Automotive Megatrends magazine Q3 2014 - The eMobility Issue

AUTOMOTIVE MEGATRENDS Magazine | Q3 2014

The eMobility Issue

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#ConnectedCar #PowertrainInnovation #FreightEfficiency #Manufacturing&Materials #Retail(R)evolution #Safety

Welcome to Megatrends Q3 2014

Welcome Welcome to Automotive Megatrends Magazine - the only global publication dedicated to the business models, technologies and trends which are shaping the automotive industry of tomorrow.

Core focus areas

Connected Vehicles

Road Freight Efficiency

eMobility

Manufacturing & Materials

Powertrain Innovation

Retail (R)evolution

Safety

Readership Every quarter, Automotive Megatrends Magazine is sent to 20,000+ opted-in automotive industry stakeholders:

Suppliers

39%

OEMs

29%

Finance / Consultants

12%

Oil / Lubricants

Logistics

6%

4%

4%

Government

Academia

3%

Other

3%

The publication is downloaded in more than 150 countries worldwide:

27% 11%

9%

7%

5%

4%

4%

4%

29%

Automotive Megatrends Magazine ISSN: 2053 776X Publisher: AW Megatrends Ltd 1-3 Washington Buildings Stanwell Road, Penarth CF64 2AD, UK www.automotiveworld.com T: +44 (0) 2920 707 021 hello@automotiveworld.com Registered number: 800516 VAT number: GB 171 5423 23 automotiveworld.com/megatrends/

Editor: Martin Kahl

With special thanks to Rachael Hogg and Matt Ayres

Business Editor: Megan Lampinen

Chief Executive: Gareth Davies

Manufacturing & Materials David Isaiah

Production & Design: Michael Franklin Anmol Mothy

Electronics & Safety Rachel Boagey

Š AW Megatrends Ltd 2014

Megatrends | 3

Contents

Contents > About this issue S E MEGATREND AUTOMOTIV Magazine | Q3 2014

8 - ACEA’s Jonnaert: Europe not out of the woods yet Erik Jonnaert tells Megan Lampinen about an exciting first 12 months as Secretary General of ACEA

> eMobility y Issue The eMobilit ightEfficiency

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#Fre inInnovation ar #Powertra lution #Safety #ConnectedC #Retail(R)evo ng&Materials #Manufacturi

Welcome to Automotive Megatrends Magazine – the eMobility issue.

Early excitement about battery electric vehicles led to global leaders predicting high numbers of BEVs on their roads within years. As BEV sales continue to fall short of expectations, however, that optimism has given way to a more realistic approach to eMobility.

From battery electric cars and buses to hybrid, flywheel and fuel cell technology, eMobility is seen as inevitable – it’s just a question of how it’s employed. And eMobility is up against a prevailing consensus that much can still be achieved with the internal combustion engine through powertrain innovation, especially when the gradual electrification of the ICE is factored in.

11 - FCVs are 'a decade away'? They're already here...

Fuel cell vehicle (FCV) technology has long been ‘ten years away’, but the cars are finally coming to market. Megatrends takes a drive in the ix35 Fuel Cell with Frank Meijer, who heads up Hyundai Europe's FCV programme. By Rachael Hogg

turns race winner into fuel 16 GKN saver for buses

19 All aboard the electric bus

Automotive Megatrends Magazine is about more than eMobility, however, and our tour of the megatrends shaping the future automotive industry takes in Connectivity, Powertrain Innovation, Freight Efficiency, Manufacturing & Materials, the Retail (R)evolution and Safety.

22 - Obama remains committed to electrification – albeit a little more quietly

Enjoy the magazine and join the debate:

28 - Harnessing the power of the sun

Obama’s pledge to see 1 million EVs on US roads by 2015 may have been overly optimistic, but his Administration remains committed to boosting the use of plug-in vehicles. By Ian C. Graig

25 - Charging uphill: the ongoing struggle for battery EVs Sales of battery EVs remain low, and BEVs look set to remain a niche for many years to come, writes Rachael Hogg

From the whacky to the serious, the sun is powering EVs in some interesting ways, writes Rachael Hogg

30 - Interview: Olivier Paturet, General Manager, Zero Emission Strategy, Nissan Europe Martin Kahl, Editor 4 | Megatrends

What’s Nissan’s view of fuel cell vehicles? Will EVs make it out of niche status? Where will EVs see greatest success? Olivier Paturet outlines Nissan Europe's Zero Emission Strategy.

By Rachael Hogg

automotiveworld.com/megatrends/

Contents

> Connected Vehicles

36 the art of HMI design

Plug’n’play, no way – ustwo on

33 - Smart data centre – the vital ingredient for the future of connected cars As the number of connected vehicles grows, so too does the need for the data centres that support connected services. Megatrends talks to data centre operator Verne Global to find out more. By Rachel Boagey

42 - Evolution, not revolution: the slow, steady advance of the autonomous car Rather than a sudden jump to full autonomy, expect a gradual emergence of autonomous capabilities for vehicles, writes Maryanna Saenko

40 Navigating the future

44 - Adapt, acquire and aggregate: how to succeed in automotive electronics Megatrends talks to Christian Feltgen about Visteon’s investments in connected car technology and services. By Rachel Boagey

> Powertrain Innovation

49 - All powertrains can be improved with the right lubricant, says Shell VP With the emergence of alternative powertrain technologies, new kinds of lubricant will be needed to help improve efficiency. By Matt Ayres 52 - What's under the hood of your self-driving car?

Google’s self-driving car is a battery electric vehicle. Is any one powertrain type best-suited to autonomous drive technology?

Martin Kahl investigates

59 - Interview: Michael Fleiss, VP Powertrain, Volvo Car Group Rachael Hogg talks to Michael Fleiss about Volvo’s powertrain focus, his opinion on electrification, and consumer perception automotiveworld.com/megatrends/

Megatrends | 5

Contents

> Manufacturing & Materials

India’s vast auto market 67 potential needs FTP boost

62 - Water, water, everywhere in vehicle manufacturing Water conservation is becoming an increasingly important issue in sustainable vehicle manufacturing, writes David Isaiah

70 recycling

The future for aluminium

> Retail (R)evolution

72 - Auto retailers: adapt now, or pay later Car dealers need to prepare now for the retail demands of the future, as EY’s Anil Valsan explains to Megatrends. By Megan Lampinen

car buying ever be fair, fast and fun?

75 Can 6 | Megatrends

78

Boosting the customer experience in showrooms using touch technology

82

It’s time to eliminate unfair trading practices in Europe’s automotive sector

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Contents

> Safety

84 - Euro NCAP raises the bar for vehicle safety In its 2020 Roadmap, Euro NCAP presents its vision and sets out key challenges and priorities to further reinforce vehicle safety and safe driving. By Rachel Boagey

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Life in the times of automotive recalls

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It’s all in the typeface: a small but significant detail of car safety

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Eyes on the road - your car is watching you

> Freight Efficiency

97 - Interview: Ben Kraaijenhagen, Product Management Environment and Trends, MAN Truck and Bus Ben Kraaijenhagen on MAN’s future focus, global emissions harmonisation and autonomous truck technology.

By Rachael Hogg 104 - Automotive Cyber-Physical systems: the next computing revolution As congestion increases, Haydn Thompson of CPSoS highlights the technology that could enhance the safety and efficiency of freight and transport while minimising fatalities. By Rachel Boagey

108 - Global truck production outlook: can the industry maintain pace beyond 2014?

Global truck and bus production in 2014 is projected to be 4% above 2013. Can this continue? By Kamini Patel

automotiveworld.com/megatrends/

Waste heat recovery: takes 108 main stage at Norgren Megatrends | 7

Region focus: Europe

ACEA’s Jonnaert: Europe not out of the woods yet Erik Jonnaert tells Megan Lampinen about an exciting first 12 months as Secretary General of ACEA

rik Jonnaert was named Secretary General of the European Automobile Manufacturers Association (ACEA) in June 2013. He officially started the job in October, taking over from Ivan Hodac who was retiring. In a recent interview, Jonnaert discussed developments at ACEA since he took the helm, and the organisation's priorities going forward.

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Initial focus areas “It was an exciting 12 months and I’m still here,” Jonnaert said. “It takes time to understand a new sector,” he explained. Jonnaert came to ACEA from Procter & Gamble, where he served as Vice President for External Relations in Europe and Asia.

Jonnaert described the past 12 months as a “transition year, not only for me but also for Europe”, with changes in leadership in Parliament. In the midst of this transition, ACEA’s focus is to “engage in dialogue with new policy makers to create an environment that is conducive to growth.” The focus has centred on four key pillars.

Innovation: “We felt it was important that policy makers create an environment that is enabling innovation,” said Jonnaert. “One of the things that impressed me in coming into this industry was the efforts undertaken in innovation. Annual R&D investment made by automotive amounts to €32bn (US$43bn) – the biggest of all sectors active in Europe.

Innovation is the backbone of this industry. We need to make sure, given the leadership role that European automotive industry has been playing, that we keep ahead of the game. We also called the new Parliament to further focus on this.”

8 | Megatrends

International trade: The second pillar addressed efforts to foster growth for international trade. “Our industry produces more in Europe than they sell in Europe. A lot of that is being exported. It’s good for jobs and growth that we can keep exporting, especially to emerging markets,” said Jonnaert.

“International trade becomes increasingly important. Our member companies are increasingly global players. The market place has become a global one.”

Regulatory framework: The third focus is building a supportive regulatory framework. “Automotive is one of the most regulated sectors,” observed Jonnaert, referring to the numerous directives and regulations with which the industry must comply.

“It’s updated regularly and it’s quite a complex regulatory environment. We want to focus on the certification of that framework and make sure where we have regulations that they are supportive of what we want to achieve.”

forces, including connectivity, emissions reduction and growing international trade. Commenting on the ubiquity of connected devices, Jonnaert noted: “The consumer of today is a connected consumer. He is always online somewhere, using an iPhone or iPad.” This desire for constant connectivity offers “a growth opportunity for manufacturers,” he added.

In terms of cleaning up car emissions, Jonnaert believes considerable strides have already been made. “There’s a lot that has already been done by the industry to come up with cars that have less of an environmental footprint,” he

Change: Anticipating and managing change was another important focus with the outgoing Commission. In June, ACEA published a new manifesto for the new Parliament. “In our new manifesto we focus on the first three pillars. I’m not going to say we’re out of the woods but we see some amelioration of market improvements for our sector,” said Jonnaert. New passenger car sales in the EU were up 6.5% in the first half this year. “It’s started moving and it’s moving upwards,” he added.

Market-shaping trends Moving forward, developments within the European automotive market will be impacted by a number of different automotiveworld.com/megatrends/

Region focus: Europe said. So far, however, the uptake of most alternative powertrain options has fallen short. “We need to be honest: the interest in alternative powertrains, especially electric vehicles, is lower than was anticipated. We need to further stimulate demand for some of these alternative powertrains,” Jonnaert said.

He noted that Europe’s vehicle manufacturers have made hefty investments in new powertrain technology, and these need to pay off.

“We want to make sure these vehicles reach the markets. This requires support from policy makers. Recharging infrastructure is a key demand we’ve been formulating for years. The Commission has agreed on a directive with member states to start investing in some infrastructure but we need to see it happen now. That creates the consumer confidence in that new technology, which is still not fully there.”

The market’s development will also be heavily influenced by growth in international trade and a key focus for ACEA is making sure that free trade agreements (FTAs) yield successful results. “Success will depend on the degree of regulatory convergence we can achieve,” said Jonnaert. The EU is holding negotiations on free trade with both the US and Japan.

automotiveworld.com/megatrends/

Tied in with these factors is the regulatory environment, which at times gets ahead of itself, said Jonnaert: “We first focus on proper implementation of what’s on the books. There is a tendency to come up with new ideas all the time. They may be good ideas but we need to focus first on what’s already there. For example: the new targets set last year for reducing CO2 emissions by 2021. Let’s make sure we get there first before we talk something new.

Implementation first.” Overall, he wants to make the regulatory environment “smarter and simpler.”

Overcapacity For years, the European automotive industry has been struggling with overcapacity, but Jonnaert is keen that the situation not be generalised, noting: “It’s different for different companies.

Some have a problem of overcapacity, some are fully utilizing capacity. As the industry picks up on sales this will be a positive development when it comes to capacity. It means we can produce more for the European market.”

Free trade will also help the situation and ACEA describes itself as a champion of FTAs. “If we can export more easily, it will also allow us to produce even more and further utilize capacity we have in our plants,” said

Jonnaert. The overcapacity situation will also depend on the general economic improvement. “If we see further progress in the economy revival in Europe, it will be good for capacity,” he added.

Protect and enable growth Overall, ACEA’s aims and Jonnaert’s own targets centre on protecting and enabling industry growth, competitiveness and jobs. “We’ve come through difficult times in the industry.

We are not out of the woods yet,” he said. “We are fortunate to have some really strong global players and it’s a question of an outstanding record in terms of innovation. It’s a question of ensuring the sector continues to be recognised for the value it adds to the economy in Europe so we can keep growing globally.”

This will require continued discussions with key policy makers and other stake holders across the sector, covering everything from suppliers to dealers. “At the end of the day we are not alone in this,” Jonnaert stated. “We try to engage in more dialogue with other key players around automotive in Europe to see how can we move the needle forward.”

A version of this article first appeared on AutomotiveWorld.com

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And the benefits associated with real-time analysis of data collected from vehicles extend beyond just the automotive industry. Insurance companies can more accurately assess risky driver behavior, enhance the claims process and identify fraudulent claims. Fleet operators can use vehicle data to improve the efficiency and safety of their operators, and retailers can improve the timeliness and accuracy of product promotions.

With IBM Watson Foundations Big Data & Analytics technology, automakers can now analyze huge volumes of vehicle data at speeds that allow cars to “talk” to each other through the cloud. This vehicle-to-vehicle communication makes it possible for drivers to receive real-time alerts about nearby hazardous road conditions or looming equipment failures.

Watson Foundations can also provide a more enriched driving experience through application or entertainment offerings customized just for them, and delivered through their vehicle’s infotainment system or a connected device.

To learn more, visit ibm.com/software/data/bigdata/industry-auto.html ibm.com / software /data / bigdata / industry-auto.html

eMobility

FCVs are 'a decade away'?

They're already here...

Fuel cell vehicle (FCV) technology has long been ‘ten years away’, but the cars are finally coming to market. Megatrends takes a drive in the ix35 Fuel Cell with Frank Meijer, who heads up Hyundai Europe's FCV programme.

By Rachael Hogg

automotiveworld.com/megatrends/

Megatrends | 11

eMobility

rom the Great Horse Manure Crisis of the 19th century, to the concern over CO2 emissions today, each period in time has had its worries with transport. Even 200 years ago, people were considering alternatives to literally clean up the streets. Back then it was ostriches, which surprisingly never caught on, before the car arrived in 1886, led by a man marching down the road with a warning flag. The car may have caused less of a mess than horses, but fast forward to today and things look a little different. Increasingly stringent CO2 limits are being imposed by governments around the world, and once again there is a need to look to alternatives.

The ix35 Fuel Cell has many advantages. While ICE vehicles do rely on imported fuel and produce greenhouse gas (GHG) emissions, they offer long range, quick refuelling, are not particularly affected by weather, and are scalable. Battery EVs may have limited range, a long charge time, require considerable battery space, and have a performance that is impacted by weather, but they offer zero emissions driving, high fuel efficiency, instant torque, are quiet, and the power can be produced domestically. FCVs take the best aspects of both the ICE and BEV.

The fuel cell vehicle (FCV) has always been the technology that is ‘ten years away’, but Hyundai’s fuel cell version of the ix35 (sold as the Tucson in the US, and the Tucson ix in Korea) is here, and available. All that is needed now is to lower the cost, raise consumer awareness, and most importantly, develop a supporting infrastructure.

There are many advantages of moving to zero emissions technology: “On a daily basis in Europe, €1bn (US$1.34bn) worth of oil is imported, not counting the gas from Russia or Ukraine,” explains Meijer. “First, that is a considerable sum of money, but it would also help Europe to become more independent. Hydrogen can be produced locally, with renewable power.” Currently, around 95% of hydrogen is produced by burning fossil fuels or as a waste product of the chemical industry, but the EU has made it mandatory that the hydrogen being produced is at least 50% renewable. There is also the issue of reaching peak oil, which was detailed by a scientist at Shell in 1956. A recent study by BP suggested this could arrive sooner than thought, as there is a reserve of just 55 years left for oil production. Hydrogen, however, is easily produced, anywhere. Put very

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When it comes to eco-friendly vehicles, OEMs are looking at downsizing, double clutch technology, turbocharging, cleaner diesels, or compressed natural gas (CNG), to make existing technology more efficient, says Frank Meijer, Team Leader, FCEV & Infrastructure Development at Hyundai Motor Europe.

In Europe, particularly, plug-in hybrids and full EVs will bridge the gap before the ultimate goal: achieving a zero emission vehicle which drives completely on renewable power.

12 | Megatrends

simply, all that is needed is water, and an electric current.

European infrastructure Arguably the main barrier preventing FCVs selling in significant numbers is the lack of infrastructure. In Europe currently, there are around 50-60 fuelling stations, of which 27 are public and operate at a pressure of 700 bars.

“That is a big gap between the couple of thousand fuelling stations you normally have,” says Meijer. However, it should be noted that there was a

Zero emissions

automotiveworld.com/megatrends/

eMobility similar infrastructure situation in the early years of the ICE, and those drivers managed before the infrastructure developed; Meijer says he is satisfied if the infrastructure for FCVs takes ten or 20 years to develop.

In Europe, a considerable amount of infrastructure investment is planned over the coming years. The EU announced an investment of €92m in July, focused on projects related to hydrogen in mobility, and refuelling infrastructure. There is also dedicated investment of €32m to help with the deployment of vehicles in 2015. The HyFive project is in full swing, and Hyundai has promised to supply 75 out of the 110 vehicles required for the project.

Germany has plans for 50 stations by 2015, and 400 by 2023, which is a huge commitment, and the UK plans to have 13 stations by 2015, 26 by 2020, and 65 by 2023. “The UK and Germany are the key pillars in Europe, and can set the example for countries like the Netherlands, Belgium, and countries that will be following like France,” says Meijer. “However, you don’t need too many stations because of the range.

The investment is approximately anywhere between €1m and €2m for each station. That is a tremendous amount of money and funding is necessary.” Infrastructure will naturally be easier to develop in certain

automotiveworld.com/megatrends/

Driving the ix35 Fuel Cell: A ‘normal’ experience One of the first and most striking things about the ix35 Fuel Cell is just how ‘normal’ it is. If it weren’t for the ‘FUEL CELL’ badge emblazoned on the side of the test vehicle, no-one would ever know.

While a power indicator has replaced the rev counter, a driver could easily be sitting inside a normal crossover vehicle.

Hyundai Europe’s Frank Meijer has said that doing this was a conscious decision by the OEM, but for the next model which is expected in 2017, no final decision has been made on whether to maintain the vehicle’s normality, or to express its unique appeal through bolder aesthetics.

Refuelling is a similarly normal experience. One of the significant benefits FCVs have over EVs is the ability to refuel in the same time that it takes to refuel an ICE (around three minutes), and just as easily, compared with the lengthy charging time of an EV: 20 minutes at best on a rapid charger, or three to five hours or longer on a slow charger. To refuel the ix35, the hydrogen pipe is clipped on to the vehicle, so there is no possibility of leakage, and there is no smell, as seen with gasoline, and no fuel cloud, as seen with liquid petroleum gas. The price of hydrogen is still very high, but at some stations hydrogen producers have covered most of the cost, as the very low number of vehicles currently on the road will not mean much of a loss to them. As the number of FCVs on the road increases, the the industrial price of hydrogen is expected to fall.

Driving is where the differences begin to appear. One of the immediately noticeable features is the lack of noise, and instant torque, which when combined offer a very smooth and comfortable driving experience.

The vehicle offers output of 100KW, and all that is emitted from the tailpipe is water. The ix35 has a top speed of 160kph (99mph) and a 0-100kph (0-62mph) time of 12.5 seconds. While this is probably fast enough for most, Meijer points out that in some European countries, consumers would generally prefer a higher top speed.

Megatrends | 13

eMobility

countries, particularly smaller countries such as the Netherlands, Belgium, Austria, and Switzerland which will be well served from a handful of stations.

In the first few years of the ix35 Fuel Cell vehicle, Hyundai is looking for particular customers that will enable the next generation of deployment, which is expected in 2017. The focus at the moment is on supplying vehicles to companies interested in hydrogen, government fleets, and research institutes. The second step will be to supply corporate companies with an interest in FCV technology, before the final step of becoming ready for mainstream customers, at which point, it is hoped that the price will have significantly dropped.

don’t really want to know, says Meijer: “We would love to do more to get these cars into normal hands, because when you drive the car, that is when you see how easy it all is.”

Lowering cost In the US, the Tucson Fuel Cell is available to lease for US$499 a month, including fuel and maintenance. To achieve this price, Hyundai Motor America has used its zero emission credits to reduce the price of its FCV, rather than using them to generate a profit like other OEMs. The European pricing has still not been announced.

Consumer awareness For potential future drivers, Meijer says that the concept of an FCV is still mostly unknown: “It’s difficult as consumers don’t know whether it is a fluid or a gas, or that only water comes out. There is a considerable quantity of information available on FCV technology, far more than is expected for ICE cars, and most of what is available does little to attract mainstream attention. Yet consumers 14 | Megatrends

There are several aspects of the ix35 Fuel Cell that currently prevent Hyundai from marketing the car at the same price as an ICE. The double storage tanks with an aluminium inner body, plastic layer, and carbon fibre housing are the second most expensive part in the vehicle. The most expensive is the fuel stack: “The car itself is exactly the same as a normal ix35 in every other way,” explains Meijer. The vehicle is also still

in low production numbers, keeping the cost high. “The number of engines that you make helps to drive down the price. That’s something which will take at least several years to happen. As soon as we can dramatically increase the production volume, we will absolutely be able to drive down the cost of the car.”

With the difficulties ahead for FCVs, what was the advantage to Hyundai of going first? “The biggest advantage is to be known as the OEM that started worldwide production and got to market first. You don’t want to be the second person on the moon, you want to be remembered for taking the first step,” grins Meijer.

Both Toyota and Honda are expected to release their FCVs next year, which along with adding some needed competition for the ix35 Fuel Cell, will help to raise awareness of the technology, and start to bring costs down. Those OEMs, and a growing number of potential FCV fans, are hoping that the FCV will not turn out to be the ostrich of the 19th century. automotiveworld.com/megatrends/

eMobility

GKN turns race winner into fuel saver for buses Bus companies are hoping a new hybrid technology proven in motorsport can deliver fuel economy wins. With GKN now involved, flywheel hybrids could start to deliver for commercial vehicles, writes Rudolf Hart lywheel hybrid technology for buses is not a new idea. By harvesting the energy that is normally lost as heat when braking, and turning it into additional power, fuel savings and emissions reductions of more than 20% are possible. The challenge has always been to produce a system that can stand up to the duty cycle of a typical city bus. High energy transfer rates, frequent stops and starts, and the typical 15 year service life of a bus make this a demanding application requiring highly reliable technology.

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Drivetrain system leader and Tier 1 supplier GKN could have the solution.

Having acquired a technology first 16 | Megatrends

developed for use in Formula One by Williams, the company is developing a version for buses – and plans eventually to offer flywheel hybrids for a range of heavy duty and transport applications.

Although the flywheel was originally developed and tested for Formula One, rule changes led teams to adopt a battery-based kinetic energy recovery system (KERS). Instead, Porsche took an interest and a system was developed and raced in the 2010 911 GT3 R Hybrid race winning car. The early potential was obvious, says Gordon Day, GKN Hybrid Power’s general manager.

Audi Motorsport, looking for a hybrid technology for its Le Mans programme, got in touch and a winning partnership was founded. This year, Audi and GKN celebrated a third victory for the technology in the 24 hour endurance race, despite fierce competition from other manufacturer teams also running hybrid race cars.

“The three years at Le Mans have been a catalyst and a steep learning curve for the technology,” says Day. “Audi’s commitment to winning at Le Mans is total. The stringent performance and conformity of production requirements were a significant step up that helped mature the technology quickly. Dozens automotiveworld.com/megatrends/

eMobility of flywheels are put through their paces in race cars, on engine dynos and test rigs and the performance for all of them has to be identical.”

Safety has been a big focus of the development. GKN Hybrid Power’s flywheel designs are supported by a stringent safety case and considerable behind-the-scenes physical testing.

“Racing is where the technology has met the pavement,” says Day, “and over three seasons with Audi there have been no surprises. Even in Loic Duval’s car-destroying accident during practice for this year’s Le Mans, the flywheel remained safe and intact.”

With the performance requirements advancing year on year as well, the system has now already undergone seven progressively more challenging iterations. For 2014, not a single component from the previous year was carried over. “The advances in the cooling concepts and the system’s thermal efficiency translate directly into economic benefit in other applications,” says Day. “The drive to develop continuously, to keep winning is also transfering to our other applications.”

Audi tends to use motorsport to demonstrate the technologies it wants to promote in its road cars, but for GKN Hybrid Power, the next commercial application will be a London bus, not a German sports car. Last year, the technology completed a bus demonstration trial in the UK capital, delivering fuel savings of more than 20% on a typical city route. Substantial improvements in exhaust air quality

automotiveworld.com/megatrends/

and solid reliability also help make it attractive to city authorities and bus operators.

Having since earned Green Bus Certification, GKN Hybrid Power is focusing on the UK’s 30,000strong bus fleet.

Working with manufacturers, including Alexander Dennis, and some of the main operators such as Go-Ahead Group, the idea is to integrate the flywheel into new vehicles as well as retro fitting, where GKN Hybrid Power’s objective is to upgrade a range of makes of buses currently in service.

As confidence and volumes build, the company plans to offer the technology to international bus markets. Further applications in other heavy-duty vehicles with similar stop-start duty cycles will also follow. Refuse trucks and delivery vehicles are the most likely entry point for the technology into trucks.

Williams’ sale of the technology recognised that for broad market commercialisation and to realise the full potential of the technology, flywheel hybrid technology needs a different level of expertise and resources behind it. For GKN, the system adds to a product portfolio that has evolved out of

its delivery of key driveline components to include complete all-wheel drive systems, electric axle modules and pure electric power units.

Flywheel hybrid technology has always sounded like a great idea in theory.

Having found the right development environment early on - and a Tier 1 leader now intent on industrialisation the technology is about to start delivering on its potential.

Megatrends | 17

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eMobility

All aboard the electric bus Among the range of low-carbon options available to transport operators, the potential for electric buses is growing, writes Rachael Hogg

automotiveworld.com/megatrends/

Megatrends | 19

eMobility nder pressure to meet ever more stringent emissions standards, transport operators are faced with a range of low carbon bus options. In most major cities, electric, hybrid, or other low carbon buses have been deployed, including New York, London, and Sao Paulo. Government funding has helped fuel an increase in the adoption of alternative powertrain buses, but as the upfront cost of such vehicles is higher than traditionallypowered buses, the additional costs need to be offset through government incentives, or by achieving high operational savings. Electric and hybrid buses offer environmental benefits, a quieter ride, fuel savings, and energy security benefits, but in many cases, it is the public users that see these benefits, rather than the fleet operators, making the vehicles a difficult sell.

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In the UK, a recent report by the UK’s Low Carbon Vehicle Partnership (LowCVP), a not-for-profit public-private partnership, evaluated the incentives needed to increase the growth of low carbon bus sales. “In the case of electric buses, a drop in price of lithium-ion battery production will certainly reduce the upfront cost, and therefore the payback time, encouraging increased sales,” Gloria Esposito, Head of Projects, LowCVP told Megatrends. “Concerns over battery durability and replacement costs need to be addressed in order to increase operator confidence in electric buses. Innovations in charging infrastructure, such as inductive charging, will have a role to play in making electric buses more mainstream.” This, says Esposito, is because inductive charging will enable electric buses to have a quick ‘top up charge’ en route, thereby facilitating a longer range during their daily operation. “This will improve the economic case through raising their utility value, and lead to larger reductions in fuel cost compared to diesel buses.” Esposito is keen to emphasise that this would affect electric bus sales not just in the UK, but worldwide.

Around the world China is a very important market for the electric bus industry. It was only in 1994 that the Chinese government began to encourage private car ownership for its citizens, so public transport developed rapidly. There are around 1.5 million buses in operation in China today, with a mandate that they can only be on the 20 | Megatrends

road for eight years. This equates to a changeover market of around 190,000 buses every year in China, without taking into account any growth. Today, only 6% of the population owns a vehicle. The figure is growing, but 94% of 1.6 billion people still need to move around, and they do this by bus. If the market continues to be flooded with gasoline and diesel vehicles, the smog and pollution situation in China will continue to worsen. Health is now becoming a factor in energy policy, and China is finally trying to change, despite being the largest consumer of oil. A spokesperson for ZF told Megatrends, “Electrification of the bus driveline has a high market potential wherever the "obstacle" of the relatively high purchasing costs of a purely electric or hybrid bus is compensated by legal provisions. When announcing the 12th five-year-plan in 2011, the Chinese government too took a major step towards promoting the use of "Clean Energy Vehicles". Due to the state subsidy programs, the registration numbers of electric buses are high.”

A recent announcement stipulated that starting in 2016, 20% of government vehicle purchases must have zero emission technology. Micheal Austin,

Vice President of BYD America told Megatrends, “China is driving demand, at least in the government spend, towards zero emissions because of health care concerns. Government spend in China is huge. However, despite the increase in demand, the percentage of electric buses is still tiny.”

There is a similar situation in India. Like China, only 4-5% of the population owns a private vehicle, so once again around 1.3 billion people need to move around. Austin said, “China certainly is the big electric bus market, and the next one would be in the next emerging market, India.” India’s bus market is expected to remain strong, according to BYD. The Gujarat government recently announced plans to introduce a pilot project to run electric buses between Gandhinagar and Ahmedabad, inspired by Prime Minister Narendra Modi’s plan of implementing environmentally-friendly initiatives throughout India.

Austin said that South America is also a fast growing electric bus market. BYD has recently announced the opening of an electric bus factory in Sao Paulo, so its capacity in 2015 will be around 1,000 electric buses. “Our advantage is automotiveworld.com/megatrends/

eMobility

that we have the Chinese bus market to drive components and leverage. We have the Chinese bus market to drive manufacturing scale. That leverage in China gives us such an advantage all across the US to drive lower cost electrified platforms. I think it's going to grow very quickly.”

Despite China’s important position in helping to drive electric bus sales, Europe’s infrastructure is already well developed. Austin said, “Europe’s infrastructure is fantastic but it doesn’t have the most fantastic products yet.

We need to get more electric buses in Europe. Scale will drive pricing, which will benefit the entire market.”

Nonetheless, hybrid bus uptake is expected to be slower than in the US or China, where market share is already considerable.

The move to electric So what will persuade fleets to switch to electric buses? “The rising price of diesel is likely to be a key factor influencing bus operators to switch to low carbon fuels and electric powertrains,” said Esposito. “There also needs to be increased awareness of the operating performance, automotiveworld.com/megatrends/

environmental and economic benefits of electric buses, evidenced by real world information from bus fleets who have adopted these vehicles. This will encourage bus operators to seriously consider these vehicles in their fleet renewals.” However, there are still barriers, including cost over conventional powertrains, uncertainty of operating performance, lack of infrastructure, and lack of incentives.

The recent announcement of Volvo and ABB’s partnership to supply hybrid and electric buses highlights that OEMs and suppliers are taking note of the anticipated growth. Jessica Sandström, Senior Vice President of City Mobility at Volvo Bus Corporation, told Megatrends, “The cooperation enables two industry leading companies in their respective fields to deliver complete, open standard, safe electrified bus solutions to cities with a potential to lower CO2, NOx, PM and noise emissions versus today’s diesel and gasoline. Volvo Bus brings the experience of some 1,600 hybrid buses in 21 countries. ABB has delivered over 1,500 DC fast charging systems for automotive, utility, government and retail customers.” The partnership’s first project will be to operate 12 Volvo

Electric Hybrid buses in Luxembourg, with its first all-electric buses launching in June 2015 within the ElectriCity project in Sweden.

A report by Navigant Research highlighted that there is an increased interest in electric buses, and between 2012 and 2018, the market will increase at an annual rate of 26%. By 2018, it is expected that 75,000 electric buses will be on the roads. Navigant expects the Asia-Pacific market to see the highest growth, with 15,000 electric buses expected to be sold in 2018, accounting for 75% of sales. And as the cost comes down as numbers increase, Navigant expects emerging markets such as Latin America and Eastern Europe to significantly increase their demand.

There is huge potential to develop the electric and hybrid bus market around the world. Literally billions of people without access to private vehicles need to move around cities and countries, and there will be increasing pressure to achieve this with reduced or zero emissions in the future. As with passenger car EVs, there are barriers to overcome first, but if the benefits start to outweigh the limitations, the market could see a huge increase in sales.

Megatrends | 21

eMobility

Obama remains committed to electrification – albeit a little more quietly Obama’s pledge to see 1 million EVs on US roads by 2015 may have been overly optimistic, but his Administration remains committed to boosting the use of plugin vehicles

By Ian C. Graig

upport for vehicle electrification has long been a centerpiece of the Obama Administration’s energy policy.

Even before he was elected President, Barack Obama declared his support for putting one million electric vehicles (EVs) on US roads by 2015. As President, he embraced that goal in his 2011 State of the Union Address.

During his first term, Obama took several steps to advance vehicle electrification, ranging from major increases in federal support for advanced battery R&D and EV charging stations to increased federal purchases of plug-in hybrid-electric vehicles.

S

While vehicle electrification remains a major Administration goal, much has changed since 2011.

Some of President Obama’s most high-profile electrification initiatives have faced major difficulties – most notably, the bankruptcy filings of companies that received Department of Energy (DOE) support during Obama’s first term, including battery firm A123 Systems and electric vehicle producer Fisker Automotive. EV sales have lagged far behind the Administration’s optimistic projections, with less than 100,000 plug-in vehicles (battery EVs, plug-in hybrid EVs, and extended-range EVs) on US highways when Obama’s second term began in January 2013.

As a result, by the start of Obama’s second term, the Administration was 22 | Megatrends

already backing away from the goal of putting one million EVs on US highways by 2015. The Administration instead has focused on the less inspirational goal of reducing the cost of plug-in vehicles and their key components. “EV Everywhere,” the electrification initiative announced by President Obama early in his second term, aims “to produce plug-in electric vehicles that are as affordable for the average American family as today’s gasoline-powered vehicles within the next ten years.”

Although taking a more low-key approach, the Administration remains committed to vehicle electrification.

President Obama’s fiscal year (FY) 2015 budget proposal, which was sent to Congress in March, requested a 21.9% increase in funding for “green” energy technology programmes at the DOE. As part of that request, Obama proposed a 23.8% increase in funding for DOE’s Vehicle Technologies programme, including a 24.8% increase in funding for advanced battery and electric drive R&D. Obama proposed a 16.1% funding increase for DOE’s Advanced Research Projects Agency-Energy, which supports research into advanced batteries, among other “transformational” energy technologies.

It is important to put those requests in context, however. First, the surge in federal support for vehicle

electrification that was funded through the American Recovery and Reinvestment Act of 2009 (ARRA), the economic stimulus law, has largely run its course, and Congress is unlikely to support another big spending boost.

Second, Congress is certain to cut the Administration’s FY 2015 funding request, as it has done for the past several years. In fact, while Congress has yet to pass final FY 2015 spending legislation, both the House and Senate versions of the DOE spending bill would significantly reduce the Administration’s funding request for the Vehicle Technologies programme.

Support for R&D is only one component of the Administration’s electrification efforts.

The ARRA provided funds to help underwrite the deployment of over 18,000 EV charging stations, for example. While those ARRA funds have largely been depleted, the Administration continues efforts to expand the relatively small US charging infrastructure. In 2013, DOE launched a public-private partnership, the “Workplace Charging Challenge,” to encourage employers to install EV charging stations at offices, plants, etc.

DOE is supporting projects to develop wireless power transfer (WPT) technologies to charge EV batteries directly from the grid without cords or plugs, a technology that could expand EV charging options in locations where traditional charging stations are impractical. DOE is also working with automotiveworld.com/megatrends/

eMobility

incentives to expand ZEV sales, including varying financial incentives offered by each state on top of the US$7,500 federal tax credit. The states are also giving ZEV drivers access to high-occupancy vehicle lanes, toll reductions, and better parking options.

The states will also take steps to encourage investment in charging stations and other necessary infrastructure.

key standards-setting bodies to develop charging-related technical standards.

The Obama Administration has also supported several tax incentives to help reduce the cost of EVs and charging stations. EV buyers receive a federal tax credit of US$2,500 to US$7,500 per vehicle, depending on battery capacity and vehicle weight.

The credit phases out for a manufacturer’s vehicles after at least 200,000 of its EVs have been sold in the US. President Obama has advocated expanding this credit, but without success. A federal tax credit for the installation of EV charging stations – US$1,000 for installation of a residential EV charging station or 30% of the cost of installing commercial EV charging infrastructure up to US$30,000 – was also available until automotiveworld.com/megatrends/

the end of 2013.

The Obama Administration supports reviving that credit along with other lapsed renewable energy tax incentives, but it is far from clear that Congress will agree to do so.

In contrast to the more subdued approach on the federal level, several state governments are aggressively promoting vehicle electrification. Most notably, a group of eight states has launched an initiative to have 3.3million zero-emission vehicles (ZEVs) – battery-electric, plug-in hybrid electric, and hydrogen fuel-cell vehicles – on the road by 2025. Reaching that goal would require ZEVs to account for 15% of all vehicle sales in each of the eight states (California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont).

The states propose using several

Vehicle electrification thus remains a goal of policy makers both in Washington and in several state capitals – though interest in fuel cells as a long-term option has revived recently, and natural gas is now seen as a viable near-term option for commercial trucks and buses.

Electrification supporters note that the number of plug-in vehicles on US highways rose 96% over the past year, climbing to over 234,000. Critics note, however, that plug-in vehicles still account for less than one-tenth of one percent of the total number of cars and light trucks on U.S. highways.

President Obama’s pledge to see one million EVs on US roads by 2015 may have been overly optimistic, but his Administration remains committed to boosting the use of plug-in vehicles during its remaining two years.

Ian C. Graig is Chief Executive of Global Policy Group Megatrends | 23

Kongsberg Automotive

Kongsberg Automotive provides world-class products to the global vehicle industry. Our products enhance the driving experience, making it safer, more comfortable and sustainable.

Enhancing the driving experience Our Business Kongsberg Automotive’s business has a global presence.

With revenues of around EUR 1 billion and over 10,000 employees in 20 countries, Kongsberg Automotive is truly a global supplier to the passenger car and commercial vehicle industries. The company is headquartered in Kongsberg, Norway, and has 32 production facilities worldwide.

The product portfolio includes seat comfort systems, driveline related systems, fluid assemblies, and industrial driver-interface products developed for global vehicle manufacturers.

SWEDEN

Kongsberg Oslo Hvittingfoss Raufoss Rollag

Gothenburg Ljungsarp Mullsjö

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Grand-Mère

Novi Milan Grand River

SLOVAKIA Vráble

HUNGARY

THE NETHERLANDS Willis Easley Brownsville Suffield Swainsboro Laredo

Moscow

Pruszków

Burton Basildon Normanton

CANADA

USA

Our Products

NORWAY

Siófok

Enschede

CHINA

ITALY

Paris Cluses Molsheim

SPAIN Epila

GERMANY Munich Heiligenhaus

INDIA Gurgaon Pune

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JAPAN

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KOREA Yangsan

Matamoros Nuevo Laredo Reynosa

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Our Business Areas Kongsberg Automotive Group is organized into four business areas, Interior, Driveline, Fluid Transfer, Driver Control, each with a clear customer and product focus.

www.kongsbergautomotive.com

eMobility

Charging uphill: the ongoing struggle for battery EVs Sales of battery EVs remain low, and BEVs look set to remain a niche for many years to come, writes Rachael Hogg

rom current US CAFE standards and the EPA and NHTSA-proposed 2025 fleet average fuel consumption target of 54.5 mpg, to Europe’s Euro standards for light and commercial vehicles, national and regional vehicle emission regulations governing CO2 and greenhouse gas (GHG) are becoming ever more stringent. OEMs and suppliers have been developing a host of alternative powertrains, with a significant focus on electrification. Most of the major vehicle manufacturers now offer a battery electric vehicle (BEV), and are keen to note the technology’s success. However, there is still a long uphill struggle ahead of these vehicles before they can be considered commercially viable.

F

Cosmin Laslau, Lead Energy Storage Analyst at Lux Research, told

Megatrends, “In Europe, the US, and Japan, governments are saying that OEMs have to do more about the emissions and fuel efficiency of internal combustion engines. For some, EVs are the only way forward to meet those needs.” However, others argue that there are many improvements that can yet be made in ICEs, from downsizing to electric turbocharging and cylinder deactivation, as well as vehicle lightweighting and aerodynamic improvements. The leading contender for ICE improvement is micro-hybrid, or stop/start technology. Navigant Research has predicted that worldwide sales of vehicles equipped with stop/start technology will grow from 8.8 million in 2013, to 55.4 million in 2022.

“There is a huge range of improvements left within the ICE,” said

Laslau, creating “a bit of a moving target” for OEMs to meet just with EVs. Consumer perception Various studies have highlighted consumer opinion on EVs. The UK Department of Transport’s ‘Public attitudes towards electric vehicles: 2014’ survey found that only 5% of respondents were thinking of buying an EV. The most important factors putting them off buying an EV were recharging (40%), distance travelled on a battery (39%), cost (33%), and lack of knowledge (16%). The limited choice of EV models (11%), the vehicle’s performance and looks (11%) and the perception that the technology is not yet proven (9%) all also contributed to buyers being discouraged from purchasing an EV. As has been cited by many, the purchasing and maintenance cost, resale value, lack of charging infrastructure, range anxiety, and the time it takes to charge an EV were all significant factors deterring consumers.

In the US, a Navigant Research report concluded that while consumers hold a generally positive view of EVs, hybrids, and natural gas-powered vehicles, interest in BEVs and plug-in hybrid EVs (PHEVs) remains low, below 50%, due to features and cost. The Union of Concerned Scientists’ report assessed American consumers’ attitudes towards EVs and found that a quarter of households with vehicles could feasibly make the move to a BEV with a range as low as 60 miles (97km).

Source: Navigant Research

automotiveworld.com/megatrends/

Megatrends | 25

eMobility The European Commission published its survey on the ‘Attitude of European Car Drivers Towards Electric Vehicles’, which highlighted the need to improve some performance characteristics of EVs. Range and cost were the main factors deterring consumers from an EV purchase. Going forward, public incentives are needed to ensure a wider market deployment, and while European drivers can see the benefits and opportunities of EVs, before they can be considered a credible option, a number of pre-requisites need to be fulfilled.

In Asia, a GFK study concluded that the majority of consumers in Japan have a favourable opinion of EVs (82%), and 63% are considering an EV purchase. In the study, Japan was the only market where EVs were seen to meet the needs of consumers, although fewer than 50% considered ‘environmental friendliness’ as a factor.

China, however, was at the other end of the scale, with only 20% of respondents considering an EV purchase, and just 16% holding a favourable opinion.

vehicles), clean plug-in hybrids, clean hybrids and clean gasoline vehicles with near-zero tail pipe emissions”. In reality, this ranges between a few thousand and some tens of thousands of vehicles; in 2012, Toyota delivered the most, at 296,880 units. Laslau said, “What we are seeing is compliance vehicles that are being made to meet the regulation, rather than a genuine attempt to sell millions of EVs.” Sales EV advocates often say that global EV sales are strong, having doubled in the past two years. True: around 45,000 vehicles were sold in 2011, according to the International Council on Clean Transportation (ICCT), and more than 200,000 were sold in 2013. However, consumer uptake of EVs has been limited to less than 1% in nearly every market. Laslau said, “You can skew the growth numbers by starting from a meaninglessly low base. If you’re adding 50,000 new vehicles in a year, that’s a drop in the bucket.”

Incentives

Compliance vehicles In areas with high levels of pollution, the concept of zero emissions is taken a little more seriously. California, for example, has a zero emission vehicle mandate, requiring “large volume and intermediate volume vehicle manufacturers to bring to and operate in California a certain percent of ZEVs (such as battery electric and fuel cell

26 | Megatrends

Taxation benefits have also helped EV sales so far. In Norway, the fiscal incentive of around €11,500 per allelectric vehicle equates to around 55% of the vehicle’s base price, and is associated with a 6% market share for EVs in 2013, and a 90% market share increase from 2012 to 2013, according to research by the ICCT. This figure highlights how national fiscal policy

can significantly entice consumers into EV purchasing. Although this may be effective at the beginning, it is not sustainable over years. Dr Lars Peter Thiesen, Manager of Advanced Technology Strategy at GM Europe, told Megatrends, “In the future it will be important to receive funding in order to offset the higher price of these technologies and vehicles. However, one should be very clear that it won’t make sense from an economic point of view to have incentive systems running over decades.” It is expected that most incentives will run out at the end of the decade, but could be replaced by smaller incentives such as free parking, or access to bus lanes.

However, these are less appealing to consumers as the cost will rise again.

Cost Although various incentives currently help bring down the upfront cost of EVs, high battery costs are an ongoing issue. Laslau said, “The cost per unit of energy is around US$300-US$450 at the moment, but needs to be decreased by a factor of two or three to make an EV a credible competitor to the ICE, and make it go from 1% market penetration to 10%. In our opinion, the cost will not decrease that dramatically, at least for the next ten or 15 years.” There are efforts to combat this though, and Lux predicts costs will decrease by about 30%, which will lead to an increase in sales. Calvey Taylor-Haw, Chief Executive, Elektromotive told Megatrends, “I think there’s still a massive education

automotiveworld.com/megatrends/

eMobility process needed to explain to drivers that EVs are good. I’ve yet to meet anyone who hasn’t enjoyed driving an EV. The price also has to come down.

The price of batteries is reducing by 25-30% per annum so it’s moving in the right direction.”

Infrastructure There is also the concern over infrastructure. As sales of EVs do continue to rise, it is likely more charging infrastructure will be needed.

According to research by Navigant, by 2020 the European car parc alone will include more than 2.9 million plug-in EVs, supported by over 4.1 million EV charging stations.

Paul Muir, Sunderland City Council’s Transportation Strategy Officer, told Megatrends, “I believe that the infrastructure is sufficient to cope with the current demand; however, as the number of electric vehicles on the road increases, provision will also need to be increased in line.”

Lux Research sees three scenarios that could develop over the coming decades. The most likely is that consumers will own both an EV and an ICE vehicle. Secondly, there will be a rise in the popularity of plug-in hybrid vehicles, which offer emission savings, but still at an increased cost.

The third scenario involves fuel cell vehicles, which Laslau says is unlikely due to cost, and huge infrastructure challenges.

Of all the zero emission technology available, BEVs are currently the

automotiveworld.com/megatrends/

most viable, and are here to stay.

Market penetration is likely to reach around 1-2% in ten years’ time, according to Lux Research, but that isn’t necessarily bad news, as there will be growth opportunities for those working in the battery industry.

Etienne Henry, Vice President Product Strategy and Planning, Nissan Europe told Megatrends, “Battery EV is probably the right technology today for zero emissions.

There are other technologies like fuel cell that we are working on, but it's not only about developing one car. It's having the solution for the customer that they can use in a given

environment. We have to think about the charging network. We thought that with electric vehicles we can quickly have the relevant solution for the customer, so that's why we developed the car, but we have also developed the infrastructure with local authority support.”

As infrastructure develops, costs continue to come down, ranges are extended, and laws force more zero emission vehicles onto the road, sales of EVs are expected to rise.

However, for the next ten to 15 years at least, EVs look set to remain a niche product.

Megatrends | 27

eMobility

Harnessing the power of the sun From the whacky to the serious, the sun is powering EVs in some interesting ways.

By Rachael Hogg ne of the reasons consumers invest in an EV or hybrid vehicle is to achieve lower or zero emissions.

Why, then, would they make that purchase only to power it using electricity generated from fossil fuel or nuclear power? From travelling 10,000km across ten countries in a homemade solar powered EV tuk tuk, to having a designer bamboo EV carport installed at home for domestic EV charging, OEMs, suppliers, and solar advocates are developing innovative ways of harnessing the power of the sun.

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Solar powered tuk tuk Over a beer, Naveen Rabelli scribbled down his idea on a paper napkin: converting a fuel-based tuk tuk to one that was powered by renewable energy 28 | Megatrends

sources. Now he plans to drive his selfbuilt solar powered EV tuk tuk 10,000km (6,230 miles) from Bangalore, India to London, UK, visiting ten countries en route. Over 100 days, travelling around 100km a day, Rabelli’s Tejas (the Sanskrit word for radiance) Tuk Tuk will run on solar and electricity, producing zero emissions, to raise awareness of a potential sustainable, low-cost alternative transport solution. While the vehicle is just a concept at present, Rabelli told Megatrends he is open to discussing the possibility of production with an automotive design or manufacturing company. Rabelli said, “Tuk tuks are one of the most popular modes of public transport in India, yet they are noisy and air polluting. Our solar tuk tuk solution, if made widely available, will contribute to reducing these pollutants.”

Critics of EVs have said that given the current grid emissions in some countries, such as India, there is little to gain by switching to EVs. “As well as reducing air and noise pollution,” countered Rabelli, “we feel our tuk tuk will ease the pressure on the overburdened electricity systems in developing countries.” While a few years ago, it seemed unlikely that hybrid or EVs would reach the mass market, this changed through innovation, investment, government green agendas, and consumer education. “I believe this could drive the demand for solar powered vehicles,” he added.

If the solar powered EV tuk tuk did go into production, it is likely to have its biggest success in countries that already have huge numbers of automotiveworld.com/megatrends/

eMobility conventional fuel tuk tuks, such as South and South East Asia. For now, Rabelli’s project, which has cost him US$6,000, will help further the study of alternative mobility solutions, showcase an entirely Indian solution to the world, practically demonstrate his prototype, and help Rabelli connect with others working towards sustainable living solutions. Currently the vehicle can travel 80km (50miles) when charged for eight hours. With five hours of exposure to the sun, it can go for another 25km (16miles).

BMW solar powered bamboo EV carport If an EV driver is looking to charge their car in style, BMW has revealed a solar powered bamboo carport to charge the i8 and i3, which recently arrived in the US. The i Solar Carport, designed by BMW Group DesignWorks USA, takes style notes from the i3 and i8 EVs. The carport is made out of renewable bamboo, with its roof covered in translucent high-grade glass-on-glass solar modules that send electricity to the EVs, via BMW’s i Wallbox Pro. Once an EV is fully charged, independent of grid-based electricity, any surplus power can be redirected for domestic use.

Although there are no official plans to produce the i Solar Carport yet, Tom Allemann, BMW DesignWorks USA said, “With the solar carport concept we opted for a holistic approach: not only is the vehicle itself sustainable, but so is its energy supply. This is therefore an entirely new generation of carports that allows energy to be produced in a simple and transparent way. It renders the overarching theme of lightweight design both visible and palpable.”

residential SunPower solar system is a reliable, cost-effective way for Volkswagen customers to help manage household electricity costs and charge their electric vehicle with emissionsfree energy.”

Solar powered world record As well as charging EVs, solar power can also be used to power vehicles.

Students from the University of New South Wales in Australia have created the world’s fastest long-range solar powered EV: the Sunswift eVe. On a single battery charge, the eVe averaged speeds of 62mph for 310 miles, ten miles more than the 300 mile official range of the Tesla Model S, although it is considerably lighter at 700 pounds (317.5kg). By the end of 2014, the students are hoping to make the vehicle the first road-legal solar powered vehicle, and are encouraging OEMs to invest in more research on EV technology.

Hayden Smith, Project Director for Sunswift said the vehicle highlights that solar powered EVs are a “viable alternative to conventional fossil fuelpowered vehicles.” As range still remains a huge issue for EVs, the students also wanted to show that it is possible for EVs to have significantly extended ranges. The solar panels are fitted to the vehicle’s body, and have the potential to charge while driving, offering enough energy to power two hours of driving. To achieve a full charge via a household wall-socket, the vehicle requires eight hours, but rapid charging units could also be used to reduce charge time.

Ford’s solar powered plug-in hybrid There may be no indication of a commercial launch for Ford’s C-MAX Solar Energi Concept, which was demonstrated at the 2014 International CES, but the vehicle highlighted the possibility of combining solar power, electrification, and autonomous drive technology. The vehicle is equipped with three SunPower-developed highefficiency solar cells on the roof, each capable of generating just over 100 watts. Over the course of a day in the sun, this is sufficient to generate about one-eighth of the car’s battery charge, explained Mike Tinskey, Global Director of Vehicle Electrification and Infrastructure at Ford Motor Company.

“We’re excited about starting the conversation about how all these technologies – autonomous car, solar power and vehicle electrification – are starting to converge, and this is an example of what you can do when you leverage that,” said Tinskey. Ford has estimated that if all light-duty vehicles in the US adopted the Ford C-MAX Solar Energi Concept, greenhouse gas emissions could be reduced by around 1 billion metric tons a year.

By combining solar power with electrification, OEMs and suppliers are opening up a new world of possibilities, from ‘free’ charging keeping EVs off the electricity grid, to vastly extending the range of EVs past the dizzying heights of the Tesla Model S. While many ideas are currently in the concept or prototype stage, EVs of the future really could be powered by the sun.

Solar powered Golf EV While BMW has revealed its concept for private EV home charging, Volkswagen already offers e-Golf drivers in the US the possibility of installing a SunPower solar system to help with home recharging, through a partnership with SunPower. The supplier says this will help customers save on annual household electricity bills, while powering their EVs, which in turn helps reduce the overall cost of ownership.

Even if a power outage occurred, owners would be able to access backup power to charge their EVs. Tom Werner, President and Chief Executive, SunPower, said, “Investing in a automotiveworld.com/megatrends/

Megatrends | 29

eMobility

Interview: Olivier Paturet, General Manager, Zero Emission Strategy, Nissan Europe What’s Nissan’s view of fuel cell vehicles? Will EVs make it out of niche status?

Where will EVs see greatest success? Olivier Paturet outlines Nissan Europe's Zero Emission Strategy. By Rachael Hogg livier Paturet is the General Manager for Zero Emission Strategy at Nissan Europe. His position involves considering everything that is required before the arrival of EVs, such as charging infrastructure, the availability of government incentives, and in general, the ecosystem around the EV. Here, he discusses the future of the electric vehicle, and Nissan’s future plans for zero emission vehicles.

O

Can you please outline the zero emission vehicle projects on which Nissan is currently working?

We have a number of strategic partnerships co-funded by the European Union. This includes a number of FP7 projects [the 7th Framework Programme for Research and Technological Development in Europe, with a budget of over €50bn], including Green eMotion, a European 30 | Megatrends

Commission-led EV promotion initiative. Green eMotion looks at the success factors for the introduction of EV passenger cars, and there is a freight vehicle equivalent too. Nissan is a project leader on an AT&T Rapid Charging Network project, which is looking to deploy multi-standard EV charging infrastructure in the UK. What is the current status of Nissan’s fuel cell vehicle programme?

We are a member of a number of initiatives across Europe on FCVs, and we’ve said many times that we will be introducing fuel cells in much the same way that we did with our battery EV. That will happen when we strike the balance between cost and performance for mainstream introduction. We have said we will enter the market around 2017.

The Leaf has been successful, but like other EVs, it hasn’t sold as well as hybrid vehicles. Do you think EVs will always be a niche product?

The view at Nissan is that zero emission EVs, or BEVs will probably represent about 10% of the industry by 2020. While it’s a long way from making 50% or 70% of the market, whether you want to qualify 10% as niche is another matter. In certain instances however, the 10% barrier could be met and surpassed for the urban environment.

What has feedback from Leaf owners been like?

We have had absolutely ecstatic feedback. I think we are reaching around a 93% satisfaction level. In our world, that’s a very high level of customer satisfaction. automotiveworld.com/megatrends/

eMobility EV sales are rising, but they have still remained relatively low. Why do you think this is?

The need for a viable ecosystem was underestimated at the beginning. There was the idea that everything would come into place quickly, but in reality it has taken longer than expected to develop the necessary charging infrastructure, and the battery EV technology.

How important are government incentives to growing EV sales?

Government incentives are essential.

There needs to be a push from public office to incentivise the arrival of EVs, but it needs to be combined with a number of non-financial or direct adoption incentives from customers. In Norway, there is a great balance between the two: for top down, there’s a very good level of incentives; and from the bottom up, there’s been a very early adoption of electric vehicles.

Is a move inevitable?

to

Our view is that the integration between energy policies and eMobility is coming at the right time. A 20% share of renewable energy in the energy sector needs to be coordinated, and eMobility is a perfect way of making use of renewable energy sources. For example, Denmark has excess power capacity and BEVs are an ideal way of avoiding losing it.

Do you think EV charging needs to be standardised across different OEMs?

electrification

Yes, the progress is irreversible for a number of reasons. Electrification makes the best use of the existing infrastructure in the city environment.

Secondly, there is a strong push in European cities to meet air quality targets. Thirdly, the integration of energy policies and transport policies sets a clear agenda for an inevitable transition to electrification. oes it matter whether the electricity used to power EVs comes from a clean source?

automotiveworld.com/megatrends/

I don’t think it’s a case of one winning over the other. The customer must understand that it is easy to recharge, whatever EV they have. That’s why we created the Rapid Charging Network project in the UK, which is looking at deploying multi-standard charging infrastructure.

Where do you think are the best places for charging points?

They need to be highly visible. The general public needs to see that things have changed, and it is possible to recharge an EV in a location that a

driver visits every day. The second stage is extending range and having charge points on highways. When the combination of the two is available, the EV becomes a solution as a unique vehicle.

What developments do you expect in terms of EV charging?

Wireless charging is a possibility.

However, to happen it would need to learn from the lessons of conductive charging. It needs to become cost effective, and must offer some kind of interoperability.

In which markets around the world do you see EVs being most successful?

Today, the leading markets are the US and Japan. In Europe, we have our big star, Norway. It is already above the 10% mark of industry share. China is taking very quick steps towards electric vehicles. It will be a combination of China, US, Japan and a few leading countries across Europe.

A version of this article first appeared on AutomotiveWorld.com

Megatrends | 31

Automotive IT news att the speed o off innovation a innovation For curr current off automotive technology, ent news and opinions on a variety o technology, design, and AutomotiveITNews.. manufacturing topics, head to AutomotiveITNews From the latest From latest connected car pla platform innovative tive fuel economy developments, tform wars to innova we pr provide ovide up to the minute news online, on T Twitter Twitter, witter, and via email newsletter subscription.

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Connected Car

Smart data centre – the vital ingredient for the future of connected cars As the number of connected vehicles grows, so too does the need for the data centres that support connected services. Megatrends spoke to data centre operator Verne Global to find out more. By Rachel Boagey

utomotive manufacturers are increasingly using highperformance computing (HPC) to create the next-generation of connected cars. However, with these cars comes data, and an increasing need to effectively manage the information and power consumption required for such applications.

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Verne Global is a UK-based developer of energy efficient data centre campuses, and has recently seen many developments in the connected car landscape, providing assistance to the automotive industry in the form of effective data management through data centres. With its newly built 44-acre automotiveworld.com/megatrends/

data centre campus in Keflavik, Iceland, Verne can enable OEMs to meet their corporate objectives by providing a scalable solution that addresses both their immediate and future power requirements and data needs.

Megatrends spoke to Jorge Balcells, Director of Technical Services at Verne Global, who believes that to successfully create the nextgeneration of connected cars, companies need to be able to manage their data and power consumption effectively. “A connected car is an incredibly powerful tool for manufacturers to gather data from their

users. Huge amounts of data from telemetry, fuel consumption and driving patterns can help manufacturers optimise their new car designs.”

This requires a vast quantity of data to be collected, transferred and analysed.

Explaining the importance of effective data management and power consumption, Balcells noted, “This data needs to be stored and managed, which of course requires power and results in rising operational costs. The less time manufacturers have to spend on data crunching, the more they can invest in revenue producing areas.”

Megatrends | 33

Connected Car

“

Huge amounts of data from telemetry, fuel consumption and driving patterns can help manufacturers optimise their new car designs - Jorge Balcells, Director of Technical Services at Verne Global

Big data centres Verne works with many automotive OEMs and while some manufacturers may lag behind when it comes to managing their data and power consumption, Balcells explained that BMW is achieving carbon and cost improvements by moving some of its computer systems to the Verne Global data centre in Iceland. “By moving ten of its high performance computing (HPC) clusters, which it uses for crash simulations, aerodynamic calculations and computer aided design and engineering from its German facilities, BMW will reduce annual carbon emissions by 3,570 metric tons, and reduce the cost of powering its HPC applications by as much as 82%.”

Balcells explained the importance of combining with OEMs to help develop connected car technology, and noted that despite Verne’s recent developments in data centre infrastructure, none of it would have been possible without partnering with OEMs for their expertise. “As with any endeavour, two heads think better than one. While we are very good at what we do – data centre infrastructure – we must partner with car manufacturers and understand their computing needs, in order to work together in synergy to achieve the ultimate goal: data crunching from driver to manufacturer.”

The connected experiencing

car is change

always and

developments, and for large-scale power users, such as data centres, thinking outside the box has become critical in realising the necessity for coming up with alternative power sources. Asked for his opinion on what will lead connected car development over the next decade, he explained that battery technology will be a key megatrend. “For many years we have heard about how impractical electric powertrains are for cars.” He continued, “As well as being too inefficient, they’re too expensive and too heavy. But today we are seeing more investment into the technology than ever before. Batteries are now lighter, longer-lasting, and can be charged quickly.”

As technology continues to progress, Balcells explained that battery performance will continue to improve.

He added, “As such, it’s Verne Global’s aim to give manufacturers an ‘information factory’ – a place to analyse all of that collected data, enabling them to keep developing these new technologies.”

From effective data storage solutions to efficient power management, data centre operators like Verne will play an increasingly important role in automotive industry stakeholders' connected car strategies.

34 | Megatrends

automotiveworld.com/megatrends/

Navigation for ALL

www.nng.com

Connected Car

An early stage prototype for user testing of different configurations of current and future technologies in in-car environments

Plug’n’play, no way – ustwo on the art of HMI design It’s time to lose the ‘stick a touchscreen on it’ approach, says digital design studio ustwo. By Martin Kahl digital design studio with a strong track record in game design was recently commissioned by a global vehicle manufacturer to create an automotive human machine interface (HMI) concept. That studio was ustwo, a 200-strong outfit with offices in London, Malmö and New York.

Crucially, it was not chosen for its expertise in the automotive industry, but for the very opposite – it was brought in for its lack of experience, and its ability to bring to the arena a fresh pair of eyes.

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But what attracted ustwo to the automotive sphere? “We see a gap appearing in the quality of user experience, and we're really well 36 | Megatrends

placed to take that on,” says David Mingay, Creative Director at ustwo.

Mingay says ustwo’s long experience of working with mobile technology has given it the experience it needs to address the massive growth in touchscreen technology, smartphones and tablets. “That has really played to our strengths, and we've been involved in a number of small and large-scale projects and games across a multitude of industry verticals.”

For now, ustwo’s OEM client remains anonymous. “Obviously, I can't say who they are,” says Mingay. “It's a global company - that's probably as much as we can say. It's a name everyone would know. We'd love to shout from the

rooftops about it because we've got some really simple but yet really effective ideas. We can't give specific examples from the client work, but essentially it’s about taking emergent technologies and doing experiments with real users in mocked up cabins, and functioning prototypes.

Unfortunately, I can't say exactly what those things are."

That well-known global OEM asked ustwo to investigate the driver-car interaction experience of the near future from a human-centric point of view. “People's attitudes to digital, to car buying and to car sharing are changing.

It’s time to wake up and look at the new horizons,” believes Mingay. “It's not just automotiveworld.com/megatrends/

Connected Car a case of sticking a touchscreen on it any more. People's engagement with digital devices and mobile devices are so profound now that they're almost overtaking the importance of car ownership.

“And this is happening with the car industry now. Emerging car buyers, aged 17, used to save up their money, spend it on a car and keep it going.

Now they're spending that money on a smartphone and using public transport. So there's a whole multitude of reasons why we think automotive is changing.”

“We’re problem solvers, especially when it comes to user experience and visual design,” says Tim Smith, a designer at ustwo. “We feel those two things are currently misrepresented in the car, and we feel we're best placed to tackle that specific problem within automotive. It's not like we're coming along and designing our own car. We can't do that. But we are addressing what we are experts in, within a car.”

Ustwo is used to tackling new territories, explains Mingay. “Yes, we do gaming, but we also do consumer and investment banking, and mission-critical dashboards. We're not scared to get into really cutting-edge, challenging industry verticals, and that includes automotive.”

When pursued on the type of in-car work that ustwo has undertaken, Harsha Vardhan, Interaction Designer, reveals a focus on gesture control.

“We’ve looked into gestural interactions, and the possibilities and application of gestures to control certain aspects of the car. We found controlling every aspect of the HMI quite demanding for the user during testing, so we pared it down to parts where it makes the most sense. There has to be a separation between discrete and continuous gestures.” After all, if you're waving to a friend, you don’t want the wipers to come on.

We expect the world in 2025 to look very different from now. Compare life today to 11 years ago; in many ways it was very

different, but in others, things still look very familiar. How different does a futurelooking company like ustwo think things will be in 2025 compared to the difference between 11 years ago and now?

Long automotive processing cycles prohibit such innovation, responds Smith. “It would be disappointing but not unlikely that in 11 years we are only one or two years ahead. We've lost traction. Companies like Google, Apple and Microsoft are offering shortcuts to plug a tablet or a smartphone into to the car for a user-friendly HMI. We don't think that's a very meaningful model, but that could be where it’s going. HMI has fallen by the wayside in favour of plug-and-play solutions.”

The danger of handing over the HMI to a third party is that the key point of interaction between consumer and car brand is lost. Are vehicle manufacturers keen to see somebody coming in with fresh ideas, rather than letting them do what they think they can do best?

A diagram taken from ustwo’s ebook “Are We There Yet” which outlines some of the machine interface challenges facing modern day drivers

automotiveworld.com/megatrends/

Megatrends | 37

Connected Car

Representation of music system information, which takes account of factors such as colour, typography and affordability to optimise a driver’s ability to visually process and control that information

“We are still getting the initial reactions,” says Mingay. “We hope automotive manufacturers take a look and find it interesting. We're certainly not saying we know best. It's about making things easier, simpler, safer and more in tune with the brand. I think that will excite manufacturers. We think there's a big gap between how designers think users will interact with them versus how users really do interact with them. And that's part of our push.”

There seems to be a very real possibility that within a number of years, not all cars will be manufactured by traditional car companies. Google designed a self-driving car and had it

38 | Megatrends

assembled outside of the automotive mainstream; that car has no steering wheel or pedals, and only a start-stop button for human input. When ustwo considers automotive HMI for the nearfuture, is this for a traditional car with a steering wheel, accelerator and clutch, or an all-new concept?

“We're not looking at driverless cars, yet,” grins Mingay. “But there are some other separate projects that we want to start looking at. What happens when you don't need to drive? Why is the seat facing forward - why can't you face each other? Suddenly it is a blank canvas. Many manufacturers need to react and pre-empt the way

that companies like Google and Tesla are shaking things up. We want to work with manufacturers and help bridge that gap. Nobody ever asks whether something is right for the user, fits the user’s needs and is something they're going to want to do when they're driving. We very much come from a user-centric design methodology.

We ask those questions. We want to understand what the users want.”

What message, then, would ustwo have for the automotive industry?

“Come and talk to us and let us spend time with you so we can prove something very quickly in a matter of weeks,” concludes Mingay. “Then we can decide whether to take things forward. We know we can turn things around very quickly with a small, strong team and get results straight away.

We're not talking about six month engagement pieces with a video at the end of it - we're talking about tangible results and tangible outcomes in a short time. Let us build and experiment with some ideas, get some users in, test it, and create something amazing.

And then let’s see how that can progress in a matter of weeks, rather than months or years.” automotiveworld.com/megatrends/

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

Š2014 Garmin Ltd. or its subsidiaries

Connected Car

Navigating the future Infotainment will remain competitive as built in, brought in and beamed in data diversifies the market for OEMs and end users. By Matt Ayres

he landscape for connectivity in consumer vehicles continues to evolve, providing a wider range of navigation and infotainment options than ever before. A diverse range of needs among consumers, combined with obvious advantages and disadvantages for different types of data delivery, means that this

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technological battle for business is anybody's game. According to Kip Dondlinger, Product Manager for Garmin Automotive, the landscape for infotainment will remain multiplatform.

“There will be vehicles where navigation is an option through smartphone solutions, such as

CarPlay and Android Auto, where people don’t want to pay for an embedded system,” Dondlinger says.

“They might be willing to live with what they can get from a tethered smartphone solution such as those.

But we will continue to see embedded solutions as well. One of the things that is problematic for mobile solutions is

Garmin displayed a Heads-up Display (HUD) concept at International CES in January 2014, which brings together the most commonly used features to the HUD, thus minimising the level of driver interaction with the center-stack touchscreen

40 | Megatrends

automotiveworld.com/megatrends/

Connected Car the fact that there is not cell phone coverage everywhere. Even in major metropolitan areas, there are still gaps in coverage. While that may be fine for some end users, for others it’s not going to be acceptable; they’re going to want access to navigation features all the time, whether they have good cell phone coverage or not.”

The Cloud also continues to play an important role in infotainment and navigation, meaning that beamed in data could be as prevalent in cars as it is in smartphones and tablets.

“Where connectivity is available, it’s great to be able to access things like POI searches over the Cloud, whether that’s through a smartphone connection or an embedded modem in the vehicle,” Dondlinger says. “We also recognise that there will be cases where none of these options are available, or where you may be somewhere without good, fast data coverage. For those situations, we continue to include embedded POI.” Dondlinger continues to explain that, while embedded systems have traditionally been slow to update their data, this will soon change when overthe-air information updates are introduced to built in systems. “We’ve got technology coming in our next generation navigation core, Gemini, which enables you to push smaller files, map updates and POI updates to vehicles over wireless networks,” he says. “It will mean we are very frequently and affordably able to give users the latest information in their vehicles.”

Another way that Garmin is responding to increasing competition from consumer electronics companies like Apple and Google is by integrating third party applications into its own infotainment systems. By including functions from popular apps such as OpenTable, Yelp and Foursquare within its navigation core, Dondlinger believes that Garmin can provide a more useful service for the end user.

“You may have an application running in the background from a third party provider that suggests destinations, or shows you where your friends are, for example,” he explains. “Those apps can benefit from being able to access the navigation information on where you’re heading, what route you’re taking.

Today, in some vehicles that support applications such as OpenTable and Yelp, you have to exit out of navigation automotiveworld.com/megatrends/

and enter into those other applications to, for example, make a dinner reservation.

“With our K2 navigation solutions, though, you’ll be able to access that type of functionality from within the navigation system. It means fewer steps for the user, so that it’s much easier to find a destination and do the other things that you want to do with a third party application, without having to manage separate apps.”

With increasing infotainment options arrive growing concerns about driver distraction. Garmin believes that by using more advanced infotainment technology alongside advanced driver assistance systems (ADAS), it can help to solve the diverted attention dangers often associated with in-vehicle infotainment.

“Driver distraction is a big issue everywhere, particularly in North America and Europe, and I think the industry can design navigation systems more intelligently to minimise distraction, or increase awareness of manoeuvres that will require the driver’s full attention,” Dondlinger says.

“For example, we’re seeing map and navigation related data being used by driver assistance systems within the vehicle, whether it’s used to correctly aim headlights, to accurately approach kerbs or to predict a powertrain response. We will also continue to see infotainment systems used within electric vehicles to help alleviate range anxieties and other issues that come along with EV technologies.”

Asked what other key megatrends Garmin would be addressing with

developments in its automotive technology, Dondlinger recognised the necessity for simplifying in-car tech and making it more useful to the end user, as well as the new opportunities that increasing connectivity offers in other aspects of people’s lives.

“As systems become more complex, they can become more and more difficult to use,” Dondlinger comments.

“Overall, though, the increasingly connected environment is going to make some really significant improvements to in-vehicle navigation.

The days of having to load software on to a system yourself are soon going to disappear, as we see more and more systems that do the same things people have come to expect through their smartphones and their tablets. That is, to always have updated software and the latest information.

“Another good service is being able to leave the vehicle and automatically have last mile information transmitted to your phone. For example, if you are going to an airport or a large shopping mall, our systems can route you specifically to where it is you want to go, whether that’s to a specific airline within an airport terminal or the nearest entrance to a store in a shopping mall.

Once you shut off your car, that information can be instantly transferred to a portable device so that we can guide you to and from a specific location.

“There are a lot of opportunities both within and outside the car to really connect the user to their vehicle and to the navigation information that’s available.”

Megatrends | 41

Connected Car

Evolution, not revolution: the slow, steady advance of the autonomous car Rather than a sudden jump to full autonomy, expect a gradual emergence of autonomous capabilities for vehicles, writes Maryanna Saenko

he hype around the supposed autonomous car revolution is gaining momentum daily. However, improvements in automation continue to be incremental, and how vehicle manufacturers go about ensuring that each implemented feature is safe, robust, and reliable will play a large role in determining the future of driverless cars.

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Rather than a sudden jump to full autonomy, the emergence of autonomous capabilities for vehicles will be a gradual one. As time progresses, the level of vehicles’ advanced driver-assist features will increase in complexity and capabilities. When considering the gradual move towards full autonomy, it’s useful to use the US National Highway Traffic Safety Administration (NHTSA) standard of car automation levels, where level 3 (L3) and level 4 (L4) denote partially driverless and fully driverless operation, respectively.

While there is growing support for the SAE standard, which adds an extra level (totalling six levels vs. NHTSA's five), providing granularity around human intervention depending on the selected drive mode, the NHTSA standard is appropriate when considering most driver assist features today.

the passing of controls back and forth between the human and the car. The initial problem of reliance on driver assist features will soon become apparent as L2 cars gain global market share. L2 technologies, such as lane sensing and blind spot detection, are already standard features in many cars today.

Over the next ten years, the automotive market will see a dramatic shift from Level 1 to Level 2 autonomy in new cars sold. Level 2 will increase from a small fraction of new cars sold today – about 3% globally – to 57% in 2020. However, a look at Lux Research’s global adoption predications for L2 cars shows that in the near term, the global penetration rates of L2 technology will be

concentrated in countries like Japan and the US. One major concern with driver assist features is that they may cause driver complacency. Once a driver begins to fully trust a feature like blind spot detection, they rarely double check to see if the indicator accurately reflects the situation. As these features become more common and drivers grow more reliant on them, there is a potential threat to safety when an L2 system fails, or the driver operates cars which lack L2 technology, such as when they travel to foreign countries.

Keeping driver engagement and enabling safe passing of controls will continue to be a safety concern for

As cars progress from L1 to L4 there will be major safety concerns when considering how drivers will interact with autonomous vehicles. Two problems in particular will be human reliance on driver assist features, and 42 | Megatrends

automotiveworld.com/megatrends/

Connected Car autonomous vehicles going forward. If developers can achieve Level 4 full autonomy, then cars will no longer need steering wheels or pedals: humans will effectively be cut out of the driving process altogether, a solution that Google is attempting.

However, on the road to this goal, the industry will first go through Level 3 partial autonomy, where humans will hand over driving duties to cars in certain conditions, and when those conditions become too overwhelming, cars will hand the controls back to the driver. The question of how to make sure the driver is still engaged enough to be able to resume their duties is unanswered. Even once the driver does begin to focus back on the task at hand, it takes time, especially as he or she is by definition being pulled back into a complex situation that the car cannot deal with.

A thought-provoking conversation is whether or not L3 ever makes sense.

There is a clear value proposition for L2 features, such as collision avoidance, but L3 is tenuous, with the known complications associated with handing controls back and forth to the human. An analogy here is that of airline pilots, who, even though they are highly trained and whose job is predicated on staying alert at all times to provide safe transition between pilot and autopilot, remain susceptible to distraction. This motivated the

automotiveworld.com/megatrends/

adoption of the FAA's Sterile Cockpit Rule, which enacted strict constraints on pilots to limit any distraction that could prevent safe operation of the aircraft, including conversation and eating. Contrast that with the typical car driver today, where eating, chatting, and, unfortunately, texting remain commonplace. Coupled with the fact that drivers would have implicit permission to stop paying attention when in driverless mode, the potential for accidents rises quickly.

One solution is to innovate past the problem, generating interest around unconventional automotive technologies like wearable electronics that could monitor drivers and

communicate with the vehicle, enabling some kind of stimulus – such as a haptic device – to nudge the driver to attentiveness. Human distraction and reaction pose a very difficult problem, and the solution may ultimately be an autonomous, driverless car that operates in limiteduse cases, such as at low speed on predictable routes.Taking the human driver out of the picture may, in the end, be the correct solution, but it only solves one of the many challenges in the way of a driverless future.

Maryanna Saenko is an Analyst at Lux Research in the Autonomous Systems 2.0 Intelligence service

Megatrends | 43

Connected Car

Adapt, acquire and aggregate: how to succeed in automotive electronics Megatrends talks to Christian Feltgen about Visteon’s investments in connected car technology and services. By Rachel Boagey 44 | Megatrends

automotiveworld.com/megatrends/

Connected Car Megatrends spoke to Christian Feltgen, Global Director of Cockpit Electronics, and Vice President of the Technology Office at Visteon, about the company’s recent developments and future plans for market expansion.

Acquired benefits “The reasons behind the acquisition were fairly straightforward,” said Feltgen, “including the sheer market size it would provide and the difference it would make to our relevance within the industry.” The acquisition not only put Visteon amongst the top three players in cockpit electronics, but Feltgen also explained that it has given the company all the necessary levers and advantages it needs in terms of purchasing power, global engineering footprint and manufacturing footprint, as well as bigger budgets and greater resources for advanced development.

The acquisition of Johnson Controls Electronics also provides more specific implications in technology areas, explained Feltgen, referring to the two organisations’ similar histories. Thanks to technologies that complement the cockpit electronics portfolio, he said, “We are able to integrate technologies, modules, electronics, and control units, and JCI brings a very market-leading technology in that space.”

isteon has recently become one of the top three global suppliers of vehicle cockpit electronics following its acquisition of the electronics division of Johnson Controls (JCI), which the company says will further its deliverance of innovative in-vehicle user experiences, as well as providing it with combined annual sales of US$3bn.

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The supplier has spent the last few years positioning itself to support vehicle to infrastructure (V2X) communication, through homegrown technology solutions and strategic partnerships, and is using its recent acquisition, amongst other developments, to improve its standing in the automotive electronics industry. automotiveworld.com/megatrends/

One particular advantage of the Johnson Controls Electronics acquisition was its head-up display technology. Feltgen noted, “The old Visteon has been very successful with market leading technology when it comes to display integration, centre stack and instrument cluster. However, JCI brings great technology in combiner and windshield head-up display technology, which complements the overall user experience technology.”

Connected convenience “Connectivity is one of the buzz words or megatrends for our product segment and for the whole industry, and our 4G LTE demonstrator car helps to reduce manufacturing complexity. A car that is permanently connected can be updated and have features added after the point of manufacturing and sale.”

However, also equally relevant as a reduction in manufacturing complexity, explained Feltgen, is the ability to manage content and quality of the car in the field. “Today, typically cars have

to be recalled for every issue that has to be fixed. With the car being connected, you can do this over the air.

And that takes a lot of lifetime cost out of the automotive industry as a whole.

That one we actually consider a bigger advantage than the reduction in manufacturing complexity.”

Feltgen addressed the importance of car infotainment platforms being adapted and updated constantly, and explained that in the future, the supplier will continue to evolve its infotainment solutions to meet rapidly changing customer needs. “The ability to update a car’s IVI system has to be a given very soon,” said Feltgen, “And not only in the sense of simple telematics, but the car has to be connected to an infrastructure that enables over the air updates.”

Eyes on the road Many efforts have been made by suppliers including Visteon to address the challenge of driver distraction, investigating many kinds of distraction avoidance technologies such as eye tracking, touch, voice, intelligent data analytics and ultimately putting all of these elements together to further enhance the user experience in the car.

Specifically, explained Feltgen, the supplier has recently been in the development stages regarding touch and camera-enhanced cockpits.

Feltgen also noted that the company has significantly increased its investment in consumer research. “One has to understand what makes up an acceptable human machine interface, which technologies are a risk relative to driver distraction, and which technologies help the driver to concentrate.”

Driver distraction issues within the car need to be addressed using multimodal HMIs, said Feltgen.

“Instead of having only one way to operate one function, giving the consumers in different regions different ways of controlling a feature or a function in the car is a key enabler to reducing driver distraction.”

Product aggregation Today, explained Feltgen, a mid-size, premium car has 80 to 90 electronic control units (ECUs); Visteon is investing in solutions that enable aggregation and integration of those ECUs into fewer, but more powerful units.

Megatrends | 45

Connected Car “The instrument cluster in a car has always been completely separate from the audio and infotainment unit. We want to join the two and we’re the first company that offers a market-ready secure solution to run those features out of one box.”

Design-to-adapt Visteon recently released a demonstration vehicle equipped with a 4G LTE telematics system offering a Wi-Fi hotspot, and Feltgen explained that technological developments such as these would be able to reduce the manufacturing complexity of the vehicle and enable Visteon to manage vehicle content and quality.

To do this, the concept car was built on a single hardware architecture that supports regional requirements through unique modem implementations and incorporates not only a telematics control unit (TCU), but OS software, apps and cloud services for a complete end-to-end solution.

One of the challenges currently being addressed by Visteon, explained Feltgen, is that in the past, the automotive industry has focused on the car’s release to the dealership. “Every technology that went into the car was designed towards step one, but that will change.”

Going hand-in-hand with the increasingly connected car is being able to not only update, but store the software and data. The products currently designed by Visteon are

46 | Megatrends

designed under the theme of designto-adapt. “Our products, both with the OEM and the end consumer, need to be designed and connected in a way that enables the updating, enhancing and offering of additional features over the lifetime of the vehicle. From design to start of production, companies need to design-to-adapt over the Cloud.”

Design-to-adapt, said Feltgen, is a theme that is incorporated into every product produced by Visteon. “We do it in a way that enables access and new features, fixing issues over the lifetime.

That's a big trend. And that is not just a trend relative to one product - that's a trend that impacts a lot of products in the car.”

Looking to the future, Feltgen explained the importance of Visteon not only

investing in a full connectivity portfolio, but of also investing in the services.

“We need to make sure we are providing services above and beyond the products on offer and that will be a very important trend for us.” As the market is still very fragmented, he added, many different OEMs have multiple strategies, leaving Visteon with the important job of positioning itself to service that market.

Although the supplier may be on the right track in achieving these goals, whether through acquisition, aggregation or innovative product development, the main hurdle lying ahead for Visteon, as for other suppliers, is continuing to prove itself in the ever-expanding automotive electronics industry.

automotiveworld.com/megatrends/

At Visteon, we’re not just telling automakers our view of mobility in the year 2020 we’re showing them.

The same foresight that has made the e-Bee a hit with automakers around the world is driving Visteon innovations in vehicle climate control and cockpit electronics. Our eco-friendly climate control and thermal management products help keep passengers comfortable and engines cool - and manage temperatures for batteries and power electronics on hybrid electric vehicles. And we’re becoming a go-to partner for automakers seeking to bring consumer electronics approaches into vehicles quickly, efficiently, and reliably. We’re bringing the future into focus - and improving the driving experience.

Over 100 years of experience in vehicle production and a broad range of services make MAGNA STEYR the worldwide leading brand-independent en nggineering and manufacturing n partner for OEMs. Our extensive range of services covers five product groups: • • • • •

Engineering Services: From From systems and modules to complete vehicle engineering Vehicle from om niche to volume production production Vehicle ehicl Contract Manufacturing: Flexible solutions fr Fuel Systems: Innovative fuel systems Battery Systems: Li-Ion battery systems for vehicle applications Entire Roof Systems: Entir e range of rroof oof systems

The product group Battery Systems develops and produces high- and low-voltage battery systems for hybrid and electric vehicles, as well as 12 V batteries for starting applications and on board power support. In this field we focus on passenger cars and heavy duty vehicles. This Magna Steyr product grroup oup is represented globally with locations in Austria and the USA.

www www.magnasteyr.com .magnasteyr nasteyrr.com

Powertrain Innovation

All powertrains can be improved with the right lubricant, says Shell VP With the emergence of alternative powertrain technologies, new kinds of lubricant will be needed to help improve efficiency. By Matt Ayres n an age where drivers assume that everything in their cars should work all the time, efficient products are more important than ever. Using the correct lubricant in an engine is one way to help cars and trucks remain reliable, and Selda Gunsel, Vice President of Global Technology at Shell Lubricants, works hard to ensure that the products her company has developed for OEM vehicle applications are used throughout the life of a vehicle.

I

“Our approach in developing nextgeneration lubricants relies on our partnerships and close working automotiveworld.com/megatrends/

relationships with car manufacturers,” Gunsel explains. “We ensure that we collaborate with leading companies and manufacturers, and we apply the learnings from these collaborations to develop our next-generation lubricants.”

The VP continues to describe what she calls the key elements of Shell’s technology strategy. “The first element is innovation, the second is based on partnerships, and the last one is application,” she says. “Innovations starts with our customers’ and market needs, so we make sure that we have good insights about our OEM

customers’ needs as well as general consumer needs.

“This defines our innovation programme.

For example, fuel economy is a big challenge, but it’s also a consumer need.

Every time we can improve fuel economy, consumers can save money.

And of course, this also reduces carbon dioxide emissions, which is critical for health and for the environment.”

Developing an innovative product in the lab is not enough, says Gunsel. Shell’s approach is to make sure that its products are applied correctly within its Megatrends | 49

Powertrain Innovation customers’ operations, to improve efficiency and productivity. This is ensured by having technical specialists working in the field with customers, to oversee the application of the right products in the right places.

However, the emergence of various alternative powertrains and alternative fuel technologies is making it increasingly difficult to know which lubricants to use and where to use them. Gunsel details how new lubricant technologies are also required to optimise performance.

“Smaller turbo-charged engines run hotter and require lubricants with higher oxidation, nitration stability and ash content to prevent piston deposits and pre-ignition,” she says. “The growing use of biofuels in alternative fuel vehicles may increase corrosion in engines and cause oil dilution, which may lead to reduced lubricant film thickness and increased wear.

Therefore, lubricants with improved corrosion, wear and dispersancy properties are needed.”

For example, hydrogen fuel cell vehicles generate water as a byproduct and require new lubricants with high dispersancy levels, while hybrid vehicles require low friction lubricants

50 | Megatrends

improved fuel economy with characteristics. While Shell recognises that an alternative solution that matches the energy potential and convenience of gasoline or diesel may eventually take hold of the market, Gunsel believes that focusing on improving the efficiency of existing internal combustion engines is still very important. “Only about 20 to 25% of the energy created by the combustion of fuel is actually used to move the car, so there is still a huge opportunity to improve the thermal and the clinical efficiency of the internal combustion engine,” she says.

With new industry specifications for heavy duty trucks and buses, improving fuel economy is also important in the commercial vehicle industry. Shell is leading development in response to the new PC-11 category, after the American Petroleum Institute (API) asked the company to take the initiative on the evaluation, development and implementation of the new specification.

“The tests that are designed to measure fuel economy in this market are currently being developed,” she says, adding that PC-11 products will probably be introduced in late 2016 or early 2017.

Asked about other energy-related activities at Shell, Gunsel explains

the company takes a that comprehensive approach when it comes to developing global solutions.

“We are working on developing energy-efficient products that help our customers to conserve energy and reduce CO2 emissions,” she says. “In addition, we are working on developing low carbon biofuels, and we have an active technology programme dedicated to developing next generation biofuels. We are also producing more natural gas. It is the cleanest burning fossil fuel available today. And we’re helping to develop further technologies such as carbon capture sequestration. This requires us to work really closely with other technology partners as well as governments.”

One other way that Shell encourages innovations in energy efficiency is through its global sponsorship of the Eco Marathon, which challenges students from around the world to design, build and test ultra energyefficient vehicles. Gunsel describes it as one of the most exciting programmes she has been involved with.

“It’s really great to see students from university and even high school level coming up with innovative solutions that can help us meet the energy

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Powertrain Innovation challenge,� she enthuses. “The results of the competition are really impressive.

The main focus of the event is to

develop vehicles that can go the furthest on one litre of fuel, and I think the solutions that students are bringing

to the table are actually very helpful. It gives us some input into our own energy programme.�

Shell chose Shanghai for the location of its Chinese technical centre in order to work closely with customers and attract the best talent in China

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Megatrends | 51

Powertrain Innovation

What's under the hood of your self-driving car?

Google’s self-driving car is a battery electric vehicle. Is any one powertrain type best-suited to autonomous drive technology? Martin Kahl investigates he idea that a tech company might challenge the traditional automotive industry by launching its own car is one that has been discussed for several years. Nonetheless, the mainstream automotive industry was caught by surprise when a Silicon Valley company that has only been in existence for several years went ahead and did just that.

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Unveiled in May 2014, the Google car was not built by a mainstream car company; and although it is called a car, other than a stop/start button, it has no steering wheel or driver controls.

52 | Megatrends

Google pitched its self-driving car as a low-speed, urban use vehicle developed specifically for providing mobility to people who could not otherwise use a car independently.

Significantly, it is a battery electric vehicle, and this raised an interesting question: what, if any, is the most suitable powertrain type for autonomous cars? Megatrends put this question to several automotive industry experts.

“One of the key enablers for DAS [driver assistance systems] and semiautomation has been the electrification

of the actuator system, which has enabled features like electric power steering,” says Andrew Whydell, Director of Product Planning for Global Electronics at Tier 1 supplier TRW. The first lane keeping system, explains Whydell, was introduced by Lexus in 2007 in the LS460. “The reason Lexus could do it before anybody else was that it had developed a hybrid version of the car with a 42V electric power steering system. It was effectively a step down from the 300V battery pack that actually ran the car.” This meant that Lexus had an electric system powerful enough even for a full-sized automotiveworld.com/megatrends/

Powertrain Innovation

luxury car, because it was essentially running off a hybrid system.

“Being able to make electric power systems powerful enough has been a barrier until the last year or so. Now that we can do it with 12V systems, we are developing solutions for the technology. With Electronic Stability Control we now have the braking, and with EPS we have the steering. This means we don’t need to have an electric car.” Furthermore, explains Whydell, the use case for electric cars adds complexity. “Electric cars are generally used for low speed city driving. There’s a natural fit between speed and the level of automated capabilities. An electric car being driven in a city environment is in one of the most challenging environments for autonomous driving anyway. It’s clear why Google has taken that approach, building up capability at low speed, but depending on how complex the automotiveworld.com/megatrends/

situation is, it may be that a driver needs to step in or the car will just slow down if it cannot figure out what it needs to do.”

In the last issue of Megatrends magazine, we looked at BMW’s highly automated driving technology which is being developed for internal combustion engine cars driving at expressway speeds - the exact opposite of Google’s self-driving, lowspeed urban electric car. Another Tier 1, Continental, is also looking at lowspeed semi-autonomous driving, with the intention of alleviating drivers of the chore of driving through slow-moving stop-start city centre traffic.

Prediction-based energy management There is a link between powertrain efficiency and autonomous drive technology, says Vincent Charles, who

works in Continental’s Innovations and Technology Corporate Communications department. The key concept, he says, is prediction-based energy management. Optimised combustion engines with an increasing level of electrification make a significant contribution to sustainability, says Charles, but a major factor in any vehicle’s ultimate energy consumption is the driver. “The driver decides on speed, acceleration, deceleration and gear changes based on his experience, knowledge of the car he is driving, and the road topology. Studies show that these decisions can easily affect energy consumption by as much as 20%.”

Such a wide variation in energy consumption has led Continental to focus on highlighting to drivers the impact of their driving style on fuel consumption, and providing them with opportunities to drive the vehicle as efficiently as possible.

Megatrends | 53

Powertrain Innovation Charles says Continental expects to improve efficiency potential by increasing the level of automation and networking of vehicles; ultimately, vehicles will optimise energy consumption using better information about their environment and the roads they are on than any human driver with the greatest foresight could ever otherwise have. Charles envisages a scenario in which a driver stuck in stopstart traffic can sit back, relax, and let the car drive through the traffic as energy-efficiently as possible using data gathered from monitoring the surrounding environment and through communication with other vehicles.

The supplier is not only looking at lowspeed solutions; Christian Senger, Continental’s head of research for automotive electronics, recently said, "The Continental Mobility Study 2013 has shown that motorists worldwide want automated driving on the freeway.

Their needs match up perfectly with the development possibilities in the upcoming years.”

As such, says Charles, "predictionbased energy management" will become increasingly important in connection with growing engine hybridisation, co-ordinating the entire flow of energy in the powertrain as well

54 | Megatrends

as that of the fuel and electricity energy sources, lowering system costs and consumption.

Not radically different

of the drivetrain, the most sensible things still apply, just as they would with a conventionally-driven vehicle.

You could imagine in-wheel motors, but that adds cost compared to having a central electric motor, a simple differential transmission and two driveshafts.”

Autonomous vehicles will most likely appear in megacities, as a form of taxi, believes Rob Rickell, Senior Vice President, Engineering at GKN Driveline. And, he adds, due to city centre emissions regulations, such a car will almost certainly be an electric car. “The Google car will be limited to a maximum speed. In terms of the drivetrain, there may be no steering wheel, but the steering will still work on a steering axle, and I expect the majority of such cars will continue to use a central electric motor, a single speed reduction gearbox and two driveshafts with CV joints driving the front or the rear wheels, depending on the passenger compartment.”

Detection, perception, decision and control

Such a car would, from an engineering perspective, not differ significantly from what is being done today with some electric vehicles, says Rickell, adding, “It’s hard to see why autonomous cars need to be radically different.” The big difference for a fully autonomous car, says Rickell, is the lack of passenger input. “There’s no steering wheel, and braking is done autonomously. In terms

Nissan is one of the major global OEMs to have committed to bringing autonomous drive technology to the mainstream by 2020. Indeed, it already has an autonomous car, says Jerry Hardcastle, Vice President, Nissan Technical Centre Europe. Hardcastle, who is also General Manager, Innovation and Performance Projects in Nissan’s Global Marketing and

The ideal combination of efficient powertrain and autonomous drive technology would be likely to involve a central electric motor, says Rickell. He’s keen to emphasise, however, that the technology for autonomous driving already exists, but that further advancements are being slowed not by technology but by legislation, and the question of how much responsibility the occupant has to intervene and stop things happening when needed.

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Powertrain Innovation

Communications Department, explains, “It’s a Leaf. We showed it at an event called Nissan 360 last summer and we've demonstrated it widely in Japan.” The electric powertrain, which delivers instant torque, lends itself to autonomous vehicle applications, says Hardcastle, but this does not exclude other powertrains from the autonomous car race. “When you're developing an autonomous car, you have four steps: detection, which covers all sensors.

Then perception – that is, identifying what's going to happen next; then comes decision, followed by control.

And right now, all four steps are difficult.”

An EV simplifies the control element, explains Hardcastle. “But once you've developed the control mechanisms, it really doesn't matter what you're controlling. And for us, there are other aspects. At Infiniti, we've got Direct Adaptive Steering, which is easier to control than standard steering. You may remove the steering wheel, but you've still got to turn the wheels. Using the Direct Adaptive Steering system for autonomous vehicles will help.”

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Hardcastle expects autonomous drive technology to be tested in EVs because, put simply, “it's easier”. Once tested, the technology will be adapted to hybrids and internal combustion engines (ICEs).

Adding the software simply to control an ICE requires considerable coding.

“Adding that to an autonomous car just makes it more complicated. Ultimately, we will develop the control systems for any powertrain. We'll develop the autonomous drive technology for any powertrain. And then we’ll put them together. So it's definitely not exclusive.

It's just easier at the beginning.”

Given that the Google car has been pitched as offering mobility to people who were unable otherwise to drive a vehicle, developing autonomous car technology for a vehicle with a combustion engine would still require the manual refuelling of that vehicle.

Here, too, EV technology lends itself to autonomous driving. GKN’s Rickell agrees, adding that the most logical refuelling – or in this case, recharging – method for an autonomous vehicle would be inductive (wireless) charging,

with charging pads at parking spaces and traffic lights, for example.

Eliminating the manual refuelling of a gasoline tank is not the only reason to develop an autonomous car, says Hardcastle, “but it is one of the reasons.

If you go down that path, then an induction-charged electric vehicle makes sense. The car will steer itself over the induction plate and charge itself.”

Feet off, hands off, eyes off Another reason for autonomous drive technology development is safety, and the fact that the car can assist the driver. Nissan boasts class-leading levels of ‘safety shield’ technology in its latest generation Qashqai. “It's got back-up collision protect, it's got lane departure warning and it's got electronically controlled braking systems,” says Hardcastle. “All of those are there now, trying to make the car safer. But if you give it more detection, more perception, then those systems can start to intervene in more difficult conditions. And you'll see that developing, probably, before the full autonomous car.”

Megatrends | 55

Powertrain Innovation

Hardcastle cites MIRA’s George Gillespie, who has described the development of the autonomous car as a three-stage process: first, feet off, with the car running in cruise control; second, hands off, with the car steering itself; and finally, eyes off – at which point, the car becomes fully autonomous. “Each of those steps takes another level of technology,” grins Hardcastle.

Markus Pfefferer, a Managing Director at Ducker Worldwide, does not believe any one powertrain type is best suited to autonomous cars. “It is obvious that the OEMs will use their existing technology to gradually mature their inhouse hybrid and electric solutions,” he explains.

“Semi-autonomous technology, which typically includes lane-keeping, collision avoidance and cruise control features, is already available in vehicles like the 2014 Mercedes-Benz S-Class, which has an optional Advance Driving Assistance Package, and the 2014 Infiniti Q50. Both run on a regular powertrain.”

Pfefferer expects to see a rise in the number of cars with semi-autonomous drive technology over the next three to five years, all with conventional gasoline or diesel powertrains as OEMs begin adopting semiautonomous systems in their regular line-up. “Current experimental fully autonomous vehicles, however, are 56 | Megatrends

either running on hybrid, such as the Ford Fusion and Toyota Prius, or on electric powertrains, like the General Motors EN-V, Nissan’s Pivo concept and the Leaf, and Google’s car.

Therefore, fully autonomous vehicles which are expected to be ready for commercial production between 2020 and 2025 may use hybrid to start with and may switch to electric powertrains as electric vehicle technology matures.”

Develop from the ground up, or bolt on to existing technology?

The Google car is so heavily reliant on the specially developed computer that manages the vehicle and its electronic systems that a traditional combustion engine would seem out of place.

“We’ve been bolting things on to existing cars for a long time, and started to realise that that is very limiting in what we can do,” says Jaime Waydo, a Systems Engineer on the Google Self-Driving Cars Project, in a Google video. The Google car has been custom-built from the ground up specifically for self-driving, and Google has the advantage of stepping into the game as an outsider, with no automotive heritage binding it; OEMs and suppliers from the traditional automotive industry, on the other hand, are effectively bolting things on to existing cars. As Ducker’s Pfefferer points out: “Google does not have a history of developing powertrains, so it’s not surprising that it has chosen an

electric powertrain for its prototype, giving it independence from the OEMs.” The answer to the original question still eludes us, however. As so often, the short answer is: it’s applicationdependent. For now, at least, semi-autonomous drive technology is being offered as an optional comfort feature; drivers are expected, or expect, to retain ultimate control. Those vehicles will spend much of their time being manually driven, and their drivers will have expectations broadly similar to drivers of manually-driven ICEpowered cars. Users of fully autonomous cars have totally different expectations; through choice or necessity, those users will be passengers only, and for them mobility, convenience and cutting edge technology are of paramount importance.

Traditional powertrains remain compatible with semi-autonomous vehicle technology, and for now also with fully autonomous vehicle technology. But the traditional automotive industry must beware: whilst it bolts new technology on to existing products, the non-traditional players are custom-building mobility solutions from the ground up. Originally we questioned the compatibility of powertrains and autonomous drive technology; perhaps the question should run deeper, and question what we really want – cars as we know them, or mobility solutions? automotiveworld.com/megatrends/

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Powertrain Innovation

Interview: Michael Fleiss, VP Powertrain, Volvo Car Group Rachael Hogg talks to Michael Fleiss about Volvo’s powertrain focus, his opinion on electrification, and consumer perception ichael Fleiss is the Vice President of Powertrain at Volvo Car Group.

He is responsible for developing engines, gearboxes, fuel systems, intake systems, and exhaust systems at the OEM.

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What will Volvo’s powertrain focus be over the coming decade?

We were part of the Ford Motor Company and a few years ago were sold to Geely. The biggest challenge has been to develop our own powertrains because we previously used Ford’s and others. We are on a mission to become a standalone automotive manufacturer. Our focus was to develop our own engine family, which we have done now. Looking ahead, over the next decade we will refine the already best-in-class engine, improve its CO2 output, and offer more performance and better value for the customer. We will also improve our electrification, which is a big part of the Volvo strategy.

What can you say about Volvo’s new triple cylinder engine family?

That is fresh off the press. When you want to stand out as an OEM, you don’t

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only need a 2.0-litre engine, but a smaller engine also. This is because there are a lot of tax regulations based on displacement, and secondly, the smaller engine, the less the CO2. We currently have a 1.6-litre gasoline and diesel engine, which are good, but we are working on a smaller engine, which is a known secret. If you have a 2.0-litre four-cylinder engine with a lot of tax regulations around the 1.5-litre mark, then the most sensible thing to do is get rid of one cylinder. You then have a perfect engine with the right displacement, and you can carry over all our manufacturing equipment. It will take some years before we launch this though.

Experts say ICE engines have a long way ahead of them. Is that your view?

Every engineering expert says ICEs will have a long future ahead. Five years ago, nobody would have dreamt that the 95g CO2 target in Europe could be achieved by conventional technology. We know we can achieve it at Volvo, and assume other OEMs are not far off. There are always improvements on conventional technology which can deliver

Megatrends | 59

Powertrain Innovation competitive consumption values for customers, without having to go the way of expensive electrification. As soon as prices for hybrid technology components reduce, the world will change, but until then, ICEs have a long future.

What further improvements do you think can be achieved with ICEs? Volvo is working on a lot of things.

There are small kaizen modifications – very detailed improvements in the calibration, material technology and combustion – but also bigger steps such as cylinder deactivation, which isn’t in the market yet. We are also looking into more aggressive stop/start functionality, which is a good measure to save CO2. So there’s cylinder deactivation, stop/start functionality, and then the move to hybrid and EV technology.

Could you comment on Volvo’s view of developments in alternative engine architectures and cylinder layouts?

We started the development of the smaller engine to understand the best displacement for our applications, and came to the 0.5-litre per cylinder that we now have on our V engines. We have a 2-litre gasoline, and diesel, and we will soon have a 1.5-litre. All our vehicle architecture is based on inline four-cylinder technology, and we have purposely designed ourselves out of V6 or V8 engines. There is no possibility to fit them into our future cars.

What would a supplier of a new engine design have to do to

convince a major global OEM like Volvo to adopt its technology, or is Volvo solely set on developing its own engine?

Do you think that the move to electrification is inevitable?

It would have to be a drastic improvement over what we current have, in terms of cost, CO2 and package. The engine bay in our vehicles is based around the inline fourcylinder, and every other engine layout I know will not fit and wouldn’t possibly be better than what we have.

I hope we can still base our developments on offering electrification if the customer wants it. I don’t want to offer electrification to fulfil legislation because you add cost to a car which a customer has not expected, and is therefore not willing to pay. We will, however, use electrification to close the gap between a four cylinder and a V8 engine, for example, in an SUV.

Sales of EVs continue to be low: will this always be the case?

It’s all about cost and range. If battery technology does not improve in this way, it will remain a niche product. We have our C30 full EV, which is running well, but it is simply too expensive if you want to make a business out of it. It will be for our niche markets, but it has its value there. In the US there will be legislation forcing the development of EVs in the midterm future, but this is determined by legislation, not customer demand. This could also be the case in megacities like Beijing or Shanghai, because of air pollution, but there we can see demand for electrification driven by both consumers and legislation.

For Volvo, if an EV must be light and small to be efficient, you enter a customer base where they are not willing to pay more money for less of a car. We think it is better to have a plugin hybrid where you can have a bigger car with the range extending functionality of an ICE, but pure electric driving too. EVs are in the plan, but only if we have to, and PHEVs are the ones we are progressing with.

Does Volvo have any plans to manufacture a fuel cell vehicle in the future?

This is not in the plan. We are a small company and will never set the trend. If another OEM is doing it, and changes the market opinion, we are watching the market and technologies. We are a fast follower, but currently don’t see any big business with fuel cells.

Diesel has been on the rise in the US. Do you think it could become a mainstream fuel there?

The US market is changing. A few years ago diesel was a dirty fuel for trucks, but that is changing. We expect diesel volumes to increase in the US, but as fuel prices are low in the US, the difference between petrol and diesel efficiency is not something that will change customer opinion. If fuel prices go up in the US, and customer expectation becomes bigger, diesel will be the engine for this market.

However, we only see a small growth in volume.

Do you think it’s necessary to bridge the gap between the engines most commonly used today and zero emissions technology such as battery EVs or fuel cell vehicles?

The customer acceptance to move from ICEs to EVs or FCVs is too big, and you do need a bridging engine or powertrain. That’s what we’re doing with our plug-in hybrids. Our V60 2.4litre diesel with plug-in hybrid had a fantastic response. We’ve sold over 13,000 cars in two years, which is quite high considering that we sell around 350,000 to 400,000 vehicles. This for us is the bridging technology.

A version of this article first appeared on AutomotiveWorld.com

60 | Megatrends

automotiveworld.com/megatrends/

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Manufacturing & Materials

Water, water, everywhere in vehicle manufacturing Water conservation is becoming an increasingly important issue in sustainable vehicle manufacturing, writes David Isaiah

ccording to the World Water Council, the tripling of the world's population in the 20th century increased the use of renewable water resources six-fold. The world's population is expected to expand by another 40-50% over the next 50 years.

This growth and increased industrialisation and urbanisation, is expected to result in an increasing demand for water.

A

"There is a water crisis today. But the crisis is not about having too little water to satisfy our needs. It is a crisis of managing water so badly that billions of people - and the environment - suffer badly," the World Water Council’s Vision Report states.

62 | Megatrends

According to the World Water Council, 1.1 billion people worldwide live without clean drinking water, while 2.6 billion people lack adequate sanitation.

Developed countries account for the majority of water usage. In residential areas, for instance, North America and Japan account for daily per capita use of water of around 350 litres, while Europe accounts for 200 litres.

The global automotive industry is a major consumer of water for various production processes. According to some estimates, producing a car uses over 39,000 gallons of water, and whether tyre production is included varies by estimate.

Worldwide, agriculture continues to account for the bulk of all water consumption, at around 70%, while industry accounts for 20%. However, this ďŹ gure is skewed in the case of industrialised nations, where industry accounts for over half of the water consumption.

Major water uses in the automotive manufacturing industry includes surface treatment and coating, paint spray booths, washing, rinsing, hosing, cooling, air-conditioning systems and boilers. The component manufacturing segment has its own list of waterintensive processes.

Water consumption in automotive manufacturing

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Manufacturing & Materials

-35.

3%

In addition to the use of water for these processes, there is the matter of wastewater, which then needs to be treated to high standards in order to meet environmental regulations.

According to the US EPA, the true cost of using water is often misunderstood in industry, resulting in poor management choices regarding how water is used.

The common perception is that water is cheap and this leads to liberal use of water, making conservation measures difficult to justify. In fact, the cost of using water within various processes could be more expensive than originally perceived.

Rising water levels in the UK In its 2014 Automotive Sustainability Report, the UK’s Society of Motor Manufacturers and Traders (SMMT) said water use in automotive manufacturing rose by 5.1% in the country last year, mainly due to an increase in production. Per vehicle water use has also increase by 3.9% in the UK. Other less positive factors led to this increase in water usage. The SMMT cites an example, which involved water leaks and issues with a water tank supplying a sprinkler system, resulting in a large tank being drained as an emergency measure.

However, improvements in painting processes, which account for the bulk of water usage in automotive manufacturing, and the creation of closed-loop systems, have significantly reduced the amount of water used per car. Production in the country's supply chain dipped, along with water use. automotiveworld.com/megatrends/

Paintshop Of the various automotive production processes that use water, metal finishing operations are notorious for high water consumption, but it is in the paintshop that water consumption is most significant. While the painting process itself uses considerable volumes water, for automotive coatings and paints that are water-based products, processing equipment must be cleaned regularly with water.

According to an Ernest Orlando Lawrence Berkeley National Laboratory report, a typical coating operation requires thousands of litres of water each week. Unless contaminants can be removed from this cleaning water once it has been used, all of it must be disposed of as hazardous waste.

A few years ago, the US Department of Energy, Office of Energy Efficiency & Renewable Energy Industrial Technologies Program, together with the US Council for Automotive Research, released a technology roadmap for energy reduction in automotive manufacturing.

The roadmap called for an elimination or reduction of energy, water and chemical requirements in paint pretreatment.

Benefits of saving water There are, of course, significant benefits of using water more judiciously in automotive manufacturing, such as reducing the energy used in water pumping and delivery systems. The Australian Industry Group (AIG) lists out a few, such as cost, energy consumption, wastes and carbon

footprint. Indirectly, this also results in better production efficiency.

Importantly, it must be recognised that the cost of water is made up not just of the purchase price, but also the handling, heating, holding, treating and discharging. And water costs and energy costs are linked; for instance, cutting down on hot water for cleaning translates into a reduction in heating costs as well.

AIG further adds that wastewater treatment often results in the generation of prescribed wastes, the disposal of which is costly. In addition, cutting energy use has a direct impact on carbon footprint.

Water conservation options There are many ways a vehicle manufacturer can conserve water in manufacturing operations. These include improving energy efficiency of operations; installing flow restrictions on tap water supply line; dry sweeping all areas before hosing, and eliminating leaks, on the lower end of the cost spectrum.

At the other end of the cost spectrum, a vehicle manufacturer could reuse water from a critical rinse stage in a less critical rinse stage; treat site wastewater and recycle internally; install rain water tanks; undertake storm water harvesting; use groundwater, or use Class A recycled water, especially in boilers and cooling towers, states the AIG. Case study - Ford Ford is one of the OEMs that has been proactive in its water conservation Megatrends | 63

Manufacturing & Materials efforts. Ford launched the Global Water Management Initiative in 2000.

Between 2000 and 2010, the company reduced its global water use by 62% (10.5 billion gallons). In 2012, the OEM announced its intention to reduce the amount of water it uses in its global operations to produce each vehicle by 30%, by 2015, compared with the levels seen in 2009.

However, when it released its 15th annual sustainability report in June this year, Ford announced that it had achieved its goal of a 30% reduction in water usage, two years ahead of schedule. The OEM intends to further reduce its usage by 2% this year, and will then set new long-term goals.

"As Ford continues with its largest global expansion in more than 50 years, the company also recognises that working in regions struggling with water scarcity will soon make water a costly commodity. From a business perspective, understanding future constraints and immediately reducing Ford’s water consumption makes sense," said John Fleming, Executive Vice President, Global Manufacturing and Labour Affairs for Ford Motor Company.

At its plants worldwide, Ford adopts conservation technologies such as 3-

Wet Paint Technology; Dry Paint Overspray System; Minimum Quantity Lubricant (MQL); Internal Water Metering; Cooling Tower Technology, and Sustainable Stormwater Practices.

Ceres was founded by a small group of investors in 1989, in response to the Exxon Valdez oil spill. It mobilises a network of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions.

Ceres has had a relationship with Ford for more than a decade, and advises the OEM on its sustainability reporting and strategy.

"Quite frankly, the auto industry has been a bit slow in making the shift to the 21st century water mindset. It's true that auto companies are not big direct users of water. But up and down its value chain, you see a far bigger footprint, from raw materials such as aluminium, which requires vast amounts of water to produce, to upstream water impacts of the fuels drivers use," says Brooke Barton, Director, Ceres Water Program. "[Ford] realises that it not only needs to be more efficient in using water, but also needs to consider what it can do beyond its factory walls to protect fresh water for the future."

Ford Mexico One of Ford's success stories with regard to water conservation efforts is its manufacturing facility in Cuautitlán, Mexico. While this region receives adequate rainfall, it does not have adequate infrastructure to recover the water and hence it is a region of water scarcity. According to the OEM, the underground water table is dropping by an average of three to four meters each year.

Between 2000 and 2013, Ford says it has cut water use per vehicle produced at this facility by nearly 58%. In addition to using its 3-Wet paint technology, chemical pre-treating of its vehicles before painting and water recycling, Ford has carried out other measures, such as replacing the asphalt and parking lots within the plant with ecological concrete, which allows rain to re-enter the ground and recharge the aquifer beneath the plant.

"Companies like Ford should set water efficiency goals that prioritise water savings where water challenges are the biggest. A gallon saved in Michigan does not have the same environmental or social impact as a gallon saved in Mumbai. It's where a company is saving water that is the critical question," Barton says.

Water conservation and management is becoming a top priority in manufacturing planning. OEMs and suppliers around the world are introducing or expanding methods to conserve water. Examples include: Daimler India Commercial Vehicles: sources water from its own wells, or a local supplier, and processes this water in its own waterworks. This is then fed into the appropriate water cycle system. Waste water is channelled to an onsite sewage treatment plant, processed, filtered, and fed back into the cycle, depending on the degree of purity achieved. The system is especially important as the area in which the DICV facility is located suffers from acute water shortage.

McLaren: McLaren's Woking, UK facility features a series of ecology lakes.

Water from the lakes is used to cool the building, by pumping it through heat exchangers. The same system is used to dissipate the heat generated by the wind tunnels at the facility. McLaren uses these lakes to operate a closed loop system for all water used at the facility. Water from the facility is channelled through a reed-bed system before it is released.

Shell: Oil and gas producer Shell is doing its part to conserve water as well and, like DICV, in an area where water is not plentiful. Shell's Pearl GTL (gasto-liquid) plant in Qatar produces water as a by-product of the GTL process.

The water produced as a result of this is classified as industrial waste and so cannot be used for drinking. However, it can be fully reused in manufacturing.

This enables the Pearl facility to avoid drawing precious drinking water from the area.

64 | Megatrends

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&\EHU 3K\VLFDO 6\VWHPV RI 6\VWHPV Towards a European Roadmap on Research and Innovation in Engineering and Management of Cyber-Physical Systems of Systems

CPSoS is a 30-month European Union funded Support Action that is a forum and exchange platform for Systems of Systems related communities and ongoing projects, focusing on the challenges posed by the engineering and the operation of technical systems in which computing and communication systems interact with large complex physical systems. Examples of this are the road transport network, the rail network, air traffic management, shipping operations and logistics. In the automotive sector key areas of interest are car-to-infrastructure and car-to-car communications, automated driver assist and autonomous car technologies.

The Working Group on Systems of Systems in Transportation and Logistics Chaired by Professor Haydn Thompson, Haydn Consulting Ltd., UK is investigating the impact of ICT technologies in the automotive, aerospace, rail and maritime sectors analyzing industrial and societal needs, challenges of the application domains, commonalities and differences between applications and proposed solutions.

The key aim is to gather the relevant stakeholders, leading specialists from computer science, systems and control, systems engineering, domain experts, end-users and vendors of solutions and prepare a ƉƌŽƉŽƐĂů ĨŽƌ ƚŚĞ ͞ ƵƌŽƉĞĂŶ ZĞƐĞĂƌĐŚ and Innovation Agenda on Cyber-Physical Systems of Systems͟ to influence future research funding.

For those interested in getting involved in the Working Group or in its outputs please contact Haydn.Thompson@haydnconsulting.com, www.haydnconsulting.com www.cpsos.eu

For him, Bright Science means developing best in class heat performance.

DSM, the inventor of Diablo technology, offers you a complete portfolio of high-performance plastics for every component in air induction systems, including ducts, resonators and end caps. If you are looking for solutions to replace metal or rubber, know that our portfolio provides suitable materials for virtually every temperature range. Our StanylŽ polyamide 46, Stanyl Diablo and Akulon Diablo thermoplastics offer the ideal solution thanks to their ability to operate at up to 230°C. Visit our website to learn more about our solutions in air-management: WWW.DSM.COM/AIR-MANAGEMENT

Manufacturing & Materials

India’s vast auto market potential needs FTP boost India’s automotive industry stakeholders seek incentives for exports in Foreign Trade Policy 2014-2019. By David Isaiah he automotive industry is one of India’s economic growth drivers.

Since 1991, the sector’s gradual liberalisation has seen the number of manufacturing facilities grow progressively.

a globally competitive automotive industry and doubling the sector’s contribution to the country’s economy by 2010.

The Indian government has played a pivotal role in shaping the industry's roadmap. Back in 2002, the government formulated the country’s auto policy, with a view to establishing

In order to boost the Indian automotive industry, the government introduced the Automotive Mission Plan 20062016. The move was aimed at steering, coordinating and synergising the efforts

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Automotive Mission Plan 2006-2016

INDIA’S AUTO POLICY India’s auto policy was designed to create a globally competitive automotive industry in India.

The policy aimed to: • promote the sector as a lever of industrial growth and employment and plans to achieve a high degree of local value addition; • promote a globally competitive automotive industry and emerge as a global source for automotive components; • establish an international hub for manufacturing small, affordable passenger cars and a key centre for manufacturing tractors and two-wheelers; • ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry; • conduce incessant modernisation of the industry and facilitate indigenous design, research and development; • steer India's software industry into automotive technology; • assist the development of vehicles propelled by alternate energy sources; • and develop of domestic safety and environmental standards at par with international standards.

automotiveworld.com/megatrends/

of automotive industry stakeholders, in order to accelerate and sustain growth in the industry.

"The next ten years will be a crucial period for growth of the Indian automobile industry as a significant player on the global stage. I am happy to see that all stakeholders are focused to convert this challenge into an opportunity," said Sontosh Mohan Dev, the then Minister of Heavy Industries and Public Enterprises.

At the time this plan was formulated, the National Manufacturing Competitiveness Commission's National Manufacturing Strategy listed various factors impacting manufacturing competitiveness in the Indian automotive sector. These included: higher import duties including inverted duty structure on raw materials; higher incidence of indirect taxes; sub-optimal levels of operations; lower operational efficiencies and higher transaction costs; lower labour productivity and higher cost of capital, and inadequate infrastructure.

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Manufacturing & Materials

“

As our industry is highly capital intensive and as almost all international manufacturers are present here, the focus for companies would be to strengthen strategic partnerships and upgrade technology to enhance international competitiveness - A Ramasubramanian, President – AMW Motors

The Indian automotive industry has found increasing recognition worldwide, and most vehicle manufacturers operating in the country have begun exporting vehicles. Nonetheless, the industry’s full potential remains untapped, and exports became a lifeline for OEMs in India seeking to offset declining domestic sales.

Foreign Trade Policy At the time of writing (mid-August 2014), the Indian Ministry of Commerce & Industry has yet to announce its new Foreign Trade Policy (FTP), which will run for a period of five years from 2014 to 2019. With no date formally set, the new policy could come as early as the end of August 2014, if local, unofficial reports are to be believed.

The upcoming policy is expected to address issues such as services exports and product branding, and of course standards. The FTP is said to be receiving final shape from the country's Directorate General of Foreign Trade (DGFT). India's FTP essentially governs the country's export and import-related activities.

In the financial year which ended on 31 March 2014, India accounted for exports to the tune of US$312.35bn, short of the US$325bn mark targeted 68 | Megatrends

for the full fiscal year. Revenues from exports have continued to remain around the US$300bn mark over the past few financial years, and have not shown year-on-year growth

The last FTP included automobiles for incentives under Focus Product, and Market Linked Focus Product Schemes. This was aimed at encouraging technological upgradation in the export segment.

FTP 2009-14 The previous FTP came into effect on 27 August 2009, and ran until 31 March 2014. Falling right in the middle of the global economic slowdown, this was hardly a period conducive to global trade, and the World Trade Organization (WTO) at the time forecast a 9% decline in global trade, in volume terms.

It also included a provision for the export of warranty spares, indigenous or imported, of plant, equipment, machinery or automobiles, along with main equipment. Other incentives for the automotive industry included allowing the status holders of the automotive sector to be eligible for a status holders' incentive scrip (SHIS).

Annual supplement 2013-2014

In the ten months prior to the FTP coming into effect, Indian exports declined due to a contraction in demand, compounded by protectionist measures adopted by some of India's traditional markets.

"The short term objective of our policy is to arrest and reverse the declining trend of exports and to provide additional support especially to those sectors which have been hit badly by recession in the developed world. We would like to set a policy objective of achieving an annual export growth of 15% with an annual export target of US$200bn by March 2011," Anand Sharma, then Minister of Commerce & Industry said at the time.

In April 2013, Sharma announced the annual supplement for 2013-14 as part of the FTP for the 2009-14 period. In a move aimed at facilitating the import of vehicles, hotels and tour operators were allowed to import passenger cars and SUVs under the Served from India Scheme (SFIS).

A further announcement saw the addition of two new ports for vehicle imports. The Inland Container Depot (ICD) at Faridabad, Haryana, and Ennore Port, Tamil Nadu, have been added to the list of ten ports/ICDs through which import of new vehicles is permitted.

automotiveworld.com/megatrends/

Manufacturing & Materials FTP 2014-2019 The last FTP ended in March 2014, and the question puzzling the automotive industry now is what the upcoming FTP will bring for to the sector. One expectation, such as that expressed by Asia Motor Works (AMW Motors) is that the overall strategy behind the new FTP will be to reduce the trade deficit and, as oil constitutes a major portion of the country's imports, the anticipation is that the main thrust of the policy would be to encourage exports in all sectors.

"Our industry [automotive] would expect the government to provide incentives for exports directly or indirectly through concessions for companies actively involved in R&D and dedicated export units. Interest rate subventions and easier clearances for exporters will also help," A Ramasubramanian, President – AMW Motors, told Megatrends.

India’s automotive market has undergone an extended period of declining sales. Faced with the prospect of continued market contraction, many vehicle manufacturers turned to exports, in

order to offset the declines at home.

The existing FTP supports exports, by way of the Focus Market and Focus Product Scheme, as mentioned earlier.

The industry feels that these measures should be continued, and indeed strengthened.

country's automotive component sector in the last fiscal, one more factor cropped up – increasing Chinese imports. In this segment, China accounted for the bulk of foreign imports, at 21%, valued at US$2.6bn. This was up from 18% in the previous fiscal.

The China factor

Asked whether the upcoming FTP was likely to bring new protectionist measures to safeguard the local industry, Ramasubramanian said: "AMW does not believe that the government will encourage protectionism, but as our industry is highly capital intensive and as almost all international manufacturers are present here, the focus for companies would be to strengthen strategic partnerships and upgrade technology to enhance international competitiveness."

The recent financial year saw India’s automotive component sector post its first ever decline in a fiscal. In all, component manufacturers operating in the country posted turnover of US$35.13bn, a year-on-year drop of 2% compared with the previous fiscal year.

"The last fiscal has been one of the most challenging for the automotive industry in India,” said Harish Lakshman, President of the Automotive Component Manufacturers Association of India (ACMA). “Flagging vehicle sales, high capital costs, high interest rates, currency fluctuations and slowing down of investment in manufacturing, have adversely impacted the growth of the auto component industry."

He added: "China is already one of India's major trading partners and Indian manufacturers have coped well with Chinese imports. In a liberalised regime, the way for Indian manufacturers would be to increase scale and competitiveness and the Government is geared to announce policies to make manufacturing more competitive and attractive to investors."

While all these factors depressed the In the last financial year, imports of automotive components grew by 3.6% to US$12.8bn from US$13.7bn in 201213. Asia and Europe contributed to 57% and 34% of the imports respectively.

Within Asia, China, Japan, South Korea and Thailand contributed to maximum imports while from Europe the key contributors were Germany, France, UK, Italy and Spain.

Wishlist "With a new Foreign Trade Policy on the anvil, we urge the government to announce long-term and stable trade policies and accord export incentives that are critical for sustaining the industry in these times of global challenges," said ACMA Vice President, Ramesh Suri.

With regard to FTP 2014-19, Ramasubramanian told Megatrends that AMW Motors would be happy, "if the government takes steps to promote high-end manufacturing and encourage specialised design and development units in manufacturing, as this will not only add value, but also generate employment for our highly skilled software specialists and engineers."

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Manufacturing & Materials

The future for aluminium recycling Closed loop supply operations around the world are helping to ensure that aluminium remains a sustainable option for automotive manufacturers. By Matt Ayres

luminium’s use in automotive manufacturing continues to grow.

The material allows a weight saving of up to 50% over competing materials, making it an attractive choice for OEMs looking to improve the fuel efficiency of their vehicles through decreased weight. This is important due to increasingly stringent fuel economy standards around the world, such as the proposed target in the US which requires all car manufacturers to

A

improve the average fuel efficiency of their eets to 54.5 mpg by 2025.

However, the potential to make vehicles lighter is not the only environmentally friendly advantage afforded by aluminium: it is also a highly recyclable material. This means that 95% of the aluminium contained in end-of-life vehicles can be reclaimed and recycled, preventing the need for carbon intensive processes involved

when producing the alloy in its primary form. By recycling automotive aluminium that has already been through the use phase of an older vehicle and producing new vehicle from it, closed loop recycling is achieved.

While closing the loop for aluminium is easier said than done due to ďŹ nancial constraints and increasing demand for the lightweight metal, several companies are working to improve their

Source: European Aluminium Association

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Manufacturing & Materials carbon footprints by including closed loop recycling in their production strategies. One such company is Hydro, a global aluminium supplier headquartered in Norway, that hopes to promote aluminium’s reputation as a sustainable manufacturing material. Hydro’s Executive Vice President with responsibility for rolled products, Oliver Bell, is optimistic about the future for closed loop recycling with aluminium.

“The requirements to recycle are increasing,” Bell says. “Everybody is looking for closed loop recycling, and with aluminium we are working to ensure that. The costs of collection are always an issue, but thanks to the value of aluminium, the collection costs are basically paid by the material. We have a wonderful material which can be easily recycled and more or less pays for its own recycling through its value.

“Aluminium is never consumed, it is just used and recycled. I believe that aluminium has a great future in that respect. We're currently investing in a new recycling centre in one of our facilities, close to our rolling mills in Norf and Grevenbroich in Germany. In general, we are actively promoting recycling and investing in recycling facilities to close the loop with our customers.”

With the inclusion of this new recycling centre in its overall strategy, Hydro hopes to increase its recycling volume from 177,000 tonnes of post-consumed scrap in 2013 to 250,000 tonnes in 2020. Operations like this are promising to the future of sustainable aluminium recycling in Europe, helping to provide local OEMs with a higher quantity of recycled aluminium to use in their products.

Indeed, localised recycling loops are an especially important consideration if carbon emissions are to be kept down.

China and India have previously imported one million tons of aluminium scrap from Europe to be recycled, with the majority of that material returning to Europe for use in manufacturing. A larger closed loop recycling infrastructure provided by suppliers in Europe is likely to encourage European OEMs to take advantage of recycled aluminium closer to home, eliminating the carbon emissions associated with long distance haulage. automotiveworld.com/megatrends/

Novelis, another aluminium supplier with operations in Europe, claims to be building the world’s largest recycling network. The company’s considerable investment involves expanding its current facilities to include recycling capabilities, and arguably the most impressive of these expansions is taking place in Nacherstedt, Germany. The Novelis plant here is projected to become the largest and most advanced recycling facility in the world, capable of processing 18 different types of scrap metal while simultaneously removing unwanted materials such as paper and plastic from the scrap stream.

The expanded Nacherstedt facility alone will add 400 kilotons of sheet ingot capacity, bringing Novelis’s recycled inputs up to 50% in its global products. But according to Roland Harings, Vice President and General Manager of Automotive at Novelis, this is just the beginning of a significant investment in the company’s global recycling operations.

“Novelis is heavily investing to increase its recycling capacity and capabilities,” he says. “For example, our expanded recycling plant in Latchford, UK was recently commissioned, meaning the plant’s capacity will increase by over a third to become Europe’s largest closed-loop recycling operation solely for automotive aluminium rolled products.”

Other Novelis expansions around the world include those at facilities in Pinda, Brazil and Yeongju, South Korea. Altogether, the aim for the supplier is to reach a 75% increase in recycling capability by 2015, rising to 80% by 2020. Once that 80% is reached, Novelis says it will eliminate 10 million metric tons of greenhouse gas from the aluminium production chain. However, the company still recognises that it will need to produce some primary aluminium in order to meet demand. New aluminiumintensive vehicles such as Ford’s F-150 and Jaguar’s upcoming XE mean that recycled aluminium alone will not be enough to meet the large quantities of aluminium required by OEMs. Dr Mark White is Chief Technical Specialist in Lightweight Vehicle Structures at Jaguar Land Rover, and thinks that it is important for OEMs to

take some responsibility for closed loop aluminium recycling alongside suppliers.

“The number of aluminium cars in the marketplace will more than double between last year and next year as a result of initiatives from JLR, Ford and the premium OEMs in Germany,” he says. “At Jaguar Land Rover, we have put closed loop recycling centres in place already at Castle Bromwich, with Solihull to follow with a fully closed loop system. Halewood will also become a fully closed loop facility in the next 12 months. Then we have a programme to take all of our Tier 1 stamping suppliers and apply that same philosophy to them. By 2020, our goal with Novelis and with our other suppliers is to be at 75% recycled metal for every Jaguar Land Rover we make.”

Such lofty ambitions for closed loop initiatives from both aluminium suppliers and OEMs are inevitably helping to encourage recycled aluminium. As with any business, though, the financial implications of closed loop recycling will play a factor in its adoption. US-based aluminium supplier Alcoa might be dedicated to recycling with its continued projects encouraging communities to deposit their beverage cans and food packaging responsibly, but Randall Scheps, the company’s Marketing Director for Automotive Sheet, provides a more modest perspective on the future of closed loop operations.

“It’s all driven by the economics of the recyclers and the sorting that is required for them to get the best price,” he says. “Closed loop recycling is a great concept, but it also has to make economic sense.”

With the arrival of the new F-150 in 2015, aluminium suppliers involved in the North American market will experience the highest volume aluminium application in the automotive industry to date. And with a greater percentage of aluminium intensive vehicles on the road, the potential supply for recycled aluminium greatly increases. However, as the average lifespan for a vehicle is between 15 and 20 years, it may be a long time yet before suppliers can rely solely on scrapped aluminium for their automotive products. The future for recycled aluminium looks bright, but it will need to be supplemented by primary aluminium in order to meet demand for years to come.

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Retail (R)evolution

Auto retailers: adapt now, or pay later Car dealers need to prepare now for the retail demands of the future, as EY’s Anil Valsan explains to Megatrends. By Megan Lampinen he digital revolution, tighter emission standards and alternative forms of mobility are reshaping the automotive industry, touching everything from the infotainment technology inside cars to the way in which they are bought. Megatrends spoke to Anil Valsan, Global Lead Analyst at EY, on the impact of some of these forces on the face of retail.

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Desktop to dealership Many studies have shown a growing interest by consumers in online retail, for both gathering information on a new car purchase as well as the purchase itself. A global study by Cisco probed the customer 72 | Megatrends

experiences of more than 1,500 consumers across ten countries, looking at the level of technology desired in cars around the world. Of all those polled, 83% prefer to research new cars on the Internet.

However, few dealers are effectively tapping into this. "I don't believe they are doing enough in this particular space," said Valsan. "In the US, there have been some initiatives. In Europe, I feel there is quite a lag in terms of capturing this."

their brand during the research phase of the car-buying journey. Valsan believes the key is to continue that relationship when the customer eventually makes it in to the dealership for a test drive. "There is still a lot of work to be done in the dealer space," added Valsan. "It has to be a seamless experience for the customer. Instead of a hard sell it should be about continuing the relationship that has begun with the research. It's about taking that forward rather than reinventing it."

Some vehicle manufacturers have been making concerted efforts to engage with customers online, offering an experience of their vehicles and

In the future, Valsan believes most carbuying decisions will be made online.

"The customer will come into a dealership to test-drive vehicles," he automotiveworld.com/megatrends/

Retail (R)evolution

said. “You won't need the same dealer infrastructure as today, and not as much real estate as today."

Education, education, education In response to a growing level of in-car technology, dealers will need to take on more of an educational, hand-holding role with consumers in the future, believes Valsan. At the moment, many customers don't understand how the many in-car systems operate, resulting in poor satisfaction or numerous trips to the dealership. Dealers need to take more time to ensure they explain all the systems and that the buyer is comfortable with the new technology.

He believes the vehicle manufacturers need to "educate the dealer or even change the incentive structure for dealers, so that the dealers are more inclined to incentivise their own staff so that customers feel much more comfortable with the technology."

Greater dealer and customer education will also come into play with the rise of alternative powertrain options, such as hybrid or fuel cell vehicles. "With alternative powertrains, there is a need to educate and spend more time with the customer to feel comfortable with it.

There are concerns around range, automotiveworld.com/megatrends/

about where they can fuel these vehicles. A lot of education is necessary. The challenge that manufacturers and dealers face is how to make this more intuitive and improve the process of educating the customer, so drivers don't have to come back multiple times to the dealership."

Alternative retail scenarios Along with the rise of new technology, the industry has seen an emergence of alternative retail outlets, from brand experience centres without any cars at all to digital showrooms with nothing but projected images of cars on blank walls. For now, these alternative approaches have been limited to premium brands, but Valsan expects to see it spread into the mainstream. "It will trickle down and be relevant to all brands, not just premium brands."

In the case of the volume brands, there may be slightly different approaches in the specific locations, making greater use of current assets. Mass market brands have considerable real estate, says Valsan, and there is an opportunity for these brands to recreate alternative retail scenarios within their existing dealer infrastructure. Beyond that, Valsan expects the mainstream

brands to set up experience centres in specific areas that their buyers are likely to frequent. “I see opportunity for the mass volume brands."

Accessing mobility As for the future face of automotive retail, Valsan expects to see a number of approaches at work: "It won't be consistent. We'll probably see different formats in many ways." In general, he believes there will be a movement towards offering more than just car purchases. "It's not just about buying a vehicle but also getting access to different types of mobility," he added.

These alternative mobility services could cover such approaches as car sharing. "In the future, dealers could be responsible for maintaining and running car share networks. It will be about moving away from just selling vehicles towards being associated with enabling the delivery of mobility services," Valsan explained.

These mobility services are also likely to spur new services from dealers; over time, expect to see a rise in dealership services linked to aftermarket, financing, and other areas outside of direct vehicle sales.

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

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

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

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

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

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

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

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

OEMs

First Tiers

OSV, Middleware, Hardware, and Services Suppliers

Silicon

www.genivi.org

Retail (R)evolution

Can car buying ever be fair, fast and fun?

Megatrends talks to John Krafcik about his plans to make TrueCar a beacon of transparency. By Megan Lampinen any consumers dread the new car shopping experience, complete with the hard sell, price haggling and anxiety about overpaying for their vehicle. A revolution, however, could be on the way with TrueCar's negotiationfree car purchase and sale platform, which offers buyers insight into what other individuals actually paid.

Megatrends spoke to TrueCar President John Krafcik about the company's latest efforts to bring transparency to the car buying process.

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Price confidence "Our product is price confidence," explained Krafcik. "We believe car buying should be fair, fast and fun. We like to be beacons of transparency."

This transparency covers a fair price for buyers and for dealers.

While consumers are concerned about being cheated on price, dealers are struggling to make a living. A recent study by TrueCar indicated that most consumers believe dealers are making much bigger margins than they really are. While most of the study respondents estimated dealer margins at about 20%, data from the ADA indicates the truth is closer to 3.8% front-end gross profit. "It means there is definitely a problem to solve," Krafcik said. At the moment, new car dealers in the US are losing money on about one out of four car deals.

From greed to anxiety TrueCar's consumer facing promise is 'Save time, save money and never overpay', but it didn't used to be. A couple years ago, the slogan was 'Pay the lowest price', an approach that proved unviable for dealers. "It was an unsustainable model," explained Krafcik. "The TrueCar model at that time made it easy for dealers to essentially press one button on our interface with them to re-price all their inventory to be the lowest price in a market area. If one dealer did that, another dealer wouldn't be too happy about it; they would do the same thing.

It quickly spiralled with prices going down and down. It was definitely an unsustainable model. We had to step back because dealers were dropping off our programme. We tried to understand their points of view and we got a good education."

TrueCar adjusted its model in several ways, yielding data tools for consumers and dealers that "helped them judge the right price, the market clearing price, for their inventory so there could be balance,” explained Krafcik. “With this transition we've gone from

appealing to the consumer’s sense of greed to trying to alleviate the consumer's anxiety about paying too much. It allows us to create an umbrella under which consumers are confident they are getting a great price but that they are not going to put the dealer in a situation where they're losing money on a deal."

New innovations The new car buying journey very often also involves the sale of an older model to make way for the new one. Getting a fair price for this model poses a challenge and many shoppers are convinced they won't get a fair price from the dealer. In the US, in 75 out of 100 new car purchases, the customer needs to dispose of an older car. In about 35 of those instances, the consumer will trade in the car at the dealership where he is buying the new one. The other 40 times, buyers take on the hassle of selling the older model themselves.

"Car shoppers feel that they're not going to get a fair price," explained Krafcik. "The ironic part is that new car dealers really want late model used

"What if we were able to, with our access to different streams of data, present that data and share with consumers real time transaction data for prices that folks paid for cars configured just the way they are configuring it?" said Krafcik. "What we are really doing is enabling negotiation-free transactions for buyers and sellers by providing price confidence." automotiveworld.com/megatrends/

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Retail (R)evolution cars because that's the biggest margin." He noted that the dealer margin on used cars is about 12%, compared to just 3.8% for new cars.

TrueCar is once again here to help, said Krafcik. It recently developed a mobile application called 'Sell My Car', which enables consumers to receive an upfront offer on their current vehicle. A consumer needs only to download the Sell My Car app, complete a 10-15 minute survey on the car details and provide photos. The information is then submitted to participating dealers, and within 24 hours the consumer will receive offers for the car from TrueCar CertiďŹ ed Dealers.

This is the ďŹ rst application to come out of the newly established TrueCar Labs incubator, and additional innovations for the automotive ecosystem will follow. The latest one under development addresses buyers that are in the market for an upgrade. The app would take in information regarding the consumer's current model and those vehicle models in which the consumer is interested. The app could alert the buyer should a speciďŹ c new model become available with a monthly payment within a certain range of what he is already paying. "The acquisition of a new product could be as simple as pressing an Upgrade option, pressing 'I'll take that one', driving to the dealer and coming out in an hour with the new car," said Krafcik.

This application is still "something for the future," cautioned Krafcik, with no launch date yet on the cards. In terms of preparing for the future, TrueCar is working in various ways to respond to the numerous market trends at work.

76 | Megatrends

So far, it is making solid headway in its mission towards transparency.

The company has been in place for about ten years and had its IPO on 16 May this year. Of the 32,000 franchised

dealers in the US, TrueCar has about 8,000 dealer partners. "Investors seem to understand our mission," said Krafcik. "Consumers certainly seem to get it, and our dealer partners really embrace our model."

automotiveworld.com/megatrends/

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Retail (R)evolution

Boosting the customer experience in showrooms using touch technology Multi-touch is in its infancy, but as it evolves, it offers an increasingly powerful way to improve customer engagement. By Paolo Pedrazzoli eaders will hardly need reminding that car buyers are a demanding audience that tend to know their facts.

Thanks to the sheer volume of information sources now available, they increasingly have a clear idea of what they want by the time they reach the showroom. This can be good news and bad news: a customer who knows his or her mind can help to close a sale, but it leaves less room for the sales staff to suggest other options and upgrades, or the chance that the purchaser will bypass the showroom altogether.

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Nearly one third (31%) of under 35year-olds would buy a new a car directly via the Internet, according to research carried out by GfK in 2013.

Indeed, the world of digital communications has changed the way that people research their car purchases, starting with the Internet and only visiting the showroom a matter of weeks before the final decision is made. automotiveworld.com/megatrends/

Turning digital communications to the showroom’s advantage Of course, most car brands are becoming more switched on to the need for multi-channel marketing strategies that embrace every possible touch point, whether in-store or not.

Plus, once someone is enticed into the nearest showroom or dealership, the online digital experience can be turned to the brand or dealership’s advantage.

While not specific to the automotive industry, a recent survey released by Deloitte in its ‘New Digital Divide survey’ revealed that more than a third of in-store purchases are now influenced by digital touch-points, with one in four shoppers spending more as a result. This makes bridging the gap between online and offline more relevant than ever.

By extending the online experience instore, brands and dealers have the potential to engender a more

interactive dialogue with customers, make better use of space and add to overall ‘brand value’.

Let’s start with that point. We all know that many consumers buy into the brand, particularly at the premium end of the market. A person’s choice of car make reflects his or her lifestyle choices and how they see themselves.

Car brands are increasingly looking at ways in which to sell an immersive customer experience - whether online or in-showroom - one that is less directly focused on making an immediate sale.

The multi-touch experience This is why a number of car brands – including two of Europe’s top three car companies – have turned to multitouch display technology as a means of enhancing the in-store customer engagement and as an integral part of their multi-channel marketing strategies. Typically ranging from 20 to Megatrends | 79

Retail (R)evolution 46 inches, these devices make a real impact that is hard to miss. They are easy to interact with and multi-touch screens are a very intuitive evolution of the existing online environment with which many of us are already familiar.

After all, most of us are used to ‘dual touch’ technology on our smartphones, tablets and laptops. Multi-touch technology takes that a whole step further, creating a multi-user experience where a number of people can interact at the same time (current systems support up to 60 simultaneous touch points).

Car brands which have already installed multi-touch display systems are using them to share a wide range of enticing content. This can include the obvious – videos, details of online accessories – but also a whole range of other material, for example, games based on the car brand, links to motor racing sponsorship content, competitions, virtual reality tours and offers. All of this can help to create a ‘storytelling’ environment, one where consumers can relate to – and see themselves in – a vehicle, rather than just being given a dry list of features and benefits. Think of this as in-store theatre.

Expanding the showroom floor Plus, the user is in control: he or she can use their fingers to navigate and interact with a wealth of content that is designed to be an enjoyable experience in its own right, not just sales information. Suddenly, the instore brand experience goes way behind the confines of the showroom’s four walls, ‘virtually’ extending the size of the space available. And the use of this leading-edge technology underlines the innovative focus of a car brand.

After all, today’s new generation of car buyers has grown up with digital technology: people no longer expect to be presented with printed brochures which by their two-dimensional, static nature, are limited in terms of what they can provide. The systems can also interact with mobile devices – for instance, using QR codes to download information to the customer’s smartphone or tablet.

There are three main ways in which car brands are using multi-touch technology. First, as a centrepiece on the showroom floor, one that could also 80 | Megatrends

be taken to events, creating a multifaceted brand experience.

Second, as a digital signage solution in a car showroom’s waiting area, whether installed within a tabletop or as a wall-mounted unit, giving customers the option to engage with the system, rather than just watching a standard video showreel. Third and finally, as a sales demonstrator system.

Helping the sales team While much of multi-touch technology’s benefit is around creating an interactive customer experience, its value as a sales support aid is just as important. A system can provide the means to explain something in more detail, to draw a customer’s attention to new offers or product ranges and help close a sale there and then. It also helps to ensure that a brand’s key messages and value propositions are cascaded down through showrooms and sales staff in a consistent manner.

One potentially very exciting application for multi-touch technology is as a car configuration tool, something which one of Europe’s top three car brands is already doing.

Given the sheer volume of configuration options now available, multi-touch systems can provide sales consultants with a chance to sit alongside consumers while they go through a number of steps to design each person’s ideal vehicle. The very last step presents the price and here’s the clever psychology: the theory is that in effect the customer has ‘created’ that price and hence is less likely to argue with that amount.

there is a whole host of other factors to consider. These include how the display will be incorporated into the showroom: is a wall-mounted system better for space-saving or will a tabletop design encourage more interaction? Does the system need to be portable?

Regardless of screen size, generally speaking it is advisable to go for as many touch points as possible; systems that only support one or two touches significantly limit what the software can do. Choose a display that has accuracy of touch; there is nothing more frustrating for users than an unresponsive screen. There is a growing community of consultants, software developers and systems integrators within Europe and worldwide who are working closely with car brands and dealerships to design and install systems that best fit each individual need.

Specifying the experience

Multi-touch is in its infancy. While some of the big players are leading the way, other car brands and dealerships are only just beginning to explore the potential of touch technology. However, as it continues to evolve, it promises to help marketers edge closer to the seamless, multi-channel shopping experience that consumers - including car owners - demand. Of course, interactive touch systems are just one facet in the automotive sales toolbox – and getting customers into the showroom is the first part of the battle but once they are there, multi-touch systems can present a powerful way to improve customer engagement.

Of course, technology is just one element of a successful and compelling multi-touch experience;

Paolo Pedrazolli is Marketing Operations Manager for 3M Touch Systems EMEA

Finally, technology can also help with the process of collecting customer data information, because multi-touch systems can be integrated with backend systems elsewhere, such as databases and CRM to gather information about user behaviour and analyse sales patterns.

automotiveworld.com/megatrends/

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Retail (R)evolution

It’s time to eliminate unfair trading practices in Europe’s automotive sector With ‘block exemption’ protection a thing of the past, the EC must act to defend the interests of the auto industry’s SMEs, writes Bernard Lycke

ver the past three years, the European Council for Motor Trades and Repairs (CECRA) has been assisting the European Commission’s Directorate-General for Internal Market and Services in its efforts to eliminate unfair trading practices (UTP) in business-to-business relationships in Europe. Despite an overwhelming body of evidence provided during this period, the Commission’s attention will at this stage only be focussed on addressing practices in the food sector, and not in all non-food sectors - including the automotive sector.

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conditions being imposed on dealers by manufacturers.

existence of unfair practices in the automotive sector.

The following month, the European Business Test Panel consultation was launched by the Commission’s Directorate-General for Internal Market and Services, with the aim of collecting information on unfair business-tobusiness commercial practises and examining possible options to improve the status quo. In response, CECRA urged its members to use this occasion to inform the Commission about the

The Commission received 746 responses from EU businesses from different sectors, including 250 responses from dealers reporting on the practices of their vehicle manufacturers. The unfair practices experienced by respondents in the automotive retail sector were so widespread and pronounced that the Commission devoted separate sections of its report, published in early 2012, to

Background Since 1985, the automotive industry has enjoyed a number of specific block exemption regulations, the most recent one being Regulation 1400/2002 on vertical agreements for the purchase, sale or resale of new motor vehicles, otherwise known as the Motor Vehicle Block Exemption Regulation (MVBER).

Although it was initially set to expire on 31 May 2010, the Commission extended the MVBER for another three years until the end of May 2013.

In June 2011, CECRA issued a position paper on unfair commercial and contractual practices, in which it warned that car dealers, who are predominantly small and medium-sized enterprises, will become increasingly dependent on car manufacturers following the expiry of MVBER, as their rights will no longer be protected by the specific legislation. As a result, CECRA predicted there would be more and more instances of unfair contractual 82 | Megatrends

automotiveworld.com/megatrends/

Retail (R)evolution focus on unfair practices in this sector.

In January 2013, the Commission again launched a consultation on UTPs, this time focusing on the business-to-business food and nonfood supply chain in Europe. In the document accompanying the consultation, the Commission made an initial assessment of the problems posed by unfair trading practices along the retail supply chain, including the lack of efficient enforcement of existing national rules and the resulting impact on the Single Market.

In order to evaluate this assessment and to determine what measures could be used to tackle the problems identified by the Commission, stakeholders from both the food and non-food retail sectors were invited to send their feedback. In response to the consultation, the Commission received a total of 200 contributions, 34 of which came from automotive retailers.

In September 2013, the Commission published a summary of the responses which revealed that unfair trading practices are still a major problem for car dealers in various EU countries.

In particular, the Commission’s summary took note of the fact that automotive retailers do not see self-regulation as an adequate means to address unfair

practices in their sector. The main reason for this is the lack of progress in negotiations with car manufacturers concerning a meaningful code of conduct that would safeguard the rights enjoyed by dealers under the former MVBER, which expired in May 2013. In their contributions, car retailers explained that the creation of a voluntary code of conduct at EU level is blocked by manufacturers who are unwilling to enter into negotiations on certain key points.

The Commission’s summary also revealed that fear is the principal reason why car dealers would not take a manufacturer to court over unfair trading practices. It was explained that “their long term commercial relationship with their suppliers is characterised by significant relationship-specific investments by retailers resulting in a fear of repercussions (including contract termination) which thus dissuade them from pursuing complaints. As a result of [unfair trading practices], retailers in the car sector will not sell cross-border against the wishes of the car manufacturers out of fear for reprisals.”

As for the possible solution to this situation, the Commission noted that car retailers do not consider national regulatory systems or self-regulatory frameworks to address these problems sufficiently. Instead, they made it clear that a solution must be found at EU level as this is an issue which concerns dealers from all corners of Europe.

Nevertheless, despite the overwhelming amount of evidence provided in response to the latest consultation, on 15 July the Commission decided to restrict its response to a communication encouraging Member States to look for ways to improve protection of small food producers and retailers, leaving the problems of various non-food industries unsolved.

A solution needed for all Irrespective of the merits of further investigation and regulation of unfair trading practices in the food sector, CECRA believes that evidence collected by the Commission from a range of non-food businesses and organisations across Europe clearly demonstrates a wider need for a clear, consistent and balanced system of UTP regulation.

automotiveworld.com/megatrends/

With the right input from stakeholders, the Commission can achieve a workable and proportionate system of cross-sector regulation, which supports the competitive independence of smaller parties in each supply chain (whatever the sector); encourages innovation, investment and employment; and ensures that consumers receive a fair share of the resulting benefits.

In order to ensure that unfair trading practices in various non-food sectors remain on the Commission’s radar, CECRA has been contacting the newly-elected members of the European Parliament, urging them to highlight this issue during the new legislative term.

In addition to its actions vis-à-vis the European Parliament, CECRA has also been reaching out to other European trade associations representing non-food industries with the aim of building an alliance on the issue of unfair trading practices.

Together with FIGIEFA, CECIMO and UEIL, we intend to address our concerns to the new Commission cabinet, which will take office in October this year.

CARS 2020 It is worth noting that action on unfair trading practices and the Commission’s CARS 2020 process are linked in the sense that they could help dealers fill the gap left by the expiry of the MVBER. As the sole representative of car dealers and repairers at European level, CECRA is part of CARS 2020, an expert group created by the Commission to ensure the competitiveness and sustainability of the automotive industry in Europe.

While the initiative on unfair trading practices is prepared by DG MARKT, CECRA is also working closely with the Commission’s Directorate-General for Enterprise and Industry (DG ENTR) to regulate relations between dealers and manufacturers via a sector-specific approach. Therefore, both of the aforementioned initiatives could possibly give rise to a legal framework for improving relations between dealers and manufacturers in the automotive sector.

Bernard Lycke is the Secretary General of CECRA, the European Council for Motor Trades and Repairs

Megatrends | 83

Safety

Euro NCAP raises the bar for vehicle safety In its 2020 Roadmap, Euro NCAP presents its vision and sets out key challenges and priorities to further reinforce vehicle safety and safe driving. By Rachel Boagey

ehicle safety testing is set to change significantly in the next few years.

Euro NCAP has recently released its 2020 Roadmap, investigating and determining the best strategies going forward facing the key technologies and focus areas for the European automotive industry, in its drive to consistently improve vehicle safety.

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In its 2020 Roadmap, Euro NCAP presents P A M D A 2020 RO its vision and sets out key challenges and priorities to further reinforce vehicle safety and safe driving, aiming to provide motoring consumers with an objective and independent assessment of the safety SSMENT

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84 | Megatrends

performance of new vehicles on the European market. The 2020 Roadmap is an extended consultation carried out among Euro NCAP’s key stakeholders, including OEMs such as Audi, BMW, Daimler, Honda, and suppliers such as Robert Bosch, Continental, and TRW, among others.

The way in which vehicles are developing means that Euro NCAP’s tests must continue to evolve and take account of the newest, essential safety technology on offer. In the years ahead, the roll out of vehicle automation is expected to accelerate development and availability of advanced sensors and driver-centred functions in the vehicle, each of which will need to have reliable and robust performance to deliver safety benefits.

The findings of the 2020 Roadmap identify four main domains that focus on the key real life crash scenarios and that can be addressed by new and updated vehicle technology, in particular in the field of crash avoidance and automation. Besides introducing changes to the star rating scheme and carrying out ad-hoc safety tests, the organisation proposes to develop consumer-focused guidelines with industry that may facilitate the operability of driver assistance systems across the European fleet.

Supplier action US-based safety systems supplier TRW Automotive believes that active safety and electronics, already a major industry growth area, will play an ever greater part in the world of automotive automotiveworld.com/megatrends/

Safety safety in coming years. Andy Whydell, Director, Global Electronics Product Planning Group at TRW, recently stated that driver assistance systems, or DAS, will play a crucial role in meeting and beating the ever stricter demands of Euro NCAP and the US Insurance Institute of Highway Safety (IIHS). “It will be increasingly difficult to meet these demands without DAS technology.”

According to Andrew Whydell, Director of Product Planning for Global Electronics, TRW, “By 2020, TRW expects to see widespread availability of collision avoidance systems including Automatic Emergency Braking and Lane Keep Assist Systems in the market to help assist drivers in remaining in lane and maintaining a safe distance from the vehicle in front, including on small and entry-level cars. Also, as passive safety technologies continue to be developed, the integration of advanced active and passive safety systems will define a new level of human and vehicle protection on our roads.” Euro NCAP has already developed test procedures for many of these systems, and it can be anticipated that Euro NCAP will continue to evolve these test procedures over time to include additional test cases to address more potential collision types and scenarios, in particular involving

automotiveworld.com/megatrends/

different road users and addressing vehicle-to-vehicle crash compatibility.

Whydell also explained, “We expect Euro NCAP to revise the scoring systems periodically to enable consumers to differentiate between the performance of collision avoidance systems fitted by different vehicle manufacturers, and also reward new technologies that can further improve road safety, for example via Euro NCAP Advanced awards.”

Greater automation The Euro NCAP 2020 Roadmap also highlighted the prospects for a greater automation of cars, and Thomas Herpich, Manager Systems Engineering V&V, TRW, explained what this will mean for safety, as well as how TRW will aim to keep up with these changes. He said, “Automated driving will be introduced cautiously, in steps which clearly define the role of the driver and capabilities of the vehicle.

Both methods of controlling a vehicle need to complement each other to achieve or even exceed the performance of a fully alert and vigilant driver. The potential of overall safety improvements will come from integrated Driver Assist Systems having better performance than human drivers in specific use cases, such as highway driving or even crossing traffic in future, and when the driver may be

tired or momentarily distracted. In these cases, the DAS system can help support the driver.”

The vast majority of accidents are caused by driver error, either due to inattention or violation of traffic regulations, and the 2020 Roadmap highlighted that increasing levels of vehicle automation offer the potential to help reduce these accidents by assisting drivers in the task of vehicle operation, especially when drivers are fatigued or distracted. Herpich continued, “In addition, global populations are aging rapidly, especially in developed regions and countries, and future automated driver assist systems will be able to help to address the declines in physical capabilities, for example vision, hearing abilities and response time of older drivers.”

TRW has been developing Advanced Driver Assist Systems for more than 20 years, and currently has a DAS engineering organisation with around 350 engineers. Herpich added, “We are using our expertise in braking and steering systems as well as advanced safety electronics and vehicle controls to develop advanced safety functions and even complete semi-automated driving systems for our customers, to enable easier vehicle integration of these advanced safety technologies.”

A version of this article first appeared on AutomotiveWorld.com

Megatrends | 85

Safety

Life in the times of What impact do recalls have on car brands? By Manmeet Malhi he magnitude of vehicle recalls in the US this year has taken everyone by surprise and is forcing an unprecedented change in the automotive industry, across automotive OEMs, regulatory bodies, consumers, dealers and other participants further down the value chain.

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million vehicles had been recalled in the US, across all brands. And in 2013, more vehicles were recalled (21.9 million units) than were sold. This year looks set to break the ten-year old record of 30.8 million units recalled in 2004.

So what does the high volume of recalls imply? Has the quality of the vehicles we drive deteriorated? Or is it that they are now subject to more stringent regulations and safety standards? And what are the

GM has borne the brunt of the tsunami of recalls this year – as of 31 May 2014, the Detroit giant had issued 30 safety and non-compliance recalls for nearly 13.8 million vehicles in the US. This includes the well-publicised recall involving 2.6 million cars for faulty ignition switches that unexpectedly turn off engines while driving, leaving airbags, power steering and power brakes inoperable.

To put this into perspective, consider that by the end of May 2014, about 20 Source: NHTSA 2012 Recall Annual Report

86 | Megatrends

automotiveworld.com/megatrends/

Safety

automotive recalls implications for vehicle manufacturers – is it possible to recover from the damage that brands suffer when their vehicles are red-flagged for lacking in quality? And do these recalls even help make future vehicles safer?

Mechanical and electrical sophistication in modern cars is at its highest level and, quality, in general, in the automotive sector has improved dramatically over the past few decades, by every measure apart from recalls. In the year of the Toyota crisis, there were fewer deaths on US highways than in any year since vehicles became ubiquitous. In the US, traffic fatalities declined from 44,525 in 1975 to 33,516 in 2012, even as the US population increased by almost 50% during the same time – a major reason for these reduced deaths are the technologies that have been developed and installed in our vehicles, such as ABS and airbags.

While vehicles today are subject to more stringent safety regulations and automotiveworld.com/megatrends/

are fitted with more safety features than ever before, they are also subject to more scrutiny, both by the authorities and the media. Toyota burnt its hands badly in 2009-10 when it ended up recalling 9.44 million vehicles worldwide for a fatal, sudden acceleration fault, on the back of a potential lashing by regulatory authorities. This series of recalls had an adverse effect on Toyota’s profit, share price and reputation. The company had to pay about US$7bn in litigation fees and estimated losses were in billions due to lost sales, reduced manufacturing output and enhanced incentive campaigns.

Some recalls, on the other hand, are not threatening and even leave many customers shaking their heads in disbelief. Take for example the quarter of a million Lexus cars recalled in 2013 for a loose nut on front wipers, or Honda, Nissan, Volvo and Kia models being recalled for having incorrect tyre pressure labels. For some automotive OEMs, like Toyota, this has led to a

‘recall first, investigate later’ culture (which is the opposite of the normal operating procedure in the automotive industry), making it clear that OEMs are erring on the side of caution.

Toyota’s strategy, however, should not be confused with ‘uninfluenced recalls’, which are initiated by an automotive OEM if it finds a defect internally.

Damage to brands is not irreversible - if recalls are handled ethically What the current spate of recalls tells us is that anyone can have a ‘recall incident’. Vehicle manufacturers that were once lauded for quality have lost brand value and some credibility due to recalls made in the past decade. Toyota has led in US recalls in four of the past five years, with Honda earning the dubious distinction in 2011. In early 2014, luxury vehicle manufacturer Aston Martin recalled about 75% of the cars it had hand crafted since 2007. To elucidate how recalls impact an OEM, consider this: Toyota’s US market share peaked at 16.7% in 2009, just before Megatrends | 87

Safety

for our mistakes “We andacceptcommitresponsibility to doing everything within our power to prevent this problem from ever happening again.

- Mary Berra, Chief Executive Officer, GM

the recalls began and consequently slipped to 12.7% in 2011; in the last two years, the company has made a strong comeback and its market share has risen to 14.1%, due primarily to consumers’ belief in Toyota and the inherent quality of its products, and the way in which the OEM openly dealt with the problem.

However, a long overdue recall that reeks of corporate irresponsibility can be destructive to an automotive OEM’s image. The volume of recalls and impact on current customers also has a detrimental impact on vehicle manufacturers in the long-term. If consumers have to take their vehicles to dealers multiple times, it becomes a hassle. And then if they have a less than satisfactory experience at the dealership, it may sway their decision to leave the brand.

On the other hand, recalls have become so common now that some dealers are taking the opportunity to build brand loyalty and show that they care about customers buying the company’s products.

Why always US? Recently, Canada and some other countries have become serious about recalls; moreover, recalls of vehicles with common parts also often become global recalls due to international supply chain inter-linkages. However, the bulk of the pressure on automotive OEMs has been from the US government, media and the legal 88 | Megatrends

system. The aggressive government in the White House enjoys taking the moral high ground with big businesses and consequently, automotive companies are under unique pressure in the US to recall everything that influences consumer safety.

Do recalls make cars safer?

Although the primary objective of a vehicle recall programme is to fix the current and potential safety issues, it is difficult to judge whether vehicle manufacturers treat these recalls as routine withdrawing and repairing of vehicles. Based on what is happening with GM’s recalls and how Toyota dealt with its recalls, industry observers believe that large product recalls have managed to reduce the number of injuries. If OEMs learn their lessons (from the recalls) and improve reliability, they are likely to experience better outcomes in the future. On the other hand, OEMs that restrict their response to merely fixing faults in defective vehicles are unlikely to experience any tangible improvement in reliability.

Saying that product reliability generally improves after product recalls doesn’t mean that vehicle manufacturers should engage in more recalls than the level the industry is already witnessing.

The implication is that OEMs should diligently undertake rigorous premarket screening of vehicles, as that would help reduce the incidence of product failures. Currently, pre-market screening is not considered priority as

OEMs often balance considerations of investing in reliability improvements with competing needs, such as pursuing growth through new product introductions and innovation.

At the same time, it is important to note that although manufacturers use state-of-the-art facilities and follow the latest manufacturing philosophies, it is difficult to make the perfect vehicle, and vehicles often need to be recalled.

Arguments about responsibility and long-running courtroom battles are not good for OEMs. Toyota, for example, decided to accept billions of dollars in costs and come out of the crises as a better company, as quickly as possible. GM has decided to follow the same approach and it is perhaps the way forward for all automotive OEMs. From the consumer’s perspective, the newer generation, accustomed to software updates on high-end technological devices, is more accepting and tolerant of recalls than past generations. So, it is perhaps OK to issue recalls, as long as OEMs behave responsibly, handle the recalls efficiently, and incorporate the learnings to make future cars safer. The bottom-line is simply this: as long as consumers are convinced of the safety of vehicles, and that recalls mostly pertain to minor non-life threatening aspects, brand loyalties are unlikely to change dramatically.

Manmeet Malhi is Senior Project Manager at EOS Intelligence automotiveworld.com/megatrends/

Safety

It’s all in the typeface: a small but significant detail of car safety Drivers may not always take notice of typeface, but it’s a vital part of their in-car safety, writes Rachel Boagey

automotiveworld.com/megatrends/

Megatrends | 89

Safety t is becoming commonplace to buy a car equipped with the latest in-car safety technology, ranging from collision warnings, to back-up cameras.

When it comes to effective car safety however, it is often the small details that are the most significant.

I

Although typeface may go unnoticed in everyday life, and in most cases isn’t appreciated by end users, a significant amount of work goes into making in-car typeface meet certain criteria. As in-car infotainment systems advance and onscreen typeface becomes more commonplace, the importance of providing a driver with information that is easy to read quickly is vital.

Eyes on the road If text or numeric characters are hard to read, user satisfaction is negatively impacted, raising the chances of collision due to both increased time of the eyes being directed away from the roadway and from cognitive distraction.

Postdoctoral Associate Jonathon Dobres of MIT AgeLab recently spoke to Megatrends, discussing various aspects of legibility testing and provided insight into how font choice impacts glance time in automotive interface design.

Dobres has acted as lead on many recent AgeLab research investigations into how the slight change of a typeface in an in-vehicle environment can impact legibility at large. The company has recently joined forces with Monotype Imaging Holdings to develop a new, streamlined methodology for testing the legibility of typefaces on screens under glance-like conditions.

Speaking about the combined study between Monotype and AgeLab, Dobres said, “Our 2012 study, which was conducted in a full driving simulator, showed that something as subtle as the choice of typeface for a menu screen could translate to substantial differences in how the driver interacts with the device. Since then, OEMs have been quite intrigued by the findings and have engaged Monotype’s type design and research experts to help them look at ways to potentially optimise typefaces for their HMI designs.”

Steve Matteson, Creative Type Director at Monotype, also spoke to Megatrends, explaining how Monotype’s work with AgeLab has taken a fresh look at glance-based legibility. The research also informs the 90 | Megatrends

Type is to as archite to shelter industry on ways to enhance legibility and reduce interface demands of their human machine interface (HMI) designs. He said, “The results were compelling. We used two different fonts including Frutiger and Eurostile, which are both designed for good legibility.

With Frutiger, we saw a 9.5% decrease in the number of screen glances, and a 3.5% decrease in driver errors.”

a drivers’ eyes are off the road while viewing the HMI. He said, “An average American reads four words per second, so that allows eight words to be read in the critical two-second window.

Therefore, it is important to provide the driver with more information in that two second window that is more easily understood. Then they can get their eyes back on the road quickly.”

Describing in-car UI design as a challenge, Matteson said, “There is often a lot of information displayed for the driver in a car and it is often the case that too much information is being exposed all at once.”

Typeface types

From this, Matteson also noted that a big issue behind the wheel is when people are looking at information, typing phone numbers and texting, and that using a cell phone while driving accounted for 17% of all traffic incidents in 2010. Matteson has been looking specifically at how to display the information differently, and what can be done in the typefaces themselves to increase the ability to get people’s eyes back on the road.

Matteson referenced TEOTR, the total eyes off the road time guideline issued by the US National Highway traffic Safety Administration (NHTSA). He explained that typefaces that are easier to read would help improve automotive experience and decrease the time that

The new study correlates with the results of the previous research but uses an adapted Stimulus Onset Asynchrony (SOA) methodology to create a more flexible, cost- and timeeffective way for designers to test specific typeface legibility under glancelike behaviour – and help automotive OEMs and HMI designers select a legible typeface for in-vehicle displays.

If text or numeric characters are hard to read, user satisfaction is negatively impacted and the risk of accident may increase due to both increased time of the eyes being directed away from the roadway and from cognitive distraction.

The results of the new tests found that on average, a humanist (Frutiger) typeface could be read accurately in shorter (8.8%) exposure times than a square grotesque (Eurostile) typeface – which was broadly consistent with the legibility benefit for Frutiger as seen in the previous study. automotiveworld.com/megatrends/

Safety One size doesn’t fit all

o legibility cture is r

If text or numeric characters are hard to read, user satisfaction is negatively impacted and the risk of accident may increase due to both increased time of the eyes being directed away from the roadway and from cognitive distraction

Dobres explained, “There has been little research into typeface at the level of design, so AgeLab and Monotype did a study using a driving simulator to gauge which typeface is the most effective, and in our results found that when menus are set in a humanist typeface, people are able to do tasks faster and with less glance time.”

A particular humanist typeface mentioned by Matteson is Eurostile, which he described as a favourite with automotive designers and a typeface often used in cars, including the Jaguar XJS. However, many OEMs are going down the road of styling their typeface to fit their brand. Despite this trend, a more defined and legible typeface is critical. Matteson said, “It is time for automotive manufacturers to look further down the road and start thinking about matching their brand with their typeface as well as providing a better experience with increased legibility.

This becomes important when you put it into context of how far you would travel with a glance away from the screen. A lot of things can happen in 25ft when you’re going 60mph.”

Typeface unmasked While most people who drive cars wouldn’t necessarily notice a change in typeface, what happens if typeface goes wrong? Dobres explained the importance of legible styles in a car for automotiveworld.com/megatrends/

a concern that very much affects drivers’ everyday lives: safety. He explained that when Apple introduced Retina screens, “we saw wonderful marketing for a high resolution screen”, but when iOS7 experienced a radical redesign, every element of the interface, particularly the typeface, became narrow. He noted, “Apple used Helvetica used for a long time and there were many different weights and variants of it, but for IOS7 they used an ultra light version of Helvetica.

Some people came up with the idea that it was a decision hindering legibility, so instead of using ultra light Apple used light. It may not sound or seem like much of a change, but on a Retina screen it makes a huge difference.”

Megatrends also asked David Gould, Director of Product Marketing at Monotype, about the requirements of in-vehicle interfaces. Gould suggested these are often guided by engineering specifications: “Engineering is often a requirement on the one end, which pays little heed to visual design, and “look and feel” mandates on the other, which often do not account for human psychology and behaviour. As a result, even the most skilled interface designer may struggle to balance art with science, making it difficult to develop a beautiful and wonderfully functional interface that does not overload the consumer.”

Of course, there isn’t just one typeface that works perfectly everywhere and even a legible typeface can come under dispute. The main concern in the automotive industry, highlighted by Dobres, is that one size doesn’t fit all when it comes to typeface, and OEMs often want their branding to extend to their typeface, not always resulting in the most optimal legibility for drivers.

So where is the compromise? Dobres explained that much of the typeface in a car does have to do with the tensions of branding. He said, “Eurostile has a futuristic look so many brands like that but there are other typefaces that have the same theme and cultural notes but may not be as geometric and tightly spaced, resulting in better legibility.”

Balancing scientific best practices and branding is a conversation that Monotype is having with many OEMs and manufactures. Dobres suggested, “It is beneficial to suggest to the OEMs that a certain branch of the typographic tree is probably beneficial to them and that they might want to choose something in that family.”

Matteson believes type is to legibility as architecture is to shelter, and said, “It is possible to significantly improve legibility with certain treatments to design.”

Many fonts are intended to be used for inches, not tiny points, explained Matteson, so when such fonts are used in an automotive environment, visual crowding may easily occur, leading to a distracted driver. The cockpit is also often moving, providing another difficult reading situation.

While there is no one typeface that rules them all, the requirements of automotive typeface are consistent.

Moving ahead, while testing fonts for use in automotive may require collaboration between researchers, the potential value for identifying the best typefaces for quick glance reading on dashboards is growing alongside the development of IVI systems, ensuring that drivers who may not always take notice of typeface will learn to value it as a vital part of their in-car safety.

A version of this article first appeared on AutomotiveWorld.com Megatrends | 91

Safety

Eyes on the road - your car is watching you Megatrends takes a look at developments in eye tracking technology that could put an end to fatal driver fatigue. By Rachel Boagey

eeling drowsy at the wheel? You’re not alone. New research from the Virginia Tech Transportation Institute indicates that driver fatigue is at play in more crashes than previously estimated.

In a 100-car naturalistic driving study conducted by the institute, results showed that fatigue was a cause of 20% of crashes, compared to the 2-3% previously estimated based on surveys, simulator studies, and test tracks.

F

This is not the only study which has produced some alarming results. The National Highway Traffic Safety Administration (NHTSA) recently reported that drowsy driving causes more than 100,000 crashes a year, resulting in an estimated 40,000 injuries and 1,550 deaths.

Embedded eye-tracking technology that could monitor a driver’s alertness and drowsiness levels is already in advanced stages of development by some automotive OEMs and suppliers, and the successful development of automotiveworld.com/megatrends/

such a system could enable a car to automatically assess and respond to movements and certain actions by the driver.

Avatars and eye-tracking Many OEMs have been using eyetracking and virtual reality to improve safety in cars, and earlier this year, Jaguar Land Rover developed an innovative 3D instrument cluster which uses the latest head- and eye-tracking technology to create a natural-looking 3D image on the instrument panel.

Cameras positioned in the instrument binnacle or steering column area track the position of the user’s head and

eyes. Software then adjusts the image projection in order to create a 3D effect by feeding each eye two slightly differing angles of a particular image.

This creates the perception of depth which allows the driver to judge distance.

Multi-modal safety As well as detecting drowsiness, there are numerous other uses for eyetracking technology which could benefit the future of in-car safety, such as allowing OEMs an insight into where drivers spend most of their time looking. With this data, developments could be made to incorporate design Megatrends | 93

Safety appropriate decisions on where to place certain features, or which to leave out altogether. The technology could also be used to control additional features in the car more easily than using haptic technology.

Visteon’s Christian Feltgen told Megatrends that eye-tracking technology is gaining in importance as a driver distraction solution. Feltgen is Visteon’s Global Director of Cockpit Electronics, and Vice President of the Tier 1 supplier’s Technology Office. “I think we were the first company to display this technology within the automotive industry and promote it to our customers, not only for the purpose of monitoring distraction but also for the purpose of additional ease of control for in-car features.”

Feltgen believes that eye-tracking will play a role in the future of in-car HMI, not only in the fight against distraction but also as a feature in the multimodal HMI system, and explained that if it is possible to know what the driver is looking at, it is also possible to help guide his interaction with the car. “It is a technology which can not only keep on the look-out for what the driver shouldn't be doing, but make it easier by enabling a pre-selection of features depending on where the driver is looking.”

The next big thing – face-tracking?

Mercedes-Benz has been researching the analysis of brainwave patterns to identify drowsiness and inattentiveness, but it still has limitations, not least of which is the need to attach electrodes to the driver’s head. Similar technology has come from Toyota Europe; since 2006, the OEM has been developing 3D Face

94 | Megatrends

Tracker, designed to analyse the driver’s ‘state’ or mood, by detecting their facial expressions. Jonas AmbeckMadsen, Senior Manager, Advanced Technology, Research and Development at Toyota Europe, told Automotive World, “The approach is to focus on a 3D model rather than the 2D model used by most face tracking systems because it is more robust.”

Using images of real faces to create a 3D model, the system monitors 238 points on a driver’s face to analyse his or her expression.

Even though eye-tracking technology is just gaining relevance in the industry, Toyota’s Ambeck-Madsen has argued that it has limited value when used on its own. Integrating a gaze detector would enable the system to know when the driver is looking for too long at an audio system, for example, helping to identify ‘gazing’, the act of “looking but failing to see”, in Ambeck-Madsen’s words. This is particularly likely to occur when a driver is tired or bored, he said, for example after driving on a highway for several hours. While Toyota has given no indication of plans to commercialise 3D Face Tracker, it underlines the potential for technology to tackle driver distraction.

Safety System (DSS) technology began its life in the mining industry, but it has the potential to save lives and dramatically reduce fleet costs in the passenger transport sector.

DSS is designed to detect driver fatigue (“micro-sleep”) and distraction. It relies on eye-tracking algorithms to monitor the driver’s face, sending alerts if it detects either distraction or microsleep. The system kicks in at speeds above 70kph (43mph), as long-haul motorway routes are deemed the most dangerous in terms of fatigue and distraction for drivers.

Ken Kroeger, Chief Executive of Seeing Machines, provided some background on the distraction and micro-sleep detection improvements in the mining industry. While the system of alerts quickly taught the drivers to drive in a more alert manner, it couldn’t address fatigue in the same manner. “The brain can be trained to not be distracted, but you can’t teach somebody to not be tired,” Kroeger told Megatrends.

From mining to automotive

Many OEMs are already exploring the use of eye-tracking technology within their cars and as the concern for driver safety increases, so too will the technology implemented behind the wheel.

Along with many other technologies now gaining momentum in automotive applications, developments in eyetracking technology have filtered in from another industry sector. An Australian company called Seeing Machines recently developed eyetracking technology to tackle driver fatigue, and began a key trial for new safety technology for the commercial transport industry in 2013. The Driver

In reality, the number of people driving vehicles whilst drowsy is probably much higher than statistics show; knowing how drowsy someone was prior to a crash, unlike drink driving, is impossible to determine. However, if technology such as this makes further tracks in the automotive industry, it is hoped that even if it can’t be solved, driver fatigue at the wheel can at least be tackled.

automotiveworld.com/megatrends/

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Freight Efficiency

Interview: Ben Kraaijenhagen, Product Management Environment and Trends, MAN Truck and Bus Ben Kraaijenhagen on MAN’s future focus, global emissions harmonisation and autonomous truck technology

By Rachael Hogg t MAN Truck and Bus, the Product Management Environment and Trends team is responsible for foresight – examining the impact of industry megatrends, developing potential resultant scenarios and identifying appropriate solutions for those scenarios. Ben Kraaijenhagen, who heads up this team, also focuses on ensuring MAN’s products are safe, that they meet all health and societal needs, and that they are environmentally-friendly.

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automotiveworld.com/megatrends/

In a recent interview, Kraaijenhagen talked about MAN’s focus over the next few years, the likelihood of global emissions harmonisation and the potential for autonomous truck technology.

What are the key research and development projects that MAN is currently working on?

We are focusing on alternative powertrains at the moment. We see

two main streams. One is big cities with low emission zones. Ideally you want vehicles producing no emissions, but that is hard to realise from both a cost and technology point of view. For a pure electric vehicle, you have to bear in mind the CO2 balance overall if the electricity plant is using coal, as that could be worse than diesel trucks.

The second stream is outside cities – inter-urban transport. There is a strong trend to reduce CO2 emissions and

Megatrends | 97

Freight Efficiency reduce fuel consumption. So we are looking towards electric vehicles, hybrids, and gas vehicles.

How has electrification and alternative fuel changed the development of trucks and buses?

Today we are producing nearly 100% diesel-driven trucks and buses, because we are in the medium- and heavy-duty segment. We have gas engines in our portfolio, and later we will have hybrid and electric vehicles in our portfolio. When we see these in large numbers, however, will depend on the infrastructure that will be needed – it is a bit of an action/reaction model at the moment. We are trying to find out what infrastructure is planned, so we can form a plan for our truck portfolio.

We are really looking towards the long term evolution here.

Do you envisage emissions harmonisation and the concept of the ‘global truck’ becoming a reality?

It has been discussed. At MAN we are in contact with regulators in Europe, the US, Latin America, China and Russia – everywhere, in fact, and the regulation is always different. It adds a lot of cost and time-consuming projects, and it would be a big help if we could have the harmonisation of vehicles and type approval. It is my belief that it will be another ten years before [emissions harmonisation] begins to happen.

In terms of emissions regulation, what do you think lies beyond Euro VI? All OEMs have agreed not to invest huge amounts of money in exhaust gas emissions. You can discuss a bit about NOx, and about fine dust, but the focus should be on the CO2 equivalent emissions of a vehicle: what kind of fuels, and what kind of powertrains.

Through alternative powertrains you automatically reduce other emissions.

There is a lot of complexity and additional costs with Euro VI, and the customer is paying the cost. We really need to look at CO2, and at fuels, powertrain, and where the vehicle will be driven.

What are the key trends you expect to see developing in the global commercial vehicle industry beyond 2014?

If you look ten or 15 years ahead, there will be a split in Europe’s vehicle class, 98 | Megatrends

high-technology class between vehicles, medium-sized vehicles, and the low-cost trucks like those offered in China and India. Looking ahead, I see a trend of moving from low-cost trucks, to budget trucks. These budget trucks will be designed and developed more efficiently, consuming less fuel and offering greater security when compared to low-cost trucks, which are not as reliable. In China, you can still buy a truck for €22,000 to €25,000 (US$29,500-US$33,500), and it will go from A to B, but you don’t know whether it will arrive at B, how much it will cost, and what energy it will take to arrive at B. I also see a trend towards safety assistance systems to avoid accidents and improve traffic flow, with European OEMs having a positive influence over non-European OEMs. The first goal outside Europe is products which are more durable, reliable and efficient, and consume less fuel for more efficient transportation with a better energy balance.

Daimler has recently announced its self-driving trucks. Does this change anything for you?

This is nothing new. We have already run numerous projects in Europe to show that self-driving trucks are a possibility. Technically it is possible, but there are questions over data security, management, and the availability and quality of data. Audi has proven in a pilot project that autonomous driving is possible, and at MAN we are involved in autonomous driving. I am convinced there will be pilot projects on a small scale for specific routes, but in general we are a long way off. From a legislative point of view, it is still not allowed. As OEMs, we could say yes, but you cannot implement it on a broader scale until you have dealt with the legal aspects.

How does MAN identify consumer demand and needs from region to region?

We have three streams. The first is my department: foresight. We do it on a general basis, and by country.

Secondly, we work on a regional basis, and are in constant contact with customer groups. Thirdly, MAN is involved in many working groups with institutes, and universities where we discuss and analyse developments in logistics, transport, and intermodality.

What do you think will be the main focus of the automotive industry over the coming years?

There needs to be a focus on the global problem of the environment, not only CO2, but also the availability of materials. The industry has to look to alternatives. We also see a trend in the whole stream of globalisation, where consumers are moving into urban environments, and the growth of transport will continue. There is also a change in mentality. Consumers used to own a car privately, but that isn’t necessarily true now. There are new business models. You don’t sell trucks anymore, you sell transport. For us, that means completely new business automotiveworld.com/megatrends/

Freight Efficiency

models. This also changes with alternative powertrains. If you look at electric driven vehicles, the business model also needs to consider who looks after the battery, the vehicle, and aftersales.

Globalisation is also huge, with the new centres of China and India. We are not sure how Africa will develop.

Many have said it is the next big thing, but we are not sure. What is clear is that Europe is no longer the centre of the world; neither is the US. This will have a huge impact on our behaviour, and our dependency.

A version of this article ďŹ rst appeared on AutomotiveWorld.com automotiveworld.com/megatrends/

Megatrends | 99

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Freight Efficiency

Waste heat recovery takes main stage at Norgren There are many ways of improving engine and vehicle fuel efficiency, but to make a step change, you have to get at the wasted heat, says Norgren’s Mark Sealy. By David Isaiah iesel engine technology is more efficient than ever before, yet even the most advanced engines currently achieve fuel efficiency of not more than 42%; the rest is lost to a combination of factors, including friction losses, tyre rolling resistance, air drag and significantly, waste heat.

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Technologies being employed to recover lost energy include reduced engine idling and start-stop systems, the recovery of kinetic energy through regenerative braking, and waste heat recovery (WHR).

A viable engine WHR

an expander turbine, whose output can again be harnessed either mechanically or electrically, before being turned back into a liquid in a refrigeration-like heat-exchanging condenser. Most Rankine systems use ethanol as the working fluid.

Norgren is one such company working on commercial vehicle waste heat recovery. The motion and fluid control technologies specialist designs WHR system valves, and views circulation control as essential to WHR success.

Mark Sealy, the company’s Engineering Director – Commercial Vehicle Sector, believes that recovering heat is the single biggest opportunity to save fuel and reduce carbon dioxide emissions.

Another is based on the Rankine cycle.

This comprises a closed-loop system that captures exhaust heat and runs it through a heat exchanger that converts a liquid into a super-heated and pressurised gas. The gas is fed through automotiveworld.com/megatrends/

According to the supplier, bespoke valves are now being designed to improve system viability and improve the controllability of the working fluid.

This is primarily to enable energy recovery from more points of the operating envelope. Bespoke designs also help address containment, size and cost considerations.

WHR is designed to reduce emissions and improve fuel efficiency, so the tightening emissions norms in the EU and North America have played an important role for Norgren's CV business over the last decade.

system must be not only affordable and durable, but also compact. According to an SAE International technical paper, an ideal application for WHR is on trucks with high mileage and large payloads – indeed, the technology works at its best on engines with high load factors.

One of the forms of waste heat recovery is turbocompounding, which directs the exhaust leaving the turbocharger through a second auxiliary turbine.

These conditions are usually seen in long-distance, heavy-duty trucks, and this is also the segment where fuel costs are operationally most significant.

According to Norgren, the business case for WHR still needs to be developed due to a combination of factors. These include technical complexity, the high level of integration needed across truck systems, and the complexities of containing the working fluid (ethanol), within the CV environment.

"You can do many, many things with engines and vehicles to improve fuel efficiency, but if you want to make a step change you have to get at the wasted heat. The reason for this is clear – over half of the fuel's energy is lost as heat. So it's a very, very significant opportunity," says Sealy.

"Already we have seen a saving of 4% on trucks under real-life road conditions. We have seen as high as 6% fuel savings on engines that run at steady high load."

With Euro VI now firmly in place in Europe, and stringent emissions norms in the US, what does Sealy envisage as the next major step for the CV industry in those markets? "I think we will see cost reduction, and further optimisation. The OEMs will try to reduce complexity, and I think we will see some of them try to remove EGR (exhaust gas recirculation) with improvements in after-treatments. But we do not expect significant new activities on emissions. There is the possibility of a further NOx reduction, but I think it unlikely.”

Alternate fuels are being considered in the commercial vehicle segment as well, which opens up possibilities for Megatrends | 101

Freight Efficiency hybrids, electric and hydrogen fuel cellpowered trucks. Norgren does feature here as well, producing coolant valves that play a role in managing battery temperature, as well as hydrogen valves and other equipment like air valves and cooling valves for hydrogen fuel cells. However, the company feels that these technologies will be limited to range extenders on fleet vehicles, such as delivery trucks.

"Conventional diesel is still number one. Hybrids will take a long time to become serious because they are just too expensive. Fuel cells will only ever be niche. So the next big thing is natural gas. We see a lot of activity in China and America, and a lot of interest in Europe but not much activity yet," Sealy says.

"For example, all of the government contracts for city buses in China are LNG (liquefied natural gas) now, already. And our prediction is that one commercial vehicle in three in China, one commercial vehicle in five in America, and one commercial vehicle in ten in Europe, will be natural gas by 2020."

The company’s focus is currently turning to the less mature markets of Brazil, India, China and Russia, where the contrast with the high emissions norms in the West is notable. Here, there has not been much emphasis on emissions standards, or rather, the adoption of new standards has been on far more relaxed.

Of course, when talking about the BRIC countries, it is important to remember that these are price sensitive markets. They may lag behind Europe when it comes to the ability to reduce emissions, but Norgren expects manufacturers to focus both on targeting European levels of quality, and on the need to meet legal requirements.

"Because it's a legal requirement, it is a different priority. So, certainly for the next cycle they are prepared to pay for European technology. But we are fully aware that we need to simplify, localise and reduce costs for the future," Sealy tells Megatrends.

Simplifying and localising may be Norgren's strategy for developing markets, but there are certain key megatrends shaping the global commercial vehicle industry at large.

Sealy cites three in particular that are 102 | Megatrends

shaping the supplier's global strategy.

One is the increasingly demanding emissions targets for off-highway vehicles, which have led to the company diversifying into this segment.

Another is the implementation of new legal imperatives in Europe and North America for CO2 reduction, which underpin Norgren’s strategy, primarily in WHR, but also in other technologies such as tyre inflation and management technology, and wastegate control.

A third megatrend cited by Sealy is the BRIC countries’ focus on emissions. This may be gaining traction much later than in mature markets, but real change is coming, says Sealy, starting with China. Even in India, where the introduction of higher standards has been delayed owing to various complications including fuel quality, Sealy believes that an emphasis on emissions reductions will come, and that it is a question of when, and not if. automotiveworld.com/megatrends/

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Freight Efficiency

Automotive Cyber-Physical systems: the next computing revolution As congestion increases, Haydn Thompson of CPSoS highlights the technology that could enhance the safety and efficiency of freight and transport while minimising fatalities

By Rachel Boagey

or over a century, the primary function of cars has been to move people around efficiently and safely.

However, with the growing numbers of cars on the roads, this function is becoming increasingly difficult to achieve.

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Two-thirds of the world's population will be residing in big cities by 2030, by which date, the global car fleet is predicted to double from currently 800 million vehicles to over 1.6 billion.

Combined, these figures mean not only increased congestion but also increased challenges for the logistics industry.

The Systems of Systems in Transportation and Logistics Working Group is currently investigating the impact of Information and Communication Technologies (ICT) in the automotive industry, in a bid to cope with the increased congestion on the roads.

The group is funded as part of the Cyber-Physical Systems of Systems (CPSoS) project, a European Union funded Support Action working towards a European Roadmap on Research and Innovation in Engineering and Management of

104 | Megatrends

Cyber-Physical Systems of Systems.

The work focuses on the challenges posed by the engineering and operation of technical systems in which computing and communication systems interact with large complex physical systems. Examples of this are the road transport network, air traffic management, the rail network, and shipping operations and logistics.

Freight efficiency, efficiency

transport

One of the main aspects driving the CPSoS’ interest in the automotive industry is the increased volume of traffic on the roads, increasing emissions, and increasing potential for fatalities, explained Haydn Thompson, Professor of Systems Engineering, from Haydn Consulting.

Thompson leads the Working Group, and has been intrinsically involved in European Union System of Systems initiatives. His involvement includes the development and coordination of SoS strategy, and the funding and review of on-going SoS projects; he also contributes to EU SoS roadmapping exercises.

“Between 1995 and 2006, freight and passenger traffic increased

significantly,” said Thompson. “Freight grew by around 35% and passenger traffic by around 20%. Transport accounts for a quarter of all emissions, so there's a big drive to reduce these. The European Union is also trying to halve the number of fatalities on the road.”

The role of ICT in the automotive sector therefore requires the analysis of industrial and societal needs, challenges of the application domains, and commonalities and differences between applications and proposed solutions. “One of the most interesting areas is the general use of ICT in the car itself providing more information to drivers,” explained Thompson. “In the future, people will also look at a facility such as business applications so that the car can become the office.”

In the area of advanced driver assistance technology, Thompson believes the potential is high for reducing the number of crashes, as well as mitigating the impact of nonavoidable crashes. “If you can get your automatic systems to cut in, you can reduce the injuries to passengers,” he explained.

automotiveworld.com/megatrends/

Freight Efficiency Traffic management is another area of focus for the group, which is made increasingly difficult as people move into big cities. “We're going to see increased congestion and logistics problems,” he explained. Included in these problems is the move from transporting large shipments of goods to much smaller shipments of goods, due to the growth of online shopping, and the associated congestion caused by vans stopping and unloading in busy streets. This, he said, highlights the importance of optimising logistics efficiency.

Cyber-Physical Systems is the linkage of embedded processing technologies and networking technologies with physical systems, explained Thompson, and the systems must include humans as key components.

He noted that human-machine interfaces (HMIs) can often overload people with information, and said, “The socio-technical issues are key. We’ve always got to remember that there's a human in the loop and as consumers, we are already bombarded with information.” It is becoming increasingly important to filter information and only provide drivers with that which is essential to their safety.

However, from the Systems of Systems perspective, providing consumers with

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information is vital. “For example, this could be in the area of traffic management where we would provide information on traffic jams up ahead or accidents up ahead. Obviously, we can't predict what people are going to do with that information. People ignore information and may choose to do unexpected things within our system.”

He continued, “It's one of the most interesting areas and in fact it's important to be able to design Systems of Systems to be resilient to this. We need to be able to deal with ‘emergent behaviour’ from the system.”

Vehicle-to-vehicle (V2V), Vehicle-toInfrastructure (V2I) communications and standards Thompson highlighted that V2V and V2I communications technologies have great potential to enhance safety, efficiency and emissions by enabling better traffic flow. Even if only 2-3% of cars were equipped with the technology, their modified behaviour would positively affect all other cars.

The automotive industry has been working for over a decade on V2V and V2I communication, and good progress is being made towards a common standard through projects such as Car2Car, a non-profit industry forum

driven by OEMs to jointly drive development, harmonisation and adoption of technologies for Car2Car systems. However, Thompson also suggested that there is a need for a world-wide standard that covers Europe, America, Japan and China.

The roll out of V2I communications technology would require extensive and expensive infrastructure deployment, and a key requirement in any infrastructure implementation is the ability to be future-proof and allow for likely future innovations. “Although a standard exists and it's very well organised within Europe, we don't really know what's going to happen until we do the first applications and large scale deployments. That will test whether a standard really works.”

The automation Zeitgeist?

The latest developments in driver assistance systems, and their integration with other previously unconnected systems such as braking and steering, are leading to semiautomated and ultimately fully autonomous cars. However, many issues remain: “On the technological side, lots of things have been demonstrated. The Google car has completed thousands of miles of autonomous driving already, but the

Megatrends | 105

Freight Efficiency nothing being considered regarding what happens once the cars are deployed on the road,” cautions Thompson. “There will be accidents in the future, there's no avoiding it, but how do you apportion responsibility amongst the car manufacturers, myriad of suppliers, sub-component suppliers and communication infrastructure operators, when cars are autonomous?

This highlights the need to have a good process in place for dealing with accidents which may occur in the future.” systems themselves cost US$150,000 to install, and cost is still a key issue in the price sensitive automotive industry.”

“But that has big issues,” cautions Thompson, “one of the main ones being privacy.”

As well as the high cost of autonomous drive technology, there is the issue of user acceptance; before the systems are implemented, people need to trust them. “While there tends to be a trend of people accepting useful functionality, such as ABS, parking sensors, rearfacing cameras and so on, self-driving cars are a big leap.”

Different rules and political standings on privacy exist throughout Europe, explained Thompson; for example, in Germany, privacy is a hot political topic, and the tracking of cars is certainly not favoured. “There are the political issues that need dealing with but equally important is the need for good security.

Potentially vulnerable connections in cars are a major concern.”

Risk should also be considered, and Thompson foresees problems caused by autonomous cars mixing with nonautonomous cars: “If everything is autonomous, life is very easy because everything is predictable. But we're going to have a mix of autonomous vehicles with cars that are conventionally driven by people, and that's where it gets complicated.

You can't anticipate all eventualities.”

Ideally, real monitoring of system would enabling the problems before

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Who’s responsible?

While the automotive industry focuses on developing the underlying technologies to put autonomous vehicles on the road, “There is

While lessons can be learned from leading sectors such as aerospace, problems persist when it comes to the development of autonomous cars on roads. “We have autonomous aircraft flying around. We're still trying to get them flying in civilian air space, but we're moving towards that with the regulators. There's already a lot of understanding of the key issues in that area,” said Thompson.

As for congestion, it is hoped that autonomy will aid traffic flow with techniques such as as radar, lidar, GPS, and computer vision. However, making the roads safer, cleaner and more efficient is no walk in the park, with issues such as cost, privacy and public acceptance standing in the way.

time the total be possible, identification of they become critical.

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Freight Efficiency

Global truck production outlook: can the industry maintain pace beyond 2014?

Global truck and bus production in 2014 is projected to be 4% above 2013. Can this continue? By Kamini Patel ower Systems Research is predicting that the global medium and heavy truck market is going to grow slowly and steadily in the next five years before flattening out slightly in line with the business cycle by 2020 (chart 1). We are predicting a five year compounded growth rate of 2%.

higher rate than Class 3. The main reasons for this shift are fleet rightsizing strategies, increasing urbanisation leading to hub and spoke distribution models, and improvements in product range in the developing economies of China, South America, India, Eurasia and South East Asia.

This may look unexciting, but delve deeper into expected production by Gross Vehicle Weight (GVW) and by region, and some very interesting trends are visible. The biggest issues in 2014 are related to economic conditions and high inventory in China, Brazil and Eurasia (Russia, Belarus, Turkey and Ukraine).

Truck production in the 12-16t / Class 7 category was poor in 2013, due mainly to weak performance in India, Japan and Korea. Prospects have brightened and will continue to improve as mining and export conditions improve.

P

In the medium term, the most significant production fluctuations are in the 3.5-6 tonnes, 6-10t (Class 3 & 4) and 12 -16t (Class 7) segments (chart 2).

In volume terms, Class 3 represents 31% of total production, whereas Classes 4 and 5 together only account for 10% (chart 3).

However, from 2015, production of Class 4 and 5 is forecast to grow at a Chart 1 - Global Truck and Bus

Overall, global production has recovered from the effects of the great recession of 2009. By 2020, the global truck market will total 6.25 million units, compared with 3.7 million in 2009.

Looking at volume growth, the variations between the mature and developing countries remain. China’s truck production will continue to dominate, but share will decline from 42% today to 39% by 2020, a sign that there will be a shift to larger but fewer trucks as labour costs and congestion increases.

Production will increase at a higher pace in other developing markets, including

the Indian Sub-Continent, South East Asia, South America and Eurasia. The mature markets of Europe (EU28 + EFTA) and North America (USA and Canada) are also expected to grow slightly in volume terms.

Regional variations will continue to be heavily influenced by changes in regulation. Today, fleets in the mature markets are adapting to the implementation of Euro VI/EPA GHG 2014, whereas in China preparations are under way to implement the Euro IV equivalent, and in India there are plans to expand BSIV to 50 cities by 2015 and implement BSV by 2020. To counteract increased acquisition costs (€4,000 - €6,000 per vehicle) there is continuing focus on improving the total cost of ownership and fuel economy.

To address these concerns, OEMs and manufacturers of engines and components are working on several innovative product development solutions to reduce the weight of truck and space taken by components. There are several initiatives under way to improve efficiencies, including: • • • •

Engine efficiency; Tyres and wheels; Transmissions; Hybridisation and alternative power.

The top 20 engine manufacturers supply 88% of global volumes These initiatives are impacting the complete value chain for of global truck production, whether it’s the powertrain, body, infrastructure or fleet management.

Source: CV Link TM

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The high cost of research and development required for these automotiveworld.com/megatrends/

Freight Efficiency Chart 2 - Global Truck Growth By GVW & Class 10% 8% 6% 4% 2% 0%

2013

-2%

2014

2015

2016

2017

2018

2019

2020

-4% -6%

Source: CV Link TM

3.51-6.0 t/Truck Class 3

6.1-10.0 t/Truck Class 4 & 5

10.01-12.0 t/Truck Class 6

12.01-16.0 t/Truck Class 7

16.0+ t/Truck Class 8

Bus/Motorhome Chassis

Chart 3 - Global Truck Production 2014 Factors impacting AMT Adoption Pros

14% 31%

3.51-6.0 t / Truck Class 3 6.1-10.0 t / Truck Class 4 & 5 10.01-12.0 t / Truck Class 6 12.01-16.0 t / Truck Class 7

35%

Cons

De facto Western Europe Standard

Acquisition price

Fuel efficient

Uptime and service

16+ t / Truck Class 8 10%

4%

Bus/Motorhome Chassis

Powertrain and drivetrain protection

6%

East to use

Source: CV Link TM

initiatives has led to many collaborations and some consolidation in engine supply, and the market continues to become more concentrated at the top end. Today, the top 20 engine manufacturers supply 88% of global volumes. In the opinion of Power Systems Research, this trend towards more consolidated engine supply will continue to 2020.

The top 20 manufacturers are a mix of US, European and Asian suppliers.

Cummins, including its Asian joint ventures, dominates global engine supply in medium and heavy trucks.

An important trend is the adoption of natural gas engines to improve fuel economy and lower costs, and many fleets in North America have switched to natural gas engines. Adoption by other regions remains heavily reliant on improvements in natural gas pricing and infrastructure. The US is leading the way, but global natural gas engine production is expected to double as other regions Europe, Asia and Eurasia - develop appropriate infrastructure.

five years is the SuperTruck programme. This initiative, funded by the US Department of Energy and OEMs, consists of vehicle and component manufacturers working together to improve fuel economy and carbon emissions through improvements in powertrain and aerodynamics, weight reduction, tyre rolling resistance, etc. This five year research and development initiative has a goal to improve fuel efficiency by 50% (30% by changes to the tractortrailer and 20% from the engine).

Daimler Trucks North America, Cummins, Navistar, Volvo and several component manufacturers are working

SuperTruck Another significant factor in the Class 8/16 tonnes+ truck segment in the next

Chart 4 - Global Truck Production By Region (% of total unit)

2%

3.7m

5.5m

6.25m

0.3% 2%

0.4% 4% 3% 4%

0.5% 5% 4% 5%

5% 10%

16%

7%

Southeast Asia

14%

Eurasia

14%

12%

Central/South America

11%

12%

North America

11% 9%

Rest of World

6%

8%

Far East Europe

54% 42%

39%

Indian Subcontinent Greater China

Source: CV Link

TM

2009

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2014

2020

Megatrends | 109

Freight Efficiency Chart 5 - Top 20 Engine Suppliers Supply 88% of Global Trucks 120 100 80 60 40 20

Ho n

g

Cu m m Le in s on g Da As ia im le rA G To W ei y ot ch a ai Po we r Is uz u Vo lvo FA W CN F H In ord du st Vo lks rial wa ge D n Ku on gf nm en in g g Yu nn e Na i vis ta r Hi nd uj a Ta ta Re na u CN lt HT C PA CC AR M its ub ish i RE ST

0

2014

Source: Enginlink TM

together and they are close to achieving their research goal by 2015.

Notably, Volvo and Daimler have developed and introduced automated manual transmissions (AMT) which provide a 5% improvement in fuel economy. As a result, transmission technology shifts are already apparent across the mature markets. According to a Power Systems Research transmissions forecast, transmissions will grow at a compounded growth rate of 8% over the next five years (see chart 6).

The highest shift to AMT is in the 16 tonnes+/ Class 8 segment. Today, Europe and North America represent around 76% of total AMT installation.

Brazil is beginning to follow, mainly due to the presence of European manufacturers. Overall, AMT is substituting manual transmissions at a faster pace compared to other transmission designs in both the USA and Europe. The latest voice of customer research from Power Systems Research indicates that AMT transition in the medium and heavy

2020

truck markets in other regions will be influenced by a favourable regulatory environment, improved cost structure and thus pricing, and better end user awareness. Our forecasts beyond 2020 show double digit growth in Class 8 AMT production in Eurasia, China and the Indian subcontinent.

Like the engine production market, the supply of transmissions is also increasingly concentrated. Most OEMS are vertically integrated and produce their own AMT products. Only two key component manufacturers, Eaton and ZF (includes ZF-MAN, ZF Meritor), have a significant share of the Class 8 AMT market.

In summary, Power Systems Research expects global production of medium and heavy trucks and buses (3.5 tonnes/Class 3) to grow at a slow and steady pace until 2018, after which production will remain flat in line with the business cycle up to 2020. Growth by gross vehicle weight class will continue to fluctuate, affected by economic conditions, regulation and innovative product platform

technologies to reduce the total cost of ownership and improve fuel economy.

The result of several collaborative initiatives between key engine, equipment, and component manufacturers will begin to bear fruit across regions. The market for engine supply and major components will continue to consolidate as manufacturers collaborate and vertically integrate to reduce R&D costs.

Overall, growth may look unexciting, but looking deeper by gross vehicle weight class highlights the significant activity by manufacturers to develop innovative product solutions. Across the truck production value chain, companies are working diligently to comply with regional regulations, improve the total cost of ownership and fuel economy.

As a result, we expect the global truck market to continue to remain innovative through to 2020.

Kamini Patel is Vice President and Managing Director Europe at Power Systems Research

Chart 6 - Global Medium and Heavy Duty Transmissions Production 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Source: OE Link

110 | Megatrends

2014 TM

Transmission Module

2019 Hybrid

AMT

Automatic

DCT

Manual

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