelaar, Punch powertrain

Sudarshan Sarma, Google

Call +44 (0) 2920 709 302

*Automotive World Single-User (max 1 ticket) and Company-Wide (max 3 tickets) Site License customers are eligible for free passes to this event. Employees of vehicle manufacturers are eligible for free passes to this event (max 5 per company).Full ticket prices can be found at http://megatrendsindia.automotiveworld.com/register Terms & conditions apply.

Sponsors

IN THE NEXT ISSUE

IN THE NEXT ISSUE

Q1 2014

available March ’14

WHAT SHOULD BE POWERING THE ALTERNATIVE POWERTRAINS?

MEXICO MAY BE THE EIGHTH BIGGEST AUTO MARKET BUT WHAT CAN IT LEARN FROM ITS NEIGHBOURS?

THE MOBILE OFFICE: HOW THE INTELLIGENT CAR WILL CHANGE THE WAY WE WORK FOREVER

EURO NCAP PUSHES CAR TECH IN THE RACE TO SAFETY

ACEA'S TRUCK OF THE FUTURE

INTERVIEW: HUGUES VAN-HONACKER, POLICY OFFICER, DG MOVE, EUROPEAN COMMISSION

PLUS INSIGHTS FROM TWO TOMORROWS, THATCHAM, INFOR AND BWI GROUP www.awmegatrends.com

Megatrends | 81

COMMENT

Navigating logistics challenges in Africa Anna-Marie Baisden Southern African states such as Namibia and Botswana also ranked highly for their internal transport networks, which are vital for getting goods beyond the ports to their intended markets. The southern states have clearly benefitted from development related to their resource industries, resulting in high scores for the quality of their road and rail infrastructure.

A

s a growing middle class in Africa creates a wealth of opportunities for consumer industries, it is not surprising that the region has attracted the interest of the automotive sector. Even in markets where low incomes mean new car sales are mostly to governments and a small elite group, demand for commercial vehicles is being driven by infrastructure spending and growth in heavy industries such as mining.

However, the developing nature of many of these countries means that bringing products to market can involve a range of logistical challenges depending on market dynamics.

The automotive industry is growing at varying rates throughout the region, which means that there is a mixture of pure importers, countries in the early stages of domestic assembly, and those engaging in full-scale production with the potential for export.

Each will find different demands placed on their logistics network, and for automotive manufacturers, the challenge lies in finding the best route to a high-growth market.

82 | Megatrends

One key takeaway, however, is that for all of the countries analysed, it is cheaper to export than import, which bodes well for the industry’s longer term development as part of the global supply chain. Ghana stands out as the leader in cost terms for both imports and exports, but its underdeveloped internal transport network is a drawback to its potential as an automotive hub.

Based on findings from Business Monitor International (BMI), Namibia has shown itself to be one of the region’s standout countries from a logistical standpoint. Having analysed a mix of countries (excluding South Africa), chosen for their demand, production or trade potential, Namibia outperformed in several categories, assessed against metrics such as external connectivity, cost to import and export, and associated red tape.

Perhaps of most interest for international firms looking to access the region is the country’s gateway potential. Based on data from UNCTAD Stat and the World Economic Forum, BMI found that Namibia not only ranked highly for its liner connectivity, but also topped the rankings for the quality of its port infrastructure. This means ongoing investment and development is reducing the risk of bottlenecks, helping ports such as Walvis Bay cope with goods for transit to neighbouring landlocked states such as Botswana and Zambia, as well as satisfying domestic demand.

This may explain why, while Ghana is more competitive on cost, BMI sees more investment in export-oriented vehicle production heading to Kenya, which scores better for its internal network and is comparable for its port infrastructure.

Therefore, as some governments in the region actively seek to attract investment in domestic vehicle production, this requirement for a fully integrated logistics network perhaps highlights the need for investment on their part too.

Anna-Marie Baisden is Head of Autos Analysis at Business Monitor International.

This article first appeared in the Comment section of AutomotiveWorld.com. For more expert insight on and analysis of the global automotive and commercial vehicle industries, visit automotiveworld.com/comment.

The Comment column is open to all industry decision makers and influencers. If you would like to contribute an article, please contact ruth.dawson@automotiveworld.com.

www.awmegatrends.com

DĞƚĂůǁŽƌŬŝŶŐ ŇƵŝĚ specialist for high-tech ĞŶŐŝŶĞ ŵĂŶƵĨĂĐƚƵƌŝŶŐ

FLUID TECHNOLOGY

www.cimcool.net