megatrends
M A G A Z I N E
Q3 2013
Sheryl Connelly
TED SPEAKER AND FORD FUTURIST TALKS TRENDS
Formula 1
HOME OF THE ULTIMATE CONNECTED CAR
A new DNA for RNA
DATSUN LAUNCH ESTABLISHES NEW HIGH-GROWTH MARKET TARGET
Hot stamping goes mainstream
Barack to the future
ARCELORMITTAL DISCUSSES CLOSING THE GAP WITH THE BEST IN THE INDUSTRY
OBAMA PLANS FOR POST-TERM EMISSIONS With insights from RBS, EOS Intelligence and ebay
WELCOME TO MEGATRENDS Q3 2013
EDITOR'S WELCOME Welcome to the latest issue of Megatrends magazine
Can you survive without your smartphone? The truth, it seems, is that most millennials can’t. On page 72, John Waraniak talks about the aftermarket as a tool to get younger generations more interested in cars, and about the prospects for this booming area of the automotive industry.
But maybe it is time that the way we view connectivity in-car should take a big leap forward. This is just what the Intelligent Car Coalition is setting out to do: lobbying US policymakers to take more consideration of the future connected car when making safety and infrastructure laws. On page 46, Ruth Dawson speaks to Catherine McCullough, Executive Director of the ICC about the need for regulation. This issue also sees Automotive World editor Martin Kahl talk to several heavyweights from the commercial vehicle world. On
page 33, Daimler’s Dr Manfred Schuckert talks alternative powertrain beyond Euro VI, and, on page 11, Eaton’s Artur Koba discusses how to launch a new, competitive AMT technology in Europe.
We also have a number of new writers contributing to this issue - and some old favourites too, such as Global Policy Group’s Ian Graig, who wrote our riveting cover feature on Obama’s plans for climate change legislation and how they will affect the automotive industry.
We hope you enjoy this issue of Megatrends magazine and, as always, we welcome your thoughts and suggestions; email us at megatrends@automotiveworld.com.
Ruth Dawson
Ruth Dawson Publications Editor, Automotive World
Automotive World Megatrends magazine ISSN: 2053 776X
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
Publications Editor: Ruth Dawson
Subscriptions and Advertising: Gavin Dobson gavin.dobson@automotiveworld.com Copyright Automotive World Ltd 2013 www.automotiveworld.com
Megatrends | 3
IN THIS ISSUE
CONTENTS Q3 2013 19
IAA 2013: solid, impressive, cautious
33 Interview: Dr Manfred Schuckert, Head of Global Regulatory Strategy - Commercial Vehicles, Daimler
12
>ON THE COVER
What’s driving the Silicon Wadi? Since Google acquired Waze earlier this year, Israel’s tech hub has become a serious contender in the traffic and navigation app market
24 | Barack to the future Obama plans for post-term emissions 54 | Sheryl Connelly TED speaker and Ford futurist talks trends and tsunamis 50 | F1: home of the ultimate connected car A look at the motorsport innovations driving OEM creativity
34 Brazil’s safety agenda
72 Aftermarket: no longer
an afterthought
16 | A new DNA for RNA Datsun launch establishes new high-growth market target 59 | Hot stamping goes mainstream ArcelorMittal discusses closing the gap with the best in the industry 4 | Megatrends
29
Cars in 3D Ruth Dawson analyses the prospects for 3D printing in the auto industry www.automotiveworld.com
IN THIS ISSUE
Fifteen minutes with Artur Koba, Eaton
11
42
Get Smart The connected car is a reality: now begins the era of the intelligent car
15 Hybrid potential
56
Supply to demand EOS Intelligence’s Manmeet Malhi explores the prospects for India’s CV market
39
Paving the smart way Artist and innovator Daan Roosegaarde outlines his vision for the highways of the future
22 Myanmar: the next
building BRICk
>ALSO IN THIS ISSUE
20 | eCall 2015: an ambitious deadline?
27 | Opening the online engagement window How can OEMs use online presence to influence purchasing?
49 | Repairability starts at home Who should bear the responsibility for the repairability of EVs?
63 Screens lose their touch
69 | Fifteen minutes with... Alessandro Bernardini, Iveco 71 | Emerging connectivity
75 | Upgrade to innovation Warren Smith argues the case for moving to a more collaborative, organised supply chain management system 78 | Smarter cars make for smarter cities www.automotiveworld.com
66 Europe: the storm
before the calm
Megatrends | 5
CONTRIBUTORS
CONTRIBUTORS
Warren Smith Global Industry Director, Automotive, Infor
Warren is responsible for establishing the direction and strategy behind Infor’s solutions for the automotive market. He first joined the company as a senior business architect under the acquisition of SSA Global in 2006.
Prior to his current position, he was the senior industry consulting and business strategy architect for Infor’s automotive business unit, where he worked to align customer initiatives and solutions within the Infor suite. Warren previously held senior positions at the Affinia Group and Dana Corporation.
Manmeet Malhi Senior Project Manager, EOS Intelligence
EOS Intelligence is a professional services firm that delivers business research and analysis solutions targeted at corporate, consulting and investment organisations. Manmeet follows the emerging markets automotive sector closely, and works with established companies in the USA and Europe to support their emerging market-focused growth and optimisation strategies.
A regular Megatrends contributor, for Q3, Manmeet has written on the opportunities and challenges of the developing commercial vehicle market in India.
6 | Megatrends
Michael Ward Head of Diversified Industrials & TMT, Corporate Advisory, International Banking, RBS
Ian Graig Chief Executive and Founding Partner, Global Policy Group
Prior to this, Michael worked at Nomura, where he was head of the automotive team and a senior member of the European Emerging Markets team (IFR and Euromoney Emerging Markets House of the year three times), and a board member of a number of private and listed companies in the region, including in the automotive industry.
He previously worked with SRI International and with Tanaka Ritger & Middleton, an international trade law firm. Earlier in his career, Ian worked as a NGO representative at the UN and in the national press office of the Carter-Mondale presidential campaign.
Michael joined RBS in February 2011 to head the automotive team and now leads the Diversified Industrials and TMT teams in Corporate Advisory.
Based in Washington DC, Ian works with corporate clients on such issues as: US energy and environmental policy; automotive market and regulatory trends; international trade and financial policy; and federal budget and tax issues.
Rachel Boagey Staff Writer, Automotive World
Phuong Nguyen UK Head of eBay Advertising
This issue sees Rachel writing about the challenges of the 2015 eCall deadline and the connected car in India.
On page 29, Phuong looks at the opportunities for OEMs to influence sales using online channels. Simply having a shop window is no longer enough, writes Phuong, OEMS and dealers need to create engaging and inspiring online experiences and campaigns.
Having recently joined the Automotive World news desk, Rachel brings several years of journalism experience to the team. Rachel is interested in electronics and safety, and enjoys writing about the latest in-vehicle infotainment developments. She is originally from Penarth, South Wales and has recently completed an MA in Magazine Journalism at the Cardiff School of Journalism.
As head of eBay Advertising in the UK, Phuong helps brands and retailers take advantage of the wide range of online advertising opportunities across eBay’s platform. Phuong has been part of the eBay family since 2003.
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3 Streams / 48 Expert Speakers / 350+ Delegates
March 18th 2013,
The Henry, Dearborn, Detroit, Michigan
Tickets from $Free!* The third annual Automotive World Megatrends USA summit will feature three separate streams focusing on today's hottest automotive topics: Fuel Economy & Emissions Reduction, eMobility and Connected Vehicles. Cutting-edge topics, expert speakers and fantastic networking opportunities will once again make this a must-attend event. Speakers confirmed so far include:
Jim Nardulli, NNG
John Traynor, BSquare
Mike Tinskey, Ford
Mike Bauer, The Carpage
Bruce Belzowski, University of Michigan
Richard Wallace, CAR
Lisa Whalen, Frost & Sullivan
Dave Hurst, Navigant
Andy Gryc, QNX
John Waraniak, SEMA
Joel Hoffmann, Intel
John German, ICCT
Matt Jones, Jaguar LandRover
Kyle Walworth, Teleca
Dr Ann Marie Sastry, Sakti3
Click here for more details or call +44 (0) 2920 709 302
*Automotive World Single-User (max 1 ticket) and Company-Wide (max 3 tickets) Site License customers are eligible for free passes to this event. Employees of vehicle manufacturers are eligible for free passes to this event (max 5 per company).Full ticket prices can be found at http://megatrendsusa.automotiveworld.com/register Terms & conditions apply.
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THE BIG PICTURE
No stars for reasonably priced cars W
hen the chairman of Global NCAP personally writes to you, you know something may be amiss. After the latest round of Latin NCAP testing showed that several major automotive OEMs are still failing basic safety standards on cars in the region, Max Mosley contacted the chief executives of the manufacturers in question, outlining concerns with the production of so-called killer cars. Amongst those singled out were Renault (for the zero star-rated Clio Mio), Nissan (Tsuru), Suzuki (Alto K10) and Chevrolet (Agile). Urging
8 | Megatrends
the OEMs to at least achieve the UN’s minimum crash test safety standards for these models, Mosley warned,“Unregulated emerging markets make it too easy for car companies to produce products that shortchange customers on safety...The lives of customers in Latin America are no less valuable than those in Europe, Japan and North America.” Global NCAP has estimated that as many as 20 million vehicles a year fail to meet UN standards. Popular cars such as the aforementioned Renault, Nissan and Suzuki models are sold with no airbags
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THE BIG PICTURE
as standard, and body structures which collapse on the driver and passengers - making for rather disturbing viewing when it comes to Latin NCAP test videos.
Nissan maintains that its Tsuru model is acceptable, emphasising that it meets the safety regulations in the markets where it is sold. And the low safety standards have obviously made no impact on sales to date: the car has been one of Mexico’s best selling cars for well over a decade due to its “proven affordability, durability and reliability”.
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Defending its strategic partner Renault’s test results, a spokesperson for Nissan said, “The more stringent test process adopted for Latin NCAP tests explains why Clio Mio/Novo, tested in 2013, received no stars...From 1 August 2013, Clio Mio will be available in Argentina with an optional driver’s airbag.”
According to Nissan, based on the Latin NCAP protocol applicable in 2012, the Clio Mio/Novo would have scored one star.
Megatrends | 9
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INTERVIEW
Fifteen minutes with...
Artur Koba, Eaton Fitment rates of automated manual transmissions (AMTs) in Europe are well ahead of the industry in North America. With penetration already high in Europe, bringing new and unique technologies to market is the best way to gain a competitive advantage. Here, Artur Koba, Regional Product Strategy Manager EMEA Truck, explains to Martin Kahl how Eaton plans to enter the medium-duty segment in Europe with an all-new AMT What are the prospects for Eaton’s AMTs in Europe over the next ten years?
Eaton will be bringing AMTs to Europe in the near term. We are working on a number of projects that will significantly impact fuel efficiency through engine downsizing and downspeeding. We will be starting with the medium-duty market but are looking at products for heavy vehicle applications. We are working with major global OEMs, and this will be launched in the relatively near term.
Will this new AMT be available alongside your current offering? We will keep both technologies in the market for a transitional period defined by the market and OEM needs.
Right now, in Europe, penetration of AMTs in the medium duty segment below 16t stands at around 20%. It will grow to 40-50% in the next few years. That is why we are targeting that segment. In terms of manual technology, we are strong in this area and our technology is proven but we will have a different proposition for AMT in the future. In the heavy-duty segment, the situation is completely different: there is almost 90% AMT penetration in Western Europe, and the technology is very well developed. If we were coming to market, it would be with something different from what is already out there.
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How confident are you that hybrid technology can help OEMs to reduce emissions and improve efficiency? Our hybrid solution for mediumduty trucks can significantly improve fuel efficiency, and reduce CO2 and NOx emissions, because it can reduce fuel consumption by 1540% compared to a non-hybrid equivalent. That has a significant impact.
Right now, the issue is how much each OEM needs to reduce emissions, and it’s a challenge. Every medium-duty truck manufacturer in Europe has tried our technology, but where we are strongest is in 12 metre hybrid city buses, which provide a great payback. Can your hybrid technology be added to an existing product or does it need to be designed into an all-new product?
It depends on the engine. We have done this in the factory, but it is not something that can be done in a garage.
What are the prospects for alternative powertrain technology in European medium and heavy-duty trucks?
There have been several positive tests for buses with CNG and electric technology, but I just cannot see an electric powertrain in a medium or heavy-duty truck. It would be so heavy that the payload would be totally inefficient. The future lies in making diesel engines more efficient. There have been several tests with hybrid technology on heavy-duty trucks, but heavy-duty hybrid line-haul trucks will probably never be able to deliver the payback. Such a truck would require large batteries and motors, and the battery will not be able to regenerate in linehaul applications. However, I see hybrid coming back with Euro VII, where I understand the legislation is likely to focus on CO2 reduction.
Megatrends | 11
What’s driving the Silicon Wadi? ISRAEL
Ruth Dawson
S
ince Google acquired Israeli crowdsourcing traffic app Waze earlier this year, the automotive industry has begun to recognise the country as a growing power in the apps world. Dubbed the Silicon Wadi, Israel’s answer to Silicon Valley is taking inspiration from congested inner-city traffic to develop new mobile solutions for driving problems. At the end of 2012,The Israel Export and International Cooperation Institute (IEICI) gave
Waze
By the end of 2012, crowd-sourcing traffic app Waze had around 28 million registered users worldwide, with average use of the app estimated at 440 minutes a month per person. With a further 2.5 million people now signing up every month, it comes as no surprise that the app sparked a bidding war between Apple and Google earlier this year.
The app tracks traffic problems through its network of users, relying on them to report road closures, accidents and speed cameras - all features that Google’s popu-
12 | Megatrends
domestic developers a huge boost, announcing that global apps would be a new area for Israeli companies. A specialist unit was subsequently set up to develop an infrastructure that would help local companies enter this lucrative market. “There is no reason why Israel should not become a power in this field in the next few years,” said Ofer Sachs, Chief Executive of the IEICI told Globes at the time. But why have Israel’s innovations become so important? Evidently they are meeting spe-
cific problems felt by drivers worldwide, but really it comes down to attention to new tech trends: crowd sourcing is the new black, so to speak, and augmented reality is certainly a creative way of keeping a driver’s (or passenger’s) eyes on the road. The following apps are changing the way consumers approach driving, and OEMs and suppliers alike would be wise to take note now of what will be the future of navigation and in-car infotainment.
lar map app did not have before Waze code was incorporated into it. As it relies on crowd-sourced information, Waze will only ever truly succeed through market penetration. Outside traffic information, one clever innovation really puts this software above the rest: Waze uses the GPS signals which track app users to develop its maps. As each Waze enabled smartphone is driven around, it plots the car’s route, adding private roads and tracks to the system which may be missed by other maps.
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ISRAEL
Parko
Spurred on by a daily search for parking spots in Tel Aviv, Tomer Neuner developed Parko, an app which connects drivers looking for parking spaces with those leaving them. This free app has already built a following of over 65,000 users since its pilot scheme began in early 2013.
Like Waze, all information is crowdsourced: location sensors automatically find vacated spots reported by other users, who are then rewarded with money, prizes or coupons for sharing.
iOnroad
Another recently acquired app is iOnRoad. Bought out by Harman, the safety app’s advanced driver assistance systems (ADAS) will be incorporated into the connectivity leader’s scalable and premium head-up displays (HUD).
“In the future, infotainment systems will have to focus far more on safety,” Michael Mauser, Executive Vice President and Co-President of the group’s Infotainment and Lifestyle Division, commented. “Our target is to make it affordable, bringing safety into all car plat-
Parko was named as one of Fast Company’s six Israeli start-ups to watch after the Waze acquisition earlier this year. Again like Waze before it, Parko has a rival in the form of Google, whose OpenSpot app for Android offers the same service - although users must report the free space, rather than it automatically updating. With OEMs including Volvo now looking at autonomous parking systems, the potential for Parko is huge.
forms, not just the high-end.We owe it to consumers to do this.”
The software uses a smartphone camera and augmented reality to display alerts to drivers when they start to speed, drift out of lane, or get too close to the vehicle in front. The software runs off the phone’s GPS, accelerometer and gyroscope to relay the information. When using the iOnRoad app-, the smartphone must be mounted below the wind-
screen’s rear-view mirror. Despite the Harman purchase, the app will continue to be sold via Google Play and Apple iTunes making this a cheap, easily accessible alternative to built-in HUD systems.
Windows of Opportunity Distraction is not something you would necessarily want in a car, but when it comes to back-seat drivers, keeping them entertained is becoming almost imperative for new connected car models.
When General Motors charged the Bezalel Academy of Arts and Design with the task of creating new ways to give passengers a richer travelling experience, students at the Academy’s Future Lab came up with the Windows of Opportunity project. Rear windows were turned into
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interactive screens using technology similar to that seen in today’s HUDs, combined with sensors and apps.
“The use of interactive displays has been limited to the driver and front passenger, but we see an opportunity to provide an interface designed specifically for rear seat passengers,” said Tom Seder, GM R&D lab Group Manager for Human-Machine Interface. “Windows capable of responding to vehicle speed and location could augment real world views with in-
teractive enhancements to provide entertainment and educational value.” Apps allow passengers to use the window as a screen, offering games, music sharing, and the ability to look through other users’ windows in real time.
Although GM has no immediate plans to produce the windows, the potential for this innovation is high. Megatrends | 13
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HYBRID POWERTRAIN
Hybrid potential PSA’s battery free gasoline hybrid brings a breath of fresh air to alternative powertrain development
W
hen it was launched in January 2013, Hybrid Air was instantly hailed as one of the most promising automotive powertrain innovations of recent times. PSA’s Hybrid Air technology, developed in partnership with Bosch, will enable the OEM to launch a battery-free gasoline hybrid car, thanks to its innovative use of compressed air to store energy, instead of a battery. It will first appear in a sub-€20,000 B-segment car to be launched in 2016, which, according to PSA data, will emit just 69g CO2/km - 45% less than a three-cylinder gasoline engine. The technology is so affordable, says PSA Peugeot Citroën’s Director of Research, Innovation and Advanced Technologies, Jean-Marc Finot, that in terms of cost of ownership, it will be competitive with a diesel offering over a ten year period. “The advantage of this system is the fuel economy in the town cycle,” explains Finot, “because you save energy in a shorter time than with pure electric hybrid technology.”
From a technical point of view, the project is validated, says Finot. “We are now seeking an OEM partner to launch it with and to share investment costs.” PSA already has a partner, General Motors, with which it signed a strategic alliance in 2012. However, Hybrid Air will not be launched in partnership with GM, says Finot. “Currently, GM has its own hybrid strategy. It is not in the scope of the current projects, but it could be a study afterwards.” At its Innovation Day launch in January 2013, PSA said Hybrid Air would initially be targeted at B- and C-segment cars, as well as light commercial vehicles. “That is our first target,” says Finot, “because this technology
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Martin Kahl
is efficient and we think that it could be fitted on this kind of car affordably and sold in high volumes.”
In terms of where PSA thinks Hybrid Air will be most successful, Finot sees it as a solution to emissions problems in markets where other more expensive alternatives are not economically viable: “The advantage of Hybrid Air is that it is a simpler technology than electric hybrid, and it can be easily industrialised all over the world. It's also easier to maintain in the dealer network. Of course, our target will be to sell it in Europe, but it could be more easily spread all over the world than pure electric hybrid vehicles.”
Another advantage of Hybrid Air is that it can be built into an existing platform, it does not need to be developed into an all-new vehicle: “This technology is suitable for our current EMP1 and EMP2 platforms,” says Finot. “It's not exactly a plug-and-play technology, we have a little work to do, but we don't have to design a new platform.” Hybrid innovation
Whilst Hybrid Air is yet to come to market, PSA’s HYbrid4 technology has been commercially available since 2011, when it launched in the Peugeot 3008 HYbrid4. Coupling a diesel powertrain with an electric motor on the rear axle, HYbrid4 turns front wheel drive cars into 4WD. The OEM now offers HYbrid4 versions of the 508 sedan and RXH, and the Citroën DS5 too. “HYbrid4 is for our high-end cars, and Hybrid Air is for B and C-segment cars,” says Finot, adding that the scope for Hybrid Air could be broadened beyond B- and C- segments.
PSA is cautiously preparing itself for the post2020 era, when legislation on emissions and fuel consumption is widely expected to become increasingly challenging for OEMs.“Like all other OEMs, we don't know what the best technology will be after 2020. Many of us have therefore already launched stop/start technology, for example, and in our case also HYbrid4. We have many technologies in the portfolio: some are validated and ready to be launched. For example, we also have plug-in vehicle technology that has been validated, and at our Innovation Day in January, we presented the ELV, an urban electric vehicle. We have these technologies on the shelf and we are ready to develop and launch them when we find a business case and a market.” In July, Bosch and PSA unveiled Optimal Energy Consumption and Recovery solution (OpEneR), their latest collaborative development. As its name suggests, OpEneR is designed to reduce fuel consumption by enabling freewheeling or regenerative braking for hybrids and electric vehicles.
PSA was very quick to market with the Peugeot iOn and the Citroen C-Zero - the two Mitsubishi i-MiEV-based EVs that it launched in 2010. It also has a light commercial vehicle programme with an electrified powertrain. With Hybrid Air under way, and HYbrid4 proving more successful than the iOn and CZero, the emphasis at PSA looks to be on hybrid technology rather than pure battery EVs. “In our strategy, we think that hybrid technology has greater potential,” says Finot. “But the electric vehicle is a good technology for town usage, so we have to be ready to launch this technology when the rules and the consumers demand it.”
Megatrends | 15
RNA presents a new DNA for
DATSUN
high-growth emerging markets David Isaiah
T
he Renault-Nissan Alliance's strategy to accelerate growth in emerging markets, especially BRIC countries, was the focus of Chief Executive Carlos Ghosn's visit to India in July. The Alliance has recently resurrected Nissan's Datsun as a low-cost brand aimed at emerging/high-growth markets, and has announced the development of all-new lowcost vehicles under the Common Module Family (CMF) programme for emerging markets, with the first cars under the CMF-A platform expected in 2015. The Alliance's attention on emerging markets is understandable, as three of the BRIC countries - China, Russia and Brazil - feature among the top-ten Renault-Nissan countries. In fact, China leads the way by volume of cars sold, while the Alliance holds a significant share of the market in Russia thanks to AvtoVAZ. Ghosn holds India in high regard when it comes to the low-cost, small car segment hence the awarding of the CMF-A platform to the Indian market first.The Alliance's rationale in focussing the CMF-A platform in the country is that if it can get it right there, and if the consumer likes the product, then that product is ready for numerous high-growth markets.
"Indian customers demand a lot of value.That is why we are testing a lot of products in India, “said Ghosn. “We know that if a product is successful in India, it is going to be successful in many other high-growth markets." The Alliance expects its investment in India, which currently stands at approximately US$2.5bn, to double in the next five years. Costs and competition
The CMF strategy is part of Nissan's efforts to cut costs and improve its competitiveness. The system combines modular engineering with Nissan's own technologies in areas such as simulation and variation engineering (a way to enhance commonisation). Specifically, cars under the CMF-A programme will cover the most affordable category of cars in this platform: the CMF concept puts vehicles into five essential modules: the engine bay, cockpit, front underbody, rear underbody and electrical/electronic architecture. Compatible parts under this platform can then be assembled into hundreds of possible configurations. While the CMF-A platform is a global one, it has been developed and engineered in India. One must keep in mind, however, that while the CMF-A is a low-cost platform, it does not
translate into Datsun. Although Datsun will have its share of CMF-A cars, the brand will also field cars that are not CMF-A. The newly-launched Datsun Go, for instance, is based on an existing Lada platform. Some of the cars developed in the CMF-A platform will be sold under the Renault brand, while others will be badged as Nissans.
"For Nissan to properly address the evolving car demands of the world, from the hedonistic luxury market to the global aspiration, the affluent global product aspiration, to the emerging middle class with very local demands, the best organisation for Nissan Motors was to have three brands. So, Infinity as a luxury; Nissan as the global brand with global product; and Datsun as the global brand with local products," Vincent Cobee, Global Head of Datsun and Corporate Vice President, Nissan, said in an interview with Automotive World. As this platform is meant for use across many high-growth markets, there could be crossbadging. Dacia is a regional brand, focussed around Europe and North Africa, hence, there will be no crossbadging between these two brands. However, should CMF-A cars go to Europe or North Africa, crossbadging may be possible.
"I'm very optimistic about the high growth markets” Ghosn commented. “Even though from time to time we have to adapt and slow down, this doesn't challenge our strategy, which means it doesn't change our investments. However, it may mean that from time to time, we just need to adapt to situations and correct our actions, without a change in the strategy...We are very bullish on Russia, even though there is a correction. Even though in Brazil, at the moment, the numbers are a little disappointing, for the long term, we are very bullish. China continues to go up. You cannot look at the market based on three months', or six months' results.” Market transition
Although at present much of global automotive sales come from mature markets in the west the industry is in a period of significant transition. High-growth markets, such as the BRIC countries and Indonesia, account for 40% of global vehicle sales, but this is slowly 16 | Megatrends
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DATSUN
changing.The Renault-Nissan Alliance expects 60% of global vehicle sales to come from highgrowth markets by 2016, hence the Alliance’s new direction.
India, meanwhile, will serve as a proving ground for the Alliance products that are bound for Indonesia, South and Central America, and some Asian and African countries. Following the launch of the Datsun Go in India, and Go+ in Indonesia, other models will be unveiled in Russia, followed by South Africa in 2014. Russia, in particular will bring an interesting scenario into play, with regard to the Datsun Go model.The car is based on the Lada Kalina, meaning that when the Go is launched in Russia, it will be in direct competition with the Lada Kalina. Such a strategy is not new to the Renault-Nissan Alliance, which has in the past launched sets of rebadged models, such as the Nissan Micra/Renault Pulse in India, and the Renault Duster/Nissan Terrano. "We are targeting an increase in our market share from current levels of little more than 1.2%, up to 10%.We expect the Datsun brand to contribute significantly to this growth," Ghosn said.
Like the CMF-A platform, the Datsun Go has been fully engineered in India, with input from Japan and France. As the Alliance puts it, "Indian product, Indian engineering and Indian product planning, supported by Renault and Nissan." However, the various models going to markets like Indonesia, Russia and South Africa, will be individually developed for different markets. As a brand, Datsun is expected to play an important role in the Nissan Power 88 mid-term business plan, under which Nissan and Datsun will launch ten new models in India by 2016. "Many global car makers look at India as an active part, take a product which has been developed somewhere, and strip down the product and put it in India at the right level
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of price.When you do this, you frustrate your customers very often because you remove what your customer wanted...We start with the Indian customer," Cobee said. Engine localisation
The Alliance's emerging markets strategy also involves increased localisation in India of its popular K9K engine, the 1.5-litre dCi diesel unit. This is one of the most used powerplants in the Renault range of vehicles, and in India it features in seven Renault and Nissan vehicles. The Renault-Nissan Technology Business Centre, India (RNTBCI) near Chennai in Tamil Nadu, is currently working to increase localisation of this engine.This centre is an engineering hub and an innovation incubator serving Renault-Nissan Alliance partners. The Renault-Nissan Alliance produces this engine in India at the powertrain manufacturing plant at Renault Nissan Automotive India (RNAIPL) in Oragadam in southern India.The plant currently produces five variants of the K9K engine, with target output of just over 152,000 units planned for this year. The centre's main goal for localisation, is to work towards meeting the local needs of the customer, while taking advantage of local mindsets for frugal engineering to keep costs down. According to Debashis Neogi, Deputy Vice President at RNTBCI, a good portion of the K9K engine's parts have already been localised, or are in the process of being localised.
" We tend to go to launch and ramp up very quickly as a Japanese car maker, and this was a bit of a hard lesson for the Indian supplier body, so we've had some difficulties there. But, when you ramp up manufacturing, it's okay.There is no problem with quality in this country; if you manage to exchange, to communicate, to follow up, then there is no problem," Cobee said.
There are, according to Neogi, two kinds of suppliers. The first is the segment of global suppliers, which have subsidiaries in India, or who have tied up with local partners. These suppliers bring with them the latest technologies; the tech centre works with such suppliers for high-technology items like fuel injection systems or EGR controllers, taking advantage of the suppliers' systems.The centre's focus when working with suppliers is to adapt local materials and local processes in order to meet cost competitiveness in India. The other set of suppliers are 'frugal engineering' suppliers, for products like casting, forging, etc. Neogi believes there is very good scope for managing costs, given the frugal mindset of the engineers at the suppliers' end.
"We selected a supplier in Delhi, Ahresty India; we worked closely with the supplier's engineering department, both on the design side and the process side. The primary factor was to use a local grade of raw material. We analysed the part in detail to study the areas where we could save weight. We then took the opportunity of localisation to reduce mass in non-critical areas, or non-functional areas. With this collaborative effort, we were able to reduce the product’s mass by around 6%." For the Renault-Nissan Alliance, developing products in India yields significant cost savings. In the case of the Go, there were savings, of at least 10%.In some cases, RNTBCI has also delivered a reduction in development lead times, said the centre's Managing Director, Karim Mikkiche. For Nissan, the main thing now, is to get its dealer and service networks right for Datsun in India. With the product in place, and in an acceptable price range (sub-Rs400,000), the Go will compete with well established small car brands like Maruti Suzuki and Hyundai, both of which have strong dealer networks in place already.
Megatrends | 17
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Š2013 Garmin Ltd. or its subsidiaries
IAA 2013
IAA 2013: solid, impressive, cautious Martin Kahl
F
or the world’s biggest motor show to deliver no alarms and no surprises during a year widely accepted as the European automotive industry’s worst ever, echoes the sector’s overriding cautious mood. It’s time to adapt, and become profitable at lower volumes, but it’s also more important than ever to develop great products that can be successful the world over.
Almost everything launched at Frankfurt this year has been heavily trailed or seen before, either at smaller, niche events (Porsche’s 918 Spyder at Pebble Beach; BMW’s recent threecity i3 launch), or in close-to-production concept form (BMW i8). Almost everything that was said followed the script; and almost everyone who was supposed to be there, was there. Indeed, perhaps the biggest surprise at Frankfurt this year was Sergio Marchionne’s decision to not attend. BMW’s Norbert Reithofer said the IAA is the world's most important car show, so it’s no coincidence that it takes place in Germany. In no other country, he said, does the automotive industry play such an important role in economic growth, employment and society. With a general election later this month, Reithofer’s comments were clearly intended to remind politicians of the need to support their national industry.
truly begun. Interestingly, the e-Golf is expected to have a sticker price of €35,000. That’s the same as BMW’s all-new i3, and €4,500 cheaper than the electric Focus, presenting potential buyers with an interesting, if not simple, buying decision. It wasn’t only about mainstream EVs: a significant role was played by luxury performance hybrids, including the aforementioned i8 and 918 Spyder;Audi (Sport Quattro gasoline-electric plug-in hybrid concept) and Honda (NSX concept) clearly want in on this game too.
OEMs also used the IAA to show that they haven’t ignored certain burgeoning segments. Jaguar (C-X17), Infiniti (Q30) and Lexus (LF-NX) would resolutely deny that their compact SUV concepts were in any way me-too products, but none currently has an offering in this growth segment - and it’ll be a couple of years before any of them comes to market.
Still, there was nothing genuinely unexpected, and the lack of real excitement from the car companies gave suppliers the opportunity to capture more of the limelight than usual. This was best exemplified by Valeo’s live demonstration in a specially-
made car park of its Park4U self-parking car technology.
Behind the scenes, executives fielded endless media questions about the current state of the European automotive industry. Rather than bullish statements, we heard carefully delivered words like stability, and slow, longterm growth.
There may not be much growth, but there’s plenty of optimism. The problem child is Europe, said Reithofer. There may be troubles ahead, he said, but it’s time to decide whether these are seen as problems or as opportunities. We should focus on our strengths, he said, and use the IAA to send to the world a positive message on behalf of the automotive industry. This article first appeared in the Comment section of AutomotiveWorld.com. For more expert insights and analyses of the global automotive and commercial vehicle industries, visit automotiveworld.com/comment. The Comment column is open to all industry decision makes and influencers. If you would like to contribute an article, please contact editorial@automotiveworld.com.
On the morning of the first public day, Germany’s Chancellor, Angela Merkel, passed the countless election billboards outside the show ground bearing her photo - and those of her political opponents - on her way in to officially open the show. Volkswagen’s media machine took advantage of her presence on its stand to invite her to sit alongside Martin Winterkorn inside a Volkswagen e-Golf. The 2013 IAA also saw the rollout of ‘EV 2.0’ finally get under way. Sure, Renault’s Zoe joined the Nissan Leaf earlier this year as a mainstream pure EV product, but only when Volkswagen makes a pure battery EV version of the Golf can it be said that the EV race has
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Megatrends | 19
eCALL
eCall 2015: an ambitious deadline? J
Rachel Boagey
une 2013 saw the European Commission adopt the latest proposals to ensure that eCall will be present in all cars by October 2015. The system, which is estimated to be able to save up to 2,500 lives a year, automatically contacts the emergency services in the event of a serious crash, communicating the vehicle’s location, even if the driver is unconscious or unable to make a call.
“Last year, 28,000 people were killed and 1.5 million were injured on EU roads,” said Siim Kallas, European Commission Vice President and Commissioner responsible for Transport. “When an accident happens, every minute counts to rescue injured victims. The eCall technology has great potential to save lives by dramatically shortening the time of intervention of emergency services across the EU.”
Despite arguably being the most obvious next step in automotive safety, eCall was supposed to be rolled out voluntarily across Europe by 2009 - eight years after the idea was first suggested. However, as there was no legal requirement that the safety system be incorporated into cars, OEM adoption of eCall was particularly slow.
This new mandatory requirement will ensure that, from late 2015, all new models of passenger cars and light duty vehicles will be fitted with the system. The legislation also requires EU member states to build and maintain the necessary infrastructure for the proper handling of eCalls in emergency call response centres. Positive supply
But it is not going to be an easy ride for OEMs and suppliers, with many saying that the two year deadline is still too short for compulsory fitment. 20 | Megatrends
“There was no way to introduce eCall in 2009/2010. The technology was just not ready,” says Andreas Kohn, Director of Marketing, Transportation and Automotive at Sierra Wireless. “Then politics came in and put more pressure on manufacturers to adopt it and things started to move.
“If you ask car manufacturers they will tell you the timeframe is too short. They will say we need at least three years after the law is assigned, but in reality that is irrelevant, the technology needs to be introduced by 2015.”
Although expected, the mandatory announcement is a call for OEMs to quickly fit cars with the necessary equipment - but is the deadline pushing the boundaries of possibility for some OEMs, who may struggle to deploy eCall on a pan-European scale? Network availability, over-the-air upgrading capabilities and device maintenance are just some of the obstacles facing OEMs and operators. According to the European Automobile Manufacturers’ Association (ACEA) the 2015 deadline certainly is an ambitious one - especially for those OEMs which will only now be starting the eCall incorporation process.
“Any public eCall service must be pan-European and available to all customers before the system becomes obligatory,” an ACEA spokesperson commented. “To work properly therefore, EU infrastructure must be ready and able to receive eCalls. The industry believes that it would be difficult to meet the 2015 deadline due to the pace of legislative procedures.
“With regard to the industry's needs, 36 months of lead time would be required, starting from when the technical requirements and the test procedure are published in the Official Journal [expected to happen
at the earliest in the first quarter of 2014]. It would be nearly impossible to implement the system within the time available if the technical requirements are only released in 2014, as anticipated.” Other challenges for OEMs include which network technology to use for eCall, how to maintain the devices, and the overall price of adoption. Oliver Beaujard, Vice President of Market Development at Sierra Wireless explained, “2G offers sufficient bandwidth for handling the size of the SMS alert sent to the emergency services and is the most cost effective option. However, it is undecided whether 2G will be around for much longer.”
Despite this, suppliers like Sierra Wireless remain largely optimistic. “Like many others, [we are] already selling millions of wireless modules at the moment, and there are a lot of telematics units available. From the supply side, I don’t see any technical or schedule issue,” said Kohn. Safety advantages
The safety benefits of this European safety system are certainly set to outweigh the teething troubles, and hopes are high that eCall will continue to grow and adapt - pushing the development of other M2M safety systems too.
“If you look beyond eCall, a lot of car manufacturers are starting deployment of telematics solutions where eCall is just one of the functionalities,” Kohn commented. “Therefore, maybe eCall will not only be advantageous in emergencies, but will act as a driver for OEMs in the future to use the technology for other services as well.”
Richard Cornish, Vodafone’s M2M Business Development Manager for Automotive, said, www.automotiveworld.com
eCALL “M2M adoption will certainly continue to experience significant growth over the next few years, largely because the benefits are universal for OEMs, car dealerships, service providers and of course, drivers and passengers. In particular, M2M is addressing a number of priority issues for car owners. Through services such as eCall, M2M is delivering improved safety and security services.”
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Speaking in a recent webinar, Covisint’s Chief Executive David Miller explained that while the accident focused nature of eCall as it is now works well, drivers will expect the system to be more person-focused in the future. “Connected vehicles have the ability to call the services and, if you look at it today, the call is very vehicle centric,” Miller said.“If you have a connected vehicle, they can send medical per-
sonnel to that location. When it becomes owner centric, there will be medical records of the owner or driver of the vehicle so that when the ambulance comes they know what your blood type is, what you’re allergic to, and your medical conditions. It’s not a car thing, it’s a driver thing that is going to change things in the end and that’s going to be of huge value because it gives people a notion of safety knowing they’re going to be looked after.”
Megatrends | 21
MYANMAR
MYANMAR: the next building BRICk
May 2012
The US begins to lift trade sanctions with Myanmar; Hyundai and other OEMs begin eyeing truck assembly opportunities. By September, Hyundai is poised to set up manufacturing in the country.
Ruth Dawson
S
ince political reforms were initiated in 2011, international interest has grown significantly in Myanmar. The US, Japan and the EU are all now reducing or eliminating economic sanctions to allow for foreign investment, and the country’s ASEAN membership means that Myanmar is well on its way to becoming the next emerging automotive market. At present, the majority of vehicles on Myanmar’s roads are used imports, mostly Japanese. Although the government intends to double car ownership levels, no timeframe has been set to achieve this - however, measures to boost vehicle sales have been introduced in recent years: September 2011 saw the introduction of a scheme whereby owners of vehicles that were 20 to 40 years old could trade them in for newer models without an import licence.
Despite being one of the four poorest ASEAN countries - alongside Vietnam, Cambodia and Laos - predictions are positive for Myanmar. Its newly enacted foreign investment law allows overseas companies to fully own ventures, providing tax breaks and long leases, making this a prime time for investment. Having joined ASEAN in 1997, the country now benefits from free trade agreements with Australia, New Zealand, China, India, Japan and South Korea. Myanmar will take on the yearly ASEAN chairmanship rotation for 2014, with a view to the establishment of the AEC in 2015. But what opportunities lie in the country for OEMs? Ruth Dawson explores key developments in the Myanmar vehicle market to date, and looks at future possibilities for the automotive industry.
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February 2013
Nissan starts its ASEAN push, showing some interest in setting up a manufacturing base in Myanmar although there is said to be “no concrete plans”. General Motors pays another visit to the country, saying it is a region it cannot ignore. Martin Apfel, President of General Motors Thailand/South East Asia and Chevrolet Sales (Thailand) Limited, suggests the OEM could start with corporate social responsibility projects, introducing the GM brand to the market and helping the OEM to gain vital knowledge about the market. Another option, according to Apfel, would be to source components from the country. Suzuki Motors announces plans to resume vehicle production in the country in May 2013. The company intends to invest US$7m to refurbish its facilities in Yangon. First operated as a joint venture with the Myanmar government from 1998 to 2010, the plant closed after the partners failed to extend their contract.
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MYANMAR
April 2013
Mitsubishi Fuso Truck and Bus Corporation expresses an interest in the market.While used vehicles from the brand have enjoyed a strong local reception, there have been no direct new dealerships to date. According to Kai-Uwe Seidenfuss, MFTBC Senior Vice President of Sales and Aftersales, the Fuso brand is already well known to Myanmar customers, with a large number of used models on the roads. Ford becomes the first global OEM to offer complete automotive solutions in the country, and plans to represent all vehicle segments by the end of the year.
August 2013
GM says that it will open its first Chevrolet showroom in the country in Q4, and Nissan begin sales of new vehicles. The Japanese OEM will begin with commercial vehicles but is said to be keeping a close watch on local trends with a view to selling passenger cars if market conditions are right.
The future
Frost and Sullivan predicts a compound annual growth rate of 7.8% (20132019) to reach 95,300 units in 2019, as ASEAN integration furthers.
However, “factors such as unpredictable regulatory changes, high car prices, under-developed auto service market and inadequate road structure might hinder potential growth,” said Dushyant Sinha, Associate Director of the Automotive Practice Asia Pacific at Frost & Sullivan. But, on the other hand, “A young labour force with a high two-wheeler ownership promises a potential car buying group in the long term. Myanmar is highly dependent on two-wheeler, accounting for more than 80% of the market while passenger cars represent 11%. Meanwhile, trucks and buses only make up 3% and 1% respectively.”
The consultancy expects Japanese brands to continue to dominate the automotive market in Myanmar, even in 2019, thanks to their small car offerings. Despite comments from Geely Executive Director Lawrence Ang earlier this year - that the OEM had no plans to open plants in Myanmar, instead focusing on increasing production in Uruguay, Ethiopia and Brazil to benefit from duty exemptions - Frost & Sullivan also expects Chinese and Korean brands to witness significant growth in the country. But US and European OEM presence is likely to remain minimal, as after sale support is still limited.
www.automotiveworld.com
Megatrends | 23
US POLICY
Barack to the future
Obama’s climate action plan and the automotive industry
Ian C. Graig
On 25 June, President Obama used a widely covered speech at Georgetown University in Washington to present a new action plan to reduce carbon emissions and mitigate the effects of global warming. Repeatedly wiping sweat from his brow on a hot and humid afternoon, Obama highlighted a series of climate, environmental, and energy policies that his Administration can implement without action by a Congress that is clearly not inclined to pass climate legislation. Obama used the speech, which included proposals both new and recycled, to boost the profile of an issue that environmental groups say he often ignored during his first term.While he remains committed to global, regional, and bilateral efforts to address climate change, the focus of President Obama’s plan was clearly on domestic policy proposals.
The speech included several plans with important implications for the automotive industry. The most significant of these was hardly a surprise: the President said that his Administration would, as long expected, begin developing a new set of greenhouse gas (GHG) emissions and fuel consumption standards for medium- and heavyduty commercial vehicles and heavy-duty engines. Specifically, the White House said that the Environmental Protection Agency (EPA) “in partnership with
24 | Megatrends
www.automotiveworld.com
US POLICY industry leaders” would soon begin writing “post-2018 fuel economy standards for heavy-duty vehicles.”
The EPA has long hinted that it planned a second round of fuel consumption and GHG emissions standards for heavy vehicles to follow on the first-ever such rules, which are being phased in between model year (MY) 2014 and MY 2018. The agency has already started technical work on the post-2018 standards with the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA), which has jurisdiction over federal fuel economy standards, and the California Air Resources Board (CARB), which administers clean air rules in California; other states have the option under the federal Clean Air Act to implement either federal or California vehicle emissions rules, though California has recently worked with the EPA to formulate nationwide standards. The agencies plan to collaborate with the vehicle and engine industries, which were actively involved in formulation of the MY 2014-18 rules. The EPA has indicated that heavy vehicle producers will be able to use a wide range of technologies, including advanced engines, mass reduction, and alternative fuels, to meet the post-2018 standards.Agency officials have also expressed hope that this, in turn, could help position US firms to sell clean-vehicle technologies to markets in Europe and Asia. The rules may also include aerodynamic and other requirements for trailers, which were considered but not included in the MY 201418 rulemaking. While the heavy vehicle proposal has not been particularly controversial, the same could not be said of President Obama’s statement that he is directing the EPA to propose GHG emissions standards for both new and existing power plants. The Agency proposed GHG emissions standards for new fossil fuelfired power plants in April 2012. However, it has revised its original proposal based on extensive public comments, and is expected to publish a new document in September. The effective date for the new regulations, which are certain to face legal challenges, have not yet been clarified. Plant goal
Even more controversial was President Obama’s commitment to propose GHG emissions standards for existing power plants - a major goal of environmental groups. President Obama called on the EPA to propose such a rule by 1 June 2014, and finalise it by 1 June 2015 - though it would not take effect until at least 2016.The proposal, which would have an enormous impact on utilities that rely heavily on coal-fired power plants, is certain to be the focus of intense legal challenges. Utilities warn that such a rule could boost the cost of electricity significantly, www.automotiveworld.com
“
This is a challenge that does not pause for partisan gridlock. It demands our attention now
”
US President Barack Obama, speaking at Georgetown University, June 2013 which would have an impact on energy-consuming manufacturing companies in the automotive and other industries - though environmental groups say industry is exaggerating the likely impact of such standards. Higher electricity costs could affect the price competitiveness of electric and plug-in hybrid electric vehicles. President Obama also used the speech to highlight a number of smaller domestic initiatives to reduce GHG emissions. He noted that his Administration will continue to set new energy-efficiency standards for appliances and buildings, while speeding approvals of wind and solar energy projects on public lands. He also said that the federal government will continue to expand its use of renewable energy sources, a commitment that could further ongoing efforts to increase purchases of alternative-fuel vehicles for federal fleets. Clean tech development
President Obama vowed to continue supporting development of clean energy technologies, though Department of Energy (DOE) programmes to develop such technologies face severe budget pressures. For example, House Republicans have proposed halving the budget for the DOE’s clean energy and energy-efficiency programs next fiscal year, including sharp cuts in funding for its Vehicle Technologies programme.The House would cut spending even more dramatically when compared with Obama Administration funding proposals. While the House proposal is unlikely to be enacted into law, it highlights the strong resistance among many Congressional Republicans to Obama’s plans for funding the development of clean energy technologies. One notable aspect of Obama’s speech was that he moved beyond proposals to curb GHG emissions and discussed the need to prepare for and adapt to climate change - reflecting a recent increase in interest among elected officials at all levels of government in developing policies to deal with increasingly severe weather, rising sea levels, and increased risks of flooding. Such emerging concerns could influence future infrastructure projects, including those related to the surface transportation infrastructure. Obama’s climate action plan and his broader clean air agenda ensure a busy few years for
the EPA and its newly confirmed Administrator Gina McCarthy (previously head of the EPA office charged with administering the Clean Air Act). In fact, the EPA’s most recent regulatory agenda includes over 75 clean air rulemakings, 33 of which are at the final rule. While Obama’s proposed regulations will be written during his second term, many will not be implemented until after he leaves office and most will face extensive legal challenges. In addition to the climate initiatives, the EPA is working on several other clean air rules of importance to the automotive industry. Most notably, the Agency is in the process of writing Tier 3 low-sulphur fuel and light-vehicle emissions standards, which will affect emissions of non-GHG criteria pollutants like carbon monoxide, nitrogen oxide, and particulate matter. EPA published its proposed Tier 3 rules in May, and the public comment period closed 1 July. The agency is now reviewing the comments and hopes to publish a final rule by the end of 2013, to take effect in 2017.
President Obama’s speech and his climate action plan reflect the realities of politics in Washington today. The current Congress is not going to pass a cap-and-trade proposal like the one that it considered early in Obama’s first term, and the prospects for carbon tax proposals are not good either. Many Congressional Republicans also strongly oppose expanding federal support for “clean” energy technologies. As a result, Obama’s proposals rely largely on regulatory actions that are not dependent on Congress. Court decisions thus far have generally upheld the EPA’s efforts to regulate GHG emissions under the Clean Air Act, though the agency faces further legal challenges. The focus of US efforts to address climate change during President Obama’s second term will thus shift to the White House, EPA, and US court system. The automotive industry should watch those institutions closely, since their decisions on climate issues could have a clear impact on the industry and on the US economy. Ian C. Graig, Chief Executive of Global Policy Group, has written for Megatrends and AutomotiveWorld.com on a variety of US policy trends and their implications for the automotive industry.
Megatrends | 25
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ONLINE ENGAGEMENT
Opening the online engagement window eBay Advertising’s Phuong Nguyen looks at the opportunity for OEMs to use online presence to influence purchasing as never before The automotive industry may have been understandably slower to embrace online retail than other sectors but things are changing, and fast. According to eBay Advertising, last year alone there were over 300 million searches for cars on eBay in the UK - a 140% increase since 2009. On Christmas Day 2012, 392 cars were bought on eBay, with a significant number of owners also searching for parts and accessories post purchase.
While some consumers are buying online, others are simply logging on to do their research before going to the forecourt, with most car buyers now arriving at dealerships with a deep understanding of the model and specifications they are after. Capgemini research has found that 94% of consumers looking for a new car now look online before buying. Online channels clearly represent a significant opportunity for manufacturers to influence the purchase journey; it is no longer a ‘nice to have’ but an essential component of every car brand’s retail strategy. But simply having an online presence or shop window is not enough. OEMs and dealers need to create engaging and inspiring online experiences and campaigns which excite consumers, build brand awareness, loyalty and ultimately drive sales - whether they may be online or in the dealership. Getting the basics right
For the first time, US citizens will watch more online and mobile media this year than television, says research firm eMarketer. At the same time, tablet usage in the UK has tripled year-on-year, with Google putting ownership at 30% of the population. OEMs and dealers should, at the very least make sure they have an established presence across a range of digital channels; they cannot afford to ignore these trends. Much like a physical dealership for sports cars would differ to one for family focused vehicles, it is important to create an approwww.automotiveworld.com
priate brand experience online supported by the right information.This also means ensuring these experiences are seamless and consistent whether consumers are at a desktop, on their tablets or browsing on the fly on smartphones. It is also imperative that car brands are not confined by their own websites and seek to take advantage of already engaged and established audiences. BMW, for example, took advantage of the online opportunity early on and opened a Direct Store on eBay (www.bmw.co.uk/ebay) over two years ago. The store allows customers to easily browse and buy over 6,000 genuine BMW parts, accessories and lifestyle items, and now attracts on average 45,000 unique visitors each month. It has rapidly become a key sales channel for the business. Campaigns based on observed insights
Car brands and dealers have a huge number of digital tools at their disposal, from search engine optimisation and social media engagement through to the use of display advertising on relevant websites. But it is those brands which invest in targeting the right consumers at the right time with engaging, relevant content that will benefit the most. Fortunately OEMs have the ability to target over and above simple age and demographic audience splits. By harnessing seasonal and real-time insights, and overlaying them with people’s search and purchase behaviours, for example, brands can reach the right people nearly every time and reduce wastage.
Imagine you are looking for a branded hubcap. There is a very high probability that you own that brand of car and will be interested in other accessories - you can therefore be targeted with offers. Taking this example a step further, a brand may look at your wider purchase behaviour and find that you have just bought a pushchair. In this instance, a brand may offer baby car accessories, or even a family car emphasising its clear safety credentials.The same ‘insight to offer’ model can
be used to promote energy efficient products, outdoor sports or even travel.
This process of using observed, rather than inferred, behaviours allows OEMs to look beyond traditional stereotypes. Although men outnumbered women 4:1 in the motors category on eBay in the UK last year, women still accounted for over 56 million searches for cars and therefore represent a huge market opportunity. Careful targeting can allow brands to appropriately tap into this market without excluding men. Extending the offer
The right consumer insights create opportunities to up- and cross-sell, particularly where the lifecycle of a vehicle is factored in. Those that have bought a new car are likely to be more interested in certain accessories than those with a five-year-old model, for example, who will be more interested in hearing about the latest offers on newer models. This also means looking beyond ‘hardware’ and thinking about what other services you can offer customers online.Again taking BMW as an example, the OEM launched a value service page earlier this year on eBay, promoting fixed priced servicing programmes for selected BMW models. Using a targeted advertising campaign which helped capture the attention of customers likely to be interested in this service, the manufacturer drove thousands of people to the page and ultimately boosted footfall into its dealership network.
Given the often high value of cars and accessories, many consumers still look to test and experience their investment first-hand. But today’s consumer journey is extremely complicated, across different channels and multiple devices, on and offline. Brands and dealers will need to ensure that what they know and learn about their customers is shared between channels to ensure they have a single view of the customer - something we as consumers have come to expect. Phuong Nguyen is UK Head of eBay Advertising.
Megatrends | 27
CASTROL EDGE
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3D PRINTING
cArS iN 3d Ruth Dawson Picture the scene: the Scottish highlands, a man in a sharp suit striding through an old mansion, an Aston Martin DB5 exploding into the night sky.
It was with some horror that car fans watched James Bond’s carefully stored DB5 destroyed on the silver screen.What cinema goers may not have realised, however, was that this was no ordinary Aston Martin: it was, instead, a 3D-printed version of the classic model, around one-third the size of the original.
3D printing - or additive manufacturing - is nothing new to the automotive industry: OEMs have been using it for well over 20 years to develop prototype parts during the design phase. But with rapidly falling costs, and the wider availability of 3D printers, this technology is only now starting to turn heads. In fact, Citigroup analyst Kenneth Wong recently estimated that the technology will grow so quickly, by 2018, the market for 3D printing and scanning products could triple. In 2011, the industry was valued at US$1.7bn.
The technique has been used in Ford’s Rapid Technology Centre throughout the complete development process, from initial research to working prototype, since 1992 in Europe. “At the time, competitors came to Ford as well, to look at the technology and the machine. We were one of the pioneers, using this technology for development work,” says Sandro Piroddi, Supervisor for Rapid Prototyping. “From then on, we have had state of the art machinery, making about 77,000 parts a year.” To date, 3D printing has been used at Ford in the development of cylinder heads, brake rotors and rear axles for test vehicles; and during the initial stages of Escape EcoBoost 4 cylinder engines, and the F-150 3.5L EcoBoost. Time is money
Rather than machining an item from a material, 3D printers ‘print’ products by building up layers of, for example, plastic. Open source software is used to create and tweak the design to be produced.
According to a Wall Street Journal report, at Ford, 3D printing has proved to be hugely beneficial in cutting production times.A cylinder head used in the EcoBoost engine, for instance, can now be produced in three months - as opposed to four or five previously - cutting production by up to 40%. www.automotiveworld.com
Megatrends | 29
3D PRINTING
Stamped out In the US, the Ford Research and Innovation Center has developed a new way of creating sheet metal prototypes.
Taking inspiration from 3D printing, this highly flexible forming process can simultaneously create features on both sides of sheet metal. It does away with the need for customised tooling, and promises to reduce material scrap and energy consumption by 70%, while cutting production costs by 90%. For now, development work is between research and implementation, but once fully
“Compared to the former machines [used for 3D printing], a big improvement has been made,” says Piroddi. “The portfolio of materials has increased too.” Earlier techniques required a mould to be cut from sand, now an engineer can bypass this process and pour metal directly into a mould.
Outside the prototyping process, Piroddi is optimistic that 3D printing could gain a strong foothold in niche aftermarket applications. “Some manufacturers do this already,” he comments. “We at Ford are not doing this at the moment, but I can imagine if the technology is in position to deliver later on serial material that would be an opportunity. For example, small run aftermarket parts, for which you need not make using an expensive tool, but instead print the parts directly.” Indeed, irreplaceable parts for classic cars are already being scanned and replicated through this process.
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evolved the technology will allow for reduced costs and faster delivery times for prototypes. The wait for a prototype part can currently stretch up to six weeks, but would drop to just three days using the new system. The development is based on Ford Freeform Fabrication Technology (F3T), a manufacturing process developed by engineers at the Center. A piece of sheet metal is clamped around the edges and formed into a 3D shape by two stylus-type tools working in unison on both sides of the sheet metal blank.
Downfall
The largest downside to 3D printing is the fact that parts are currently limited to the build size of the machine being used. At Ford, the largest printer, which makes complete instrument panels, is only suitable for 100cm by 80cm parts. Piroddi believes that in 20 years’ time there will be an improvement in this build size, but warns that lead time and costs will both increase alongside. The cost of materials is a huge consideration for any aspect of manufacturing, and here even more so. “The question is really do you need such big machines? At the moment we are in a pretty good shape regarding build size; improvement would be great but, for example, to have a machine printing a complete hood, I’m not quite sure if this is really the right way.”
After the CAD data of a part is received, computer-generated tool paths control the F3T machine to form the sheet metal part into is final shape, to the required dimensions and surface finish. “As we forge ahead with cutting edge technologies in manufacturing like flexible body shops, robotics, 3D printing, virtual reality and others, we want to push the envelope with new innovations like F3T to make ourselves more efficient and build even better products,” says John Fleming, Ford’s Executive Vice President of global manufacturing and labour affairs.
But the biggest benefit of 3D printing - production problem-solving - outweighs this negative. “If you have a problem in the development and you need a physical part, that’s great,” says Piroddi. “The part will cost, I don’t know, say €3,000 (US$4,000) or €4,000, but you have the part within two or three days. The engineers can look at the part, test it and say we are on the right track, we can tick off the tooling. The other extreme is if they detect an error in the design, they can stop, redesign it and stop it from going into tooling. “It’s a trade-off. It’s expensive if you are talking about many parts. If you’re talking small quantities, then it’s the right technology to detect and avoid later on issues and problems in the production and development.” Material costs will have to fall if this type of manufacturing can reach into ever more areas of automotive manufacturing. In www.automotiveworld.com
3D PRINTING
addition, for 3D printing to gain more of a stronghold, material re-usage will need to be improved - as will the variety of materials that can be printed.
“You have certain machines where you build a part, and material which was not touched with the laser has to be scrapped,” says Piroddi. “The wish would be that the powder not touched by the laser was reused, which would reduce dramatically the cost of these technologies.” Piece by piece
Earlier this year, Engineer Jim Kor unveiled the Urbee 2, a concept car manufactured entirely by 3D printing. Each three-wheeled vehicle takes around 2,500 hours to create, with several part designs being uploaded, produced and then fixed together. According to Kor, the body is as strong as steel but half the weight; the chassis is made of a molten polymer sprayed on in microscopic layers.
Unsurprisingly, Piroddi is not confident that we will be driving printed cars any time soon - despite the aforementioned benefits: “No, definitely not, it’s too complex - the complete vehicle itself, with all the components,
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different materials required by law and for quality. If you are using 3D printing, building the parts layer by layer, this will give you a certain surface quality.”
Piroddi does not expect consumers to be producing and fitting their own spare parts at home either.
“You will not reach the quality we have here, or on the expensive printers,” Pirrodi says. “I Inspecting gadgets
3D printing may be revolutionising manufacturing, but it will also create demand for enhanced testing techniques, says Dr Katy Milne of the Manufacturing Technology Centre in Coventry, UK. “Additive manufacture poses a big challenge for NDT inspection because the shapes of the products can be so complex,” Milne comments. Ford, however, are fighting fire with fire and have developed a new ‘3D cave’ which helps engineers experience proto-
can imagine if the printer is a low price, you have to pay a high price for your material.The next thing is you need a certain software to design your part, to treat it so that you can build your part on your printer. But perhaps, you can get some files of parts which are already constructed from the internet, and print them at home.” “On the other hand, never say never - I don’t know what will happen in 100 years.” types before they are built. In a small room in Cologne, a dummy car interior has been coupled with 3D projectors and motion sensors to test the tiniest of details in a virtual car.
“The CAVE makes it so much quicker and easier to analyse designs,” said Michael Wolf, Virtual Reality Supervisor, Ford of Europe. “For example, to manufacture three different front pillar design examples and fit them to a prototype vehicle could take 10 days. The same project could be completed in just one or two days using our virtual reality simulator - and also saves physical resources.” Megatrends | 31
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INTERVIEW
Interview: Dr Manfred Schuckert, Head of Global Regulatory Strategy - Commercial Vehicles, Daimler Martin Kahl
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r Manfred Schuckert is the Head of Global Regulatory Strategy in Daimler’s Commercial Vehicles Group. His work focuses on light commercial and heavy duty greenhouse gas (GHG) and CO2 regulations worldwide, particularly in the US, China and Japan. He also deals with criteria pollutant regulations, such as NOx (oxides of nitrogen) and particulate matter (PM) in the BRICS markets, and new fuel-related directives such as the European Renewable Energy Directive and the European Fuel Quality Directive. Here, Schuckert talks about powertrain development beyond Euro VI, and the technologies he thinks will prevail as GHG emissions and fuel consumption regulations become ever more stringent across all major regions. From an OEM perspective, what has been the impact of Euro VI on product development and sales?
We invested heavily in the complete renewal of our Mercedes-Benz truck family. This enabled us to present our whole MercedesBenz portfolio in Euro VI around six months before it comes into effect at the start of next year.The results of this huge effort have already begun to be reflected in our sales performance. As of today, every second Mercedes-Benz new Actros truck in Europe is ordered in Euro VI.
With Euro VI coming into effect in January 2014, many OEMs are already preparing for a possible Euro VII. What do you expect this to entail, and how will Daimler look to meet such legislation?
Euro VI is by far the toughest environmental regulation so far. Not only does it call for an 80% reduction in NOx and 66% reduction in PM, but it is also a detailed regulation on all the operating points of an engine with limits on off-cycle operating points, particulate numbers, etc. In the medium and long term, that will lead to a significant reduction of emissions in the field. Therefore, we do not expect a Euro VII, and we believe that once the old vehicles are out of operation, we will also fulfill all national emission requirements across the EU. Additionally, any tightening of the NOx standards will lead to increased CO2 emissions. In the EU, there is likely to be legislation www.automotiveworld.com
When equipped with a Detroit DT12 automated transmission, wide tyres with low rolling resistance and an aerodynamically-shaped semitrailer, the Freightliner Cascadia Evolution has a fuel efficiency rating of 10.67 miles per US gallon
on the measuring and reporting of CO2 emissions from heavy duty vehicles, but this will not be a Euro VII type of regulation.
Is Daimler using any particular strategies or technologies to meet the forthcoming GHG and fuel consumption targets coming into effect shortly in the US?
At the beginning of 2012, the US Environmental Protection Agency certified Daimler Trucks North America’s (DTNA) complete range of Freightliner and Western Star onhighway, vocational and medium-duty trucks as fully compliant with the Greenhouse Gas 2014 (GHG14) regulations. DTNA is the first US truck manufacturer to have received this certification. Take a look at the new Freightliner Cascadia Evolution: when this vehicle is equipped with a Detroit DT12 automated transmission, wide tyres with low rolling resistance and an aerodynamically-shaped semitrailer, it has been shown to have an outstanding fuel efficiency rating of 10.67 miles per US gallon (22 litres/100km).
With GHG emissions and fuel consumption regulations becoming ever more stringent across all regions, which powertrain technologies do you anticipate playing the greatest role in helping OEMs and fleets meet these regulations?
Depending on cost effectiveness, we continue to improve the efficiency of our vehicles. In this context, we were the first OEM
to introduce an integrated powertrain in the US, and this plays a vital role. Engine, transmission and axles are perfectly synchronised, resulting in much better fuel economy. We continue to develop all important technologies, but we believe that any further regulation must reflect cost effectiveness for our customers. Any traditional passenger car-derived approach will not be accepted by our customers and will lead to market distortion. How important is natural gas to Daimler commercial vehicles? Where will NG have the greatest success, and in which segments will it be most relevant? Daimler Trucks is already the market leader in natural gas-powered trucks and buses in North America, and we are investigating further markets to use this CO2-beneficial energy carrier. One of the challenges we see is an adequate CNG/LNG infrastructure. Do you envisage the possibility of a ‘global truck’, a heavy duty truck which you could sell in all major markets?
From a regulatory point of view, it doesn't make any sense to have a ‘global truck’. Weights and dimensions, maximum speeds and other requirements are so different in the various markets that market-specific solutions are the only way to be successful. On the other hand, components such as engines, transmissions and axles, to name but a few, could be used across the various markets to gain economies of scale. Megatrends | 33
BRAZIL SAFETY
Brazil’s safety agenda
South America’s automotive market has been dealt a series of blows recently, with reports of shocking road fatality statistics appearing alongside the news that several major OEMs are selling vehicles which fail to meet the most basic of safety regulations. However, one country at least is looking to change things with a new government test centre David Isaiah
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onsidering Brazil’s booming market and ever-growing manufacturing capabilities, it seems almost absurd to suggest that the country’s automotive safety standards would lag behind the US and Europe. But lag they do - and it is by no small gap either.
However, the Brazilian government is trying to change things: these past few months have seen the country announce its intention to build its first crash test facility. Responding to an investigation by the Associated Press, which highlighted the lack of safety features on cars sold in Brazil, those in charge now hope to drastically improve the country’s safety record.
Automotive accidents have been on the rise in Brazil, especially over the last decade, when car sales have also increased significantly. Although the country is home to one of the fastest growing automotive markets, it must bring its safety standards up to par before it can become a significant exporter of cars. As it is, Brazil’s car exports have plummeted nearly 50% since the highs of 2005.
According to AP’s investigation, cars produced by global OEMs which are sold in Brazil have fewer safeguards compared with the same, or similar, models sold in markets such as the US and Europe.
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BRAZIL SAFETY
In a bid to get back to this 2005 level, Luiz Moan, the new President of Brazil’s automotive lobbying group Anfavea, has set a goal of five million domestic car sales and five million domestically produced cars; including one million exports and one million imports. According to Roger Lanctot,Associate Director of the global automotive practice at Strategy Analytics, the country is still struggling to come to terms with increasing highway fatalities, and this is stalling the marketplace. “If Brazil is to fulfill the opportunity of becoming one of the world’s leading automotive markets - not only consuming cars but building and selling them too - the quality and safety of the cars made in Brazil must improve,” Lanctot wrote in an article for Automotive World. Crash testing for dummies
The new facility plans entail an investment of US$50m. According to a document from the Ministry of Development, Industry and Foreign Trade, this centre will be constructed on the outskirts of Rio de Janerio, with operation planned by 2017.
Although AP stated that the plans suggested the centre would be part-funded by OEMs, industry commentators have been left to wonder how the impartiality of the safety testing can be secured. “Until now, there was nothing the government was testing,” an unnamed official told the AP. Considering the significant role played by the automotive industry in Brazil’s economic development, the matter of this crash test centre is a “politically sensitive” topic. More than 100 fatalities a day
A report by the BBC in September 2012 found that around 40,000 people a year die on Brazil’s roads.This high incidence rate has been blamed on factors such as poor driving conditions, inexperienced drivers, and a high level of drink driving. In 2009, the World Health Organization (WHO) ranked Brazil eighth in its list of road fatalities. In fact, according to the country’s Minister of Health, 42,844 people died from road accidents in 2010 - an increase of 21% compared with 2006. WHO research has also found that car passengers account for 5% of all road accident fatalities in Brazil, with drivers accounting for a further 5%. The death toll on Brazil’s highways has now well surpassed the 100 fatalities a day seen in the US. The Huffington Post has attributed this high number to a combination of factors, including a lack of
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safety standards, test facilities and consumer awareness, and poorly regarded local build quality.
AP meanwhile, citing automotive engineers, put the deficit of safety standards down to the lack of body reinforcements, the use of lower quality steel in car bodies, weaker weld spots, and old car platforms. But things can get better: March this year saw Latin NCAP release the test results of two new models produced in Brazil - the Ford EcoSport and the Hyundai HB20. Despite previously finding that the safety levels of certain popular cars sold in Latin America were 20 years behind industrialised countries - and well below global standards upon completion of Phase 3 testing, it concluded that there is now “clear evidence that safer cars can be built in Latin America...at affordable prices...”
“It is frankly shocking that major manufacturers are willing to offer one star cars for sale in Latin America, when as a matter of routine their cars achieve five stars in Europe,” Max Mosley, Chairman of Global NCAP, said at the time. “Fortunately, with Latin NCAP putting vehicle safety on the agenda, we are now seeing some progress. The increase in cars earning four stars is welcome and brings us closer to the day when one star cars, which would fail to pass even the UN’s basic crash tests, are eliminated from the market entirely.” Centralising safety
Dr Dirceu Alves of Abramet, a Brazilian association of doctors who specialise in treating traffic accident victims, believes that setting up a new crash test centre in Brazil will certainly improve safety.This is especially true as the government has no means to verify OEM claims on safety otherwise.
“There is no doubt about the importance of this lab,” Dr Alves told AP.“We cannot believe in the quality controls of the automakers alone.We believe it will be one of the factors in reducing the number of traffic fatalities.”
Some, however, do not feel that having a crash test facility alone is a complete solution. Alejandro Furas, Technical Director for Global NCAP, thinks that regulations are necessary for the facility to be fully useful. Furthermore, if OEMs help to fund the planned centre, it will not be “really independent at all”. “It’s a good thing that there will be an independent crash laboratory,” Furas told AP.“But that doesn’t mean that cars will be better or safer. [It] is an incredible tool but there have to be regulations.”
Megatrends | 35
SUPPLY CHAIN
e new supply chain Mike White, Senior Vice President, Global Automotive Sector, DHL Supply Chain discusses the new DHL report, Lean and resilient: The new automotive supply chain hybrid, with Martin Kahl
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s the current automotive industry set-up capable of being as nimble and agile as it needs to be, to achieve a lean and resilient ideal? Manufacturers certainly have an issue in relation to their sourcing decisions, and where the end manufacture takes place. There is some static risk after manufacturers have invested in the point of production, and they are reliant on their own and third party service providers to fill in the gaps, supporting volatility with network mode planning in place to support any blips in the pipeline. What needs to change in order for the current supply chain to operate at its optimum capacity?
Because of industry globalisation, issues will always arise, meaning that we will not be able to guarantee 100% that we will make the strategic plan. We will always need to have a tactical alternative to plan A. We would evaluate the supply chain, and take a total logistics cost management approach to each situation.
Whittling down cost has led to the risky business of single source supply.
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How can the industry move away from this to being agile, yet still cost effective?
It is all based on the levels of cost people are happy to go to, and what they believe the value of making those changes would be in relation to the end benefit. The only thing a logistics service provider can do is offer alternative solutions to OEMs or Tier 1s in relation to the logistics cost and mode of choice. The sourcing decision on supply for new models and new plants generally takes effect after the research, around about a twoyear period. Then we start to think about freezing that sourcing decision 12-18 months into the new build expectations, with a freeze on the actual supply chain anywhere between three to two months prior to job one. As long as we can, from a logistics point of view, be part of that sourcing decision and give the customer information about opportunities and cost impacts in relation to it, they will make an informed decision.
They may even try to influence a supplier to establish alternative facilities closer to their sites. We're seeing that more and more as
manufacturers don't want to invest in one plant to produce one car, they'd rather produce four or five down the same line. Even when there is difficulty with a single source component, which is very rare, they can still flex their production movements down the line and maintain production schedules.
In terms of production and sales, the industry is moving more towards emerging markets. Is that happening because of demand for vehicles in those emerging markets, or are OEMs and suppliers simply chasing low cost production? It's not to do with cost, because they're going to invest in new plants and tooling to support demand in that region. It's down to: ‘what and where am I going to sell, and how can I sell more of these vehicles, and increase my market space in that region?’
After they've made that decision, they start thinking about reducing costs and bringing in synergies, they may decide to build five vehicles down one line or in that particular plant. They may move some powertrain activity closer to it. There are also governmental inwww.automotiveworld.com
SUPPLY CHAIN centives to invest in foreign countries, but normally there's a caveat for that - the government will put a restriction on local content after a period of time. Investing in a facility involves a longterm commitment, and OEMs usually take suppliers with them. A long-term joint venture may be involved. Does the wage rate itself really matter anymore? It matters once they go into contracts for service solutions. It doesn’t matter to their overall strategy of building or selling that vehicle in any given market. But there is certainly still disparity in relation to wages.
Have you observed any trends in investment in emerging markets versus re-shoring? I haven't seen a big retraction of manufacturing from one location to another but certainly there has been a movement of parts and materials that support the manufacturing. Much of the metal-in-white and bodywork material is produced in one country and then shipped to another to support the manufacturing of the same OEM. It is not necessarily about re-shoring and bringing back that capacity, it's just matching demand where there is an opportunity to support a new vehicle. What are the implications for companies like DHL of the automotive industry moving towards mega platforms?
We're able to saturate a network which is already in place.We can support an increase of capacity more easily than having it in multiple locations for end receipt.We certainly would have an opportunity to saturate and improve our network, and we can pass that improvement in cost back on to the customer.
Are there any risks to the automotive industry of using mega platforms like this? One obvious example that springs to mind is that a recall on a model built on a mega platform would affect numerous other models.
Yes, and natural disasters are also risks. Also, ultimately, you've got the workforce and the infrastructure in place for one facility building numerous vehicles, in some instances, for different markets. If there are union-related issues, taxation or governmental issues, for that one particular plant, there's a huge element of risk there for the OEM to deal with. Do you see a return to the use of supplier parks? Yes, although they never really went away.We operate supplier parks across the globe, but now there is a valid interest in having a flexible line feeding from external supplier parks close to the plant, to free up space to support the manufacturing of multiple models. www.automotiveworld.com
Globalisation will see suppliers based on different continents needing to cut the lead time on delivery into a plant. Offloading, decanting, delivering to marketplace - all this can be taken off their hands by a supplier park, and even sequenced into the vehicle manufacturing plant directly from there.
We will bring in all the levels of inbound manufacturing sequencing, just-in-time, assembly, kitting, and final configuration to line side, point of fit, directly from a marketplace in a supplier park rather than the plant, to free up space and allow them to take on more production capacity. How can OEMs, suppliers and LLPs pre-empt the unknown?
It's about forward planning. When you go to a new model, the suppliers, the logistics service providers and the manufacturer, all need to make sure that the sourcing decisions are correct, and that the supply chain has proven alternatives in place, with backup. Is there a technology that you would like to see that could change things, or is it a number of factors?
Technology will certainly play a part. DHL Link is a scenario where we can combine all system interfaces and connectivity into one platform and have that skewed out into a reporting format to evaluate down to model
level build requirements of the 'will make' scenario, down to the minute on routing schedules.The visibility of having known parts and components in the pipeline, en route, will make production schedules key to making decisions. Should there be an effect of a strike action, bad weather, whatever, it's red-flagged prior to jeopardising the production, to be able to set up and establish an alternative routing mode, or even switch production in time to maintain the levels of manufacturing.
To achieve that, there are already products on the market, such as RFID tags, which are too expensive for the automotive industry to deploy across all parts and components. Almost all technology is expensive in the first year and gets cheaper. RFID will get cheaper, and I'm sure we'll use that a lot more. Then it's all about communication. We are very much embedded with our customers in plant. We are pulling material in from originbased networks and reviewing and establishing scenarios of change, mode change, and supply change whenever it's needed. Having the opportunity to make those decisions, giving us the autonomy on behalf of the manufacturer to make those decisions is key. Rather than just technology, it's about trust and relationship. We definitely need to have a plan B and remind everybody that things can go wrong.We already have technology in place, we just need to be smarter about how we use it.
Megatrends | 37
DRIVING THE DRIVING T HE FUTURE FUTURE OF OF AUTOMOTIVE A UTOMOTIVE SO FTWARE SOFTWARE
EB CONNECTED CAR
EB EB Automotive Automotive C Connecting onnecting You You tto oW What hat M Matters atters Addressing Driver's Connected onnected Navigation Navigation A ddressing D river's needs needs through through C IInfotainment nfotainment Driver Assistance D river A ssistance Vehicle V ehicle tto o X Communication Communication A utonomous D riving Autonomous Driving
automotive.elektrobit.com sales.automotive@elektrobit.com Download our Navigation Brochure
Paving the smart way While the rest of the industry focuses on smart cities, Daan Roosegaarde has been working on the one thing right under our noses (or, rather, toes) that so often gets overlooked: roads. Here, Roosegaarde talks to Rachel Boagey about his vision for the highways of the future
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n conjunction with Netherlands-based Heijmans Infrastructure, Roosegaarde presented the first smart highway prototype during the 2012 Dutch Design Week. With the aim of making European roads more sustainable, safe and intuitive, the partnership is now building the first smart highways on the continent, with plans to test the first kilometre at the end of this year. Where did your inspiration for the smart highway come from?
We had been working on a series of interactive designs: we did a project in 2008, a dance floor which generates electricity and lights up when you dance on it. Then one day, when I was sitting in the car, I was amazed by the roads we drive on. We spend an incredible amount of time, energy and money on them, but somehow they are disconnected from an architectural discourse, or a landscape design discipline. I wondered if there was any way we could make them more interesting. Within a couple of weeks we teamed up with a road manufacturer, and now we’re in the middle of an incredibly complex but very fascinating R&D process, making our prototypes and ideas a reality. It’s not just about making roads safer or more poetic, but making them more functional by being energy neutral. I am interested in the notion of making landscapes which engage people, either in an aesthetic or social way.We’re doing a project in Africa, a country where electricity is a problem; the street lights are being stripped for their copper. That’s where these kind of paints that are charged in the daytime and give light at night start becoming very useful.
www.automotiveworld.com
Where do you think we will see the first fully sustainable highway?
Our team will start in the province of Brabant, in the Netherlands, which is very keen on investigating the notion of a smart city, so that’s a great area for us to build the larger pilots. Places like Africa and Aruba are indeed very interesting for lighting but, when you talk about dynamic EV charging, Scandinavia becomes more relevant, they want to make like less polluting but still stylish roads. Different designs will appeal to different contexts, I’m interested in learning from each environment and fine tuning a design accordingly. Why do you think the smart highway idea has not reached this level of development before?
When you look at the automotive world, there wasn’t a real desire to innovate because the roads are functioning well as they are. So why is a road manufacturer like Heijmans spending so much money on this? They need to create a new niche to survive. How does your smart highway interact with the user and why do you think this is so important?
Some components will be within the car, in terms of safety, for example, but these will need to be a collaborative effort between OEMs - simply because not everybody can afford the same car.
INFRASTRUCTURE example, so we’re talking about lighting, showing information which interacts with weather conditions. Will the photo luminescent paint used to display these ‘signs’ be added to the road surfaces or will it need to be embedded?
All the concepts that I have proposed can be applied to existing roads, and that’s very important for us. There’s not really big business in building new roads: European governments are shutting down street lights to save money, so roads are not becoming a safer place. Someone needs to come up with new designs to fix that. The danger is to only apply our project from a functional perspective, saying it should be cheaper than existing lighting.That’s certainly a commercial ingredient, but we noticed that the type of clients attracted to this are not specifically infrastructure companies, but more recreation or city marketing, who want to make spaces which are beautiful.
One of your proposals is painting snowflakes on the ground which would illuminate at certain temperatures. Would seeing the paint be a problem in severe weather conditions such as thick snow? We can put a little copper wire in the photo luminescent paint that will generate energy and heat the ground so the snow will melt on that area. When do you see dynamic charging being introduced on European roads?
There is a pilot project in progress which allows drivers to go 70kph [43.5mph] and charge the car while it’s in motion. You can transform the safety lane quite easily into an electrical priority lane. But it comes down to a matter of government policy: a politician has to make a statement to say these defaults are necessary for them to be introduced.
You also want to have things which are visible to everyone, from all different countries.The car cannot know if the road is slippery, for
Megatrends | 39
THE BIG PICTURE
!I, Robot!
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ndia, a manufacturing market typically targeted by the automotive industry for its low cost workforce, is turning more and more to robotic production.
In what may be regarded as a fairly surprising move, the reasons are largely rooted in the reliability of workers. A strike at Mahindra & Mahindra this year, for instance, resulted in loss of production to the tune of around 8,000 to 10,000 units: no OEM can afford to lose nearly two weeks of production.
But labour disputes are not the only reason manufacturers are opting for automation, with increased and consistent product quality, and manufacturing safety being other positive benefits. According to a report carried by The Financial Express, the role of robotics
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as a measure to reduce the dependence on workers is gaining prominence. The report cites the example of Tata Motors, where automation levels in 1998-99 - when its Indica hatchback was first produced - were around 35-40%. At present, the OEM’s automation levels are around 65-70%.
Speaking at Automotive World’s Commercial Vehicle Megatrends India 2012, Raj Singh Rathee, Managing Director of KUKA Robotics (India), said that the number of robots used in Indian CV manufacturing alone is set to increase from a current low level of penetration to somewhere in the thousands.
“New opportunities will continue to arise. The increase in robotics applications in car assembly is a good example of an area that
previously did not involve robotic automation. But now…new robots have made it possible to use robots in assembly. Successful trials in Europe showed that…small robots can fit into very small or congested work spaces,” Rathee told Automotive World. In the US, robotics are moving down the supply chain, with a recent report from Automotive News finding that suppliers are beginning to see the benefits of automation; many are buying into robotic systems to keep pace with rising vehicle demands. In fact, an analysis of first quarter sales in 2013 by the Robotic Industries Association showed that US suppliers were on track to boost robot purchases up 22% to 7,872 units this year.
www.automotiveworld.com
THE BIG PICTURE
www.automotiveworld.com
Megatrends | 41
THE INTELLIGENT CAR
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t is safe to say that the connected car is here - so far as Europe and the US are concerned anyway. Walk into any dealership and you can buy a vehicle which will integrate with your smartphone seamlessly.
That’s all well and good, of course, but where do we go from here? Melding the capabilities of your smartphone with your vehicle is fine, but having a car that comes with said functionalities already built in is the industry’s new goal. The intelligent car is the next step in automotive connectivity: no longer will vehicles be limited to the functions of - or tethered down by - a smartphone accomplice.
“The connected car really has to do with the physical attributes of connecting,” says Joel Hoffman, Automotive Strategist at Intel. “The intelligent car takes a more holistic look at the entire vehicle electronics. This is a bigger area of exploration for the industry, and it’s one that is going to make a much bigger impact than anything we’ve done to date.” In the intelligent car, connecting to your digital life moves up a notch to cloud capability, making vehicles function wirelessly, without the need for a smartphone platform. While many use the example of cars setting the heating or turning the oven on as you drive home, the business case behind the intelligent car is far more sophisticated: it is all about OEMs gaining control over their in-car technology again. “The connected car has more of a journey than a destination,” says Hoffman, “but it’s going to be more dramatic than introducing a mobile phone into a car.” Intelligent cars, autonomous drivers?
So what does the automotive industry actually need to do to get from the connected to the intelligent car? “The first step is underway, with the desire that people are creating for the connected car,” Hoffman comments. “That desire gives people the idea that they can have these usages. And, unfortunately, they’re limited to certain markets or cost levels of the vehicles.
“The next step is to get the industry to agree that they will collaborate much more than they do today, because in order to get a common set of hardware and software elements, OEMs, Tier 1 and Tier 2 suppliers all have to agree that certain parts of their design are going to be commonised much than today.” However, Hoffman hints that human attitudes will need to change if they are to truly benefit from the intelligent car of the future: “Most people will admit that they like advanced tech
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if it makes them look smarter, but they don’t want it to be smarter than them. “You’re going to be the one who decides if it’s going to self-drive, partly self-drive, or if you’re going to drive. In most cases, people will want that choice because the car is a servant to the person.” Behind the scenes
However, it is not just viewpoints of consumers and OEMs that need to develop: looking at the smart car’s internal system, Dean Miles, Senior Vice President of automotive at Symphony Teleca, points out a clear issue that must be resolved before the intelligent car can become a reality: processing power.
“There are 100 different definitions of intelligent: is it self-driving or is it just being aware of other vehicles around it and giving you the correct warning? We’re on a line between a connected vehicle - a vehicle that is reasonably aware of its environment, like most Volvos now - and a self-driving vehicle. The real crux of the issue is the quality of the software, the speed of processing and the amount of processing in the vehicle.
“For me, it’s probably to do with the amount of processing power and the affordability of that power within the vehicle. If you look at the Google self-driven car, for example, the processing power that would be required is tremendous - it’s similar to an Apache helicopter!” www.automotiveworld.com
THE INTELLIGENT CAR
Image credit: JD Hancock
www.automotiveworld.com
Megatrends | 43
THE INTELLIGENT CAR
The Intelligent Car Coalition Set up in May 2013, the Intelligent Car Coalition (ICC) is a non-profit consumer advocacy and education organisation. With founding members such as Intel, Verizon and AT&T, the ICC will attempt to engage US policy discussions on the intelligent vehicle; driving improvements on issues such as data privacy and security, liability, research and development and distracted driving. Here ICC Executive Director Catherine McCullough talks to Ruth Dawson about regulating in-car connectivity. What is the Intelligent Car Consortium setting out to do?
Our mission statement is ‘to advocate for public policies that bring the benefits of innovation at the intersection of automotive and communications technologies to consumers, and promote safety, mobility, and transportation efficiency on our nation’s roads and highways’. In practice, that means we want to work with all stakeholders in the transportation and tech sectors to figure out what it means for our policy framework now that these two industries are merging. We believe that the quickly-evolving innovations in intelligent cars have great potential to benefit society, and we want to be part of the dialogue to help ensure that these breakthroughs are able to fulfill their promise. What do you define as an intelligent car?
There are several terms used to describe this developing space, and some of them mean different things to different people. For instance, some think of connected cars as those that connect to other entities - such as applications - via smartphones. Others think of connected cars as those that use a signal emanating from the car itself, or a device in the car, to communicate with other vehicles or infrastructure. There are also autonomous vehicles - in which some or all of the vehicle’s capabilities are fulfilled by the car itself without human interaction. These driverless cars are capable of sensing the vehicle’s surroundings and navigating without human input. We chose the word ‘intelligent’ because we see promise in all of these technologies. Indeed, intelligent cars are using advanced and cutting edge technologies to create a new and better vision for the future of driving. What is needed to take the connected car (a smartphone integrated vehicle) up to the next level of the intelligent car?
There are many intelligent car technologies entering the marketplace - and at a rapid 44 | Megatrends
pace.Their appearance is good news for consumers, because we are seeing the beginning of a new era when intelligent technologies will save us time, fuel, money and, most importantly, lives.
The US government is tasked with making sure consumers gain the benefits of these emerging technologies. However, some of the regulatory tools the government has been given by Congress many years ago weren’t designed to work in a quickly-evolving technology space.
We think that if all stakeholders - industry, government, consumers - got together and collaboratively engage on policy questions surrounding these technologies, consumers will be able to gain these benefits much sooner.
Safety, privacy, security and other issues are already on the US government’s agenda. In fact, the Department of Commerce’s National Telecommunications and Information Administration (NTIA) just completed a successful multi-stakeholder process that resolved privacy issues around mobile apps.
As intelligent vehicle issues are considered, we hope that the government will continue to rely on such multi-stakeholder models that allow consumers, industry and government to realise outcomes that enhance consumer safety and meet other policy goals, while at the same time allowing for innovation and consumer choice. In some cases regulation may be the right answer, in other cases, it may not.
Why do we need specific regulation for the intelligent car?
What would you say to those critics who have suggested that regulating the intelligent car so early on can stifle creativity?
Government and industry want consumers to feel safe and reap all of the amazing benefits of intelligent car technologies. Multistakeholder models for developing approaches to address policy issues provide great public policy processes for these quickly-developing technologies, technology patterns, the differences in technologies and how technologies interact with each other.
When premature regulation thwarts the incentive for industry to develop solutions for a policy challenge, it can negatively impact everyone’s goals. That’s a shame because, with technology, fixes can often be engineered relatively quickly - typically outpacing regulation.
We may or may not need regulation. Guidelines, ratings, and voluntary industry solutions often can be as effective, or more effective, than regulation at achieving a policy goal, while also enabling the innovation and competition that promotes the best products for consumers and society. This is the balance that our nation’s policymakers face.
We believe that instead of dictating how any one technology should work, or picking one technological solution over another, stakeholders and decision-makers should consider safety and other policy goals that can guide stakeholders as they build technology solutions.
As it becomes more of a reality, what areas of regulation will be required? Which is the most important?
Premature regulation certainly has the potential for that negative impact. More importantly, approaches that dictate how each technology works may impact safety and other policy goals negatively; for instance, failing to account for - or slowing the development of - new safety innovations could remove the incentive for companies to compete and therefore the introduction of the best technologies for consumers and society.
That’s why we think it makes sense for a multi-stakeholder process to set performance goal-oriented approaches.This encourages the development of multiple technology solutions for safety and other policy issues that are created through innovation and competition. When multiple technology solutions meet safety and other policy goals, it benefits consumers and society at large. www.automotiveworld.com
DĞƚĂůǁŽƌŬŝŶŐ ŇƵŝĚ specialist for high-tech ĞŶŐŝŶĞ ŵĂŶƵĨĂĐƚƵƌŝŶŐ
FLUID TECHNOLOGY
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PROMOTIONAL FEATURE
The Software-Factory concept for Driver Assistance systems Jürgen Ludwig, Head of Business Development, Elektrobit Automotive’s Driver Assistance Division. The increasing complexity of Driver Assistance system software poses considerable challenges to software developers. A Software-Factory solution is the answer – it’s a concept that homogenizes processes and tools and optimizes continuous testing and data management.
Today’s vehicle systems are becoming increasingly complex. Driver assistance systems, in particular, are associated with a disproportionately high increase in complexity. One single control device has to cope with vast volumes of data and signals from sensors made by different manufacturers. Results or output signals often affect safety-critical functions such as steering or braking, so
46 | Megatrends
development and extensive testing for compliance with effective standards is essential.
These days, the standard for a premium OEM is 50 software functions, comprising 200 modules for ten ECU platforms manufactured by five different suppliers. In addition to pure development activities, i.e. writing the code for the functions, is the generation, integration and testing of the correct functions from the correct software modules for the correct platform in the right configuration and the right version is increasingly challenging. Conventional software engineering methods and standard environments can barely cope with this complexity therefore EB Automotive developed the
Software-Factory concept to solve this challenge which has already been used successfully in projects. Continuous software development
The Software-Factory concept initially defines standard processes for all participants. At the same time, the tool environment is homogenized and ‘continuous integration’ with automated continuous testing is introduced.A sophisticated data management concept optimizes the evaluation and administration of all data generated on the ‘production lines’. A production line generates the software stack for a control device in all necessary variants so driver assistance
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PROMOTIONAL FEATURE functions are continuously created for the production processes. Despite the many different control devices and variants, the Software-Factory guarantees consistency and high quality.
The Software-Factory’s hardware and tools can be used for several control devices in a virtual tool environment. The production line generates faster amortization from the initial investment. Not only does virtualization improve capacity utilization, it also takes care of the long-term archiving aspect
Transferring software production to the Software-Factory has other benefits in addition to the positive impact on cost and quality already mentioned. The OEM or supplier’s specialists can immediately begin the next innovative feature after implementing a new function instead of having to adapt an existing function for other vehicles. On the one hand, this reduces the OEM or supplier’s team to a manageable size. On the other, it ensures the ‘masterminds’ remain motivated. Ultimately, the concentration on core activities leads to greater commercial success. The OEM defines the brand-typical ‘driving experience on four wheels’, the supplier can optimize a function in the overall system and the software supplier can use the SoftwareFactory for efficient implementation in different vehicles. Patchwork software
The software used for innovative driver assistance systems increasingly incorporates modules from very different sources. Conventional driver assistance systems consist of a closed package of a sensor, processing unit and display or actuator. As a result of the diversity of influences, such as sensor data fusion, modern driver assistance sys-
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tems uses information from completely different types of sensors. In addition to data from conventional sensors, there is card data (electronic horizon) and data from other vehicles (Car2x). What’s more, OEMs are increasingly developing their own functions for integration in the control device.This is the only way they can implement ‘hallmark’ customer functions which differentiate them from competitors and provide a competitive advantage.
by technology specialists in conjunction with proven “old components“. Creating a robust overall system from this kind of a patchwork takes considerable effort – or a Software-Factory. Like a real factory, the raw materials ‘supplied’ have to meet specifications. Software modules also have to satisfy a defined level of quality or software metrics.These are verified in the SoftwareFactory, with the functions built in the necessary variants and all functions and side effects are tested.
A driver assistance control device contains OEM software modules, Tier 1 software modules and software modules developed
EB Automotive’s Software-Factory concept was rolled out in the automotive industry several years ago and has been very successful. Initially, the critical factors were resource shortages and the challenges associated with increasing complexity. Today’s critical factor is commercial advantage, due to economies of scale. The entry into the described new software world is also possible through the use of proven software modules such as ADASISv2 eHorizon Reconstructor or Predictive Curve Light by EB. Processes and responsibilities can then be gradually outsourced to free up internal resources for innovation.
However, proven software modules should be re-used if possible to save development resources and enhance quality. For example, if the electronic horizon is used in several control devices, it is better to procure the software module (ADASISv2 eHorizon Reconstructor) from one supplier and to implement it in all the control devices. Independent implementation by the Tier 1 suppliers can lead to deviations in behavior despite conformity to specification.The coordination becomes more complex and the effort increases if changes occur.
Summary and outlook
Megatrends | 47
Repairability starts
EV SAFETY
at home
Who should bear the responsibility for the repairability of EVs? Aaron K. Warner talks to Thatcham Research’s Future Vehicle Manager Andrew Hooker about EV design, safety and repairs
H
ybrid and electric vehicles may be growing in popularity by the day, but with increasing consumer confidence and proliferation of models, so too has come a problem: there is a widening skills gap when it comes to repair works, and OEMs must now look to bridge it in order to keep HEVs on the road - or risk customers being deterred from purchase by running costs. One rather glaring problem when considering EV repairs is the fact that many repair centres still do not have the training to deal with EV damage. As the number of electrified and hybrid vehicles on roads around the world is set to rise exponentially, now is the time to implement a new strategy. “Repair cost cannot be ignored by manufacturers if they want to produce a vehicle which will appeal to consumers,” says Andrew Hooker, Future Vehicle Manager at Thatcham.
As well as determining the safety ratings of new vehicles in accordance with Euro NCAP ratings, Thatcham also assesses repairability. The organisation feeds all its findings back into the industry, and offers training and advice to repairers and emergency responders.
“Skills within the repair industry are currently lagging behind the rapidly advancing technology being incorporated into electric and hybrid vehicles,” Hooker continues.“Take the example of high voltage battery packs: these can pose significant risks for repair technicians who have not received specialist training - and that might prevent them from carrying out the repair.” The result is that even official main dealers often have to pass a customer vehicle on to a centralised specialist centre, instead of carrying out a local repair. This could limit choice, increase repair time and push up costs for the customer, manufacturer and the repairer.
However, vehicle impacts are very difficult to predict and often push past the boundaries of what is expected. Despite the most sophisticated CAE analysis and volumes of simwww.automotiveworld.com
ulations, it is impossible for manufacturers to design for an easy repair in every eventuality.
“Part of the complexity stems from the fact that the overwhelming majority of high voltage vehicles to date are derived from a conventional ICE model instead of being built for purpose,” says Hooker. “This can complicate the repair process as cabling and electrical systems end up being placed where there is space - as opposed to where they would be accessed most easily and safely if designed wholly as an EV.” As HEV design matures,Thatcham is looking to OEMs to anticipate the operations required to repair their vehicles by incorporating features such as cable connector locations, access to the voltage isolator and fast and simple removal of the main battery. However, engineers already walk a difficult line between ensuring accessibility of the battery and cabling for service and maintenance, while ensuring these components are suitably shielded from a potential accident.
able, and may have a significant impact on the desirability of new models.
At present, the repair industry is geared to deal with relatively low volumes of EVs, with customers having to rely largely on a main dealer and authorised crash repair centre support for accident repair. The current process either involves OEMs centralising their HEV repairs at specialist locations or outsourcing the entire process to approved independent bodyshops who deal with a wide range of manufacturers. As EV numbers grow this model may well become unsustain-
The primary concern for OEMs looking to maximise EV sales should be in perfecting the current technology and delivering it at an attractive price. It is important to remember, however, that this extends beyond just the forecourt sticker. The costs of servicing, repair and insurance become more significant every year and so any coherent strategy for maximising the attractiveness of EVs and HEVs has to address long term running and ownership costs.
What is clear is that vehicle manufacturers need to consider the many accident scenarios that typically occur. Wiring harnesses on conventional vehicles frequently get trapped and compromised, so consideration needs to be applied to higher voltage systems too. Deformation of vehicle bodies can also cause panels and components under pressure to spring back when released for subsequent repair.
Addressing the skills shortage at a local level with specific training is key to removing this potential hurdle, and some organisations are already responding. At Thatcham’s Automotive Repair Academy, for example, the EV repair course makes up an important part of apprentices’ training programme, and new graduates are already returning to their employers with a much more developed skill set.
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FORMULA 1
50 | Megatrends
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FORMULA 1
F1: home of the ultimate connected car Motorsport innovation has, over the years, increasingly fed into the mainstream automotive industry, particularly in the areas of powertrain and electronics. As the connected car becomes a mainstream reality, road cars are again set to benefit from motorsport input, thanks to the high level of connectivity between race cars and their teams Martin Kahl
W
ith 1.5GB of data transmitted from each Formula 1 car back to its garage during a Grand Prix race, enabling the constant monitoring of fuel consumption, tyre wear and engine status, “an F1 car is probably the best example of a connected car”, says Steve Wainwright, General Manager EMEA,VP Sales and Marketing, Freescale Semiconductor.
Freescale has a long-standing partnership with McLaren Electronic Systems, which began in 1999 and was formalised in 2008, when the two companies entered into a technology partnership. Freescale itself was established as a company in 2004, when it was spun out of Motorola. The automotive industry is Freescale’s largest single business segment: in 2010, 50 million cars globally had a Freescale component in them. 300 million automotive microcontrollers (MCUs) were provided by Freescale in 2010 alone, and the company has shipped four billion since 1996. According to Wainwright, “That translates to 160,000 cars a day rolling off a line somewhere in the world with Freescale in them.”
were working much more closely, and at that point we formalised our partnership.”
“There is a standard ECU which all of the teams use; all of those control units come from McLaren Electronic Systems in Woking, UK, and are underpinned by microprocessors which come from Freescale,” explains Dr Peter van Manen, Managing Director of McLaren Electronics. “The electronics and software which are created by McLaren Electronics Systems are used by all of the teams on all of the cars, with a single version of hardware, and a single version of software. The only difference between the cars is the tuning and the data that’s used to tune them.” Although teams could gain a competitive advantage in the area of electronics, the FIA introduced a standard ECU in 2008, to remove
driver aids like traction control and automatic gearboxes. The electronics platform that was being developed by a number of sources was adding little to the racing, says van Manen. “The tuning of the systems was providing the differentiation. Electronics was a performance differentiator in the early 1990s, but there was an opportunity to reduce costs by having a single platform.” Motorsport: the industry test-bed
Freescale’s interest in motorsport lies in the test-bed opportunities that it offers. “You don’t make a lot of money supporting F1,” says Wainwright. “There are 22 cars on the grid this year, so the volumes are low. What you do get is this opportunity of a lab environment, and learning cycles.” Product development cycles in F1 are much shorter than
The technology partnership came about as a result of the FIA’s decision to standardise powertrain management in Formula 1. “Suddenly Freescale became a supplier to all of the teams on the grid in Formula 1,” says Wainwright. “That was followed up by the extension into NASCAR. By that time, Freescale and McLaren Electronic Systems
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FORMULA 1
in road cars. Whilst a product may take five to seven years from development to fitment in a road car programme, “it is very different in F1,” says Wainwright. “There’s always a change in regulations, and every year there is a new engineering challenge, so there is constant innovation.”
The extreme conditions of motorsport, and of Formula 1 in particular, are ideal for testing those components which, in road cars, would be exposed to much less extreme conditions. “This is an extremely tough environment in terms of heat and vibration. In an F1 engine, you have a machine running at 18,000 RPM. That’s about three times what you get in a road car. That puts tremendous demand on the processors we use, but the processors we use for race cars are the same as those we use in most road cars.” High speed data, high speed cars
Success in Formula 1 hinges on high speed data transfer between the car, the garage and the factory, explains van Manen.“F1 is a racing series that goes around the world, and every two weeks we set up a new track. F1 relies on a connection between what’s happening on the racetrack, and what’s going on back at base. A Formula 1 car is a complex piece of machinery: it’s made up of about 25,000 components, and 5-10% of those components change every two weeks to make the car faster. The car relies on electronics to make it work reliably, to keep it safe and to perform at its best.”
With up to 10% of the car changing from one race to the next, the teams need to quickly understand how the changes will affect performance. “We can put what is effectively a new car on the track every two weeks by being able to gather data and act upon that information, to develop the car and race effectively against competitors.” Data from the cars is sent back to the garages, and from the garages back to the
52 | Megatrends
factories in real time via a DSL line. “Within most of the garages, there are complex simulations going on, about the state of the engine, tyres and fuel consumption, so that the guys running the race are able to very quickly take decisions, and know what the impact of those decisions will be,” explains van Manen. This may be crucial in Formula 1, but picture how valuable such data monitoring could be if information about the status of road cars could be monitored in real time, with faults identified before they lead to serious problems.Take it a step further, and vehicles could be repaired on the road, without the need to return to a garage.
Technically, this is already possible, as proven by David Coulthard during the 2002 Monaco Grand Prix. A problem with a transfer valve created dramatic smoke from Coulthard’s McLaren, and threatened to cost him the race. Working remotely via telemetry, McLaren’s engineers identified the problem and carried out a repair, without him returning to the pits. Coulthard went on to win the race.The fact that remote repairs of this kind were later banned shows just how significant such remote intervention could be, not only for Formula 1 but for road cars in general. 2014 rule changes
Although regulations change constantly in Formula 1, the changes coming into effect in 2014 mark a major development in the sport. “The new engine regulations are much closer to some of the road car considerations, and
that is interesting for us,” says Wainwright. The changes include: reduced emissions; increased fuel economy, with the amount of fuel carried on board falling from around 150kg to 100kg; new regulations on how long engines have to last; and most significantly, there will be a smaller engine, going from a 2.4-litre V8 currently to a 1.6-litre turbocharged V6. “All of these things make a big difference to the appeal of this racing to viewers,” says Wainwright. “It’s going from a rarified atmosphere to something we can relate to a little more easily.” It also gives Formula 1 some green credentials as the sport attempts to become more efficient, but it is high-speed connectivity and data transfer that is set to be the next major technology to transfer from Formula 1 to road cars. “All road car telemetry has been helped by F1 - how to do things at very high speed while ensuring data integrity. That’s very important for driver assistance. It’s all about data acquisition, data transmission and data processing.”
As connectivity improves, it will enable greater levels of driver assistance, and ultimately vehicle autonomy. “At the moment, ADAS is typically the combination of passive and active safety. Much of this technology is already here, like the 77 GHz radar for anticollision, and the manipulation of video signals for lane departure warning.” As telemetry in Formula 1 advances, and as the technology transfer from Formula 1 to road cars accelerates, so the narrowing gap between ADAS and the autonomous car becomes easier to comprehend - and much of it is thanks to motorsport innovation. www.automotiveworld.com
FUTURING
You can’t predict the future but you can plan for it
As Global Consumer Trends and Futuring Manager at Ford, Sheryl Connelly’s work sees her analysing everything from alien invasions to the more realistic trend of aging population to determine the future strategies and prospects of the company. Here, Connelly talks to Ruth Dawson about how predictions feed into production
W
hen you have identified a trend, where do you go from there? How does your work feed into production? In the early days, we would come up with the trends, and talk about the implications for Ford.We were a push organisation: we'd have to knock on doors and ask to go into meetings, to share what we found. If we were talking to designers, for example, we would take them through the trends and explain how Ford might design a better car. This, of course, was very naïve because we are not designers, So it was decided that we would avoid that.
Where we could contribute was to highlight things that were not within the view of the experts closest to the vehicle. We started to talk about trends, and looked outside the auto industry and found illustrations of how other categories were responding. That became a springboard for discussion for the experts who were best able to determine what implications it would have for Ford. Are there any trends you paid less attention to in the past which have turned out to be quite important?
Because we have a three-year development timeframe, what we watch is fairly slow moving. If it were to change rapidly, we're probably watching the wrong things. I always explain how we think of trends by using denim as an illustration. Denim has been around for 150 years and, in the early 1900s, 54 | Megatrends
it was often associated with a lower social economic status because it was a work uniform; it wasn't expensive, it was durable. If you look at denim today, it's high fashion. Consumers are willing to spend a great deal of money on a pair of jeans. That is a manifestation of a trend: it's a shift in a deeprooted value, attitude or behaviour.
By contrast, if you were to look at styles of denim - boot cut, acid wash - those are fads. If the things we watched changed that rapidly, by the time it played out and you've built a car around it, it may no longer be relevant. I can't really think of anything that I can say we didn't see coming, but there were instances where we were focusing on a symptom and not a cause. We used to track middle-market squeeze, recognising that low cost producers were moving up the value chain, trying to offer more premium goods, and, at the same time, luxury producers were trying to work their way downstream. The middle-market - the bread and butter brands
like Ford - felt that they were being squeezed out. We came to conclude that was just our point of view.What we were seeing was a byproduct of market fragmentation, customisation, globalisation. We then started focusing more broadly on market fragmentation and the desire for personalisation. Do you have to prepare for unexpected trends or events? When the tsunami hit Japan in 2011, for example, the automotive supply chain was severely damaged.
When we explore the future, we talk about wild cards, under which a tsunami would fall. We talked about tsunamis when I first started the role, and, within a year one occurred. Wild card events are important: they have a low probability of occurring, but when they do, they have dramatic and widespread implications. Disruption of communication; disruption of infrastructure; strain on resources - whatever the tipping point is, you know that those things will follow, and you have to ask how are we prepared for that. www.automotiveworld.com
FUTURING We also track global trends - that are probably visible today or on the horizon, and try to explore the boundaries of possibilities. And we use scenario planning: it's a very rigorous process where you write stories about how the future will unfold. Again, staying true to the premise that no one can predict the future, the power of scenario planning is that it forces you to imagine multiple scenarios of how the future would play out, and you try to do it in extremes. For instance, if you write one story about economic prosperity, you have to pair it with a story about economic collapse so that you can explore the nuances in between.
What trends are you looking into at the moment?
We have a database of 200 trends: we take off the top ten or so to start our discussion, and over time they rotate. They are not mutually exclusive; you see a lot of overlaps.
In recent years I've spent a lot of time talking about the tension between two conflicting trends: information addiction and how reliant we are on having things available; and the feeling of being inundated with information and not having effective tools to determine what is accurate or credible. I don't see it playing out black or white, there'll be many shades of grey, depending on the individual and what their preferences are. But we recognise that there is a nuance in there, that there is no one size that fits all in terms of reliance and access to information.
Given that Ford has a global reach, and trends vary so much from country to country, how do you adapt forecasting for regions?
When futuring was centralised, it was because Ford was worried that teams across the world were trying to anticipate where the market might go, but if they weren't talk-
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ing to one another, we were running the risk of coming up with not only inconsistent but incompatible views of what was most relevant. The idea behind us forming a trends team was that there would be a one-stop shop to help guide discussions.
We've spent a lot of time identifying global trends and trying to figure out how the implications vary from region to region. For instance, having a discussion about aging in a place like Japan is quite different than one you would have about aging in Italy or Germany. There are different dynamics, different cultural structures, different politics, different birth rates. In the US, aging is less visible because you have so much immigration, by contrast Japan does not have a lot of immigration and so the problem is highlighted.
How do you reconcile the fact that younger generations are less interested in driving and buying cars with the aging population trend?
Our values, attitudes and behaviours towards individual vehicle ownership are really evolving between the generations. If you came of age in the '60s or '70s, purchasing your first car was this major milestone into adulthood. For a long time it stood as a marker of the level of professional success that you had achieved. But younger people don’t really see the car in the same way. In fact, an argument can be made that it's been displaced by cellphones. Cellphones to a young person are a much greater marker of status and a tool of freedom and independence. But, because of that, cars are being developed and marketed in a way that says it can do so much more than just transport you. It used to be that you would sell a car based on performance features; now it's more about what it does beyond transport. Developing features like Sync and MyFord Touch, and enabling platforms that allow you to pair handheld devices with your car has been a big part of our strategy.
It's really important to note that that's not going to appeal to some people. One feature we don't spend enough time talking about is the ‘do not disturb’ button that comes with the system. There are those people who say ‘my car is a sanctuary, it's a place where I decompress from the day’. In that regard, it's not driven necessarily by age. I can't say the ‘do not disturb’ button works more for an older person than a younger person, it's very context driven.
It has been predicted that there will be up to four billion cars on the road by 2050. Combined with the development of megacities and rapid population increase, how do you think cars will fit in as a means of transport?
This is one of my favourite areas of exploration: I was so inspired by Bill Ford when he gave a TED talk two years ago and tackled this. His words were something to the effect of ‘I used to spend all my time thinking about how to sell as many cars as possible; now I worry what happens if you sell as many cars as possible’.
Central to his concern is the advent of global gridlock. If you have travelled in a densely populated city - Shanghai, Mumbai, New York - you would know that it's not convenient, it's not conducive. Henry Ford believed mobility was an integral part of the advancement of freedom and innovation, and if mobility comes to a stop you put this freedom and innovation in peril.
As a by-product of that we have to explore a range of solutions. Bill Ford talked about mass transport and things like car sharing, or vehicle to vehicle communications. But he also has alluded to the fact that how that plays out won't be decided by OEMs alone, there are so many stakeholders, not least of which are urban planners and those who decide what kind of infrastructure is put into place.
Megatrends | 55
CV INDIA
Supply to demand India’s commercial vehicle market is in transition from being a supply-driven segment to one that is pushed by demand. With the recent entry of several international players and car OEMs announcing plans to enter the LCV market, the sector is expected to undergo significant changes over the next decade Manmeet Malhi, EOS Intelligence
F
uture commercial vehicles on Indian roads are expected to feature advanced electronics, efficient fuel systems and have an increased lifetime. These factors alone are certainly significant game changers, but the most important market development is expected to come from how new entrants challenge the long-standing duopoly of domestic giants Tata Motors and Ashok Leyland, which currently hold around 80% of the market. After experiencing year-on-year growth of 30% in 2009-10 and 2010-2011, the CV industry - mainly the medium and heavy segment has remained flat for the past two years: slowdown in industrial growth, weak investment sentiment and significant fleet capacity addition have all adversely impacted the market.
It is, however, interesting to note the variation in growth rates for LCVs and M&HCVs in 2011-12 and 2012-13. While LCVs have sustained growth momentum, poor performance of M&HCVs in 2012-13 led to an overall contraction in the market of 2%. The slowdown gradually crept into the LCV segment in Q1 2013-14 too, prompting a sales decline of 3.9% year-on-year.
LCV Sales (in units) YoY Growth M&HCV Sales (in units) YoY Growth Total CV Sales (in units) YoY Growth 56 | Megatrends
With a challenging near-term macroeconomic outlook (at the time of writing, sales of medium and heavy-duty trucks have been declining for 17 consecutive months), demand for CVs is expected to remain subdued over the next several quarters. Regardless, long-term indicators continue to be bullish, as tailwinds - such as expectations of economic growth improvement, structural changes and progressive infrastructure development aiding the demand for trucks - are expected to gather steam. The next wave of growth
By the end of the current decade, the Indian CV sector is expected to have evolved along the lines of an already developed market. Improving road infrastructure, rapid urbanisation, tightening emission and safety norms, consolidation of fleet operators and increased focus on the total cost of ownership, are all expected to shape the industry’s evolution. One particularly notable driver of growth will be the evolution from disorganised manufacturing and retail to a more structured
form, leading players to invest in transportation and logistics. Demand for both self-managed CV fleets and third-party providers will thus increase, boosting the overall market.
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
215,912
200,699
287,777
361,846
460,283
524,887
12.3%
-7.0%
43.4%
25.7%
27.2%
14.0%
274,582
183,495
244,944
323,059
349,216
268,263
-0.4%
-33.2%
33.5%
31.9%
8.1%
-23.5%
490,494
384,194
532,721
684,905
809,499
793,150
-6.1%
-21.7%
38.7%
28.6%
18.2%
-2.0%
www.automotiveworld.com
CV INDIA Drivers Improving road infrastructure Better enforcement of overloading regulations Tightening emission norms Consolidation of fleet operators Goods and service taxes
Implications
Higher speeds, faster turnaround time and better mileage will increase demand for more powerful trucks; the cost of freight is likely to go down too with improved infrastructure as timeto-market reduces further
Market demand will converge towards right-load vehicles, offering the potential to change value-proposition for new entrants and global players As implementation of emission norms gets stricter, fleet replacement for non-compliant vehicles is expected to gather pace; OEMs might also use this opportunity to introduce technologically-advanced CVs to the market with lower emissions
Fleets will increase focus on total cost of ownership and restructure fleet composition to include more LCVs; it is anticipated that LCVs will be preferred for fast turnaround transportation, and will aid in covering short distances better than larger vehicles
Once implemented, this would lead to re-shaping of the supply chain structure, shifting the focus to optimising logistics rather than reducing tax liabilities The potential of the CV market is so great that even OEMs outside this area of the industry have been tempted in: India’s leading passenger vehicle player Maruti Suzuki has announced plans to enter the LCV space by 2015. The OEM will bank on its vast nationwide sales and service network to penetrate the market, competing head-on with Tata Motors and Ashok Leyland. The widening competition from both domestic and international OEMs can only work to improve organisation in the industry, prompting India to step up as a real competitor globally. Key challenges
In terms of challenging the long-standing duopoly of Tata Motors and Ashok Leyland, there will not be any major shift anytime soon, as new entrants will focus on tackling critical entry barriers, such as building a servicing network. Evolution of the industry would give new players an opportunity to establish themselves in the market but there will be significant changes in the competitive landscape. In anticipation of the continued growth of the CV sector, several global players - including Volvo, Daimler, Navistar, MAN and Isuzu have entered the market, either directly or in partnership with an Indian OEM.
Daimler has been particularly aggressive: it started selling locally manufactured, ‘made for India’ trucks in September 2012 and plans to launch 17 models by the end of 2013. The company sells trucks under the BharatBenz brand, which is the company’s fifth truck brand globally.With an investment of more than US$850m. India is Daimler’s largest greenfield venture outside Europe. In March 2013, within six months of its launch, BharatBenz overtook Mahindra Navistar which had been in the market’s HCV segment since 2009, signalling strong acceptance by customers.
www.automotiveworld.com
• • • • • • • •
Challenges for new entrants
Building distribution and service network, and maintaining dealer viability Designing trucks for the domestic market and introducing fuel-efficient technologies Developing a broad product portfolio, spanning all segments to meet customer needs and mitigate cyclical risks Competitive pricing, low operating cost reduce turnaround time Developing supply chain partnerships Providing financing at competitive rates Creating and maintaining brand image Localised production to remain cost competitive
Despite slowdown over the past 12-18 months, long-term fundamentals of the CV industry remain strong - a fact signified by the entry of a large number of global OEMs.
Previously famous for the lack of innovation, there has also been a spurt in Indian CV R&D over the past few years as new players have entered with state of the art, made for market products. Incumbent OEMs meanwhile have finally had to dig into their pockets to remain competitive. Besides supporting the market’s long-term credentials, R&D investment also indicates that the sector is rapidly evolving, across parameters such as market structure, customer behaviour, product portfolio and competitive landscape. The Indian CV market is on an accelerated pace of convergence with established markets worldwide and it is just a matter of time before this sector makes its mark on the global stage. Manmeet Malhi is a Senior Analyst at EOS Intelligence, and follows the emerging markets automotive sector closely.
• • • • • •
Challenges for incumbents
Delivering lowest total cost of ownership rather than just low initial cost of purchase Developing R&D competency Improving skill sets of service network and local mechanics as technology content per vehicle increases Improving service infrastructure at dealer's end Developing products to address gaps in product portfolio Adhering to tightening emission norms
Megatrends | 57
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HOT STAMPING
Hot stamping goes mainstream Since its introduction in the 1990s, the use of hot stamping has been steadily gaining popularity across the automotive industry. As the technology develops, and its benefits increasingly justify the upfront investment costs, hot stamped parts are appearing not only on large premium cars, but also on small, mainstream and even low-cost cars. Martin Kahl investigates
H
ot stamping is used to produce safetycritical structural parts, such as bumper beams, door and A- and B-pillar reinforcements, and roof and dash panel cross members. Its main attraction is that it offers the associated benefits of weight reduction and the production of higher strength parts. As a result, hot stamping is now widely regarded as a mainstream manufacturing technique. “The question is how quickly OEMs not currently using many hot stamped parts will close the gap with the best in the industry,” says Jean-Luc Thirion, Head of Automotive Product Portfolio, Global Research and Development, ArcelorMittal.
“Hot stamping is a cost-effective technology enabling the production of high-strength complex parts without too many processing issues. Hot stamping technology, and Usibor, [ArcelorMittal’s proprietary 1500MPa steel grade developed specifically for hot stamping] enable weight-saving solutions at a notable cost, because even if the material and the technology is slightly more expensive than conventional products, the decrease of thickness of the material compensates for that.” The rise of hot stamping in China
Although hot stamping started life in Europe, it is now being used in almost all major automotive markets. Demand for Usibor in the BRICS varies, says Thirion. “In China, you see the same cars as in Europe. India is a very local market with products adapted for the market.”
The cost-sensitive nature of the Indian market, along with lesser crash and emissions requirements, puts hot stamping lower down the priority list when it comes to investment. “In China, local brands are developing cars to Western standards. In India, the market is far behind.The interest for global standard products is quite low.The market will not develop at the same speed as China. India is much more price-driven than China.”
www.automotiveworld.com
Megatrends | 59
HOT STAMPING
At a recent media briefing, ArcelorMittal said it expects its upcoming VAMA (Valin ArcelorMittal Automotive) joint venture factory in western China to account for up to 10% of China’s automotive steel production - thanks to growing demand for high grade automotive steel. ArcelorMittal is forecasting an increase in automotive steel consumption in China from 14 million tonnes in 2012 to 17 million tonnes in 2014, 20 million in 2016, and 22 million in 2018. This demand is due to a growth in annual car sales, which the company expects to reach 31.5 million units in China by 2017. In China, the demand for Usibor comes mainly from OEMs using it in global platformbased models. “Our objective is to develop the same solutions for China as for other markets,” says Thirion. The new VAMA plant will produce not only Usibor but also laserwelded blanks. “VAMA is a huge investment,” says Philippe Aubron, Chief Marketing Officer for ArcelorMittal Automotive Europe. “The target is to produce up to 2.3 million tonnes of steel for automotive. That should represent roughly a 10% market share in China.”
The major hot stampers, including Gestamp, Benteler and Magna are increasing the number of their hot stamping lines in China, says Thirion. “In China, there are also local hot stampers who are using more of our coated Usibor, because it's a good, cost-effective technology even for an emerging country like China.” There are also some local stampers producing hot stamped parts in China, but Thirion does not expect domestic OEMs to invest in
60 | Megatrends
in-house hot stamping. “The classic Western hot stampers are there but there are also local hot stampers, which are not bad at all. We are quite confident that these local hot stampers and the global players will propose a lot of interesting hot stamped parts for the car industry in China. There are demanding objectives in terms of CO2 emissions and pollution in China, and that will force them to go in these directions.”
“There is also another solution, a very high grade martensite steel used in North America for roll-formed parts. Even if we think that hot stamping will be a mainstream solution, it's not the only solution. And it will depend heavily on the target cost of the vehicles.”
But is it a real threat to steel? “We are working on third-generation AHSS - this is a new generation of Usibor up to 2000 MPa with which we will deliver additional weight-saving potential. Even if our competitors are catching up, we will increase the gap with new products and reduce the cost of weight saving,” says Thirion.
“We need to propose the same solutions in South America as Europe and North America. For years, we have developed AHSS in South America. In 2012, we developed 15 new steels for South America, cloning them from European products. Now we know that demand for AHSS in Latin America will rapidly follow Europe and the US.”
Along with the benefits of hot stamped high strength steel parts, OEMs and suppliers are being offered attractive solutions by suppliers of other materials, including aluminium and, to some extent, carbon fibre. Thirion admits that carbon fibre “is a very interesting material. The leaders in this market are making some very interesting parts. But the use of carbon fibre is slow and expensive, for the time being.”
Safety in South America
This year Latin NCAP crash test results have highlighted the gulf between safety standards of cars sold in Europe, North America and Japan, and those offered in regional markets like Latin America. The press coverage surrounding the disappointing results of these tests - several global OEMs scored zero points and zero stars - is spurring a new drive for safety, and Thirion is convinced that Latin NCAP standards will force local production to higher standards of safety.
www.automotiveworld.com
HOT STAMPING
Growing OEM investment
In addition to the growth of hot stamping at the classic outsourced suppliers of hot stamped parts, there is also growing investment by OEMs, including Fiat, BMW (at its Dingolfing plant), Volkswagen (at Kassel) and Volvo (at Olofstrom). In addition, “Some car makers are increasing their use of this technology in collaboration with major hot stampers. Some Asian car makers will also produce hot stamped parts in-house.”
Volkswagen, at the same time as investing heavily in hot stamping, is now focusing on the use of four core vehicle architectures, off which most of its group models will be built. That obviously offers great potential for high volumes of similar parts and economies of scale across many different models. And Thirion believes the industry will see the growth of hot stamping and the growth of vehicles architectures running hand in hand. “The need for weight saving is such that OEMs need to customise their solutions to the market, to the specific high cost, and so on. Initially we saw the growth of Usibor mainly in the upper segments. But Usibor parts are increasingly used in smaller segments. Hot stamping is a mainstream solution because it's a cost-effective solution.”
From small cars to heavy trucks, light trucks, and even medium and heavy commercial vehicles, Arcelor Mittal are planning heavy promotion of hot stamping, because it says that, compared to what is available, hot stamping is a very interesting weight-saving solution. Such parts, says Thirion, would be structural safety parts. “Initially, hot stamped parts were used mostly in the upper parts of the vehicles, and the current trend is to go more and more into lower parts of the vehicle, where OEMs need corrosion protection. Our Usibor product has good results but we are developing new hot stamping grades with new coatings. It's more niche market, but it enables customers to use hot stamping for www.automotiveworld.com
parts and applications where they currently don't. With the solutions that we are developing, we will also soon be able to use hot stamping for chassis parts.”
ArcelorMittal sees chassis parts as the next area of focus for hot stamping parts. These could come to market by 2015, a year that will see something of a renewal of ArcelorMittal’s hot stamping offering. “We are dedicating a lot of effort in R&D to the development of new coatings and new grades in order to make it possible to use hot stamping for applications like chassis parts where we need more deformability and maybe less strength. For chassis parts, the objective is to reach 1000 MPa in order to save weight on some parts. This really illustrates how there can be a variety of different strengths per application.”
In terms of specific parts,Thirion says the cradle will be a possible candidate. “We use hot stamping together with laser welded blanks, and we have developed a material called Ductibor which is used with Usibor.We use it for the B-pillar because we need 1500 MPa in the upper parts and deformability in the lower part, where we already have 500 MPa.We are trying to develop intermediate grades; we will have a 1000 MPa steel for chassis parts. You can imagine that intermediate value would be useful for side rails, for parts which need to absorb energy during a crash. So we will be developing hot stamping technology for everything we can, trying to customise the mechanical properties that the customer needs to exactly where they need them.” As well as lower strengths of steel, ArcelorMittal has talked in the past about introducing a 2000 MPa steel, now expected to be launched in 2014 or 2015. “Our future Usibor 2000 will replace 1500, but not for all parts. We do not plan to replace all Usibor 1500. Strength is not everything. Sometimes you cannot save weight anymore because of the stiffness. When you have reached the minimum thickness for
the required stiffness, you cannot reduce it any further, so there is no need to use higher strengths.”
Bringing a higher grade strength steel to market has its challenges. “Developing such a product is complex. There are numerous trials by our competitors, but the availability is limited and some processing properties are restricted. Such a product can only be successful if customers can use it, weld it and form it.” Production capacity
Despite the anticipated rise in the number of hot stamped parts, Thirion does not foresee any production capacity constraints. “The number of stamping lines across the world is increasing constantly.The steelmakers are developing new lines, and the stampers are investing more and more in hot stamping. The number of new hot stamping lines around the world is huge, and growing very fast, including in China and Korea.” Notably, the use of new hot stamped parts in vehicles replaces existing parts, so growth is in line with replacement. “We will not substitute every chassis part, because there are some parts which are designed for stiffness and for some chassis parts we are not able to decrease the thickness even if we increased the strengths. But we think that at least one quarter of chassis parts could be lightened with such materials.” Despite attractive material solutions being offered from other quarters, along with other ways of saving weight and increasing vehicle safety, Thirion is confident that hot stamping has a strong future. “We are developing new products to broaden the application of hot stamping, and increasing strengths in order to enable further weight saving.” Ending on a bullish note,Thirion says,“We are convinced that hot stamping will remain the mainstream technology, at least for a quarter of all vehicles in the future.”
Megatrends | 61
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INFOTAINMENT
Screens lose their touch Ruth Dawson
J
ust a few short years ago, touchscreens were heralded as being the best way to deploy connectivity in car. Emulating the smartphones and tablets consumers are now so well accustomed to, dashboard touchscreens deployed connected car functions seamlessly - or so marketing teams would have led us to believe. Fast forward to 2013 and the automotive industry’s love affair with flush touch sensitive surfaces is starting to cool. Although touchscreens may be deployed on ever more tech outside of the car, the latest round of connected vehicle developments has seen some OEMs and suppliers go back to basics, with buttons and dials in place of a flat surface.
Apple recently teased the industry with a fragment of insight into its vision for iOS in the car. An application lodged with the US Patent and Trademark Office revealed that, rather than the single button and flat screen combination seen on other Apple tablets and smartphones, the company’s Digital Dash has textured ‘buttons’ moulded into the touchscreen.The system has been designed so that it will have “raised ridges, indents or other tactile properties to facilitate operation without diverting attention away from the road”. Ford, meanwhile, has announced that it will be combining more traditional buttons and knobs with a touchscreen interface for its next generation of connected cars. Somewhat confusingly, the OEM cites the touchscreen as the reason why half of its www.automotiveworld.com
customers choose to buy the system - so why the step backwards?
Once again the switch flip is largely a result of distracted driver regulation: NHTSA’s phased voluntary guidelines aim to keep the driver’s eyes off the road for no more than two seconds at a time, twelve seconds in total. A reasonable request one might think when it comes to tactile surfaces, but almost impossible to obey when a driver is expected to navigate a flat touchscreen system with various menus and options. However, in Ford’s case at least, there is another dimension to this decision, other than gaining a business edge: part of the ongoing criticism levelled at the OEM’s MyFord Touch system focuses on the interface itself. The other 50% of Ford’s customers, it appears, are deeply unhappy with the touchscreen.
Jack Nerad, Executive Editorial Director at Kelly Brook Blue, commented to USA Today that it is better to stick to what consumers know best, saying that Ford’s decision to get rid of buttons entirely “may have been a bit overkill”. Consumer Reports has furthermore labelled the interface “distracting”, the fundamental design as “flawed” and the flush, touch-sensitive buttons as “maddeningly fussy and...hard to distinguish.”
Frost & Sullivan has taken a more diplomatic line, stating that “OEMs are finding it hard to balance out an offering which provides the latest and greatest features but also assures
safety… clearly proving that full touch experience is not yet automotive ready.”
But many OEMs are still keen to figure out the role of touchscreen in the future connected car. Speaking to Autoline, Johann Jungwirth, Chief Executive of R&D at Mercedes-Benz North America, said that he believed the future of HMI would be a blend of voice, touch and buttons. To Jungwirth it “doesn’t make sense” to incorporate a touchscreen solution into mid-size or larger cars where the centre of the dash is further away from the driver. A more comfortable solution in this scenario would be to use a console or voice, gesture or gaze control.
“It’s not [one] size fits all,” Jungwirth said. “It’s really about creating what’s natural.”
The realisation that screens may have lost their touch could not have come soon enough - but whether it will work in Ford or Apple’s favour in the short term is another matter. The initial draw of touchscreen tech at the dealership may prove too much of a flash to ignore for buyers, with some already viewing Ford’s move back to buttons as a retreat to the dark ages. But what of the future? At this year’s CES in Las Vegas, Tactus Technology unveiled a flat touchscreen which could rise into a keypad on demand. Ideas like this could bridge the gap between a sleek dashboard and consumer preference. Whether OEMs will be willing to embrace it, however, is another story.
Megatrends | 63
SITTING ON THE THE BIG PICTURE
ELECTRIC FENCE T
o battery swap, or not to battery swap,
It had not been an easy ride for Better
nault committed to providing Better Place
ever, is yet again hanging in the balance. After
ing as a leader in the battery swap market, a
Z.E. cars for use in Israel and Denmark, after
that is the question. The answer, how-
battery swap pioneers Better Place liquidated, it seemed that the tech was doomed to be relegated to the past.
64 | Megatrends
Place, after all: despite the company emerglack of OEMs making EV models capable of
using this recharging system seemed to cement the company’s downfall. Although Re-
with at least 10,000 battery swap Fluence
three years the OEM decided to withdraw its investment and focus on charging technology instead.
www.automotiveworld.com
THE BIG PICTURE
And so it was that in May 2013, Better Place
Israeli consortium headed by solar power en-
customers, the wider public take up would not
sale falling through, another purchaser quickly
decided to liquidate. “Despite many satisfied be sufficient [to sustain the company] and sup-
port from car producers was not forthcoming,” explained former Chief Executive Dan Cohen.
But in the space of a few short months, things appear to have turned around. Weeks after
Tesla demonstrated its battery swap technology, Better Place was back, bought out by an
www.automotiveworld.com
trepreneur Yosef Abramowitz. Despite the
stepped forward and committed to keep 15 of the 18 Better Swap stations running.
Reports suggest that the Model S had been initially designed to accommodate fast battery swaps. But Tesla’s network of free super-
chargers announced in June just proves that this manufacturer is still hedging its bets.
Megatrends | 65
EUROPE
Europe: the storm before the calm While facing the lowest sales volumes for 17 years, European OEMs are taking on the hefty task of restructuring operations to deal with the overcapacity problems that have dogged the industry since the 1970s. Unsurprisingly, many have built record stores of liquidity to ride out the storm - and there are early signs that the industry will emerge from this period in better shape than many thought possible, just as the market begins to grow again. All looks well in Europe, with prospects of optimised balance sheets on the horizon. Michael Ward, Head of Diversified Industrials at RBS, analyses the future financial prospects for Europe
T
he headlines are clear: the European car industry is facing one of the most difficult periods in its history, with OEMs’ combined losses reaching more than €12bn (US$16bn) in 2012. It is becoming increasingly apparent that premium car manufacturers are no longer immune to the challenges of the European market - and the ability for extraordinary profits from China - as seen in 2011 and 2012 - to hide all sins in Europe is at least partly over.
Faced with this, and having experienced more than five years of substantial uncertainty, optimising balance sheets for shareholder returns has been a luxury none could afford. Instead, since the crises of 2008, CEOs and CFOs, under pressure from credit ratings agencies, have demanded shock proof balance sheets. As a result, European headquartered vehicle manufacturers (OEMs) carry a record €75bn level of liquidity. This risk aversion appears further supported by the proportion of cash to undrawn lines rising from 50-50 towards 70-30 post crisis.
Against this backdrop, it may seem like quite a leap to propose a return to better times. But, as we may be seeing the beginning of a period of greater demand predictability and, more strikingly, the potential to undertake a genuine if imperfect structural change in Eu-
ropean volume production capacity, we could start seeing the first signs of moving away from balance sheet resilience, and back towards optimisation with normalised levels of liquidity. A return to historic norms could see a release of liquidity of €15bn for European OEMs alone. Capacity
RBS sees overcapacity as the single biggest challenge facing the European car industry. Volume players have seen their capacity utilisation levels in Europe drop from above 80% before the crisis to close to 60%. Moreover, the overall utilisation rate masks the fact that some production plants in Western Europe are estimated to be running at as low as 2030% of their capacity. The US finally addressed this issue after the financial crisis with US$80bn of US government support. This one off re-setting of production capacity has had a profound impact on the big three OEMs - as seen in the dramatically different fortunes of GM and Ford in their restructured North American operations, compared with their struggling European subsidiaries. The US domestic car industry peaked in the 1960s and has since experienced nearly 40
years of failing to deal with this structural overcapacity issue: it was at the heart of the secular decline of the big three over that period which has only now reversed. Can Europe follow the example?
In Europe, €30bn of government money was spent providing - as the European Commission described it in its Cars 21 report “breathing space for reorganisation”, or perhaps more accurately, avoiding reorganisation. It is clear, however, that the government well of support has run dry, leaving companies with only a self-help programme. It will not be a cross-industry initiative as proposed last year by Fiat’s Chief Executive, Sergio Marchionne, under the auspices of ACEA, since the issues facing premium OEMs, volume players and the likes of Toyota and Hyundai are not the same. But this is not to say that the removal of excess capacity would not help all. Despite this, the European high-volume car market is going through one of the largest restructurings ever. More capacity reduction from full plant closures has been announced in the past twelve months than in the decade and a half before that. It will be a long way from solving the issue in one go, but the current view is that it is material and supportive of our better times theme. Estimates vary as to how many plants needed to close to address the capacity issue: Numbers as high as 20 have been suggested, while our own analysis suggested ten from a total of 51 assembly plants of the European and US volume players in Europe which are most affected by structural overcapacity. Plant closures
Source: Company information
66 | Megatrends
In the summer of 2012, we moved on from looking at how many plants should close and undertook a very detailed study into just which ones can be closed and at what cost. This complex undertaking required a model, engine, platform and supplier level analysis. In addition, we did not underestimate the www.automotiveworld.com
EUROPE
Source: Company information, LMC Automotive
social and political dimension to this exercise. In short, we concluded that the industry simply could not afford to look at the upper end of what may be optimal: ten or more plants and a minimum cost of more than €11bn.
Hence we developed a five plant closure scenario which we believed affordable and sufficient to make a meaningful difference to long term structural overcapacity. As core thesis was developed, the European OEMs began announcing plant closures, starting with GM closing Bochum. Since then, all volume players in Europe have announced their plans.Whilst RBS predicted quite accurately the actions of Ford, GM and PSA, we did not envisage that Renault and Fiat would close no plants at all. However, a detailed model and factory analysis of Fiat’s revised strategy suggests that the refocusing of its model line-up effectively increases capacity utilisation - partly by moving to Europe certain models that were planned to be made in the US. And there is further evidence that such actions will assist in closing the production-sales gap. According to RBS calculations, capacity utilisation amongst the volume players will reach 70% by 2015, when LMC sees growth beginning to return more meaningfully; in other words, utilisation at the bottom of the cycle could be closer to what we had at the top. That is real progress. Demand predictability
With the looming issue of structural overcapacity, it is particularly bad that demand has been falling in Europe, and in the periphery countries dramatically so - but further compounding this issue has been the inability to predict just how bad things were becoming.
beginning of greater predictability. The most recent quarterly downward revisions from LMC were the lowest seen for two years, and are expected to continue.
“
In the financial world, the debt markets have been exceptionally helpful to OEMs in providing ready access to bank and capital markets.This has allowed the creation of liquidity buffers. But our better times horizon is 2015
Conditions remain challenging in a number of European markets. A tougher economic climate means tougher competition in the premium segment, as elsewhere.
”
Norbert Reithofer, BMW CEO ( July 2013) This is real progress. The headlines continue to make painful reading but knowing how much the market is falling makes planning considerably less fraught. Risks aplenty
The European macro economy probably remains top of the list of risks, but more specific automotive issues are also present, such as price discipline. Discounting appears to be increasing but pockets of more promising progress are appearing. China is critical, but merits a separate analysis and a thorough look at capacity issues in the medium term.
It should also not be forgotten that none of the scheduled plant closures have yet happened. A reversal would be very damaging, but if anything, these closure plans are being accelerated. Europe’s automotive engine room, Germany, also represents a risk but a cautious optimism still remains that the current pressure on sales and profits will be relatively short term in the domestic market.
or beyond, and this needs to continue. Very much related to this is the view of the credit ratings agencies. It is intrinsic in their approach that they will lag in their re-rating of the sector for such a change as outlined here. Hence the potential release of liquidity may well come later than we predict as they await a greater degree of verification of the sustainability of the change. If we are right in our overall proposition, the next question becomes an unexpected one in the context of the storm conditions of today: what to do with the money? We doubt there will be much enthusiasm to send it back to shareholders, and the industry is not short of capital needs in new models, technology, environmental and safety-related projects. We are not persuaded that this could start a period of consolidation, but further alliances will certainly feature. Of course, we may just be too early and the memory of today’s conditions too fresh in 2015 for such ambition to return. But this has never been an industry that lacks ambition.
LMC data illustrates the point perfectly with substantial downward revisions to the medium-term forecasts every quarter last year.
Whether you are the chief executive, CFO or treasurer, this means one thing: build a substantial liquidity buffer to allow for any outcome and survive the storm. But what we see from the last two quarters’ LMC data and very much supported by our discussions with the boards of many of our clients, is the www.automotiveworld.com
Source: Company information, LMC Automotive Source: LMC Automotive
Megatrends | 67
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INTERVIEW
Fifteen minutes with...
Alessandro Bernardini, Iveco Martin Kahl speaks to Alessandro Bernardini, Head of Iveco Innovation Truck and Bus and Alternative Traction and Electrification
W
hat are the main challenges in bringing alternative powertrains to market? Our customers want a vehicle which exactly meets their individual needs.We need to have vehicles with completely different architectures and configurations. And therefore the alternative traction solution cannot be the same. The challenge is to further reinforce the standardisation process.
Also, in the so-called niche products, alternative traction is still a niche. It's growing, but it's a niche compared to the overall mass production. Iveco’s overall production is not much less than the total production volume of one of the best selling passenger cars. Yet the customer demands the same kind of performance, and does not care if we are doing 1,000 or 10,000 vehicles. So it is up to us to decide what is best to offer in terms of standardisation and customisation.
need to reach 300,000km - the standard usage range for LCVs. 150,000km is more than enough for the real urban cycle. That kind of range, 150,000km, is very close to what we can achieve with our current battery technology.
From a cost point of view, if you know that the battery is doing a defined lifecycle that is meeting your expectations, you can define a cost which is today not far from a combustion engine.
How do you identify the appropriate alternative powertrain technology?
How do you see the future of battery technology in the CV sector?
We have had first-hand experience of hybrids since the 1990s, so we have real direct experience of prototyping many kinds of technologies. We speak directly with our fleet customers, we know what they are looking for, and there is active discussion to define their needs and ensure we have the solution in our portfolio. This is basically our approach: continuous and open discussion with our customers, and reliance on the experience we have from our past and present.
Take this example: light commercial vehicles operating only in downtown areas will never
Iveco benefits from the Fiat group’s considerable experience in natural gas. In the last few years, we have been pushing into the market to extend natural gas to long haul applications. We use liquefied natural gas - this, today, is the only real alternative to diesel fuel, and it delivers a real CO2 reduction.
I think one of the most relevant points is the overselling of performance, as has been done in other sectors. If we look at real data, we see constant battery improvement giving us a trend, and today we have, for the first time, a system that really meets the customer's expectation, without overselling what it can do.
www.automotiveworld.com
Can you please outline Iveco’s offering in natural gas?
From a business point of view, the main drawbacks are the payload reduction and range limitation.
There are currently around 12,000 natural gas-powered Iveco vehicles in circulation.The number is huge, but what is even more relevant is the number of years they have been on the road - this is not just a new technology but something that is proven in the field daily. That comes with years of experience and continuous improvement. The major drawback for the technology is not the vehicle but the infrastructure. In ten years' time, how do you expect your CV portfolio to be powered?
Diesel is still going to be the backbone of our industry, using a diesel engine that is evolving and improving in terms of efficiency. Alternative fuels or alternative traction can help reduce emissions.
Ten years is a long time but not so long for a real step forward in terms of technology. We believe plug-in hybrid technology will be the only real hybrid solution, but the main powertrain will be still the diesel engine - at least for heavy duty trucks. In buses, cities and governments are asking us to deliver low emission solutions, so full electric or plug-in is going to see higher penetration. And for light commercial vehicles, in urban use, plug-in hybrid technology will be much more developed and available in the market, but will still rely on diesel plus plugin to operate fully electric in urban areas. Megatrends | 69
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CONNECTIVITY
Emerging connectivity Tech Mahinda’s Senior Vice President and Global Head of Integrated Engineering Services, Karthikeyan Natarajan, discusses the connected car in India with Rachel Boagey
T
he connected car is a term so often bandied about in this industry, but the actual definition is fluid, adapting to the expectations of consumers in countries across the world. While Western markets are moving on to the intelligent car and autonomous vehicles, developing markets like India have different wants, needs and plans for in-car connectivity.
When it comes to in-car connectivity, what are the differences between Western markets and India? Consumers in India expect connectivity at zero cost. Unlike Western markets, consumers don’t want to pay for it, but at the same time they want the same features as consumers in Western markets. Why do you think Western countries are more driven by data capability, whereas in India, for now at least, the market is pushed by the simpler desire for voice functions? If you look at the kind of connectivity that is available in India, it is still 85% dependent on voice. It will probably eventually change, but at this point in time that’s where it is.
OEMs in India are moving towards datadriven connectivity. Where is Tech Mahindra in this regard?
Our key concern is can you really produce connectivity at low cost or no cost? We want it to be monetised by three key stakeholders. One is the OEMs, because OEMs will be able to collect the data that is going to come from the vehicle, to better understand the performance characteristics in terms of how they can develop. Second, can we also enable it for the ecosystem? How can they really leverage the connectivity in the car? Can we ask them to pay for it? And the third element will be the end consumer. The burden on the end consumer will be like the Western markets, where they get into a subscription or pay-per-use, but it will be more driven by volume and the ecosystem than just the end-user requirements. Do you think that low data coverage has affected the development of the connected car in India? www.automotiveworld.com
I don’t think so, because India is a very price sensitive market. If you look at smartphone penetration, this is maybe less than 20% of the whole market, so this is likely to grow faster. Apple has grown about 400% this quarter so that’s something which will probably eventually drive people to leverage the connectivity that is available for multiple applications. What are the specific connectivity features that Tech Mahindra is looking to incorporate into vehicles?
We’re trying to come up with a unique and interesting feature, a cognitive companion which means you can track the performance of the driver, based on speed, steering and braking. There is also an electronic coach, ecoach, which will help consumers drive better in Indian conditions, warning them of speed limits and traffic signals.
Over the next ten years, how close do you think India will come to seeing the development of a fully integrated V2V, V2I, V2X network or integrated transport system?
In 2000, India was lagging in technology advances by ten years; by 2020, I think we will just lag by maybe a year or two. Most of the features that are seen in Western markets, consumers expect to have in India already, but they also want it to be cost effective. That’s a challenge for OEMs in India because they really need to bring in something that’s more affordable. My guess is we will see V2V between 2018 and 2020.We are not far off in terms of how V2V communications would help fuel efficiency because, if you’re saying that you’ll adapt to this technology because it helps you to reduce the conditions, it helps you to save fuel, I’m sure the adoption will be much faster. Where in India do you think it will happen first?
It is likely to happen in cities faster than the rest of India. You might be surprised to know that some cabs in Chennai already have Wi-Fi in their cars - that’s something you wouldn’t have expected to have happened already.
You have previously said that North American OEMs are still focused on the front end of the connected car experience, whereas European manufacturers are more interested in the backend.What do you think Indian consumers are more focused on?
Anything that will help them to handle better features at low cost, in terms of fuel efficiency and better service and maintenance. Those elements, plus anything that can enable them to use their smartphones more effectively and start them requiring rescue services through the vehicle based entertainment system, that is more preferred by the Indian consumers. A recent consumer survey found that 86% of Indian consumers trust the technology in driverless cars, compared to the US, where only 60% would be happy driving a driverless car. Why do you think this is?
I’m not sure that I would like to be driven by a self-driven car in India, because of the multiple variants that affect driving. If you look at the number of vehicles that are on the roads in India, it probably would outweigh any congested city in any Western country. I think autonomous vehicles in India will take a very long time to appear because of two things: one is cost, and secondly, I think it will take a step by step approach. I see the introduction of driver assist systems first, then maybe the next generation could be autonomous cars. Systems such as Tech Mahindra’s electric vehicle called e2o will be first, which can warn you if you are driving too fast, too slow and braking too fast, too soon and too frequently. Do you think technology, such as in-car head-up displays will ever be suitable for the market in India? That would be maybe available only in the high-end versions, which is at least another two, three years away for India. We have not really seen many of those products in India yet.
Megatrends | 71
AFTERMARKET
AFTERMARKET: NO LONGER A
ccording to John Waraniak, Vice President of Vehicle Techonology at SEMA, his organisation represents “the grass roots of the auto industry and everything you don't necessarily need, but everything you want”. The aftermarket business is an industry worth around US$31bn a year, and the annual SEMA Show is the largest gathering of small businesses in the US. “It may be a small portion, perhaps 10%, of the overall automotive aftermarket,” says Waraniak, “but it's the high margin, performance brands, products and accessories that people - particularly automotive enthusiasts - want on their vehicles.”
John Waraniak spoke to Martin Kahl shortly after his confirmation as a speaker for Automotive World’s Megatrends USA 2014 conference.
Has the interest in performance and customisation changed in recent years?
Over the last ten years the automotive industry has gone from commoditised to customised, and mass markets have shifted to more fragmented customer segments. Ten years ago, the breakeven point for a US assembly plant was around 80,000 vehicles. In terms of customisation, 80,000 is off the scale. Most niche, low volume special editions, like a Chrysler SRT or Ford SVT, are runs of fewer than 5,000. There is a tension in the line - you've got to have enough pull from consumers that want those vehicles. Ideally you would never want to produce one more than is wanted by consumers. 72 | Megatrends
Many of our SEMA members work with the OEMs’ performance and aftermarket organisations to put their parts and systems on original vehicles. Successful companies and brands form emotional connections with consumers. SEMA companies like Eibach, Kicker, Hurst, Magnaflow and Nitto have tremendous brand equity, so when Ford, GM, Chrysler, or Toyota designs and builds a special edition vehicle, they typically reach out to the SEMA member companies to provide those authentic brands and performance parts for them, so they're actually on the vehicles when they are purchased new. It used to be that buyers wanted the fastest and best performing cars. Horsepower and performance are still important, but now they also want the smartest cars. Smart vehicles give a lot of street credibility and provide the cool factor to Gen-Y and millennials in particular.The Fiesta movement at Ford, as well as Scion are great examples of experiments in how to do things differently. Scion started off with 13 SEMA aftermarket companies providing accessories and grew to over 135 under the Scion Optomize programme. If you didn't want a radio in the vehicle, they left the it out, so that you could put in your own head unit or audio system. That was the first experiment and a lot of auto manufacturers have taken notice of the lessons learned from Scion. That leads on to the personalisation aspect of customisation. Mini offers a
high level of personalisation. So does the Fiat 500, and Opel has the Adam, for which there are a multiple different configurations. How do you view aftermarket personalisation and OEM personalisation? Personalisation is big, and certainly Gen-Y or Gen-O, the Optimisers, grew up digital but many consumers want cool vehicles that connect with their lifestyles, not just younger buyers. Millennials as well as Boomers want to take their digital lifestyles into their vehicles. They may not be performance enthusiasts, but they certainly are lifestyle enthusiasts so they want the latest personalisation products and systems in their vehicles. The automotive industry has been notoriously slow to respond to developments in consumer electronics. Is this somewhere that an organisation like SEMA can take a massive step ahead of the mainstream auto industry?
Absolutely.There is a battle for the future of the car between Silicon Valley and Detroit; it's a healthy battle, raising the bar for everyone. The product development cycle in consumer electronics is about six to 12 months. In automotive, it's anywhere from 12 to 36 months. So, how do you bring those two industries together? That's where Silicon Valley and automakers collaborate to create the services, features and functions for the connected space, which is fantastic, because www.automotiveworld.com
AFTERMARKET
AN AFTERTHOUGHT
electronics are 30% of the vehicle content and cost today.
The automotive industry can only bring connectivity to market in new vehicles, but there are millions of cars already on the road that need to be connected - what can be done to bridge this gap?
I call that the Aftermarket X-Factor. In the US, there are about 250 million vehicles on the road today. OEMs, in a good year, could probably produce 15 to 16 million new vehicles, and let's say 30%-40% have connectivity systems in them. It will take the OEMs 15-20 years to reach a critical mass of vehicles that can talk to one another. With the Aftermarket X -Factor, we can get there in half the time by retrofitting existing vehicles with here-I-am devices which can prevent forward and rear collisions, lane departure warning systems, backup cameras and so on. Being able to retrofit connectedvehicle systems is a huge advantage, and the US government and the Department of Transportation are working with the aftermarket to get those devices into vehicles faster, in addition to putting them on-board new vehicles. In terms of infotainment in general, do you see a future for built-in devices or do you think everything will be brought-in? www.automotiveworld.com
I think it will be a hybrid, a blending of builtin, brought-in and beamed-in. Some people do not want a built-in factory installed system. They want the latest aftermarket consumer electronics solution. If something really cool and innovative comes out, and it's shown at the SEMA show this November, people will want it in their vehicles in December. Do you think it is true that young people are less interested in cars than cell phones and personal technology?
As a whole, yes, perhaps younger people are less interested in driving than previous generations have been due to the freedom their phones and computers provide, but, with that said, they're interested in driving the new types of vehicles and want connectivity, performance and smartness in their vehicles.The industry is changing to cater to their lifestyle needs. For some, arguably, yes, 4G is more important to them than a V8, yet they still will need a vehicle as they progress through life. They want those amenities and convenience features and systems in their vehicles. Even though fewer young people may be traditional automotive performance enthusiasts, the market will continue to increase because people still will find driving is one of the best ways to actually have some freedom What can be done in terms of business models to ensure that people can afford the rising prices of cars?
Connected vehicles must connect with consumers’ lifestyles and experiences. If the cost of advanced vehicle technologies and systems goes past the demand, even though it's something they want but can’t afford, they won't put them in their vehicles.You may see more leasing of services, or even bundling the service with the vehicle. Perhaps you sign up for a service and the vehicle and the service provider work together to get you the car or truck that fits with your lifestyle and needs.
You want to take the same systems that you have on your phone and integrate those with your car, so if you already have the service with your phone, why can't you take that into your vehicle? We're just not there yet in terms of open systems, interoperability and systems integration. For example, let's say your phone works with your particular Ford, GM, Chrysler, Hyundai or Toyota and you want to make sure that it will work in another brand’s vehicle when you rent a car. We'll see more of that as platforms and architectures evolve. Cars, phones and computers have changed our lives and that order or priority has changed. 20-30 years ago the car was the first thing people looked at for freedom and motivated them to get their driver's licence. To some the phone or the computer comes first, but, a vehicle is still part of that lifestyle that has to fit in.
Megatrends | 73
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SUPPLY CHAIN
UpGRaDe tO INNOVatION Warren Smith argues the case for moving to a more collaborative, organised supply chain management system
F
rom OEMs down to tier suppliers, the automotive industry is undergoing a series of changes, many of which are being driven by a shift in product innovation and increasingly complex design enhancements. Changes of this nature are forcing manufacturers to redefine operational processes, requiring a shift towards establishing a more robust and unified IT infrastructure. It is a new world for automotive manufacturing, one that includes a much broader vision for what encompasses enterprise resource planning (ERP) solutions. Simply managing the internal manufacturing process is no longer sufficient. Today, automotive manufacturers must concern themselves with the reliability and responsiveness of their sub tier partners, subcontractors and resources beyond the four walls of their own plants.
The holistic supply chain - including vendors providing raw materials, suppliers of components and subassemblies, design engineers, testing labs and regulation control agencies plays a critical role in ensuring that vehicles leaving the assembly line are compliant with current quality and safety mandates. This is no simple task, and will undoubtedly continue to grow in complexity and subsequent risk. Indeed, as the stakes continue to rise, challenges such as recalls and fines take a toll on workforce productivity, and make quality control one of the most critical drivers for upgrading IT infrastructure. Consumer demands necessitate an increase in high-tech and complex in-vehicle components. Sensors and embedded software are becoming commonplace in more systems across the entire vehicle, from axles through to airbags. With this heightened complexity of components, regulation compliance, and certification requirements, manufacturers must learn to rely on more sophisticated technology solutions to keep pace within the market. Manual processes, spreadsheets, traditional reports and email notices are just not reliable enough nor do they support the workflow and collaboration needed for this new era of manufacturing. www.automotiveworld.com
Fortunately, ERP technology is ahead of the curve when it comes to the growing demands of the manufacturing industry. Modern ERP solutions can synchronise collaboration, connectivity and visibility to provide a more thoughtful approach to automotive components, modules and full vehicle production. Manufacturers and suppliers can fully leverage integrated solutions to oversee realtime collaboration and promote sharing of data, including computer aided design (CAD) drawings and 3D images. Seamless connectivity throughout the manufacturing supply chain allows automotive manufactur-
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Beyond mitigating the negative aspects of the process, the positive benefits such as supply chain visibility and collaborative design also help to speed innovation.Vendors are able to share ideas, document ownership rights, and incorporate schematics that impact performance details. As automotive components evolve in complexity and involve unseen attributes - such as component thermal drift and software or firmware versions - the ability to document and control changes becomes more important. No longer can the line foreman pick up and visually identify if the most current version of a system, such as the brake assembly, is being installed: too
Simply managing the internal manufacturing process is no longer sufficient. Today, automotive manufacturers must concern themselves with the reliability and responsiveness of their sub tier partners, subcontractors and resources beyond the four walls of their own plants.
ers to maintain tighter version control, manage ripple-effect changes, track critical escalations and capture relevant dialogue incontext to a specific product. The ability to track, report and validate team decisions is one of the greatest benefits of an integrated collaborative system. For example, the ERP system is able to capture dialogue, which can then be viewed in-context of the component part number, lot number or vehicle model, or VIN. The content can then be referenced for future decisions, reporting process enhancements. This level of historical documentation often proves valuable when legal or compliance issues occur and can provide insight for questions regarding due diligence, intellectual property rights and validation change or risk mitigation.
In the event of a recall, detailed tracking of versions, configurations and process changes help to isolate and quarantine faulty units, with as much speed, efficiency and cost control as possible.
many variables simply go undetected.
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Luckily, advanced ERP systems have the capability of tracking such concealed variables and detailed specifications. It‘s these details of today’s highly advanced and technical automotive manufacturing process that provide risk - and complexity. Maintaining sturdy control of the process affords great opportunity and benefits. A streamlined, efficient system means cost savings, fewer gaps in communication, fewer delays and errors and more responsive service to customers.
Improving supply chain visibility allows the manufacturer to speed processes, improve collaborative engineering and ensure greater safety compliance. Everyone wins, including the end consumer who can feel confident in the vehicle’s compliance with current mandates. Warren Smith is Global Industry Strategy Director, Infor.
Megatrends | 75
ADVERTORIAL
Variable cam timing systems from BorgWarner A phaser to suit all camshafts By Anna Strehlau, Engineering Manager, New Business Development, BorgWarner Morse TEC
In addition to direct injection and turbocharging, valve event timing plays a vital role in engine downsizing as the times at which inlet or outlet valves open or close can be controlled using cam phasers.This in turn allows the charge cycle losses to be reduced under partial load and the cylinder charging to be increased under full load. BorgWarner Morse TEC provides highly engineered variable cam timing (VCT) systems focused on utilizing cam torque energy and oil pressure to improve fuel economy and vehicle performance. With best-in-class simulation capabilities and state-of-the-art testing facilities, BorgWarner’s product portfolio includes various cam timing systems that offer a broad range of solutions designed for a variety of vehicle applications.
Anna Strehlau, Engineering Manager New Business Development, BorgWarner Morse TEC
B
orgWarner Morse TEC offers oil pressure actuated (OPA), torsionally assisted (TA) and cam torque actuated (CTA) phaser technology to achieve reliable variable cam timing on a variety of engines. Auto manufacturers profit from attractive solutions for virtually all application architectures as the variable cam timing systems from BorgWarner contribute greatly to making engines considerably more efficient while reducing emissions and engine complexity. In addition, BorgWarner's advanced variable cam timing technologies provide compact packaging and improve cold start performance.To meet the rising demand for in-line four-cylinder engines, BorgWarner is expanding its technologies for variable cam timing by enhancing its family of cam phasers. OPA and TA phaser technologies
BorgWarner’s oil pressure actuated adjustment systems use a hydraulic actuator driven directly by engine oil pressure. By simply using the available engine oil supply, the camshaft can be phased relative to the crankshaft while the engine is running. Here the timing angle is set via the alternate filling of two oil chambers. Suitable for all engine types, this reliable entry-level and low cost 76 | Megatrends
solution reduces engine parasitic losses while improving vehicle performance.
The more powerful torsional assist phaser technology uses the available torsion energy in addition to engine oil pressure, providing an optimized solution for boosted four-cylinder applications. The advantages of this technology are an incremental reduction in oil demand and faster response time in comparison with OPA technology.
Cam torque actuated phaser technology
For maximum performance as well as high speed actuation independent of the oil pressure, BorgWarner offers its cam torque actuated phaser technology.This solution takes advantage of the existing positive and negative cam torque energy generated during the opening and closing of the inlet and outlet valves.While OPA and even TA phasers must limit their range of travel based on swept volume requirements, the innovative CTA design can support a range of authority of 100
BorgWarner’s modular cam phaser technology gives automakers more flexibility in choosing the configuration that best meets their performance parameters with the added benefits of a compact package and simplified installation.
degrees crank or more. In addition to the considerably larger timing angle and more rapid response, other benefits of this technology are its independence of the engine speed and its safe functioning over an extended temperature range. In addition, phasing is possible even during engine cranking. BorgWarner’s CTA phaser technology also meets the requirements of start stop systems, in particular when phasing is required at very low engine speeds. Overall this leads www.automotiveworld.com
ADVERTORIAL
Using the existing torsional energy in the valve train, CTA phasers actuate more quickly, use less engine oil and operate under a wider range of engine speeds and temperatures than conventional VCT systems.
to better efficiency, lower fuel consumption and a considerable improvement of the response for advanced combustion strategies. In this way, CTA technology solves the target conflict between increased engine performance and improved efficiency. Advanced mid position lock technology
Another BorgWarner innovation in cam timing is the patented mid position lock technology, which was named a Pace Awards finalist
in 2011. Conventional cam phasers have a predefined lock situated at the end-stop position. This lock position, especially in the case of an expanded range of authority cam phaser, may not be optimal for all the potential engine re-start conditions. BorgWarner’s mid position lock technology circumvents this disadvantage by providing a default lock position which can be freely defined in an intermediate position within this range of authority. Cam timing systems equipped with this function allow an extended maximum lift range which in turn permits the camshaft position required in each case to be calibrated more precisely. Patented hydraulics provide for the reliable repositioning of the system to mid position when necessary. The system is also equipped with a failsafe function, so that if there is a sudden loss of power, or the engine is switched off normally, the mechanism is automatically returned to mid position and locked there.This avoids any problems which could occur when restarting the engine if the cam timer is in an unfavorable position. CTA and TA phasers with integrated mid position lock technology are also available with an integrated center bolt and spool valve for smaller package size and easier installation.
Complete portfolio of timing products
BorgWarner Morse TEC’s advanced technologies and broad product portfolio for cam timing systems offer engine and auto manufacturers more opportunities for downsizing engines. The variable cam timing systems as well as BorgWarner’s patented mid position lock technology allow optimized adjustment of the valve control times and result in improved combustion efficiency and reduced fuel consumption while increasing engine performance.
Cam phasers with CTA technology Features & Benefits
> > > > > > > > > > > > >
Suitable for all OHC engine types Uses camshaft torque to actuate Fast actuation independent of engine oil pressure or rpm Actuates during engine cranking Suitable for start/stop engine applications Industry-leading actuation rates Enables late intake valve closing strategies Available with mid position lock technology Large range of authority up to 120° crank Reduces engine parasitic losses Increases fuel economy Lowers emissions Improves vehicle performance
www.borgwarner.com Cam timing systems equipped with mid position lock technology allow an extended maximum lift range which in turn permits the camshaft position required in each case to be calibrated more precisely.
www.automotiveworld.com
Megatrends | 77
COMMENT
Smarter cars make for smarter cities Kal Gyimesi and Eric-Mark Huitema, IBM
O
ur cars are becoming smarter: under the hood, scores of processors manage hundreds of actuators and sensors; tens of millions of lines of software code vigilantly scan, keeping everything running smoothly. Ubiquitous cellphone links, streaming satellite media, and advanced navigation services mean drivers are almost as connected on the go as they are at home. These onboard technologies have improved cars’ reliability and performance, and made them safer too. Anti-roll-over and anti-lock braking systems, for instance, have avoided tens of thousands of fatalities.
The next frontier of automotive intelligence, however, is shifting beyond the car. Together, cities and OEMs around the world are beginning to experiment with advanced, interactive systems that help drivers commute more safely, quicker, and with less congestion than before. The first stages of this transformation are taking shape via mobile apps. Digital map makers are in a race to advance the quality of realtime traffic mapping, to help commuters see and avoid congestion before they hit it. San Francisco is one of a growing number of cities that has begun to add wireless sensors to its curbside parking spots to help cut congestion. Via a smart phone app, drivers can quickly locate empty spots, see what they’ll cost, and go straight there, rather than cruise aimlessly.
From these early efforts, automotive engineers, data mavens and urban planners are beginning to recognise that cities have a vital role to play.
78 | Megatrends
By tapping into the growing flow of data streaming from cars, cities are learning they can cut congestion and improve road safety. Eindhoven is a mid-sized city in the south of the Netherlands where city planners are increasingly concerned about the impact of congestion on the convoys of container trucks that flow from Rotterdam, Europe’s largest port, through Eindhoven to Germany and the rest of Europe.
Responding to this anxiety, regional planners turned to mobile technology to collect and analyse the digital performance data from a fleet of test vehicles. The data the system is harvesting is of a humble sort: it includes the countless status signals that pulse through a modern car’s operating system, including everything from the use of hazard lights, to the deployment of anti-skid braking systems. Normally, this data is of interest only to mechanics that hook into data ports. But, by collecting a steady stream of this information in real time, scrubbing it of private information, and analysing it for trends, Eindhoven is learning how to better orchestrate city traffic. Two years ago, Eindhoven started working with IBM and NXP Semiconductors to wirelessly relay anonymised vehicle performance indicators from about 200 vehicles to a data centre. For a six month trial, some 1.8 billion bits of data were collected from the test fleet, divining trends about road conditions. A spike in the number of cars deploying their anti-skid systems in a given location on a
chilly morning, for example, identified a spot of black ice. A surge of signals of cars turning on their fog lights, likewise, was an early indicator of dangerously low visibility. All in, the system recognised 48,000 such incidents.
But while this use of data is all well and good, the next step is for cities to begin using it proactively to prevent congestion and improve safety. For example, Eindhoven is developing workflows to detect potholes remotely, by tracking signals from cars’ suspension monitoring systems.The city has also successfully tested scenarios where, given a sudden stoppage of many cars at once, authorities can proactively signal inbound drivers’ navigation systems to lower their speed and re-route to avoid the congestion. The automotive industry has been wildly successful at advancing the intelligence of its vehicles from the inside out and we can now start attacking these problems from the outside in. By developing technologies, standards and applications, OEM and city planners have an even bigger potential to help traffic flow more smoothly and safely. This article first appeared in the Comment section of AutomotiveWorld.com. For more expert insights and analyses of the global automotive and commercial vehicle industries, visit automotiveworld.com/comment. The Comment column is open to all industry decision makes and influencers. If you would like to contribute an article, please contact editorial@automotiveworld.com. www.automotiveworld.com
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IN THE NEXT ISSUE
IN THE NEXT ISSUE
Q4 2013
available December ’13
OEMS TAKE ON THE CLOUD: DATA CENTRES SUSTAIN THE CONNECTED CAR
THE PROSPECTS FOR INDONESIA’S AUTO INDUSTRY
SMART CITIES: INDIA
MILLENIALS REVOLUTIONISE CAR OWNERSHIP MODELS
DO WE REALLY NEED TO DEVELOP DRIVERLESS CARS?
HACKING AND THE AUTOMOTIVE INDUSTRY
AUTOMOTIVE WORLD MEGATRENDS ’13: Speakers from the LV and CV industries share their thoughts
PLUS: INSIGHTS FROM LEADING CONSULTANCIES AND INDUSTRY INSIDERS 80 | Megatrends
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TOMTOM AUTOMOTIVE Connected Navigation System STATE-OF-THE-ART
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HAROLD GODDIJN CEO TOMTOM ‘When it comes to creating a unique in-vehicle infotainment system, TomTom is the ideal partner for Car Manufacturers and System Vendors. We offer an independent set of open, fit-for-use and easy-to-integrate, NDS-based Connected Navigation System components.’
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