AUTOMOTIVE
megatrends Issue 1: September 2012
M A G A Z I N E
Are you OPEN to Ethernet? Andy Palmer on Nissan’s future plans Is recycling key to aluminium's future? Volvo’s changing focus: safety, fun and efficiency Ian Shannon, Shell: “There’s no silver bullet that’ll deliver sustainable mobility” In association with Shell
automotive megatrends
Editor's welcome A platform for success
A study published by Evalueserve earlier this year, ’Platform Strategy will Shape Future of OEMs’, forecast that by 2020, the number of light vehicle platforms used by the top OEMs would be cut by two-thirds from the 175 platforms that existed in 2010.
O
ne OEM’s platform is another OEM’s architecture, and a key point in Volvo’s evolution will be its Scalable Premium Architecture (SPA), unveiled at the 2012 Geneva Motor Show. In this issue, Automotive Megatrends magazine talks to Peter Mertens, Volvo’s head of R&D, about the role of SPA in the brand’s future - a future which will include not only safety and efficiency, but also a focus on driving dynamics.
Whilst Volvo sees its future in vehicle architectures,Turkey’s Karsan is preparing to launch its first in-house developed vehicle platform.The Concept V1’s all-new platform was created initially for Karsan’s New York Taxi of Tomorrow bid. Karsan’s Vice Chairman, Claude Nahum, discusses the evolution of this platform with AMM, explaining how the focus changed as he realised the potential for and absence of - a multi-purpose, highly accessible vehicle for all, and in particular for people with reduced mobility.
The VW Group’s new MQB (Modular Transverse Matrix) platform has enabled the VW family to significantly reduce weight and deliver improvements of over 20% in fuel efficiency and emissions over outgoing models. However, there is much that can be done without developing an all-new platform.
Shell’s Ian Shannon tells AMM that fuel efficiency and emissions reduction can be achieved not only in future cars, but also in cars already on the road, by using synthetic and low-viscosity lubricants. Shannon is Shell’s Global R&D Manager for Passenger Car Motor Oils, and although he believes the conventionally-fuelled internal combustion engine will be the predominant technology for at least the next decade, he underlines the importance of pursuing a variety of alternative powertrain technologies and fuels.
September 2012
Someone who sees a key future for alternative fuels - and hydrogen in particular - is Dr Lars Peter Thiesen, who heads up GM’s Alternative Propulsion Center Europe.AMM talks to Thiesen about the potential for hydrogen fuel cell vehicles in Europe, and also to Andy Palmer, Executive Vice President at Nissan Motor Company, who discusses the role of electric vehicles in the cities of tomorrow. Hand in hand with powertrain development runs the increasingly sophisticated process of lightweighting.Whilst Volvo plans to reduce weight through the increased use of hot stamped ultra-high strength steel, Roland Harings, Vice President of Global Automotive at aluminium supplier Novelis, tells AMM he anticipates the use of aluminium to grow significantly over the next decade.There is an urgent need to develop a closed loop recycling system for aluminium, he says, to reduce dependence on raw material suppliers. Elsewhere, Jaychandran Pradeep takes a look at how careful management could see emerging markets become a key supplier of raw materials to the automotive industry. Fuel economy is - and will remain - a major driving factor in vehicle development; widespread media coverage, rising fuel prices and punitive vehicle taxation mean that consumers are acutely aware of CO2 and mpg; safety, meanwhile, has assumed a lessvisible role - a result, perhaps, of high NCAP test scores and the absence of immediate fiscal incentives for consumers to choose optional safety features. Jean-Marc Gales, Chief Executive of CLEPA, is concerned.“We always talk about CO2, but never about safety,” he tells AMM.
tandem with the development of intelligent transport is the development of in-car infotainment.The GENIVI Alliance and the OPEN Alliance are two growing organisations established to bring together OEMs and suppliers to create de facto standards for invehicle data transfer.Their work may be changing vehicles in ways we cannot see, but as Partha Goswami’s article explains, increasingly accessible in-vehicle infotainment and telematics offerings are also bringing visible changes to vehicle interiors. The platform as a concept has evolved, as underlined by the parallel existence and growth of vehicle architectures alongside platforms.This evolution will, in turn, help vehicles to evolve.The need to achieve economies of scale and reduce manufacturing costs has never been greater, and neither has the need to reduce vehicle weight and emissions, and increase fuel economy and safety. We hope you enjoy this issue of Automotive Megatrends magazine, and as always, we welcome your thoughts and suggestions, just email megatrends@automotiveworld.com. Martin Kahl Editor Automotive World
Gales is keen for the industry to develop intelligent transport technology. Running in
Automotive Megatrends | www.automotiveworld.com | 1
M e g a tr e nd s e v e nt s in 20 1 3 Commercial Vehicle Megatrends India 2013 26 - 27th February 2013 Chennai, India A u t o m o t i v e Me g a t r e n d s I n d i a 2 0 1 3 28th February to 1st March 2013 Chennai, India A u t o m o t i v e Me g a t r e n d s U S A 2 0 1 3 19 - 20 March 2013 Dearborn, MI, USA A u t o m o t i v e Me g a t r e n d s E u r o p e 2 0 1 3 12 - 13th November 2013 Brussels, Belgium Commercial Vehicle Megatrends Europe 2013 14 - 15th November 2013 Brussels, Belgium
For more details please see www.automotiveworld.com/events
O r ga ni z e d b y :
automotive megatrends
Contents Editor's welcome
Interview:Andy Palmer, Executive Vice President, Nissan Motor Company
Interview: Ian Shannon, Global R&D Manager, Passenger Car Motor Oils, Shell Interview: Dr Lars Peter Thiesen, Manager, H2 & Fuel Cell Deployment Strategy, GM Europe Engineering
The automotive industry is OPEN to Ethernet Interview: Joel Hoffmann, Treasurer, GENIVI Alliance
The connected car’s long term evolution by Jürgen Hase
Volvo puts fun at the heart of safety and efficiency
Recycling: the key to aluminium’s automotive future
How connectivity and infotainment is shaping the vehicle interior and the in-car experience by Partha Goswami
1
4
15 20 22
26 30
35
38 42
Interview: Jean-Marc Gales, Chief Executive, CLEPA
46
Automotive components sourcing: where to next? by Jaychandran Pradeep
52
Karsan’s highly accessible vehicle (HAV)
September 2012
Automotive Megatrends magazine ISSN 2047-9840
Publisher: Automotive World Ltd 1-3 Washington Buildings Stanwell Road, Penarth CF64 2AD, UK www.automotiveworld.com T: +44 (0) 2920 709 302 info@automotiveworld.com
Registered number: 04242884 VAT number: GB 815 2201 Chief Executive: Gareth Davies Editor: Martin Kahl
Sub-Editor: Ruth Dawson
Chief Technical Officer: Michael Franklin
Subscriptions and Advertising: Gavin Dobson gavin.dobson@automotiveworld.com +44(0)2920 709 323
John Cumpston john.cumpston@automotiveworld.com +44(0)2920 709 348 With thanks to: Nissan Motor Company, Shell, General Motors, Broadcom, GENIVI Alliance, Deutsche Telekom,Volvo, Novelis, CLEPA, Karsan and Beroe Consulting.
48
Copyright Automotive World Ltd 2012
Automotive Megatrends | www.automotiveworld.com | 3
automotive megatrends
Andy Palmer Interview:
Executive Vice President, Nissan Motor Company
Automotive Megatrends talks to Andy Palmer, Nissan Motor Company Executive Vice President, about the evolution of the city as a concept, and how this will affect the future of mobility By Martin Kahl
Andy Palmer 4 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
A
t the time of writing, Nissan’s pure battery electric car, the Leaf, has sold around 40,000 units.The company’s NV200 van, which is offered in light commercial vehicle and passenger configurations, was launched with a conventional ICE in 2009, and is now undergoing testing in various cities with an electric powertrain using Leaf technology. In August 2012, the company presented its vision for a London taxi based on the NV200, and the plan is to offer the vehicle with conventional and pure battery electric powertrains.This announcement came just days after the Renault-Nissan Alliance published its plans to invest 4bn in EVs before 2015 and to sell 1,500,000 overall before 2016.
Here,Andy Palmer, Executive Vice President, Nissan, gives his company’s perspective on the way in which cities look set to change over the next ten years, and how some of these megatrends are likely to affect the way that people buy and use their cars.
How do you see cities growing and changing the way that people view a car in general, and how do you see car ownership changing over the long term?
The population is growing worldwide. By 2050, 70% of the world's population is going to live in a city. In the US, 700 people out of
September 2012
every 1,000 own a car. If you go to India, ten out of every 1,000 own a car.Those new middle classes in India, China, Russia, Brazil are going to demand a car, and they are moving to cities.You won't be able to breathe the air in the cities in the future if the cities don't change.They have to. Irrespective of whether you believe in global warming or not, just think of it from an asthmatic point of view, having all those particulates in the city centre. It has to change.
As far as I understand the statistics, the current prediction to 2050 is that the temperature of the planet will rise by six degrees.We can more or less simulate what happens with a two degree temperature rise. Nobody has a clue what's going to happen to the planet if it rises by six degrees. Something has to change. So what stimulates the change? You have to start somewhere. People have argued that if you go to EV, all you do is you move the emitter from the car to the power station. It's true.
Automotive Megatrends | www.automotiveworld.com | 5
automotive megatrends
That may be true, but the automotive industry can only do so much.
We can't change the world! We can only start the revolution.We moved and made a business case around it which relies on us selling a lot of vehicles and persuading people to move to EV. But even in our simulation, we only say 10% of our customers will move to electric. It then relies on us to lobby governments, cities and utilities to say we've done our bit, now it’s their turn to make sure electricity is generated in a more environmentally-friendly way. Governments are thinking about the way that the grid is deployed - why not make it so that the car can be used to balance the grid, for example? It’s easy to make these big conceptual discussions, but the fact is, you always need something to go first, and Nissan made the decision to go first.
Nissan has firmly backed EVs. Do you see a role for forms of powertrain other than the EV and the ICE in the Nissan range? Yes.We say that we're absolutely 100% the leader of EVs.Actually, we say zero emissions, because we're also developing fuel cell. Fuel cell’s time hasn't come yet. When do you think its time will come?
2017, 2020. EV is easy, relatively speaking, because every house has a plug. In the case of hydrogen, a huge investment is required in hydrogen stations.You need governments to make those moves for hydrogen. For EVs, the populace can make the move. So we say we're going to lead that. Now, for the other 90% of cars that we sell, we say we're agnostic with our technology. Let me put it in this way: putting a hybrid on a Micra is, in my opinion,
ridiculous.Why do you need to have all of that cost on a car that's essentially sold on its accessible price? It's the wrong kind of technology. On that kind of car, you need downsized, supercharged, turbocharged engines, lightweight materials, highly aerodynamic, and some form of electrical assist. Or you go all the way to EV.That's your scope. You hit 90 grams of CO2 using conventional technologies or hit zero using the expensive technology. For a heavier vehicle, like the Qashqai, EV makes less sense because it is less efficient when you're carrying heavier weights about. So in this case you can go down the traditional technologies of clean diesel if you want, but I would argue there's a space there for something like a hybrid or a plug-in hybrid. If you master the battery technology from EVs, then all of that technology is transferrable to plug-in hybrids. So we can enter into plug-in
The battery used to power the Nissan Leaf
6 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
eNV200 Concept
hybrid technology, which we will, by the way. In 2015, we'll launch our first plug-in hybrid.
Which model is that, and will it wear a Nissan badge?
We haven't confirmed the model but it will wear a Nissan badge, yes.We'll use the EV battery technology.We’re building a bridge between ICEs and EVs or zero emissions. Our strategy is to master zero emissions and use that technology to help the other segments, but always be amongst the leaders.
How is the Leaf performing compared to predictions and expectations, and how do you anticipate sales developing?
I'd say it's going pretty well.We had supply problems following the earthquake and we've had more than a hiccup with the strength of the Yen, which doesn't help us because a lot of our Leaf production is in Japan. But we pretty much sell everything that we can make.We're not deployed everywhere now.We've deployed in Japan, and we’ve now deployed across the US.We're not fully launched in Europe yet, so there's still plenty of upside opportunity.We start the push at the end of the year, basically.We start production in Smyrna (Tennesse, USA) at the end of this year, and at the Sunderland plant in the UK September 2012
Automotive Megatrends | www.automotiveworld.com | 7
automotive megatrends
from February next year. In May we will know whether we've got the legs to make this successful or not. I think we've already made it successful. From a brand point of view, we were part of the Japanese noise and I think going strongly with zero emission has allowed us to stand for something, and to stand out from the other Japanese and Korean manufacturers. So I think, to many extents, Leaf has done the world of good for our brand. Now the question is whether we can make it do the world of good for the planet. That test is coming over the next 12 months.
What is the preferred form of charging, as far as you're concerned? Plug-in? Battery switch? Wireless charging?
We don't think that battery switch is ultimately the right solution. It's being tested in the Renault-Nissan Alliance, and we're pretty clear on the Alliance: we test things, we go in different directions to see which way it goes. So far, battery switch has been introduced in Israel.We'll see how it goes. I think battery switch will work very well when there are one or two players, but its assumption is that all car manufacturers will use the same battery, and we can't even decide to use the same plug! The chances that we'll all use the same battery have a probability of zero.
by Nissan.You still have to dig the hole in the ground and connect it, but we're bringing the price of fast chargers down. In the medium term - 2014, 2015 - we think that induction charging will start to come in. We'll launch induction charging with our Infinity EV in 2014. It's a slow charge.We're not there with the technology yet to be able to do fast charge induction charging.
Do you envisage induction charging points in the roads, so that cars can charge whilst waiting at traffic lights, for example?
It can be on the street but it will not be fast charge. It's better if you park for a few hours. It could located in multi-storey car parks indeed, it's better if it's under cover because it protects the system from litter and debris.You need a relatively small air gap between the coils. It's entirely reasonable to imagine this technology becoming home charging
technology.We think it’s a realistic solution, and it will mean that the majority of people will never need to get their fingers dirty filling up with gasoline, and they will not even need to plug their cars in.
How do you see the issue of plug standardisation playing out over the next decade?
There are only two manufacturers of EVs today, they're both Japanese and they both use CHAdeMO, so that is the de facto standard. There's a debate within ACEA in Europe and within SAE in the United States, but are looking at different plug standards.They will commonly be called Combo2 but to look at them, they're different.At Nissan, we will make sure that whichever way we go, we'll continue to build CHAdeMO and we'll make sure that none of our customers are left high and dry. By 2017, Nissan and Renault will already have 1.5 million EVs on the road and so the standard becomes de facto.
Our preference is for plug-in, and plug-in comes in three solutions.You can plug the vehicle in to your domestic power supply, and we deliver that with every car that we sell.You can plug in via a fast charger, three-phase electricity.We manufacture a fast charger because we wanted to bring the costs down, so for ÂŁ8,000 you can buy a fast charger made
8 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
10 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
Ian Shannon Interview:
Global R&D Manager, Passenger Car Motor Oils, Shell
Although Shell’s Ian Shannon believes the internal combustion engines using conventional fuel will remain the predominant powertrain technology for at least the next decade, he says there’s an important place for a variety of alternative powertrain technologies and fuels By Martin Kahl
Ian Shannon is the general manager for passenger car motor oil R&D in Shell’s Lubricants Technology organisation.This gives him product development responsibility for Shell's branded and OEM-focused passenger car motor oil and motorcycle oil developments.This, Shannon says, involves developing products for next-generation Shell Helix, and, in the US, Pennzoil and Quaker State products.
Automotive Megatrends asked Shannon to outline how he sees the role of the internal combustion engine (ICE) changing over the next ten years, and from where he expects the likely challenges to the ICE to come.
“In the passenger car sector, it's important to recognise that the role of the internal combustion engine is to provide mobility,” he says.“There’s no silver bullet option that'll deliver sustainable mobility over the coming decades. I expect to see a diverse range of fuel and powertrain options emerging over time, with that preferred set varying by market.” That said, he concedes that “it's also important to recognise that all of the divergent powertrains will have a place in addressing this challenge of sustainable mobility.” Shell talks of a powertrain ‘mosaic’, and Shannon says that, along with a variety of powertrain options, there is a place in the mosaic for “the development of different liquid fuel and non-conventional options like biofuels and LNG.” Conventional fuels will remain “predominant for the long term”, he says.“The internal combustion engine really has a highly significant role to play in the next ten years.” September 2012
Erring on the side of caution
Whilst some OEMs and suppliers confidently quote specific percentages for sales of alternative powertrain vehicles, Shannon takes a more cautious approach. “Within Shell we adopt the 3:20 rule for electric vehicle developments,” he explains.“Every three years, you get a 20% improvement in battery performance and reduction in costs. It's our estimation that by 2020, alternative powertrains will still only constitute at most around 1.5 in every 100 vehicles. Unless there's a very hard technology game-changer that's pushing the markets, or some form of government legislation, then the relative growth will be quite subdued. So it'll be very important that electric and other alternative powertrain vehicles continue to grow and penetrate the market, but the predominant powertrain will continue to be the internal combustion engine.”
Some OEMs say that, long term, no further major leaps can be made in improving the internal combustion engine on its own, without some form of mechanical or electric assistance. Shannon agrees that strategies like hybridisation or more electronic control of engine operations are going to be necessary to improve the efficiency of the internal combustion engine.“I have a great respect for the automotive engineering industry,” he says. “20 years ago, the diesel engine industry was facing a significant challenge around reducing particulate emissions. In many ways, the industry wasn't really sure what to do, but
today, the emissions from a diesel tailpipe are maybe a 50th of what they were 20 years ago. There's a great culture or heritage of responding innovatively to challenges, and the automotive industry still has a lot of innovation to offer in terms of squeezing more efficiency out of different powertrains.” Different strategies and designs need to be developed to help deliver more from the internal combustion engine, he says,“and the focus of my team is on working closely with OEMs in collaborative partnerships to help those OEMs squeeze as much efficiency out of diesel and gasoline engines as we can.” Assisting new technologies
Even with the expected low penetration rates of new and alternative powertrains over the next ten years, petroleum companies like Shell are working hard to ensure that they remain at the forefront of technical developments.“In terms of non-internal combustion engine powertrains, I can only speak for what Shell is doing in this area. In the long term, it is clear that electric vehicles and hydrogen fuel cell vehicles are going to become important as powertrains, providing that technical and infrastructure challenges can be overcome. Shell recognises that, and we're investing in a range of low carbon technologies. For example, we're a member of multi-stakeholder initiatives in Japan and the UK that are looking at testing or carrying out trials for electric vehicle infrastructure.”
Automotive Megatrends | www.automotiveworld.com | 11
automotive megatrends
In Japan, Showa Shell is working with municipal governments to provide battery charging points at Tokyo's service stations, explains Shannon; and in the UK, Shell is a member of the Energy Technologies Institute exploring opportunities for conducting large-scale demonstration projects for the infrastructure to support electric vehicles. In terms of hydrogen, Shell is “an enthusiastic participant” in developing or demonstrating hydrogen capabilities, operating standalone demonstration hydrogen filling stations.“All of this,” says Shannon,“helps us to evaluate a range of different technologies and learn valuable lessons, including, for example, how to store and dispense hydrogen at different pressures.” Increasing ICE efficiency
In terms of making the ICE more efficient, one particular issue on which Shell is particularly vocal is on the use of lower viscosity lubricants. Speaking at Automotive World’s recent Commercial Vehicle Megatrends conference, Shell outlined the considerable benefits that commercial vehicle operators could enjoy in the short term, by switching to lower viscosity lubricants.The benefits, however, extend well beyond commercial vehicles - such lubricants also have an important role to play in light vehicle applications, says Shannon.
“The most significant factor here in terms of passenger car vehicle design is the need to meet ever more stringent CO2 emissions legislation. Use of lower viscosity lubricants in passenger cars is undoubtedly a key contributor to improving fuel efficiency and hence reducing CO2 emissions,” he explains. “The use of lower viscosity lubricants is very relevant to light vehicle applications. In many
ways, I would argue that the benefits of lower viscosity lubricants are higher in a light vehicle passenger car application than in a truck application, if only because the normal duty cycle for passenger cars tends to be at a lighter load than in a commercial truck application.” Collaborate and listen
Shell is a keen proponent of industrial collaboration, and works in a number of coengineering partnerships with OEMs to develop future lubricant technologies to improve engine performance and efficiency.“A good example of this is our collaborative work with Gordon Murray Design.We've evaluated the 0W-10 concept oil in the Gordon Murray lightweight urban passenger vehicle, which achieved a 6.5% reduction in urban cycle fuel consumption.Although that's a development in the concept stage, in itself it represents a very significant advancement in lubricant technology, and that feeds into the products we're developing for use in the near future, the closer term, working with other automotive manufacturers and also with our branded product portfolio.”
Shannon says that in its work with OEMs, Shell treats the lubricant “as an engineering design component, and that allows critical engine components to operate most efficiently.”
Ferrari is another well-known Shell collaborator.“It's our belief that close collaboration with an OEM partner underlines the potential of that car engineering approach to deliver very significant benefits in fuel economy,” he explains.“In that way, we're helping OEMs to deliver against these ever more stringent CO2 emissions requirements.”
12 | Automotive Megatrends | www.automotiveworld.com
Component collaboration
As well as developing lubricants for use in ICEs, Shell works with component manufacturers to develop lubricants for specific components that can help to reduce emissions. Engine downsizing is one of the key strategies being employed almost universally by OEMs to reduce CO2 emissions and increase fuel efficiency.As engines become smaller, the role of components within the engine becomes more critical.“Engine downsizing,” says Shannon, is a key enabler to helping automotive OEMs deliver against CO2 emissions reduction requirements, and improve engine efficiency.The downsizing process, says Shannon,“includes greater use of turbocharging, use of ever more sophisticated fuel injection strategies, employment of advanced and low friction valve train systems, rolling element bearings, use of diamond-like carbon coatings, and electronic control of the engine operation, like cylinder deactivation and stop/start techniques, as well as hybridisation.” And finally, he adds,“low friction lubricants”. This is where Shell comes in.“The really important point here is that many of these components and engine design changes bring about specific challenging demands on the lubricant formulation. It's quite important that we are not only developing lubricants which are low friction in themselves, but are also designed to lubricate and provide optimum performance for operation of these more sophisticated new components.” As an example, he cites an increased use of advanced valve train systems.“That stresses the level of anti-wear capability to ensure that the valve train system can operate effectively
September 2012
automotive megatrends
T25 - XP1
Professor Gordon Murray, GMD CEO and Technical Director with Carl Stow, Senior Scientist Shell Global Solution
September 2012
Automotive Megatrends | www.automotiveworld.com | 13
automotive megatrends over the lifetime of the vehicle. Some OEMs have hydraulically-actuated valve train systems as well, and again, that places additional and different demands on the lubricants.”
The use of turbochargers is a second example, he says.“The desire is to operate turbochargers at maximum temperature.That results in high thermal stresses on the lubricants. Formulating oils that can survive in these high temperature applications and allow the engine to run efficiently through the vehicle lifetime is just as important in delivering fuel efficiency gains and enabling OEMs to deliver those fuel efficiency gains as the use of low friction lubricants on their own.” Efficiency and the future
As for how the efficiency of light vehicles will develop over the next ten years, Shannon says “the important thing to remember is that this is being driven by mandated legislation.” Although the legislation will demand different things at different paces, all major consumer markets globally will be affected.“It's clear that automotive OEMs have to deliver these significant improvements in vehicle efficiency if they're going to avoid paying some of the very stringent penalties, fiscal penalties that would be delivered if targets aren't met. The obvious example, which I think we're all familiar with, is the European CO2 emissions legislation, with penalties charged per gram of CO2 per car over the limit.” There is still much to be done to improve fleet-wide emissions, says Shannon.“Currently, with best-in-class technology, OEMs in Europe can just about meet the 2013/14 fleet average target of 130g CO2/km.There's still a very
significant requirement in the next five to seven years to reduce CO2 emissions. Will it vary by region? Undoubtedly, but there's no doubt that every region has CO2 emissions legislation in place and there'll be a follow-up whereby the technology that's used in one region is fairly rapidly transferred to enable vehicles manufactured in those regions to meet those requirements.”
Low cost competition
Lubricant suppliers develop lubricants for new cars, but as soon as those cars are on the road, they have very little control over which lubricants are used at service intervals. Products used might vary between competitive offerings and low cost, inferior products. Here, the marketing machine kicks in to ensure that the lubricants that are developed for a specific engine continue to be used.“There are several routes to assuring that,” says Shannon.“I think the first level of influence is through consumer education and helping consumers understand, either at point of sale or through other communications, the importance of the lubricant in maintaining engine performance throughout the vehicle life.We've sponsored and participate in a webbased organisation, which is now led by the API in the US, called Motor Oil Matters.” This, he explains, is an example of an industrywide educational communications process to alert consumers to the need to maintain oil quality throughout the vehicle life, not just through the warranty period.“Underlying that is the need to have a robust and reliable standard of industry specifications and approvals in place. So we work actively with the various industry-specifying bodies,
14 | Automotive Megatrends | www.automotiveworld.com
including the API in the US,ACEA in Europe, and JASO in Japan and now also some of the Chinese authorities.And we're working closely with OEMs to make sure that the standards that are specified for aftermarket products are representative of the requirements for vehicles coming into the fleet as well as the ones that are already existing in the aftermarket.”
Whilst OEMs, engine manufacturers, fleets and major service centres understand the role that lubricants can play in helping to reduce fuel consumption and emissions, the majority of consumers look at price and brand; this emphasises the need to inform consumers that the lubricant supplier recommends the lubricant for that particular engine not only for commercial reasons, but also because it can help to improve performance and reduce fuel consumption.
“Again, it goes back to my earlier comment about communication and education,” summarises Shannon.“ There is a role for Shell to help to communicate to interested consumers that the lubricant can play a role in reducing fuel bills.” Shannon explains that his role within R&D is “primarily to make sure that the products we formulate and develop genuinely deliver the fuel economy benefits that an interested consumer might expect to see. So not only do I develop products that meet standard specifications, but I also aim to demonstrate those benefits in a way that is meaningful to consumers. I'm looking to produce material that can help in the consumer education process. One of the most important channels of communication to our consumers is through the trade and through the OEMs, so we also work very closely there.”
September 2012
automotive megatrends
Dr Lars Peter Thiesen Interview:
Manager, H2 & Fuel Cell Deployment Strategy, GM Europe Engineering
Automotive Megatrends talks to Dr Lars Peter Thiesen about the prospects for hydrogen fuel cell vehicles in Europe
D
By Martin Kahl
r Lars Peter Thiesen heads up GM’s Alternative Propulsion Center Europe. His 250-strong team, based near Rüsselsheim, Germany, is responsible for Opel/Vauxhall’s hydrogen and fuel cell deployment strategy in Europe, and focuses exclusively on pure battery and hydrogen fuel cell electric powertrains.With the Opel/Vauxhall Ampera close to its showroom launch,“we are concentrating on the next steps, and hydrogen plays a major role for us,” he tells Automotive Megatrends. The internal combustion engine (ICE) will remain the predominant player in any vehicle range,“for at least the next ten to 20 years,” says Thiesen. However, the commercial viability of alternative fuels increases in line with rising fuel prices, and, in business terms,
Thiesen welcomes rising fossil fuel prices. “We have done a study together with other OEMs and energy companies, oil companies, looking at the total cost of ownership of propulsion systems, namely the internal combustion engine, and battery electric, plugin hybrid, extended range electric, and fuel cell,” he says.“The result of this study was that in the 2020 to 2025 time frame, the total cost of ownership for these different powertrains will pretty much be the same. And this was done on an assumed oil price of €115 per barrel in the 2020 timeframe, which I think is pretty realistic.” Should that per-barrel price be wrong, he says, it would only be because it would be higher than €115 in 2020.“If the oil price rises sooner, then the time when this same order of total cost of ownership for the various propulsion
16 | Automotive Megatrends | www.automotiveworld.com
systems starts earlier, is in favour of the alternatives.”
However, he concedes that if the oil price stays low, it would come later.“It's all about this total cost of ownership.The propulsion systems may become more expensive, but the benefit of the fuel cell system is that it consumes per 100km half the energy of ordinary technology, meaning it becomes more and more of a benefit in comparison to the older technology.” Investing in technology of tomorrow
Development of the Chevrolet Volt was famously unaffected during GM's Chapter 11 period, and the company appears to have taken a similar approach to the work carried September 2012
automotive megatrends
out by Thiesen’s team in Europe, and the associated global partners (Thiesen’s team accounts for about 40% of GM’s global alternative propulsion activity) during the current financial crisis.“There has always been the belief that if we do not invest in technology for tomorrow, then, although there might be some short-term benefits of using the money [budget] for other purposes, that's not the right long-term strategy.”
Take fuel cell electric vehicles (FCEVs) as the next step, he says.“This is a technology where we are really among the leaders, and this is something we have built up over a period of more than ten years now.” Partnering on clean energy
One thing that stands between OEMs and the commercial viability of fuel cell vehicles is infrastructure and availability of hydrogen for consumers. There is considerable momentum to develop a hydrogen network in Germany, says Thiesen.Two examples of this are the Clean Energy Partnership and H2 Mobility.The Clean Energy Partnership, which brings together OEMs, energy companies and the German government, has been running since
September 2012
December 2002.“For quite some time it was only in Berlin, but now we have added Hamburg and three of the larger German states (Baden-Württemberg, North RhineWestphalia and Hesse), because we think that this is where the main infrastructure development will happen in the future.”
The initiative was started in 1999, says Thiesen.“We really had to educate other industries, and those industries had to educate us - they had to understand our business and we had to understand their business.” At first, the big question was about which fuel would be the future fuel.“After doing a lot of studies, we decided as a group that it is likely to be hydrogen.Then we said if at some point in time we want to sell cars, we need to have a test programme, a demonstration programme.” This decision, he says, led to the Clean Energy Partnership. After securing public funding for refuelling stations, cars and their maintenance,“the next step was to install the German National Innovation Programme for Hydrogen and Fuel Cell Technology, to secure funding.” 48% of all the demonstration activities are now funded. “The next step was to install a national office,
the national organisation for hydrogen and fuel cells - National Organization Wasserstoff (NOW) - which not only handles the funding, but also bundles things together.They look at whether there is a real national strategy on what we need to do, which steps we need to take.This is not the case in any other country in Europe.You can use funding money for everything if you want, but it needs to be spent in a focused way so that we really get to market as soon as possible.”
The Clean Energy Partnership will run until the end of 2016.“At the end of this year we will have more than 100 [fuel cell] cars from all of the OEMs in the Clean Energy Partnership, including 30 from Opel/Vauxhall.” A second partnership, H2 Mobility, involves many of the same companies, but its focus is on the business case for installing a hydrogen infrastructure.“In the very beginning, percentage wise, you need more stations per car than later on. So we are currently developing this kind of business plan but the point here is that it's very important that all the stakeholders are sitting at one table and discussing together how to do it.”
Automotive Megatrends | www.automotiveworld.com | 17
automotive megatrends
Building a business case for society
As well as addressing the business case for installing a hydrogen infrastructure, OEMs need to develop a business case for bringing fuel cell vehicles to market by the target date of 2015.This is where the issues of total cost of ownership and incentives come into play. “The total cost of ownership of this [fuel cell] technology will definitely not be on par with older technologies before 2020.This means that the cars will be much more expensive even in 2015 and 2016.What we will definitely need, then, is systems of incentives in the countries where we offer these cars.And we are not talking about an incremental additional cost per car of, for example, several hundred euros.These cars will cost thousands of euros more [than ICE-powered cars]. On the other hand, these are zero emission cars, and so they are of great benefit to society.”
The benefit to society is something that Thiesen is keen to promote - indeed, part of his role involves lobbying - and he sees the societal benefit as the key to incentives.“You really have to look at the positive external effects. But how do we overcome the higher cost of vehicles which benefit society and the environment? We need incentives during these first years, and this applies to the cars as well as to the [hydrogen fuelling] stations.”
It won’t happen overnight, and it won’t be for everyone
Developing a public hydrogen fuelling infrastructure in Germany will take time, says Thiesen.“There will not be nationwide infrastructure with fuelling stations overnight. The plan for Germany is that we start in big cities.There are six areas where you could think about establishing stations some kilometres away from each other.Then you have stations at the important Autobahns - the A1,A2,A3 and so on. From the very beginning then, not everybody will be in a position to own a fuel cell car, because of the refuelling restrictions.” Thiesen sees the deployment of a hydrogen fuelling infrastructure as a key moment for the automotive industry.“In more than 100 years of automotive development, we haven't had these issues to deal with.This time we need a harmonised approach between the cars and the refuelling stations.And since Germany, for example, is not a country with a five-year plan, it’s very important that we have a collaborative approach.” Comparing apples and pears: fuel cell vs. attery electric The concept of fuel cell vehicles is highly convincing, but the task of bringing the vehicles to market appears to be more
Opel/Vauxhall has joined forces with the UK H2 Mobility initiative to promote the manufacturing and use of hydrogen vehicles in Britain. UK H2 Mobility will prepare an action plan aimed at turning the UK into a leading global hydrogen vehicle player
18 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
All Images supplied by GM challenging than bringing battery electric vehicles to market. Does Thiesen agree? “Yes and no. It's more difficult because of the [hydrogen] infrastructure, cost and durability issues.” Thiesen says it is currently easier to sell range-extended vehicles like the Ampera, which can be recharged at home or refuelled with gasoline, all using existing infrastructure. “This is why we developed the Ampera, because it's not dependent upon a specific infrastructure.”
In terms of pure battery electric, however, he says “I'm quite sceptical whether we will have a public recharging infrastructure.” For this reason,Thiesen disagrees with the notion that fuel cell vehicles are more difficult to bring to market than battery electric vehicles,“because we haven't yet seen that battery electric cars can be recharged everywhere.” Hydrogen for 2016?
GM’s fuel cell test vehicle in Europe is the Chevrolet Equinox-based HydroGen4. In June 2011, an Opel HydroGen4 fuel cell demonstration vehicle covered the two millionth mile of GM's global fuel cell market test fleet. In January 2012, the HydroGen4 was presented under the Vauxhall brand at the London launch of UK H2 Mobility.The aim of
September 2012
the initiative - to which GM is a signatory through its Vauxhall subsidiary - is to evaluate the potential of hydrogen as a transport fuel.
Opel/Vauxhall has said it expects its fuel cell technology to be ready for market introduction by 2016.
Automotive Megatrends | www.automotiveworld.com | 19
automotive megatrends
The automotive industry is OPEN to Ethernet
Automotive Megatrends talks to Broadcom, a founder member of the OPEN Alliance, about the latest developments in the efforts to promote the use of in-vehicle Ethernet technology By Martin Kahl
T
he OPEN Alliance special interest group (SIG) was formed in November 2011 with six members: NXP, Freescale, Broadcom, Harman, BMW and Hyundai.These companies came together to create a standard for in-car electronics and data transfer applications using Ethernet to deliver data at 100Mbps over unshielded single twisted pair copper cable.The project “has been a great success,” says Dr.Ali Abaye, Senior Director, Product Marketing, at founding member Broadcom. Growing membership
Membership of the OPEN Alliance has swelled in the nine months since its creation.As of 3 August 2012, the group has 55 members, of which 11 are ‘promoter’ members and 44 are ‘adopter’ members. In May, Kirsten Matheus, Ethernet Project Manager at BMW, was appointed as the OPEN Alliance Chair.
“When the group was founded in November 2011, our mission was, and continues to be, to improve in-car safety, comfort and infotainment, while reducing network complexity and cabling costs via wide-scale adoption of Ethernet-based automotive connectivity through single pair unshielded networks,” explains Abaye.“We expect our mission to remain the same, although we expect that in coming months the work of the group will continue to evolve as we welcome more car manufacturers and technology providers as members.”
New members include General Motors, Renault and, significantly, two Japanese OEMs. “We had a goal to make sure that we open up to North America and Japan, and it looks like we’re making huge progress there.We have regular OPEN Alliance meetings, and recently held a meeting in Japan.” The strategy proved a success, he says, with Honda and Nissan both recently joining the OPEN Alliance. The OPEN Alliance is gathering momentum, driving other OEMs and suppliers to join at a surprising speed.“Throughout my career, this is the fastest-growing alliance I have ever seen,” says Abaye, adding that companies are not only joining for the sake of it.“We are very pleased with the quality of the members that we have. Companies are not just passive members - they are very dynamic and make it an interesting organisation to be part of.” Focus on infotainment
The OPEN Alliance is focusing on developing an infrastructure for in-car infotainment.“Our strategy from the outset for bringing Ethernet to the car industry was to focus on two markets,” explains Abaye.“Firstly, advanced driver assistance, where we are making traction as we planned; and secondly, infotainment.”
As the market and technological potential for the connected car develops, so too does the need for an underlying infrastructure.“We see a lot of progress on the infotainment side,
20 | Automotive Megatrends | www.automotiveworld.com
both in terms of people conducting serious feasibility studies, and designing infotainment systems using Ethernet technology.And the key technology they are using is BroadRReach and Ethernet AVB.”
In infotainment and related applications, the quality of service is key, he explains.“We need to ensure there is enough bandwidth so that a voice call, music or video does not deteriorate. Ethernet AVB addresses that, and we see a lot of traction from people using this technology to enable the next-generation infotainment services that they may be targeting.”
In December 2011, Broadcom launched its BroadR-Reach portfolio. A family of BroadRReach switches incorporating Ethernet AVB will go into production this year,“and we are on track to do that,” confirms Abaye. “Broadcom is working with numerous car manufacturers to easily and cost-effectively incorporate the BroadR-Reach portfolio into cars in order to power infotainment, navigation and safety systems.” The first car to feature BroadR-Reach
Abaye expects the see the first vehicle on the road featuring OPEN Alliance-compliant technology in 2013.“This depends on BMW’s schedule,” he says,“but we are supplying them with BroadR-Reach technologies by the end of this year.” That vehicle will be the 2013 BMW X5, which will feature “the world’s first 360September 2012
automotive megatrends
degree surround view parking assistance system jointly developed by Broadcom, Freescale and OmniVision in October 2011.”
IEEE - Ethernet-based PHY technology for automotive
Earlier this year, the Institute of Electrical and Electronics Engineers (IEEE) created a study group to work on automotive Ethernet-based PHY technology. IEEE RTPGE (reduced twisted pair gigabit Ethernet) aims to find reduced (ie old-generation domestic-type Ethernet cabling) twisted pair gigabit Ethernet solutions for automotive applications.“Many individuals affiliated with Broadcom and several other companies such as BMW, Bosch, and Daimler contribute to this study group,” says Abaye.The second meeting of IEEE 802.3 (the main body for the standardisation of Ethernet technologies), took place recently in San Diego, but it is too early to comment on the outcome of the meeting, says Abaye.“We are not able to comment on meeting developments at this time but look forward to continuing our involvement in the industry group.”
The targeted speed, one Gigabit, is key.“We always wanted to take a higher data rate to an established standard body, so the automotive industry can leverage the standard solutions.” Abaye is anticipating a rapid acceleration of incar data transfer speeds.“We see in-vehicle data transfer speeds growing to over 2 Gbps (Gigabits per second) in the next couple of years, based on speeds of 2.3 Gbps for September 2012
compressed video.We expect this to come to fruition with video player-to-display devices.”
Other ways to connect
Broadcom also offers technologies for wireless, Bluetooth and broadband. In January 2010, Broadcom announced that Broadcom’s Bluetooth + Wi-Fi 'combo' chip solution, featuring InConcert technology, was used to provide wireless connectivity in certain Ford vehicles.“And Broadcom’s wireless and Bluetooth technologies are integrated in Ford’s SYNC system, which is based on the Microsoft Embedded Auto software platform,” says Abaye.
In the future,Abaye expects to see a combination of connectivity technologies used in cars, including Ethernet, Bluetooth and WiFi, which he says “will interoperate to deliver entertainment and advanced safety features for drivers and passengers”.The car, he says, will ultimately become an access point for data.“Through developments in vehicle-tovehicle communications (V2V) or telematics, we expect that external data can be transferred to the car so that it is treated as an access point.” Once that data reaches the vehicle,“Ethernet could function as a backbone to transmit the data,” he explains. “Bluetooth or Wi-Fi could be used to wirelessly stream songs or movies from the infotainment system to passengers’ mobile devices like smartphones, tablets and notebooks.”
Abaye hopes to tap into the widespread use of Ethernet in non-automotive applications. “Our vision on the networking side is to make Ethernet in the car happen. Ethernet is used everywhere, and the automotive industry also clearly can take advantage of that.” The benefits of a de facto standard
With the launch of the first vehicle using OPEN Alliance-approved technology expected in 2013, the big question is whether Ethernet will ever become the de facto standard technology for in-vehicle data transfer.“Ethernet lends itself to certain applications like infotainment and safety systems,” says Abaye,“but low-bandwidth networking technology does exist today that is suitable for certain applications like body control.As such, we don’t expect Ethernet to completely displace low-bandwidth networking technology in the car and expect that Ethernet and Controller Area Network (CAN) will coexist for many years.” Finding a de facto standard does, however, offer distinct advantages. In addition to the weight of cabling in a vehicle – wiring harnesses weigh between 30-80kg, meaning cars carry wiring equivalent to the weight of a child or even an adult – the use of multiple cable formats adds complexity.“Currently, different networks are used in cars: coax, MOST, FlexRay and so on. Eventually, and I am not saying this will happen overnight, but eventually they could all run over Ethernet, talking the same language.And that will save a lot of operations and R&D costs.”
Automotive Megatrends | www.automotiveworld.com | 21
automotive megatrends
Joel Hoffmann Interview:
Treasurer, GENIVI Alliance
Joel Hoffmann outlines the role of the GENIVI Alliance in developing an open source in-vehicle infotainment reference platform By Martin Kahl
T
he GENIVI Alliance was formed in 2009 by eight founding members: BMW, Delphi, General Motors, Intel, Magneti Marelli, PSA Peugeot Citroën,Visteon and Wind River.The non-profit organisation was created to drive the development and broad adoption of an open source invehicle infotainment (hence “IVI”) reference platform.
Joel Hoffmann is a Business Strategist in founding member Intel’s Automotive Solutions Division. Having been with the GENIVI Alliance since 2000, Hoffmann now sits on the GENIVI board as Treasurer, and heads up the GENIVI marketing team. Automotive Megatrends spoke to Hoffmann to learn more about the work of the GENIVI Alliance.“GENIVI aims to develop a set of working codes that the auto industry can use to build less expensive and more functional head units,” Hoffmann explains.“That goal is challenged by the fact that automotive head units are becoming increasingly complicated. Typically, when software gets more complicated then the development cost goes up, and it mostly goes up because of the cost of testing and validation.”
GENIVI set out to take the concept of Linux that had been successful in other industries, and apply it to the automotive industry.“The idea was to solve some of the additional issues that come up when you're dealing with a Linux platform. Linux is so malleable that there's not a lot of re-use use when it comes to building an actual end product.” The core functions of Linux tend to be fairly stable, says Hoffman, but adding features also multiplies considerably the number of variations.“The challenge is to make it not only reusable but also more consistent, enabling software developers to work from a common baseline. GENIVI is attempting to be that common baseline; within GENIVI, the potential exists to have one set of requirements that we all
agreed to for the most basic functions of the infotainment system.”
Bringing open source design to the automotive industry
GENIVI operates on open source platforms. “Of GENIVI’s total effort, 80% comes directly from the open source community,” explains Hoffmann.“Much of it comes as part of the kernel.And then there are other projects that have been widely accepted in the embedded open source community.They're mature, robust and well accepted.And the GENIVI Alliance will examine and approve those elements of open source code.”
With 80% of the software accounted for,“the next section would be approximately 15%, representing the open source code that had to be modified to accommodate automotivespecific requirements. GENIVI will compile those requirements. If they can't find a component of software that meets the needs of the automakers, GENIVI will reach out, or hire a company to introduce these proposed changes, or create a patch.”
This accounts for 95% of the GENIVI base code.What remains “doesn't exist in any other community, like MOST. GENIVI creates an extraction layer and develops this internally. This becomes GENIVI owned code, and all GENIVI members have access to the code. They don't have to pay for it.”
The automotive industry is one of the least likely industries to embrace open source design, and Hoffmann says the response of GENIVI’s automotive partners in the past has been “very negative.” The open source community and the automotive software community are learning to be more alike,“but typically the automotive software industry has a very different development methodology to the open source community developers. Over the last five or six years, GENIVI has been coaching and training the automotive guys to
22 | Automotive Megatrends | www.automotiveworld.com
understand how they benefit from sharing their software, because, in the past, everything was proprietary.”
In terms of convincing the automotive industry of the benefits of open source design, the cyclical nature of the automotive industry has worked in GENIVI’s favour.“The lower the cycle, the more open the automotive industry becomes,” says Hoffmann. "This economic downturn pretty much matched up with an increase in the automotive industry’s interest in open systems.As an industry, it’s more receptive to inviting others to contribute to its technology than when times are good. If the automotive industry really gets back on its feet, it may close down a little bit. So our purpose here is training, teaching, incubating these concepts, and then formulating our GENIVI deliverable, which is pretty much a compliant specification, or a GENIVI specification with a compliant programme added to it.” GENIVI’s broad membership
The GENIVI Alliance currently boasts over 165 members from a variety of industries.This includes ten or 11 automotive OEMs, including vehicle manufacturers that don't publish their membership.
Hoffmann says about 90% of the automotive Tier Ones are GENIVI members.“Tier Ones are interested in GENIVI because the Tier One marketplace is being changed dramatically.The lines between Tier Ones,Tier Twos and Tier Threes are being blurred and the technologies that are available to the car companies are coming from a variety of sources.The business models of yesterday's Tier One are being disrupted, partly by GENIVI but really by the whole economic force.” The third key group of members is made up of the silicone suppliers.“Every one of the silicone suppliers that produces automotive silicone is a member.”
September 2012
automotive megatrends
Other members are ISDs (software developers) and services companies,“and this is where I think the biggest opportunity exists,” says Hoffmann.“The ISDs are typically involved in developing some type of an application for sale to a Tier One or an automaker.They want to be involved in GENIVI because they can influence how GENIVI's definition of middleware is going to be laid out.And if they have some influence over that then they can build their product to plug into it. So when they pitch to an OEM, they can say they are already a GENIVI member with a GENIVI compliant product.”
OEMs don’t want to lose their head units
A key motivation for OEMs is to do whatever they can to retain the thousands of dollars in revenue that they are used to making on head units, says Hoffmann.“They anticipate that the form factor of head unit is going to change, and, because of mobile phones and other innovations, they may not have that same profit opportunity. So they have to see a way to reduce their costs. If it's making the software more efficient, then that's what they hope is going to happen.”
A focus on infotainment
The GENIVI Alliance is focused on infotainment, and not telematics.At this point, it is worth defining how infotainment differs from telematics, and whether there is likely to be a blurring of the two.“GENIVI is intercommunity, very focused on infotainment. Certainly there's a lot of shared infrastructure between a telematics system and an infotainment head unit,” explains Hoffmann. “Traditionally, the head unit contained all the electronics that fit in the centre stack of the car, and then typically the telematics elements would be in a separate dedicated telematics control unit.The telematics unit controls the telephony equipment that may be in the car. It's connected to an antenna. It makes a certain amount of decisions there.And then it just inserts whatever it needs to into the display of the head unit.When we originally started laying out some of the definitions of GENIVI, we tried for a while to break down the very small form factors such as the telematics box, and then a mid-range configuration, and then a high-end configuration for a luxury car.We really haven't invested much to put a GENIVI stack into a telematics box. It could be that also the processing and the intelligence of a stack is so much smaller for the telematics control unit that it wouldn't really see as much return on investment as it does in the head unit. So your head unit is likely to be a connected head unit, but perhaps with its own telematics control unit, at least for the next several years.”
September 2012
Automotive Megatrends | www.automotiveworld.com | 23
automotive megatrends
Built-in or brought-in?
The development of mobile handsets and tablets has the potential to threaten the builtin head unit. Is there a future for the built-in head unit, or will tablets and handsets take the place of such devices? “I think both will happen. Plenty of people will tell you that the head unit will go away and it will just be an LCD panel. But the real issue is cost. If the cost can be contained to put an intelligent head unit in the car, it will always be a better performing and more trustworthy function for the driver.We're seeing the head unit take on more functions, not necessarily the TCU functions, but maybe driving the instrument cluster or the HVAC controls. So it's not just a head unit for entertainment but it is integrated with the vehicle operation.”
Currently, there is little that can be done between a phone handset and the head unit in terms of command and control, says Hoffmann.“Bluetooth provides a level of control over media, enabling you to stream music from your phone into the radio of your car. But there's not a lot of protocol or technology to do much more than that. So if you're just using the phone for entertainment, that's a very good use case, but there are so many more things that can be done in the car itself.” GENIVI won’t go after the aftermarket...
GENIVI’s development is for future models, cars which are not on the road today.That technology will be out of the reach of the millions of cars on the road today that are not connected at all. Is there anything that GENIVI can do to help those cars? “Those cars could use a GENIVI-compliant stack. But there's nothing being done in GENIVI to advance the rate of adoption of an aftermarket system. Aftermarket systems are having a big problem these days. It used to be that you could buy a car and it always had the same size opening, so if you pulled the radio out, there was a slot where you could put any radio you wanted. That's not true very often any more. Car makers are styling the infotainment system into the interior. Retrofitting a car with a different system is very difficult.”
...but the potential is strong for software key-activated functions in new vehicles
Although an aftermarket option appears to be out of the question, Hoffmann outlines the potential for adding features and functions through software.“Let’s say that a car that comes out in 2013 has a GENIVI compliant head unit; the features in that car could make it more realistic to attach new peripherals, new devices, because of the scalability of the software.A very good feature of Linux is its ability to grow dynamically as the need arises. So, you could have a car that could be designed with an expansion slot and that slot could be located anywhere in the car. Some cars may be already equipping themselves with hardware features like cameras that are not activated unless the customer purchases a software key.And that software key could be supported on the GENIVI compliant system. The software, says Hoffmann, could come from a variety of different sources,“and that's very important.Today, if you want to upgrade software in a legacy car radio, there's no option except to replace the entire image of software.There are no options available to replace just parts of it. But the flexibility of Linux based system gives you an additional way to do that.” Hoffmann emphasises that these ideas are outside of GENIVI's scope “it's entirely up to a Tier One or an automaker to decide that's what they want to do, but the openness of the platform is going to really be important for that purpose.” GENIVI-compliant products on the road
Despite being an alliance based on open source design, GENIVI Alliance members do not publicly announce GENIVI-related product plans.“In terms of rollout and deployment, no automaker has made a public statement,” says Hoffmann.“We know of more than two and less than five members of GENIVI that have stated their intent to bring a product to the market.”
24 | Automotive Megatrends | www.automotiveworld.com
September 2012
Autofacts – Providing insight you deserve Autofacts is an integral part of PwC's automotive practice. The forecast data and analyses we provide are used both by PwC's client service teams and by Autofacts' distinct client base to assess implications, make recommendations and support decisions in the automotive sector.
Forecasts • Synchronous Global Update • Integrated Data & Analysis
• Online Client Access Tested and trusted detailed planning data and analysis on the global light vehicle sector:
Analyst Briefings
Custom Analysis
• Issues-based POV analysis
• Decision support
• Regional market outlooks
• Business planning • Thought leadership
Analyst Notes • Regional Industry Snapshots • Free Monthly Distribution • Engaging Viewpoints
Covering key issues facing companies operating in the global automotive sector:
Working in tandem with PwC’s automotive practice, Autofacts can assist with:
Providing easily digestible industry updates on key market developments:
• Deep regional insights
• M&A valuation support
• Unique auto viewpoints
• Powertrain
• Market trend analysis
• Industry studies
• Key industry data sets
• Bodystyle (NA / EU)
• Powertrain outlook
• Assembly / Capacity
• Portfolio risk analysis
• autofacts.com/sig nup
Key Client Benefits • An independent, unbiased global perspective • Differentiating & refined industry viewpoints • Proactive & informed dialogue with executives • Access to industry specialists with deep expertise
For more information about Autofacts products and services, please contact:
autofacts@us.pwc.com
automotive megatrends
The connected car’s long term evolution
Automotive M2M and LTE wireless networks will evolve quickly to support the faster exchange of information for a more convenient and safer driving experience, predicts JĂźrgen Hase
26 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
The next step, already being taken by many manufacturers, is to develop the capacity for vehicles to not only receive data, but to also actively send messages.
Jürgen Hase Whether it is Continental’s AutoLinQ in-vehicle infotainment and connectivity solution, BMW’s ‘ConnectedDrive’ online route guide or Cisco’s mobile demonstration and networking technologies showcase vehicle ‘Network on Wheels’, more and more OEMs and suppliers are working intensively on researching machine-to-machine (M2M) and vehicle-to-vehicle (V2V) communications solutions for automotive applications. Secure, fast mobile communications in emergencies
Many cars already feature Internet connectivity, enabling drivers to retrieve emails, conduct Internet searches, request remote diagnosis from a workshop following a breakdown or display empty parking places.
September 2012
From the mobile network provider’s viewpoint it makes sense to go forward step by step, rather than to reinvent the wheel.
For logistics service providers and commercial fleet operators, tried and tested M2M telematics solutions monitor drivers and routes, keeping to delivery deadlines better by means of fast wireless order management. Tracking and tracing systems and locationbased services have achieved a high level of customer acceptance and are likely to be used even more widely. Mobile navigation systems have also proved their worth in practice, demonstrating that they work all over Europe with SIM cards. Finally, a number of carmakers are already offering access to internet-based mobile services as standard. In most cases the drivers use their own SIM cards, either in a slot in the dashboard or in their mobile phones. eCall
The Europe-wide rollout of the eCall emergency call system for motor vehicles will definitely make SIM cards a standard in-car feature.At present, slot-in standard cards are
The European Commission’s emergency ‘eCall’ system
is on target for installation in every new car from 2015. The aim of the programme is to reduce the number of road casualties. eCall does this by supplementing the vehicle's onboard electronics with a permanently-installed SIM card and GPS module.
These additional connectivity features link emergency calls to the airbag sensors so that if an accident occurs, information about the vehicle’s location, time of the accident and identification number can be sent to rescue services, along with the driving direction, severity of the accident and even the number of fastened seatbelts within the vehicle. Consequently, rescue services can send helpers to the accident site immediately or establish a voice connection with the vehicle - testament to the European Commission’s claim that its eCall international emergency system could save around 2,500 lives a year and it estimates that eCall will also result in a 15% drop in the number of casualties involving seriously injured persons.
Automotive Megatrends | www.automotiveworld.com | 27
automotive megatrends
The connected car’s long term evolution technology that can bring films, web radio, online gaming and even business applications into the vehicle, transforming its interior into a multi-purpose space for living, playing and working. While car office and vehicle-to-vehicle communication are current hot topics, so is cloud computing, something which is seen as the most likely means of rolling out in-car communications.
However, it will be some time before cars are transformed into mobile hotspots that access multiple applications via the cloud.The LTE network roll-out is still very much in its early days, as is the regulatory authority requiring gaps in broadband provision to be plugged first in rural areas that lack broadband Internet access.
mainly used. Fundamentally, however, hardwired or soldered SIM cards within a module are more stable and more durable than a plugin card.Vehicle manufacturers that already use them report positive experience with soldered cards. Hard-wired cards also play an important role in mobility concepts such as car2go, where they serve to authenticate, locate and bill mileage for the provider’s head office. So OEMs and mobile communications providers will need to pay careful attention to quality assurance for SIM card modules. In-car M2M and V2V
In-car M2M solutions have also been developed to make life easier for drivers.Take, for example, Daimler’s car2go project in Austin,Texas. Members have a card that they can use to reserve a vehicle ahead of time or to pick one up as and when transport is required.They do this by simply holding their card up to a specially-installed reader on the windshield of the project’s branded blue and white smart cars, which are available all over downtown Austin. Once inside the vehicle, the card requests the member’s secure login PIN and is used to start the car’s ignition.When finished with the car, the user simply parks it back within the Home Area for the car2go team to refuel and clean for the next user; the user’s credit/debit card is then billed for the
amount of time they used the car, calculated down to the exact minute.
An example of innovative, secure communication in traffic is the development of secure vehicle-to-x communications, such as Deutsche Telekom’s strategic partnership with Deutsche Bahn for networking, car-sharing, electro-mobility and fleet management. Following the successful secure transfer of data to and from Deutsche Bahn’s car-sharing vehicles in a pilot project in Friedrichshafen, Germany, Deutsche Telekom is providing additional telematics services through its mobile communications technology.These include finding, booking and opening vehicles using a cell phone.The telematics systems also integrate the vehicles to three networks, demonstrating how cars, trains and energy systems can be effectively linked to each other. Cars can be rented spontaneously using a special mobile app, which also transfers data such as the range and power levels within the car to the user’s smartphone via M2M communication technology so they know when to charge and for how long. The promise of LTE
There are great expectations for LTE (Long Term Evolution), the new fourth-generation mobile communication standard. It is a
28 | Automotive Megatrends | www.automotiveworld.com
German cities, such as Cologne and Düsseldorf, now have LTE networks, but issues such as a suitable IT infrastructure for vehicles and resilient business models for applications are still a long way from being resolved. Pricing must clearly be transparent. Drivers are unlikely to accept hidden costs and roaming charges.The driver has to foot the bill for the wireless technology and aerials that are a precondition for in-car multimedia reception. Two days of test-driving Deutsche Telekom’s Cologne LTE network by Audi, using an Audi A8 W12L equipped with professional measuring equipment and aerials, recently demonstrated that LTE operates stably and failure-free even at significant speeds. Given the average four to five-year development cycles for new models, it makes sound and practical sense for OEMs and mobile communications providers to join forces right now in considering which broadband applications the car of the future will use and which frequencies and technologies they should support. LTE - making services and networks fit
The growing availability of 4G LTE networks is creating new opportunities to develop products and services. LTE is rolling out across Europe with the first LTE network in the London Borough of Southwark going live in February 2012; while in Germany, Booz & Company forecasts that LTE will be available for approximately 80% of the German population by 2015. September 2012
automotive megatrends
As of the end of 2011, LTE base stations in over 100 German towns and cities offered users bandwidths of up to 100 MBit/s. But the same rule applies to LTE as to wireless communication in general in that users of a network cell must share its total capacity. So if, for instance, 1,000 vehicles were held up by a traffic jam on the Autobahn within the operating area of a single network cell and several hundred users wanted to use video streaming simultaneously, not even LTE would enable them to view moving images smoothly. LTE will in any case need to live peacefully
September 2012
alongside existing standards. Using multistandard base stations that enable mobile network operators to dispense with the costly provision of dedicated GSM/GPRS/EDGE and/or UMTS/HSPA/HSPA+ technology will make that possible. In the future, networks and network cells will be configurable flexibly on the basis of certain capacities for all standards - analogous to the measured actual usage of standards from GSM to LTE. Ultimately, drivers will decide whether LTE services are a success.As the first LTE-enabled
terminal devices are only just hitting the market, no forecast can yet be made about the automotive ’killer app’. If wireless communication providers, network providers, terminal device manufacturers and the automotive industry can work together and adopt a common development path based on existing services and business models, nothing will stand in the way of a new chapter in this automotive technology success story. Jßrgen Hase is Head of Competence Center M2M at Deutsche Telekom
Automotive Megatrends | www.automotiveworld.com | 29
automotive megatrends
30 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
Volvo
puts fun at the heart of safety and efficiency Peter Mertens explains to Automotive Megatrends how Volvo’s core brand values of safety and fuel efficiency complement each other, and still leave room for a third brand attribute: fun
O
By Martin Kahl
nce known as the brand for safety,Volvo has, in recent years, also promoted its cars’ fuel economy and reduced emissions, notably through its DRIVe range. It is now focusing on a third, somewhat unexpected aspect of vehicle development, says Peter Mertens, head of R&D at Volvo Car.“We are going in the direction of improved driving dynamics and making the cars more fun to drive.The all-new V40 is class-leading when it comes to the safety standards we have implemented.”
The V40, launched at the 2012 Geneva show, features an array of safety technology as standard; the car also exemplifies Volvo’s environmental strategy.“We will be class leading or are class leading on fuel efficiency. We have announced 94 grams [CO2/km]. Our competitors are all at 99. Five grams doesn't sound a lot, but it is a lot.A lot of effort is involved in coming down from 99 to 94.” Volvo has been able to reach that target using an engine with start/stop.
Has Volvo needed to make compromises for that extra 5g reduction? “We were all afraid that this would be the case but, after driving the vehicles, they are so dynamic and still so much fun to drive it's amazing how much power and torque you get out of this little engine and still have emissions of only 94 grams of CO2. It's really a lot of fun and still you are responsible and really environmentally friendly.” So what has Volvo done to achieve that? “It’s not one single thing,” says Mertens.“It starts
September 2012
Volvo Pedestrian Detection with full auto brake
with reducing the friction in all areas of the vehicles, lowering the chassis, improving aerodynamics.” Reducing friction has been possible through the use of specific lower viscosity lubricants.“Not only in the gearbox but in all areas,” says Mertens.“It’s also about reducing electric load wherever you can.” In addition to lubricants, the portfolio of efficiency improvements includes changes to
reduce use of the alternator, low-rolling resistance tyres, tyre pressure, engine finetuning and calibration, and the use of start/stop technology.
Whilst OEMs work hard to implement these developments into a vehicle to achieve low CO2 emissions, Mertens agrees that drivers will find it difficult maintain those levels of
Automotive Megatrends | www.automotiveworld.com | 31
automotive megatrends
Volvo V40 material mix
efficiency in real-world driving conditions.“It's always difficult to completely reproduce the cycle in real-life traffic, but we have put a lot of measures in place to make real-life fuel consumption absolutely competitive.”
“Everything I’ve talked about helps the customer to achieve real-life fuel economy and improvements.The V40 consumes 3.6 litres per 100km and you can get very close to that [94g/km].” Mertens adds that conditions play a key role.“Of course you can't do that with winter tyres and you cannot do that in snow.” Volvo gets connected
Safety, environmentally-friendly driving and driving dynamics can all be aided by welldeveloped telematics and infotainment systems. One challenge that Volvo faces is how to bring cutting-edge infotainment technology into a vehicle whilst also avoiding driver distraction.“You're asking the 100 million dollar question! What we try to do is bring connectivity into the vehicle but really make it intuitive and less distractive.We will not have 50, 60 buttons in the vehicle which you have to switch and play with to get the stuff you
want.We'll do a next step next year actually when it comes to connectivity and intuitiveness in our mainstream vehicles and do a huge step then with the introduction of SPA (Scalable Premium Architecture), our new platform.” Volvo’s SPA break
“We're going to develop our own architecture for all our mid to large vehicles.We'll replace everything – a new engine family, and transmissions to with it.” The process will see Volvo switching to its own technology and becoming completely independent of Ford.
SPA, explains Mertens, is less a platform and more a concept of compartmentalising different areas of the vehicle, such as the engine and the powertrain.“SPA is a set of components which is variable and very flexible.You try to achieve a balance between having a good share of common parts between the vehicles and also having them individual enough so that you have the right differentiation. That is the key balance you have to come back with.What we have found is that we have a pretty good strategy which goes away from actually being horizontal,
32 | Automotive Megatrends | www.automotiveworld.com
where you share components for example with different brands, to a more vertical approach where you use components more between different segments. Our 40, 60 and 90 ranges will share a lot of components in the future.”
Where Volvo can save, it will - the non-visible parts can be shared across different models, “and we’ll do the same on the powertrain side.We have, for example, taken a very brave and conscious decision to focus and stick to four cylinders only. We're not going to do six cylinders and eight cylinders because we will do four cylinders so well that they have more output and better fuel economy than today's six cylinder.That is part of our strategy to really become independent of any other technology.” Mind-blowingly low emissions
Now that Volvo has achieved 94g CO2/km with a combustion engine, what role will alternative powertrains play in Volvo’s - and the industry’s - future? “At Volvo, we very much believe in plug-in hybrids.We currently see some challenges making electric vehicles really customer-ready so that they can cope
September 2012
automotive megatrends with real-life customer demands.We think the plug-in hybrid is the technical solution for the next five, maybe eight years.We'll see what happens with electric vehicles.The beauty of plug-in hybrids is their very low CO2 emissions. For example, our V60 PHEV achieves 49g CO2/km, and that is a mindblowing number.”
There is still some room for improvement in the efficiency of pure combustion engines, says Mertens, but the potential “is not that huge anymore.” Significant improvements in ICE technology will require some form of “support system”, he says.“We see plug-in hybrids as the solution to bridge the gap between complete combustion and electrification or hydrogen or whatever comes in the future.” KERS
Mertens says Volvo is also working on KERS (kinetic energy recovery systems).“We are very much convinced of a mechanical KERS. If
you don't want to use it, it has a planetary gear which just shifts direction and then it kicks in when you are cruising to help to significantly lower fuel consumption during that period, or when you need more torque or more power to overtake, for example.This is something we wouldn't consider to be hybrid - it’s a mechanical or traditional system which can help a combustion engine to become even more fuel efficient.” Volvo’s weight loss regime
As part of its attempts to reduce vehicle weight by 100-150kg compared to equivalent products today,Volvo has invested in hot stamping manufacturing equipment.“We will have significantly more boron steel in our future vehicles which help us reduce weight over and above just using aluminium.The smart solution is a good combination of different materials. Boron steel, or hot-formed steel, is a very important strategic direction and we're going to go aggressively.”
Although he will not disclose how high the yield and tensile strengths of Volvo’s future high-strength steels will be, Mertens says, “even more important is where and how much is used.We really plan to use this to significantly improve our passive safety.We will combine a stiffer body, a stiffer safety cell and reduced weight to help improve fuel economy.” Passive and active safety
There is some debate over how much more can be achieved with passive safety alone, given the developments in active safety systems.“Our approach is that we have to use both in parallel. Our clear target is for nobody to be significantly hurt or injured or killed in or by a Volvo in 2020.” “We are working on that with significant effort on both areas - in the active safety area, which will become more and more important, but also on the passive side because until
Volvo V40 crash test
September 2012
Automotive Megatrends | www.automotiveworld.com | 33
automotive megatrends
Volvo V40 active safety technology
active safety is perfect, you cannot avoid accidents.You have to have a stiff body cell and lots of passive safety features that protect you when an accident is unavoidable.”
Despite the advances in automotive active safety systems,Volvo continues to innovate in passive safety technology.The new V40 features a pop-up hood for pedestrian protection in frontal collisions.“The hood is one of the things we have been doing.We invented that and we are the first in the
industry to put this into series production. That is one thing.The boron steel approach to us is also very much something which we'll look into.We'll look outside of all the standardised safety tests. More than anybody else we look very closely at real-life crashes. We want to ensure the car can be ready for pretensioners to pull the cord tight before an accident happens.” Here, Mertens refers to the “grey zone”, where the concepts of active and passive safety overlap.Volvo’s current strategy also
34 | Automotive Megatrends | www.automotiveworld.com
focuses on another grey zone, where its safety and environmental strategies overlap.The investment in hot stamping technology sees the company addressing these two key issues at once - reducing the weight of the vehicle for improved efficiency, and strengthening the safety cage.Whilst environmental legislation and targets increasingly shape vehicle development,Volvo is conducting its pursuit of CO2 emissions reduction and improved fuel efficiency in tandem with, and not at the expense of, its core values. September 2012
automotive megatrends
The Volvo V40: packed with safety The New V40 is Volvo’s entry into the premium hatchback market. Even though it is intended as a global product, “Europe is our focus”, says Håkan Abrahamsson,Vehicle Line Director C Cars and V40 Vehicle Programme Manager. Indeed, the company has said that 85% of production is earmarked for European markets.
Production started in May at Volvo’s Ghent, Belgium plant, and the first deliveries are expected to be made from late summer onwards. Production is targeted at 25,000 units in 2012, before rising to meet expected annual sales of 90,000 units.
The V40 showcases Volvo’s latest developments in fuel efficiency and safety technology.The car comes with a portfolio of safety technology as standard, both passive and active, including the first ever external airbag for pedestrian protection.“We have a few world firsts here,” boasts Abrahamson. Pedestrian airbag technology
structure under the top of the hood, the base of the windscreen and the A-pillars.“When you have a collision, the airbag deploys and the hood is released using pyrotechnic devices on the hinges,” explains Abrahamson.“This creates a good distance to the structure, but we are taking it one step further as we wanted to protect the very stiff area of the windscreen base.” The U-shaped airbag deploys around the base of the windscreen and covers the A-pillars.The hood raises ten centimetres and slides up over the base of the windscreen to create a shallower angle between hood and screen.The system is
operational at speeds of 20-50kph.Volvo says 75% of all accidents involving pedestrians involve vehicles travelling at up to 40kph.
Not only is Volvo’s pedestrian airbag technology new,“it’s a world first,” says Abrahamson.“I’m proud to say that we are the first to have an external airbag.” The pedestrian airbag technology has been produced in partnership with Autoliv.“It’s our design, they are the supplier, and we work very closely of course as we always do,” says Abrahamson.
The key talking point of the new V40 is the socalled pop-up hood.This innovative external airbag technology serves a dual purpose. Pedestrian protection requires a long energy absorption distance, says Abrahamson,“but then you cannot have a sleek car.We wanted pedestrian protection and a sleek design, so therefore we have this airbag.”
Using seven front-mounted sensors,“the V40 can distinguish a human leg from a tree, football, trolley or an elk,” says Abrahamson. Pedestrian detection is not new to Volvo, but the V40 uses the latest technology to achieve it.“Our pedestrian detection has been upgraded.We are even sharper now at distinguishing pedestrians.”
According to Volvo’s data, pedestrians account for 25% of traffic fatalities in China, 14% in Europe and 12% in the US.The most serious pedestrian head injuries caused by cars, the company says, result from impact with the
September 2012
Automotive Megatrends | www.automotiveworld.com | 35
automotive megatrends
Volvo V40 driver protection
Other features
Another key feature on the new V40 is City Safety, which complements Volvo’s Pedestrian Detection with Full Auto Brake. City Safety brakes the vehicle in city traffic, to prevent low speed impacts and rear shunts.“We have upgraded from 30kph to 50kph.That’s a world first level as well. These systems - Pedestrian Detection with Full Auto Brake, and City Safety with pedestrian brake - they work together.”
only overcome the problems caused by water droplets on the previous-generation’s camera system, but also to add functions. In addition to detecting vehicles in the vehicle’s ‘blind spot’, the enhanced BLIS uses radar located in
the rear of the vehicle, enabling it to identify vehicles directly behind the car, up to 70 metres away.“It can identify a vehicle approaching very fast from behind and will warn the driver.”
Also updated are the vehicle’s ESP (Electronic Stability Programme) and DSTC (Dynamic Stability Traction Control) systems.
Also available is Lane Keeping Aid which “steers you if you drive too close to the lane markings.” The system identifies the lines on the road, and if the vehicle appears to be drifting,“first it just gently steers you back in line. If you approach the line at too abrupt an angle, you get a haptic signal.”
Cross Traffic Alert uses radar to assist drivers reversing out of parking bays, giving them vision 30 metres each side of the vehicle.The system “alerts you with a sound and blinking in the centre screen.”
Volvo has also switched to a radar-based system for its side mirror-based Blind Spot Information System (BLIS), enabling it to not
Volvo V40 pop up hood
36 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
Recycling: the key to aluminium’s automotive future Roland Harings of Novelis talks to Automotive Megatrends about the growing importance of aluminium in the automotive industry
R
By Martin Kahl
oland Harings,Vice President of Global Automotive for Novelis, is bullish about the prospects for aluminium in the automotive industry, telling Automotive Megatrends he expects “a significant step change in the use of aluminium in the body-in-white now for the next five to ten years.” Aluminium will grow from being “a niche material with a share in the body-in-white of about 1%”, he says, to “3%, 4% or 5%. Beyond 2017, you can even imagine that we will have a share of 10% to 15% of the body-in-white materials supplied to the automotive industry.”
are really astonishing, better than what you can do with steel and obviously with aluminium”.There is a long way to go for materials like carbon fibre reinforced plastic (CFRP) to make the leap from the “Formula 1 hand-built style of production, which you typically see today” to being a mainstream option.“For some areas of a vehicle, they are a real alternative,” he concedes.“I don’t see them as a threat. I think in the future we will see a very sophisticated mix of materials, even more than today’s material mix that is mainly composed of different steel grades and some aluminium. It would be much more complex and sophisticated than today's vehicle.”
Aluminium - better than all the rest?
Aluminium’s best opportunity, says Harings, lies in helping OEMs to reduce the weight of larger vehicles.“The bigger the vehicle, the more the use of aluminium and lightweight technologies pays off.” And this has a bearing on the regional opportunities available to aluminium suppliers like Novelis.“In markets like North America, customers want bigger, more spacious cars or even SUVs.” On the flipside, the smaller the vehicle, the lower the aluminium content.And that is for two reasons, says Harings.“First, the business cases for small vehicles are very difficult to make. The second reason is legislation. It's easier to meet the CO2 and fuel efficiency targets on smaller vehicles than on vehicles where you also want to achieve a certain level of performance, speed, driveability and acceleration.These factors drive the need for a higher use of aluminium in D and E segment vehicles and SUVs.”
The company says it is expecting a growth in demand for aluminium in automotive applications of 25% CAGR (compound annual growth rate) over the next five years.Whilst this growth will be assisted by the anticipated growth in global annual new vehicle sales, Harings also expects the proportion of aluminium in vehicles to increase over the next decade.“We see a trend that aluminium is gaining. Most, if not all, of the growth in aluminium will be in flat-rolled products.The major growth will be in the body-in-white, which is our business.Today, steel dominates, but you could say steel is coming under pressure from aluminium; at the same time, we see the carbon fibre materials and composites going after the higher strength and crash relevant parts of the body-in-white where high strength steel currently plays a dominant role. Aluminium is far ahead of the plastics and the composites, but they will grow.” As to whether these new materials compete with aluminium, or whether aluminium operates in areas that these new materials do not, or cannot, Harings says “the jury is still out.” There have been some interesting developments, particularly in carbon fibre reinforced composite materials, he says, “where you can get material properties which
those segments than might be achieved by the mainstream brands.“In these segments, cars like the Audi A3 and the Mercedes-Benz Aand B-Class use an increasing aluminium content in the body-in-white, our key market,” says Harings.“And the latest launches of these vehicles feature aluminium where the previous models did not.Again, the willingness of consumers to pay for a certain performance more than perhaps in other segments underlines the growth potential for aluminium at the luxury brands, and this leads also to a higher aluminium penetration in the smaller segments.”
Aluminium makes sense for large cars...
...whilst only premium brands can make the business case for aluminium in smaller segments
The increasing number of premium vehicles in the C and B segments, and soon maybe even in the A segment, could shift the balance and lead to a higher penetration of aluminium in
38 | Automotive Megatrends | www.automotiveworld.com
Novelis aluminium sheet during the production process
September 2012
automotive megatrends
September 2012
A selection of Novelis aluminium coils
Automotive Megatrends | www.automotiveworld.com | 39
automotive megatrends
Novelis invests in China
China looks particularly attractive for aluminium suppliers, says Harings.The company has recently announced its first automotive sheet manufacturing facility at Jiangsu Province in China; the US$100m facility will be capable of producing 120,000t per year by 2015.“With the legislation on CO2 and fuel efficiency demands in all regions, including China, including Asia, we see that aluminium is increasingly being used on each
next-generation vehicle. It's really been about the timing, and when the high volume vehicles get their retooling or a complete redesign. When we show this technology to China for the latest design in body-in-white, we create a lot of interest.And we are in discussion now with all the European and American OEMs producing in China through their joint ventures.At the same time, we see rising interest at the Chinese OEMs, because now for the first time this kind of technology and material is available in China, making it possible for them to use in the next generation of vehicles the same technology as their competitors, the European and the American companies that are using it already.” Accelerated growth
As well as seeing a potential growth over the next decade of up to 15% in the uptake of aluminium, Harings believes the speed of growth will accelerate.“We work closely with most OEMs, so we have some really good insights.We see more or less a 25% growth rate in North America, Europe and China, with good visibility to 2016.And there are good positions still pending for the timeframe beyond 2016, where the OEMs might go one way or another - we could see an acceleration even above the 25%. I personally believe there will be such pressure on all OEMs that they have to come up with something which is competitive to the other OEMs, which means weight and performance and fuel efficiency have to match or be close to what the direct competitor is already offering. In my view, this will accelerate the use of lightweight materials and specifically aluminium.”
Worker bands a coil of aluminum at Novelis plant in Sierre Switzerland
40 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
Reduce the weight, reduce the fuel consumption
Driving the growth in aluminium is a combination of the desire from consumers for fuel efficient cars, and legislation requiring increased fuel efficiency. Not surprisingly, Harings believes aluminium “has superb characteristics, and it's a developed technology which delivers the results”, but he backs this up with numbers.“If you take 100kg out of a vehicle, you save about 0.3 to 0.5 litres per 100km in fuel consumption.” Making cars from recycled cans?
The steel industry claims that steel is better than aluminium because it requires much less energy to produce steel parts than it does to produce the equivalent parts in aluminium. Harings concedes that the aluminium industry has a job to do to communicate its side of the story.“The problem that the aluminium industry has is the widespread knowledge of the electricity demand for primary aluminium production. People have to distinguish between primary and recycled materials. Recycling aluminium only uses 5% of the energy required for primary aluminium production.Aluminium is an extremely recycling-friendly material, much more than steel.Aluminium should not and cannot go to landfills.We already achieve a recycling rate of 95% to 98% in the end-of-life vehicle process hardly any aluminium is lost in the system.”
Harings is insistent that the recycling process needs to be improved, and the company now includes closed loop recycling in its automotive contracts.This includes buying back scrap material not used during the stamping process. At the other end of the vehicle’s life, Harings explains that the closed loop needs also to “ensure that when cars are scrapped and shredded, this scrap material, which is used in the body-in-white, comes back to us and can be used for body-in-white materials again.A long-term objective for us, in ten, 15 years when the vehicles built now with an increasing aluminium content are recycled, is to have the technologies to go back into structural parts, into what is needed in the body-in-white of the new generation of vehicles.”
Reduced reliance on aluminium producers
Presently, high volumes of scrap aluminium are shipped overseas for processing: Novelis says over one million tonnes of aluminium scrap was exported from the EU in 2011, and a similar quantity in 2010.This is due, says Harings, to a lack of recycling capacity and capability in Europe. In 2011, Novelis publicised its target to reach 80% recycled September 2012
content by 2020, up from 33% in 2010.The company says it is on track to achieve a level of 39% recycled content by the end of 2012, and 50% by 2015.This will require a doubling of its recycling capacity from 1.2 million tonnes in 2011 to 2.1 million tonnes by 2015, something that will be made possible by Novelis’ investment in the largest recycling centre in the world in Germany.“We will invest in a 400,000t state-of-the-art recycling centre with the newest technology adjacent to our automotive plant at Nachterstedt in Germany,” explains Harings.“We will include in this new investment not just the conventional technology that they use for the high quality scrap that we get directly from our customer base, but we want to tap into scrap pools which are today typically not recycled within Europe.” This US$250m investment will “build up the capacities to close the loop,” he says.“This is just in Europe.
Conventional aluminium lightweighting can reduce the CO2 footprint of a car by 18g per 100km, which is a significant number, specifically if you compare this to the gaps that some of the OEMs will have to close.” The price of lightweighting
Much can be done to improve efficiency through aluminium lightweighting before options like drivetrain electrification need to be considered, believes Harings.“OEMs are willing to pay to reduce the weight of their vehicles. Lightweighting through the use of aluminium costs the OEMs about 37/gram.To achieve the equivalent benefit through electrification costs 95/gram.You should do everything else to achieve your targets before going to the very expensive last step of full electrification.”
Recycling: the key to aluminium’s automotive future I could also give you similar examples of expanding our recycling capabilities in Asia, North America and South America.”
The future looks light for automotive aluminium
How does Harings see the use of aluminium developing over the next ten years? “I think the long term trends may be the drivetrain of the future.There was considerable hype in the beginning about full electric drivetrains. Now there is more realism of what can be achieved in electric drivetrains and who is really the potential buyer of an electric vehicle. If it makes sense to use aluminium to reduce the weight of cars with conventional internal combustion engines, it makes even more sense for cars with more sophisticated drivetrains like hybrids and EVs.” Improving the efficiency of vehicles requires investment. On the decision between investing in lightweight materials or new powertrain technologies like electrification, Harings says OEMs should look to aluminium first.“These drivetrains may be more efficient and lighter weight, but they will require a business case. It makes much more sense to use all the latest lightweight technology before you go into these kinds of drivetrain technologies.
The threat of rising and volatile raw material prices is a key factor in the decision to switch to aluminium.“A frequently asked question of the OEMs is where's the aluminium price going? It is very difficult to predict,” says Harings.This is where recycling will play a key role.“In a growing market for aluminium, the increasing recycling activities worldwide will help to moderate the potential significant demand increase.Achieving a high recycled content will make the world market of raw materials relatively small in the equation. If the car companies work with us, we can do this together without even thinking about the raw material producers. Based on the high recycled content approach, aluminium has a unique advantage to be more independent of raw material than OEMs would see with other materials.” “One other big advantage that aluminium offers is that you can buy your requirements up to five or six years up front on the LME (London Metal Exchange), giving you a safe business case. This is unique in this kind of materials industry. You cannot do this with steel or with plastic, so it's a real advantage for aluminium.” As emissions regulations tighten, metal forming techniques improve, and aluminium recycling becomes a viable industry, suppliers of aluminium parts like Novelis appear wellpositioned to benefit.
Automotive Megatrends | www.automotiveworld.com | 41
automotive megatrends
How connectivity and infotainment is shaping the vehicle interior and the in-car experience By Partha Goswami
B
ack in October 2011, an endearing YouTube video was getting a large number of hits. The video shows a baby playing with an iPad, enjoying its response to his finger inputs. He then tries to use a glossy magazine the same way, visibly confused that it does not work.The video presents an interesting paradigm: to this little baby, born into a connected world with smart devices, a print magazine is nothing more than a broken iPad. It underlines a powerful message that designing a future man-machine interface for these ’digital natives’ may require a new set of rules.
The car industry managed to maintain more or less the same user interface and interior experience for the majority of its first 100 years, with AM/FM radio being the primary connection to the outside world.
The age of vehicular connectivity really started when General Motors introduced its OnStar telematics service in the mid-nineties and soon made it available in the bulk of its product portfolio. In addition to its on-board radio and cassette/CD player, the interior received a major upgrade, featuring a new embedded telematics system with microphones, and mirror sporting four simple buttons to connect the consumer to a back office and 24/7 emergency services.
(e.g.AM/FM, GPS, Bluetooth,WiFi, cellular) and sensors (e.g. radars, lidars, cameras).They bring in a wide variety of data, content and services that directly influence the kind of displays, controls and interface that need to be designed into the interior. Future vehicles may see even more radios, e.g. DSRC and NFC that are likely to need an even newer set of controls and front-ends. Bandwidth of spectrum bringing data into the vehicle
Some sensors, such as cameras and radar technology, are driven by safety mandates or the competitive need to offer semi-autonomous features.Wireless radios and cellular connectivity, on the other hand, are driven partially by consumer expectation. Consumers, especially the younger generation, are looking for many of their mobile device experiences inside the vehicle. Some recent studies in the US have shown that GenY drivers are more likely than older demographics to be excited by touch screen controls,TFT displays, apps, and smartphone connectivity in the car. OEMs are responding by redefining the interior through the introduction of things such as large displays, touch controls, capacitive switches, voice recognition. Increasingly common in new cars are features
such as Bluetooth-enabled hands-free calls, connectivity to a private cloud or internet, the ability to run apps from the car’s head unit and the ability to use limited voice commands to perform certain tasks, such as play and control music lists.Voice control has come a long way and matured to a point where it can be deployed with some limited success.Yet, the recent experience with Siri shows that the voice-based virtual assistant has a long way to go before it can be considered a robust and fully reliable tool.A recent test with Siri by an analyst at Piper Jaffray revealed that it responded only 68% of the time in a quiet room. On a busy street, the numbers dropped to 62%. Gesture-based controls, inspired by the gaming world, have also entered the conversation, although the technology is still in its infancy for in-car application. Future add-ons to the vehicle interior
We can expect to see more integration to the cloud, better car-centric apps, and web-based services. In addition, assuming vehicles get a robust pipe to the cloud, infotainment for the passenger, front or rear, where distraction is not an issue, becomes a real possibility.
At the last Consumer Electronics Show, a 4G LTE-connected Chevy Volt demonstrated new capabilities for OnStar's own cloud ATOMS
The in-vehicle experience has since continued to grow at a fast pace.The integration of personal music devices (iPod, MP3 players) has become mainstream: Internet radio apps such as Pandora, Slacker and others have made their way into cars, opening the door for more in-vehicle apps; LCD displays are making their way into the vehicle centre stack and cluster; multi-touch screens with capacitive controls made their debut with the CUE infotainment system in the US; plug-in electric and range-extender cars like the Chevrolet Volt took advantage of reconfigurable displays to inform and educate the driver about the state of the vehicle. Today’s infotainment and telematics systems can also incorporate a diverse set of radios
42 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
(Advanced Telematics Operating Management System), such as streaming data from home or web to multiple zones in the car. For example, the driver could stream podcasts while each rear passenger could independently enjoy his or her own local or streamed content. Rear passengers were also able to video chat via Skype or play games on the dual headrestmounted monitors.The driver had the ability to override the tablets from an in-dash console.
In principle, future consumers living in a smart and connected home will be able to manage all their home systems - appliances, security, entertainment - right from the in-vehicle interface.The consumer may start the day by using a smartphone app to remotely start and unlock the car.After he gets inside, the vehicle recognises him (based on his smartphone) and the cluster display provides customised system parameters such as the driving range and the state of health of key systems.Then, the touchscreen allows him to turn off the lights at home and adjust the home temperature setting. Rear-seat passengers could meanwhile stream a movie using the family’s Netflix or Hulu subscription, play games, read the news or video-chat.
The marriage of infotainment and ADAS HMI
Many of the camera and radar-based ADAS (advanced driver assistance system) sensors are increasingly using the same user interface. Cameras are providing a variety of cues and visual guidance to the driver inside. In addition to visual and audio alerts such as side blind zone alerts, new haptic alerts are now added to GM’s new Cadillac cars that September 2012
provide physical vibrations to the left or right side of the seat, like somebody tapping on your shoulder, if the car veers out of a lane or there is the potential for an impact. Where do we go from here?
The early phase of developing the optimum user interface and interior experience to support connectivity is already under way. So far, industry
technologists and experts have made huge strides in responding to the market through new displays, controls, and touchscreens. Cadillac CUE, for instance, exemplifies a design trend to use more surface, sliders and capacitive sensors in place of knobs and mechanical switches. CUE was also designed with significant focus on driver distraction, adhering to AAMA guidelines (American Automobile Manufacturers Association).
Automotive Megatrends | www.automotiveworld.com | 43
automotive megatrends But ongoing trends will surely demand even more holistic and integrated interior design, and will have to leverage smarter and more robust speech, gesture and visual interfaces so that the driver can stay focused on the task of driving. Simplification: managing the cognitive load
One obvious challenge is ensuring that the plethora of new interfaces, displays and controls does not overwhelm the driver.An average mid-level car today could easily have more than 40 buttons, switches, knobs and controllers, not to mention all the tell-tale icons and screens.
Even though elements of our desktop, mobile handset and living room will continue to make their way into the car cockpit, the primary task in the car remains driving from point A to point B safely.While in-vehicle connectivity promises to enrich our driving experience in many new ways, managing cognitive overload and providing the best situational awareness remains job one. In this context, the Yerkes-Dodson curve can be a good framework to put this into perspective.
Essentially, this model is based on the premise that beyond a certain point, human performance drops with increasing cognitive load.At the same time, the under-loaded state can offer a different challenge, potentially disengaging the driver from a monotonous drive. Combined smart HMI and ADAS solutions can best enable the driver to move away from state A or C into the optimal safe state B.
The child becomes a man
Returning to the boy for whom a magazine is nothing but a broken iPad, what will this baby expect when he gets to drive his first car in 2026? While we may not have the best insight any time soon, we know that tomorrow’s display, devices and controls have to offer interfaces to manage input from multiple systems, such as infotainment, vehicle diagnostics and safety systems without overwhelming the driver. For now, designing an engaging interior interface that seamlessly stitches ADAS and infotainment systems together is likely to offer better situational awareness. Last but not least, simplification should be a big part of this strategy, so that the solutions themselves do not overwhelm the driver.
Partha Goswami is a technology specialist in GM's Global Planning & Program Management, focusing on Connected Vehicle & Infotainment. Partha Goswami was invited to contribute this article.The above opinions do not necessarily reflect those of General Motors.
44 | Automotive Megatrends | www.automotiveworld.com
Acronyms used: DSRC: Dedicated Short Range Communication (5.9 GHz band) NFC:
Near Field Communication
V2V:
Vehicle to Vehicle
V2X:
Vehicle to anything (i.e., vehicle or infrastructure)
V2I:
Vehicle to Infrastructure (e.g., traffic signals or other roadside units)
September 2012
automotive megatrends
Jean-Marc Gales Interview:
Chief Executive, CLEPA
Jean-Marc Gales, Chief Executive of the European Association of Automotive Suppliers, talks to Automotive Megatrends about how he sees the future of mobility affecting the role of suppliers in the automotive industry
J
ean-Marc Gales is the Chief Executive of the trade body which represents automotive suppliers in Europe. CLEPA fights the corner for more than 90 major suppliers, and looks after the interests of a section of the industry that also includes 3,000 small and medium-sized companies employing around five million people in manufacturing alone.
In this exclusive interview with Automotive Megatrends, Gales outlines how he sees the role of the automotive supplier changing as not only legislation but also the concept of mobility itself shapes and changes Europe’s automotive industry over the next ten years.
Jean-Marc Gales
By Martin Kahl
From CLEPA’s perspective, what are the prospects for automotive suppliers in the near and longer term future?
The good thing is the automotive market is still growing. Even this year, despite a crisis in Europe, we will see a growth of 5% worldwide. 5% of 70 million car sales equals 3.5 million units. It's like adding the German market to worldwide sales. It's an industry that is still growing, and 5% is a good growth rate. People want to be motorised, and individual mobility is a need that will continue.
We've got over 500 cars per 1,000 persons in Europe, but we've still got only about 30 in China and about ten in India, so there's a lot to do still.The car parc in China is still much smaller than the one in Europe although the population is about two and a half times bigger. It's still a positive trend. However, something that really comes up is the environmental question, and, crisis or no crisis, the pressure to reduce CO2 emissions will continue in the next ten to 15 years worldwide. How will CO2 legislation affect the relationship between OEMs and suppliers over that period?
The role of the supplier as a system provider will become more and more important. In the past, a lot of this was done by the car 46 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends manufacturers, but they have since outsourced most of the important things. Safety systems, for example, are no longer made by vehicle manufacturers, but by suppliers.And it is the same for technology that reduces CO2 emissions.The car makers still make engines, although they co-operate now, and we will see more co-operation on engines because of the high development costs.We will see a lot of engine parts outsourced to very capable suppliers; the front and rear ends of cars are done mostly by suppliers and they are currently working on composite materials to reduce weight. Lightweighting is one of the very big trends, and suppliers like Faurecia, Plastic Omnium and Lear are very good at this.They will become more important in supplying car manufacturers with total front and rear ends for cars. Hybrid manufacturers will be able to supply car manufacturers with fully fledged hybrid systems, not only stop and start but mild and full hybrids. The advances in fuel efficiency are well publicised. Do you think the same attention is being paid to safety developments?
No, in terms of safety I think we could do more, frankly.That was a weak point of the (recently concluded) CARS 21 exercise. Four years ago, we made ESC mandatory for all new cars from 2012 onwards. In CARS 21, there was so much pressure on CO2 that even the Commission didn't push that issue. However, I think there is so much that can still be done. Nowadays we have pedestrian detection systems. Pedestrian collisions are becoming more frequent and they almost always have heavy consequences.We have appropriate systems that can detect and automatically brake the car, and they don’t cost a fortune. Do you think the regulators and the industry have struck the right balance between improving safety and improving fuel efficiency?
We are fighting for systems like lane departure warning and lane keeping systems. Suppliers like Continental, Bosch,TRW and Autoliv have developed these systems and they can deliver them. Make those systems mandatory.The car manufacturers always say it's too expensive, but how can you say that if you are counting human lives? It is essential that we look not only at the 30,000 deaths on the roads of Europe every year, but also at the societal and emotional cost when 1.5 million people are injured and need to be hospitalised. I am very thankful to Euro NCAP for pushing this. Euro NCAP is not mandatory, of course, but no car maker wants to have four stars when they could have five, so we are working closely together with Euro NCAP to devise even tougher rules for five star cars, and we are also pushing the Commission to get more September 2012
active on this.They tell me it's not a priority right now, but maybe it will become one again soon.We always talk about CO2, but we never talk about safety.We have an interest, we have developed these systems, and we’ve put a lot of money into them because they are systems that really reduce accidents. How can regulatory bodies like the European Commission make it easier for OEMs and suppliers to bring products to market that meet safety and environmental legislation?
In terms of environment, the next big step is to develop smart regulation for 2025 and 2030. Safety has been out of the spotlight for the last two or three years.We [CLEPA] are in all the consultation parties, and our lobbying efforts can help. I think we need to get together with bodies like FIA [Federation Internationale de l’Automobile] and CECRA [European Council for Motor Trades and Repairs] to really push safety and make sure that we get safety back into the spotlight. Some safety systems are built into cars, while others are optional.What effect does that have on your efforts to promote safety products?
The customer needs to have an incentive to choose those optional safety systems, and the best incentive is regulation.The second-best incentive, and I always say this to CECRA members, is that there is a job to be done by the dealerships and the salesmen. Systems like eCall cost money, but if you explain them properly to customers, they will opt for them.And, of course, there's a job to do on the regulatory side to take these issues more seriously than we have done in the last three years. More generally, do you anticipate greater consolidation in the automotive supply sector over the next decade?
I think consolidation will never stop. In terms of reducing costs, suppliers will always try to sell activities where they are not one of the top three or five worldwide.And maybe that activity will become one of the top in its field once it has been sold to somebody else. I think it will be less about two companies merging, and more that company A will sell an activity where it is not a world leader to company B, which can become a world leader when it integrates those operations. Specialisation is certainly an issue.And with that specialisation, there will certainly be some consolidation as well, because in this difficult environment where you need to spend a lot of money on research and development, you need to specialise. What opportunities do you think exist for new players?
The CO2 regulations of the future make it possible for new players to enter the market,
and there is an opportunity for new technologies.The internal combustion engine will still be here for quite some time, but in the end, some hybridisation or clever hybridisation will take over. I think range extender technology is a great opportunity, and you do not need to be a great industrial group to develop fantastic range extenders. That opens the door to new companies wanting to get into the automotive market and sell those systems, or to sell those patents to other suppliers. However, given the tougher CO2 laws of the future, new entrants have a better chance than they had in the past of entering the automotive sector, specifically in the powertrain supply industry and even in new automotive businesses like car sharing. How do you see mobility changing over the next decade, and how will this affect what suppliers deliver to the industry?
I see a continuing need to drive, but in the future some cars are going to be driven more and for that we will sell fewer cars.That's the issue of car sharing. For the supplier industry, as long as cars are still being manufactured and driven, and we can sell spare parts, it's good. However, some of our members are working on intelligent transport systems, where car sharing plays a role. Some of our large members have the knowhow to supply intelligent transport systems to entire cities. Once you have car-to-car and car-toinfrastructure communication, you can consider an intelligent transport system in a city supplied by one major supplier. I think that especially mobility in big cities needs to change because it just cannot continue the way it is right now.There are people working on assisted driving where on the motorway at 130kph the cars are only 5cm from each other. They are all driven electronically and interconnected. That would reduce considerably the space you need on roads.There are many such developments coming up and in the new Vision 2020 programme, the Commission has set aside some €500m for dealing with intelligent transport systems.They are waiting for proposals, so our members need to come up with good proposals, and at CLEPA, we are setting up a working group on intelligent transport systems to take account of changing mobility in the years to come.
Automotive Megatrends | www.automotiveworld.com | 47
automotive megatrends
The V1 is a multi-configuration vehicle, intended as much for large families, families with elderly relatives families, and for people with wheelchair users.“As well as being a mobility vehicle, it's a vehicle that can be configured as a large family vehicle, and can still be sold on as a vehicle for mobility impaired people� – Claude Nahum, Karsan
48 | Automotive Megatrends | www.automotiveworld.com
September 2012
automotive megatrends
Karsan’s
highly accessible vehicle (HAV) The Karsan Concept V1 began life as an all-new platform for the New York Taxi of Tomorrow tender, but the focus has since changed to develop a multi-purpose vehicle which is highly accessible for all, and in particular for people with reduced mobility. Martin Kahl talks to Karsan’s Claude Nahum Established in 1969, Bursa-based Karsan is best known as the Turkish assembly partner of Ford, Hyundai, PSA Peugeot Citroen and Renault trucks. It operated under the ownership of the Koc Group between 1979 and 1998 and, from 1998 onwards, under Kiraca Holding, where it evolved into a contract manufacturer.
The company’s Bursa plant has a 100,000 unit capacity, including a 40-50,000upa paint shop. In 2011, Karsan’s 900 or so employees produced 25,000 vehicles, including large industrial commercial vehicles, the large trucks and buses. V1 to be a part of New York
In 2009, the New York City Taxi and Limousine Commission (TLC) formally kicked off a project called Taxi of Tomorrow, in which vehicle manufacturers were invited to submit their best ideas for a purpose-built vehicle to serve as a New York City taxicab.“Since we didn't have our own platform at the time, we were in a position to suggest to the city how the taxi should be,” explains Claude Nahum, Vice Chairman, Karsan.
It became apparent, says Nahum,“that none of the automotive OEMs that the organisers had been in contact with had offered a genuine vehicle for New York - they were all adaptations of existing vehicles. Obviously a new platform requires three years of development at least, and a full production run to amortise the investment.”
When, in December 2009, New York issued its Request for Proposals (RFP),“we saw that they had allowed for a three-year development period and ten-year exclusivity. This initiated us to prepare for the tender, which we submitted in May 2010.There followed a long process of assessing the responses.We had numerous meetings with the city, the TLC and their consultant, Ricardo, on the vehicle. In November 2010, the process produced three finalists: Ford, Karsan, and Nissan.” People with mobility difficulties
Ultimately, Nissan’s NV200 was chosen as the Taxi of Tomorrow, but Karsan had already been preparing to broaden the scope of its vehicle development beyond the taxi project. “Because the development time was very short, we started developing the platform without waiting for the New York results.”
“Being one of three finalists meant we had a 66% chance of losing. So we looked at enlarging the sphere of opportunity for the vehicle.We launched studies in the 40 largest cities in the world to understand the taxi industry, and we saw that every country and every city has its own legislation, its own rules, and its own dedicated applications.We started getting into the taxi business, and this suddenly opened our eyes to a completely new market - we saw that a lot of people around the world were not served at all by the automotive industry: people with mobility difficulties, people that are not as agile as the rest of the population.” Nahum emphasises that this does not only mean people who are wheelchair-bound - it also means elderly and September 2012
Automotive Megatrends | www.automotiveworld.com | 49
automotive megatrends
Karsan’s
highly accessible vehicle (HAV) obese people, pregnant women, and anyone else who has difficulties commuting.
“We saw that the modern means of communication - new phones, internet - gives people the opportunity to remain in electronic contact but not in physical contact with the outside world. Suddenly this was an eye opener and we saw that with the 650 million people that have disabilities around the world, and many of them wheelchair bound, the modern car does not serve them at all. The vehicles are difficult to enter and exit, and this platform that we had developed for New York was dedicated actually to serve this population. So from there we expanded to looking at the opportunity that these people gave us.” Highly Accessible Vehicle (HAV)
“Today there are more than a billion people who are elderly or have mobility difficulties through disability,” says Nahum.“We want to give them a solution to be able to be back in contact with the physical world.”
“The choice for them today when they really want that contact is to buy a vehicle and spend US$14-17,000 having it modified; they end up with a vehicle that's not homologated, that might or might not be safe, and is extremely difficult to sell.”
Nahum believes that modified vehicles also categorise people.“You are labelling this population, saying they are not like the rest of the world. It would be more interesting to have a vehicle that anybody with or without mobility difficulties can choose as their own vehicle, and yet it's also available for people with mobility problems.That’s why we call it a Highly Accessible Vehicle - HAV.We think that is a complete new segment that doesn't exist.”
Although it looks large, the V1 “is no bigger than a London taxi”, says Claude Nahum The Swiss ambassador
Karsan is being assisted by Marc Ristori, a Swiss champion Supercross rider who has been paraplegic since a fall during a competition in December 2007. Ristori is “our consultant, ensuring that we're developing the vehicle according to the real needs not only of the people that are wheelchair bound, but of their families, their relatives and their friends.”
During the vehicle’s development, Karsan discovered no evidence of other OEMs having tried to develop a similar mobility-specific vehicle or platform.“As a society and as an industry, we have completely overlooked this segment.”
Other than providing mobility-impaired people the manual driving facilities they need, or seats that they can more easily enter and exit,“we have completely forgotten the needs of a huge segment of the population,” says Nahum.
“In the case of Marc Ristori, for example, he gets in, dismantles the seat and drives. But he says that for most other people in a similar situation, deciding to go to the beach, or to the other side of town, is just not an option. If you are mobility impaired, you need to call an ambulance.” Mass-market potential
When Nahum runs through the statistics, the scale of the problem, and the potential for vehicles designed for people with mobility impairments, becomes clear.
“There are 2.4 million families in the US that have at least one wheelchair. 2.2 million can afford this vehicle on 36 monthly instalments without a problem.Average use of a vehicle in the US is 9.4 years, which is unusually high. That still leaves 200,000 vehicles needed in the US per year. In China, it is 328,000 50 | Automotive Megatrends | www.automotiveworld.com
vehicles.The Chinese Disability Federation has 83 million associates, and employs 81,000 people. Now, these are things we don't talk of in the automotive industry.” “Suddenly,” says Nahum,“New York opened our eyes to a huge population that needs to be served.”
“We had set out to develop a taxi, but since the taxi platform needed to be ADA September 2012
automotive megatrends
(American Disabilities Act) compliant, we found ourselves with a platform that could be universally marketed and serve populations with disabilities or impaired mobility.We started looking into it and we discovered that there's a huge market that is untapped for the kind of vehicle.And now we are looking to make sure that we are able to really respond to the requirements of the market.” HAV – more than just a concept
“This is not a concept, it's much further ahead than a concept,” says Nahum.“These are vehicles that are circulating in the streets. But it is yet not a production vehicle.The engineering work is being done, it's ongoing, and to be able, if we decide to go on with the speed that we're going, that by 2014, mid 2014, the vehicles can be in production.” Look around, look up
The vehicle has an all-glass roof and large windows that enable seated passengers to feel as if they are walking in the street, says Nahum.“Once you've put in the people in the vehicle, people that have been left back at home, or an elderly population, you've got to make the journey interesting, more than just starting at point A and ending at point B. So this vehicle is like an aquarium, a glass house. We want people to be in contact with the city, to enjoy the city, enjoy the surroundings
September 2012
around them. Modern cars are claustrophobic, they are low, difficult to enter, and do not have a lot of light. Here you are in the surroundings. So we are taking people and making them access life. So we want people to enjoy mobility.” Social networking
High speed internet connections and mobile devices make staying in touch so much easier than in the pre-internet days; however, it also makes it much easier to remain in contact without being in physical proximity to people. “Today, you access everything via the internet. We want to take people away from their screens,” says Nahum.“We want to take them into the city.The city is a network that they should enjoy, and we want them to access life. We want them to log into a wider space, namely the city.We want to bring life back to the millions of people that do not find a means of mobility that suits them.” London taxi
Following its bid to become the New York Taxi of Tomorrow, Karsan has developed a London taxi version of the V1. First show in the summer of 2012, the vehicle is powered by an electric powertrain, and uses a steerable rear axle to meet the London taxi turning circle requirements.
The business model
As to whether this vehicle will be sold as a Karsan-branded vehicle, or whether it will be licensed to another OEM, Nahum is unable to say.“We are at a crossroad - we have to decide whether to go it alone or in partnership with somebody else.This is also one of the things that we're working on.”
“The main thing is that this vehicle lives.We feel it. Besides all the industrial side, this social connotation is important because more and more we are coming to a world where we need to do things that are right, not only to generate profit, but to do something right.We need to add that to this world, and we feel that this is part of it, and if the road to that is through association, co-branding with one of the big OEMs, we have no objection. No product jealousy.There is a focus on the ultimate goal of it being realised.”
Whatever becomes of the Karsan V1 project, it is clear that there is an urgent requirement and vast potential - for a dedicated vehicle or platform to address the needs of millions of people worldwide with mobility issues. Karsan’s V1 concept is a rare example of altruism in the automotive industry; to turn this altruism into the global success story that it deserves to be will require careful management to ensure that what makes the concept so compelling works its way into the eventual production vehicle.
Automotive Megatrends | www.automotiveworld.com | 51
automotive megatrends
Automotive components sourcing:
where to next? The view of the future market for automotive components is changing daily.With new technologies and growing economies pushing expansion, Jaychandran Pradeep analyses the likeliest outcomes for components sourcing
O
ver the past decade, the nations under the spotlight for manufacturing growth have been the so-called emerging nations: a diverse group geographically spread out across the world, including China, India, Brazil, South Africa, Indonesia,Thailand and Taiwan. Many of these emerging nations managed to achieve spectacular growth, mainly due to export of commodities (China, Indonesia and Brazil) and services like software (e.g. India). Now, these countries are moving up the value chain in a broad range of industries, including automotive. Countries like China have made their intentions known, by restricting export of commodities and encouraging export of finished products produced from said commodities (for example, rare earth).Automotive components are a major market: around 60-70% of an automobile’s cost comes from components like raw materials and sub-assembly parts, with major automotive companies outsourcing production of around 95% of the various components to suitable suppliers.
Given the current state of play, the major question now is: can emerging markets succeed in becoming suppliers of automotive components and successfully challenging the supremacy of technology and innovation in western countries and Japan? The lure of emerging markets
For several years, many global automotive heavy weights have flocked to emerging markets in Asia and South America, attracted by significant factors like the relatively cheap, skilled workforce; the fact that around twothirds of the world’s population resides in emerging markets, making for an attractive consumer base; rising income levels, making for a fresh higher demand for automobiles; demand heading towards saturation in developed economies.
Although global automotive companies such as Toyota, Ford, GM and Honda have established sales operations in the emerging markets, a large number of their supply chains for various automotive parts are still based in developed countries. However, some, like Honda and Toyota, have recently announced that they would be looking into local sourcing for automotive parts for plants in emerging markets as a result of the March 2011 Japan earthquake and the later floods in Thailand, two events which revealed that the major weak node in their supply chain was dependency on single-source suppliers for particular components. The other side of the coin
A key consideration is the high probability that the spectacular growth witnessed in emerging markets over the past decade might not be replicated during this decade. Structural issues within countries like China and India have resulted in high inflation and slower demand growth which is eventually expected to lead to slowing down of GDP growth rates in these economies.
Now, if the growth rate in these markets does suffer a slowdown, it would directly impact the probability of emerging markets becoming favoured procurement destinations for automotive components in the near term, as automotive manufacturers would be hesitant to ramp up production in those countries until demand picks up. The future of automotive components procurement
Automobile manufacturers shifting their production base and component sourcing to emerging markets could be considered a natural reaction from a business perspective, due to high wages and lack of the amount of skilled workforce required.The following factors are a combination of the standout pros and cons for emerging markets in relation to automotive components procurement: -
In recent times, countries like China and India have witnessed a slowdown in their industrial production due to high interest rates and weak demand both domestically and internationally. Brazil, meanwhile, has suffered from high inflation and an expensive currency, while South Africa has been grappling with surging power prices for the past three years.
It would be a stretch to say that the emerging markets would slow down dramatically in the coming years; however, it has to be accepted that the growth rates in emerging markets could be under pressure in the near term, at least until some of the structural issues, such as lack of sufficient infrastructure, are resolved.
52 | Automotive Megatrends | www.automotiveworld.com
-
-
Vast skilled workforce India and China currently produce the highest number of engineering graduates in the world, with developed regions like the US and Europe lagging far behind.This means a vast skilled workforce, ready to work for relatively low wages. However, it is still questionable as to what percentage of the total number of engineers graduating from these emerging countries is really employable.
Unorganised automotive component industry structure The domestic automotive component industry structure in emerging markets is at present relatively unorganised, with few well-established players.This makes it difficult for automotive manufacturers to have complete visibility in their supply chains, should they decide to procure components locally in emerging markets. Rising wages The Chinese government has recently
September 2012
automotive megatrends
-
-
announced that wages are expected to rise by around 13% per year to 2015. Furthermore, wages are also expected to considerably increase in other countries such as India, Brazil and South Africa, thereby challenging emerging markets’ major trump card - low wages.
Global automotive component behemoths shifting operations into emerging markets Many global majors in automotive components, such as Bosch and Delphi, have already begun shifting some of their operations into emerging markets to cater to domestic automobile manufacturers and global players who have operations in emerging markets.
Low innovation and investment in R&D Emerging nations have already begun efforts to alter their image from being factories of the world, to designers and manufacturers of value-added end products, such as automotive components. Investment and research are being steadily stepped up to enable emerging nations to move up the value chain in various industries, and to prevent themselves from continuing as mere raw material exporters.
Considering these factors, the prospect of emerging markets becoming top destinations for automotive component sourcing remains mixed. However, if structural problems such as low levels of innovation despite a huge qualified workforce, insufficient infrastructure, lack of strict government regulation and high inflation are adequately addressed, then emerging markets becoming major suppliers of automotive parts within this decade will become inevitable. Jaychandran Pradeep is a Senior Research Analyst - Industrial Durables at Beroe Consulting in Chennai, India September 2012
Automotive Megatrends | www.automotiveworld.com | 53
Proven Automotive Solutions for India developed by
global leading navigation solutions localized for India with stunning visual experience and intelligent features available for all platforms