Automotive World Megatrends Magazine – Q4 2013

MEGATRENDSQ4 2013 M A G A Z I N E

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

E XC L U S I V E I N T E R V I E W

Gordon MurrayFORMER F1 DESIGNERTALKS ISTREAM ANDTHE FUTURE OFENGINEERING

Blowing liquid airTHE NEW INTERNAL

STEAM ENGINE SET TOREVOLUTIONISE LCVS

Race Sunday, tweet Monday

SOCIAL MEDIA SPARKSA NEW DAWN IN

MOTORSPORT

Who should bedriving your car?WE ASK WHO SHOULDBE MAKING, SUPPLYING

AND CONTROLLINGOUR CARS

Megatrends | 3www.awmegatrends.com

Automotive World Megatrendsmagazine

ISSN: 2053 776X

Publisher:AW Megatrends Ltd1-3 Washington BuildingsStanwell Road, Penarth CF64 2AD, UK

www.awmegatrends.comT: +44 (0) 2920 709 [email protected]

Registered number: 800516VAT number: GB 171 5423 23

Chief Executive:Gareth Davies

Editor:Martin Kahl

Publications Editor:Ruth Dawson

Production & Design:Michael Franklin

Analyst:David Isaiah

Staff writers:Rachel BoageyRachael Hogg

Commercial Manager:Gavin Dobson

Events Manager:Amanda James

Copyright AW Megatrends Ltd 2013

Welcome to Megatrends Q4 2013

As the end of the year rolls around, we are

left to ponder 2013’s events and their future

implications. Millennials’ dwindling

enthusiasm for purchasing has been the topic

of many a water cooler conversation, car

hacking too, but is either as much of a

problem as they seem? Rachel Boagey

investigates on pages 18 and 26.

This issue of Megatrends revolves around one

big question: who should be driving your car?

From the word go, car design and development

is changing. The car is no longer exclusively a

product of the traditional automotive industry:

consumer tech companies may be muscling in

but, says Gary Shapiro, Chief Executive of the

Consumer Electronics Association, now is the

time for the two sectors to converge. Shapiro

speaks to Martin Kahl ahead of January’s CES

on page 76.

While it is clear that OEMs can incorporate

smartphones into cars very well, the question

still remains whether tech companies will be

able to build cars themselves (page 57). Many

may conclude that the likes of Google and

Apple would be better off working as mere

suppliers to OEMs, but new manufacturing

processes may give them just the boost need

to build an ‘iCar’.

On page 50, Formula 1 heavyweight Gordon

Murray discusses his new iStream

manufacturing process which, he says, “could

very, very simply make an Apple or a Google

or a Sony or anything like that”. Gordon

Murray Designs has “a full suite of tools, to

help somebody get from an idea on a bit of

paper to the cars coming off the line.” Ever

the innovator, Murray speaks exclusively,

revealing more than one little hint of what’s

in store for the future.

Albeit from a less glamorous world than

Murray, Peter Dearman, founder of the

Dearman Engine Company, is no less the

entrepreneur. On page 68, the company’s

Chief Executive Toby Peters talks about its

new liquid air engine, first developed in

Dearman’s garage workshop and now set to

revolutionise LCV powertrains.

But perhaps the most talked about

technology of the year is that which is driving

autonomous vehicles. Both the US and UK

are seemingly against driverless cars being on

public roads for anything other than testing

at present, but the likes of Mercedes is ready

to go. But there is still one matter to resolve

before autonomous vehicles should be

allowed on the roads: just who, or what,

should be driving your car when you are

taking a back seat? Frost & Sullivan’s Prana

Natarajan considers the matter on page 60.

We hope you enjoy this issue of Megatrends

and, as always, welcome your thoughts and

suggestions. Simply email

[email protected].

Ruth DawsonRuth Dawson, Publications Editor,

Automotive World

Editor's welcome

WELCOME TO MEGATRENDS Q4 2013

4 | Megatrends www.awmegatrends.com

> ON THE COVER

38 | Race Sunday, tweet MondaySocial media, globalising brands and costreduction are breaking new ground for amainstay of vehicle promotion

68 | The internal steam engineToby Peters discusses the Dearman EngineCompany’s new liquid air innovation

50 | The automotive architectFormula 1 designer Gordon Murray on hisiStream manufacturing process,industrialised housing and supercar dreams

57 | Can tech companies build cars?Non-traditional manufacturers are gainingever more ground in car tech but making areal life ‘iCar’ is another matter entirely

60 | Who should be driving your car?Autonomy may have been the hot topic of2013, but who, exactly, should be incharge of your car when you are not?

Contents

21 24 R&D locallisation and captive engineering centres

26 Is car hacking that much of a problem? 33 MD of Netherlands safety institute talks three hot topics

18 The millenial conundrumRachel Boagey investigates this newly identified generation’s growing apathy for car purchasing

22 Are Chinese OEMs still copying car designs?Paolo Beconcini analyses the legal ramifications of ‘copycat’ car developments

IN THIS ISSUE IN THIS ISSUE

Interview: Dr Ajit Kumar Jindal, Head of Technology,Commercial Vehicles, Tata Motors


45 78 Lubricants: no longer just a commodity

34 CO2 emissions and the future of brand success

67 Is car sharing the new proving ground for tech?

54 LTE: building a better connected car

37 Interview: Ian Taylor, Senior Technologist, Shell Lubricants

76 CES head Gary Shapiro talks converging industries

28 Can the ICE survive the EU?Six panellists give their thoughts on a regulation that could see conventional powertrains outlawed by 2050

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

> ALSO IN THIS ISSUE 11 | Streets ahead Inrix dreams of maps independent of roads

71 | Simulators: the final frontier? rFactor Pro’s Chris Hoyle argues the case for replacing prototypes

73 | Mirror image Are Tesla’s attempts to get rid of side mirrors misguided?

75 | Big data, bigger opportunities Now is the time to improve customer experience using data already available

82 | Navigating logistics challenges in Africa Anna-Marie Baisden analyses BMI’s new report

IN THIS ISSUE IN THIS ISSUE

Volvo’s alternative fuels Product Manager on beatingemissions legislation with better overall design

CONTRIBUTORS


CONTRIBUTORS

Dr Paolo BeconciniPartner, Carroll, Burdick & McDonough LLP

Paolo specialises in international andChinese intellectual property and productliability. Having resided in China since 2001,he advises and counsels German andmultinational firms in intellectual propertymatters such as patent and trademarkportfolio structuring, patent prosecution, IPRand technology transfer and licensing, IP duediligence in M&A, patent litigation and brandprotection.

He has successfully assisted in several patentinfringement lawsuits in China, includingMAN Group in landmark design patentinfringement case Neoplan v. Zonda.

Anna-Marie Baisden Head of Autos Analysis, Business MonitorInternational

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

When BMI’s online industry coverage wasfirst introduced, Anna-Marie covered anumber of sectors before specialising in theautomotive industry. She helped build anddevelop BMI's Autos service and now headsa team of analysts, covering all aspects of thesector. Her work encompasses not onlyproducing and co-ordinating auto analysis, butalso presenting it to industry players, includingmajor OEMs.

Dr Wolfgang BernhartSenior Partner, Automotive CompetenceCenter, Roland Berger Strategy Consultants

Dr. Wolfgang Bernhart is a Senior Partner atRoland Berger Strategy Consultants. Workingwithin the Global Automotive CompetenceCenter, he leads global automotive innovationand product creation competence.

After gaining a PhD in production technologies,Wolfgang began consulting 20 years ago, andjoined Roland Berger in 2006. He now specialisesin technology-related growth strategies forOEMs and suppliers, emerging market strategies,cost innovation programmes, optimisation ofproduct creation processes, and the relatedorganisational and footprint strategies.

Gareth HessionVice President of Research, JATO

Gareth joined JATO in 2010, continuing astrong career in the automotive industry thathas spanned over 15 years. Gareth’s role seeshim determining what and how informationis researched, and providing the supportingprocesses, systems and central services thatenable field research teams around the worldto deliver quality data.

Gareth previously ran the asset riskfunctions of two large leasing businesses,and held manufacturer managerial roles inaftersales, product marketing and salesplanning.

Scott Logie Strategic Marketing Director, St Ives Group

Prior to being appointed as Strategic MarketingDirector at St Ives, Scott worked on datamanagement and marketing solutions forBritish Aerospace, Bank of Scotland and Occam.

Scott is one of the UK’s leading datamanagement and marketing solutionsexperts, and has developed business andimprovement strategies for many Occamclients. He has been widely quoted in thepress and recently appeared on BrandRepublic and Direct Response. Scott is alsoChairman of the Direct MarketingAssociation.

Rachael HoggStaff writer, Automotive World

As the newest member of the AutomotiveWorld news desk, Rachael has brought awealth of varied experience to the team.Having been an industry follower for manyyears, she is interested in the future ofautomotive HMI, developments inalternative powertrains and safety. Rachaelis originally from Cheshire, UK, and hascompleted postgraduate studies in magazinejournalism at the Cardiff School ofJournalism.

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

THE BIG PICTURE


Is this the end to the built-in versus brought-in debate? Mercedes-Benz has been working on a new navigation programme that will

let drivers seamlessly navigate to their destination using GoogleGlasses.

Mercedes’ Door-to-Door Navigation system relies on a smartphoneconnected to the car’s dashboard tech and the glasses: when leavinghome, a driver simply needs to enter an address through theirGoogle Glasses. Then, when they enter the car and plug in theirphone, the destination is transferred to the built-in navigationsystem. When the driver reaches his destination and unplugs thesmartphone, the system transfers back to the Google Glasses sothat they can get from parking space to finish line.

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

that is important to us,” Johann Jungwirth, President and CEO ofMercedes-Benz R&D North America told Wired. “We have beenworking with Glass for roughly six months and meeting with theGoogle Glass team regularly.”

The potential for distraction is not being ignored, and Mercedes’early efforts for integration are well-placed. Legislators in US statesDelaware, New Jersey and West Virginia, for example, have allintroduced bills that would ban drivers from wearing GoogleGlasses in the car if passed; a Californian driver, originally stoppedfor speeding recently, was also given a citation for driving “with amonitor” in violation of state law on Interstate 15 in San Diego.Although Google’s wearable head-up display are still only in‘explorer’ testing phase, Mercedes’ solution is quietly proving theOEM has the foresight to thrive when it comes to in-car tech.

SEAMLESSCONNECTIVITY

THE BIG PICTURE


For further information write to us at [email protected] or visit us at www.norgren.com/cv

Norgren recognises theimportance of fuel effi ciencyand environmental protectionas well as the importanceof reducing and eliminatingleakage in air braking andauxiliary systems.We are committed topioneering solutions whichenable truck manufacturersto meet these aims.

DEEP UNDERSTANDING AND PATENTED PRODUCTS WHICH

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YOU CAN SEEOUR THINKING

ENGINEERING ADVANTAGE

Exhaust brake control Engine

controls Inlet throttle

NAVIGATION


Inrix is launching what it believes is oneof the biggest advances in navigation ina decade: what makes it better thanexisting navigation technologies?

If you listen to traffic reports on the radio,you will definitely have come across Inrixbefore. Many traffic services have historicallybeen tied to the map database, particularly inearly navigation systems where the locationreferencing methodology was tied to themap - be that on DVD or hard disk drive inthe vehicle. Even connected services now arestill very tied to the digital map.

What we have done is to make Inrix XDTraffic map agnostic. The big advantage is thatwe are able to report traffic information anddata about specific events, whether it'scongestion or incident data. We are able tocollect, process and disseminate that data toa much higher level of granularity, giving farmore precise detail. This enables us toprovide a broader coverage of traffic data,with something like a 25% increase overtraditional systems, which are based aroundmajor freeways, motorways and arterialroads. What that means for the user issystems can now provide far more accuratetraffic routing information, therefore saving

time, money, CO2 emissions and all theadditional benefits that go around it. It's afairly major step forward in the way thattraffic is gathered, processed anddisseminated.

Have you had any input from OEMs?

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

How does INRIX's advance givemanufacturer a competitive advantageover those that may not choose toinstall it?

From a HMI and mapping perspective, itoffers the ability to provide far more granularinformation on denser networks. Whenyou're driving through a town and followinga map, you can avoid the traffic hotspots. Butwhen you're navigating, the big advantage is,based on the additional coverage that we areable to provide, the system will end up witha knowledge of the ability to route aroundproblems when a destination is chosen,including on minor roads, which has not beenpossible to date. From a connected

navigation point of view, you have far moreefficient routing.

Why is it important for automotivemanufacturers to break free fromtraffic message channel?

TMC, as a technology, is now probablycoming into its third decade, and has anumber of restrictions. The first one is thatit has a very big bandwidth restriction, soyou're only able to report incident-basedinformation - whether that's on roadworks,closures or accidents, or even flow - partlybecause of the bandwidth restriction, partlybecause the TMC referencing is tied to themap. With XD Traffic, you are totally free ofthat restriction. Typically, connective systemsuse 3G and 4G networks, so the bandwidthissue goes away.

Secondly, you're no longer tied to the map,offering two advantages. You can reportinformation down to a sub-intersection level.So, if there was a section of road that wasonly a few hundred metres long, we wouldbe able to tell you about that. Secondly, TMCis governed by how many TMC points arebeing reported off, that restriction is liftedwith XD Traffic because we can report offthe TMC networks.

What is the importance of OEMs beingable to easily integrate the softwareinto their navigation systems withoutthe need for map licensing or locationreferencing?

Obviously, you still need a map within thevehicle, primarily for display purposes. But theone thing it does is break this cycle thatwe've had in terms of having to create TMCcodes, send those codes, get them approvedand integrated into the digital map that willthen be used by the OEM. We can provideupdates to XD Traffic far quicker, againstwhatever map the client or customer may beusing, so it speeds up the update cycle.

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

MEGATRENDS EUROPE ‘13

Euro VI formally comes into effect on 1January 2014, and it’s a “landmark

technological achievement in emissionsreduction”, delegates were told atAutomotive World’s Megatrends Europe ’13,which kicked off in Brussels on 12November. Day one was devoted toCommercial Vehicles, and the message wasthat there’s more to come, both from theindustry and from the regulatory side.

So, what is on its way? With Euro VI as goodas here, what will be regulated next, and howwill any additional regulations be met? OEMsand fleets alike are concerned aboutinvesting in alternative powertraintechnology, not only because of the up-frontcost and uncertain return on investment, butalso the resale value, the as-yet unprovenlong-term benefits, and the limited use cases.Electrification and fuel cell technology maybe suitable in some circumstances, but theseare restricted to particular applications, andthe business case has yet to be made forhybrid technology. Natural gas could stand achance, but the best way of getting CNG andLNG vehicles onto the roads is, of course,to get them onto the roads.

And the hesitation to invest in newtechnology is not limited to alternativepowertrains: thanks to the considerable up-front and long-term running costs of Euro VI

trucks, many OEMs are seeing pre-buyorders filling their books. One OEMsuggested off the record that 50% of itscurrent orders are for Euro V trucks.

The European Commission says it developsits regulations in partnership with OEMs,suppliers, and operators, consulting even attrade union level; yet private discussions withfleets, manufacturers and suppliers suggestedthat the level of dialogue is far from where itneeds to be. As a result, attempts are beingmade to stimulate pan-industry debate, witha view to creating a ‘voice of the industry’ towork with the European Commission inorder to help shape legislation, rather thanfight against it.

One size doesn’t fit all when it comes toregulation, and there was some agreementthat usage-based and duty cycle-relatedassessment should be considered, instead ofbroadly-applied legislation. And although fuelefficiency, emissions and air quality are globalproblems, solutions are not being developedand applied on a global basis. Regulations areregional, and so are standards, yet some ofthe products to which they apply - vehicles,fuels or lubricants - are sold globally.

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

tackled, with a focus on the considerable heatand braking energy losses; the makers oflubricants, fuels and additives say they can alldeliver almost instant benefits, as can tyretechnology; and there’s a crucial role fortelematics, both to monitor and assess driverbehaviour, and to improve on-road freightmovement.

Indeed, before any more work is done ontrying to improve vehicle efficiency throughtechnology, major improvements need to bemade in process and management: smartloading and smart deliveries are not justsmart terms, they are concepts necessary toaddress the fact that up to 30% of the trailerson Europe’s roads are running empty.

Perhaps the industry should stop beatingitself up, said one speaker: Euro VI may bewidely regarded as a major technologicalstep forward in terms of emissions, but it ishere and yet even if every truck on the roadwas replaced with a Euro VI vehicle, therewould still be an air pollution problem inEurope’s cities. Now that such advances havebeen made in truck technology, thecommercial vehicle industry might be in astrong enough position to demand a similarlevel of improvement from other highpolluting sectors, ranging from construction,aviation and marine, right through topassenger cars.


Hello Euro VI, buy buy Euro VMartin Kahl

MEGATRENDS EUROPE ‘13

www.awmegatrends.com

Education, education, education. This was theunderlying message in the presentations

and debates during the passenger car day atAutomotive World’s recent Megatrends Europe’13 event in Brussels.

Education is needed for smart technology toreach meaningful levels of penetration in theautomotive industry. It is an issue which affectssuppliers and OEMs in the fields of powertrain,safety and connectivity, and all parties neededucating on what is best for them to make,sell, buy and use.

Development in advanced driver assistancesystems (ADAS) has been rapid, and was thesubject of much of the debate in the safetystream. Interestingly, there is increasingpotential for confusion over ADAS technology.Drivers need to understand the benefits of it,but ADAS is a catch-all term used to describea multitude of driver assistance technologies,each developed for different real-worldsituations, said Euro NCAP’s SecretaryGeneral, Michiel van Ratingen. You cannot buyan ‘ADAS’, but you can buy things like ESP andESC, or LDW and LKA - a real spaghetti soupof acronyms, some of which sound alike but dodifferent things, others which sound differentbut do the same thing.

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

Whilst safety technology has advanced, theindustry needs to move on from analysingcrash data to analysing data on avoidedcollisions said Kompass and Casto LopezBenitez, Policy Officer, Road Safety Unit, DGMOVE at the European Commission. Asuccessfully avoided collision currently doesnot show up in any data, making it difficult tocorrectly assess the performance of collisionavoidance technology.

Vehicle connectivity and driver distraction gohand in hand. Some say drivers have alwaysbeen distracted; others say it is becomingworse with the advent of brought-in devices.Discussion in the connectivity stream focusedon the topic of distraction and the built-in/brought-in/beamed-in debate. A clearmajority of cars on the world’s roads are notconnected, and that is likely to remain so forsome considerable time. Of those withconnected vehicle technology, many users stillneed educating on how to pair their brought-in devices; they also need to be taught thebenefits of not only the entertainment aspectsof infotainment, but also the genuineinformation: communication, traffic, smartroute planning and navigation, or vehicle status.

It is down to the relevant players to guideowners on how to use their systems. Humansare the best adaptive system, far better thanany electronics. But let us not forget howclever cars can be, said one of the panels in astream that included Clint Steiner of Garmin,Emil Dautovic of QNX and Nuance’s Luc vanTichelen: cars already come equipped with ahigh number of sensors, and we should makemore use of them. Why not design in the abilityto decide what information to present to thedriver and when? Approaching a complexjunction is hardly the time for the car to beinforming you that you have a new message.

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

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

Discussion about infotainment was notexclusive to the connectivity stream, however:

infotainment technology should also bedeveloped such that it provides drivers withsafety information as well as “comfort andcommunication” said BMW’s Kompass. Theidea of designing into the car the concept ofnot distracting drivers, and delivering only whatis needed, was supported by the EC’s Benitez.

But, on the other hand, the need foreducation is not limited to infotainment andADAS. Drivers unused to vehicles equippedwith “interventionist” technology, rangingfrom AEB to LKA, may panic when theirvehicle responds in an unexpected way. Thepotential risk of leaving a driver to figureout how, when and why such technologyworks could be just as high as not having itin the vehicle at all.

Much of the debate about how to improve fuelefficiency and reduce emissions naturallycentres on engine downsizing - a matterrestated by Ford’s Carsten Weber in hispresentation about Ford’s EcoBoost engine.Nonetheless, delegates attending thepowertrain stream also heard aboutimprovements that can be made throughlubricants and transmissions. Indeed, at a timewhen suppliers and OEMs are consideringupwards of 8-speed gearboxes for themainstream cars of the future, AVL’s StephenJones threw down the concept that four gearsmight just be sufficient.

The convergence of topics across the event’sthree streams was clear, with Castrolillustrating just how diverse the automotiveindustry has become, by appearing in theconnectivity stream. Tasked with defining theCastrol of the future, its Innoventures divisionis looking at all aspects of the industry, fromfuels and lubricants to the connected car.

There may be a lesson in there for allautomotive industry stakeholders. Indeed,Megatrends Europe ’13 proved to issuesomething of a call to arms for the industry: it’stime to educate.

Education, education, educationMartin Kahl

14 | Megatrends

www.castroledge.com

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COMMENT

At the end of October, the UK-based

Freight Transport Association sent out

a resolutely frustrated press release. Changes

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

members are spending hundreds of

thousands to retrofit cabs, improving

aerodynamics and safety elements which

could, in theory, be standard on the vehicles

available today.

Surely it should not be the case that in 2013

fleet owners are spending a hefty slice of

their budget to make sure their trucks have

what many would regard as basic features if

applied to the European passenger car

market.

Soon after the FTA commented on Europe’s

worryingly slow design progress, Dr Manfred

Schuckert, Head of Global Regulatory

Strategy, Commercial Vehicles, at Daimler

took to the stage at Automotive World’s

Megatrends Europe ’13 conference.

“We are not done in Europe yet,” Schuckert

said firmly. For Daimler, Euro VI is not the

be all and end all for European truck

emissions legislation, and the OEM has some

very determined plans for the future.

Speaking at October’s American Trucking

Associations conference, Wolfgang

Bernhard, Chief Executive of Daimler Trucks

Division, called for a new approach to

emissions regulations, one which takes into

account the savings that can be made across

the whole vehicle, not only on the engine.

Furthermore, he commented, legislators

should take into account any technologies

that have yet to be invented.

No short order from Bernhard then, but

clearly he is not the only one to think that

now is the time to look at the vehicle as one

whole unit. However, achieving a high truck

standard - whether it is through design or

regulation - is only part of the problem. There

needs to be more cooperation between

North America and Europe, to homogenise

regulations between the two markets, and

Bernhard believes that the removal of tiny

variations would do wonders to simplify

business standards for global OEMs.

This holistic approach to the future of

commercial vehicle developments and

markets is not solely an OEM ideal, however.

Also speaking at Megatrends Europe ’13, Franz

Dorfer, General Manager of the Engineering

Center Steyr at Magna Steyr, said that a

prime consideration for energy efficient

trucks should be the way they share the road

with other vehicles.

“We can make the trucks better and better,

but what we really need is intelligent traffic,”

Dorfer said. Truck-to-truck communication

should be possible - it should not just be

passenger cars which benefit from V2X

communication systems.

Despite many, including Frost & Sullivan,

predicting that the market as a whole will

become more technology conscious -

adopting more safety systems, increasingly

considering ABS, stability control systems,

tyre pressure monitoring, vision-based

systems and advanced telematics - it looks

like regulation, as ever, will be the biggest

driver behind any developments. Whether

the traditionally slow pace of legal debate

and subsequent change can keep up with the

rate of tech development, however, is

another matter.


Beyond the aesthetics ofCV designRuth Dawson

Megatrends | 17

2013 has been the year of the millennial.Across all business sectors, their attitudes

and habits have been carefully monitored -but none more so than in the automotiveindustry. Younger buyers are a lucrativesegment for OEMs and although they maynot have much money just now, they will in afew years and at that time they will belooking for a brand they trust. The key is totarget them early and build manufacturerloyalty.

At the Centre for Automotive Research’sManagement Briefing earlier this year,General Motors’ lead economist, MustafaMohatarem warned that millennials arebecoming increasingly disinterested in buyingcars - or even having driving licences.

The surge in consumer electronics, includingsmart phones and tablets, is a cause forconcern for many sectors of the consumermarket, but the possibility that the recentabsence of young people in the new carmarket may have something to do with agreater interest in communicative technologyis one which has comes as quite a surprisefor the automotive industry.

Data from the University of Michigan’sTransportation Research Institute (UMTRI)suggests that young Americans are much lessinterested in car ownership than their oldersiblings, parents and grandparents: consumers

in the 35-to-44 demographic were the mostlikely to be purchasing new cars four yearsago, today it is the 44-to-65 baby boomersbuying cars with the most frequency.

From 2007 to 2011, the share of US sales tocar buyers aged 18 to 34 fell nearly 30%, and,based on figures from January through August2013, the percentage of new cars bought bymillennial buyers has fallen to 11.4% from ashort-lived 12.6% in 2012.

Money troubles

So why is there a decline in young peoplebuying new cars? Edmunds.com ChiefEconomist Lacey Plache believes employmentis the main factor at work here. In 2012, theUS economy created an average of 30,000new jobs each month for older millennials(those between 25 and 34). But in 2013 (toAugust), there were only an average of 4,000new jobs created for this age group eachmonth.

The slowed housing market is also at work.The US averaged just 500,000 newhouseholds formed per month in the firsthalf of 2013, compared to 1.4 million newhouseholds per month in 2012. Youngeradults are living at home with parents or withroommates, and these situations result in lesscall for a vehicle, making it easier to sharewith others in the household. "But young

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

Another reason highlighted by Mohatarem,was the suggestion that, “Despite theimprovement in the overall auto market,young people are not as active as theytypically are. Some people have suggestedsocio-economic reasons for that; you’veprobably heard them say that young peopleare much more into Facebook and usingtheir phones to communicate.”

In his CAR presentation, Mohataremhighlighted the different factors affectingyoung people purchasing new cars in the US,drawing specific attention to the levels ofunemployment recorded in May 2013 : 24.5%for 16-19 year olds is a rather worryingfigure, considering unemployment levels forthis age bracket were closer to 15% in 2006.

He continued, “When I look at the numbers,what stands out is...unemployment for youngpeople, it is really higher than it has been inrecent history. Young people just aren’tworking in the numbers that they typicallywould be, they are having trouble getting jobs.So that is a number one reason why theyaren’t participating in the vehicle market.”

Mohatarem did however attribute theslowdown in car purchasing to temporary


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

MILLENIALS

!The millennial conundrum!

MILLENIALS

economic causes rather than apermanent shift indemographics: “It’s not apermanent withdrawal fromthe market, it’s more of adelay.”

But this little glitch has notstopped GM from trying tokeep young peopleinterested in purchasingcars in recent years,continuously attemptingto attract 18-to-34-year-olds through a blend ofsocial media campaigns,video game placementsand peer-to-peeradvertising. At theDetroit Auto Show in2012, GeneralMotors alsointroduced twoChevrolet concept vehicles, theChevrolet Tru 140S and the Chevrolet Code130R, in response to extensive research intothe mindsets of young car buyers.

But while some may assume that a millennialwould only be attracted to low-cost, smallercars, Clemson University analysis has foundthat, when a group of students were askedto design their ideal concept car, less wealthyGen Y consumers do not necessarily likeentry-level or bottom-of-the-line cars, butwant more expensive cars - even thoughthey may not be able to afford them.

The disinterested generation

However, some OEMs have accepted the ideathat millennials may be uninterested in buyingcars due to a bigger interest in spending theirmoney on the latest technology. BMW is aprime example: its recently released Geniusprogramme uses artificial intelligence tointeract with potential customers of theBMW i3 EV or i8 PHEV in a live question andanswer format. The system works on a mobileplatform in the UK, a potentially appealingfeature to young buyers seeking the latesttechnology in their new car.

Similarly, Scion has announced a standardtouchscreen audio system in all new models.According to Vice President Doug Murtha, “astandard touchscreen audio system acrossthe entire Scion line-up stays true to thebrand’s innovative nature and responsivenessto the desires of its youthful drivers.”

Thankfully, sitting up and taking notice ofmillenials is having positive results: accordingto President of Infiniti Johan de Nysschen, thecompact crossover segment is being drivenby the demographic.

“The new millennials are driving growth in thepremium segment, but particularly in thissegment. These young people have grown up,

if not in affluent homes, at the very leastin upper middle class homes, accustomed topremium brands. Whether it’s electronics,technology, fashion or purses, it doesn’tmatter. And their parents may well too havebeen driving some kind of premiumautomobile brand. But now, as they ventureout into their own world, they don’t reallywant to compromise any of these attributes.Since many of them will be early in theircareers, they may not have immediatelydisposable income to go for the very top tierof those brands. That is why manufacturersrecognising this trend are creating vehiclesthat, in all the product attributes, exhibitpremium brand qualities but at a price pointthat is more accessible to these new buyers.”

Indeed, AutoTrader.com’s recent study on thenext generation of car buyers confirmed deNysschen’s observations, revealing thatmillennials are highly aspirational andimage-conscious, more open to importbrands, and certainly do have an interest invehicles and driving.

“This generation represents the future of ourindustry, so it’s essential to have a deepunderstanding of their wants and needs,” saidIsabelle Helms, Senior Director of Researchand Marketing Analytics at AutoTrader.

The AutoTrader.com study also discoveredthat a slowdown in car purchasing has notdrastically affected figures of Millennialsbuying cars, showing that they make up 75mof the US population, and in fact purchased25% of all vehicles in 2012.

Mobility alternatives

It is still true to say, however, that youngdrivers have started to move towardscheaper ways of motoring, due to increasing

car prices andsky-high insurance for driverswho have recently passed their test. Britain’slargest independent car club, The City CarClub, has noticed a significant rise in usersunder the age of 30 joining their ‘book in,jump in, drive away’ scheme, with 15% oftheir membership now under 30, comparedwith 11% in 2011.

“We’ve been operating in the UK for eightyears now and have definitely seen anincrease in the number of members who areunder 30,” a spokesperson said. “It helpsthat we allow anyone with a year’s licenceto join our club and drive any of ourvehicles, including vans, where most‘traditional’ rental companies have agelimitations of either 21 or 25. Add thesignificant increases in insurance costs thisage group is facing for their own vehicles,and it’s easy to see why we’re becomingmore popular.”

Although the millennial generation’s interestin buying new cars has declined, youngerpeople have certainly not lost their interestin cars altogether. The annual US sales ratefor 2013 is at 15.4 million, and is only set toclimb in forthcoming years.

The future direction for this demographicwill hinge on economic developments. On apromising note, the US economy isexpected to continue to expand at amoderate pace over the next two years. “Ifthe government can make progress on itsoutstanding fiscal issues, the key remainingdrag on the economy, millennials could findmore job opportunities, enabling them toset up more new households and buy morenew cars," concluded Plache.


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COMMERCIAL INDIA


Despite the Indian commercial vehiclemarket falling into a downward spiral -

only 53,533 CVs were sold in October,compared with sales of 66,722 vehicles in thesame month a year ago - Dr Ajit KumarJindal, head of commercial vehicle technologyat Tata Motors remains upbeat.

"The commercial vehicle industry is, ofcourse, passing through a very toughchallenge," Jindal commented. "But webelieve that the basic economic indicatorsare still very strong. It’s only because of non-economic reasons that the market has goneinto a phase of degeneration. Once the otherconditions become stable then the markethas got a huge potential to grow."

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

What do you think will power thefuture commercial vehicles in India?

We already have a CNG vehicle on almostevery platform and, as probably you know, insome parts of the country like Delhi, it ismandated that some commercial vehiclesand buses have to be CNG. In Delhi, Tatahave the largest fleet of public transportbuses running on CNG. I think it is possiblythe second largest CNG bus fleet in theworld.

We have also developed both series hybridas well as parallel hybrid technology: theseries hybrid vehicles was developed for oneof the European customers in Spain and, ofcourse, we are already working on makingthis technology more cost effective to make

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

Though as of now the momentum on LNGis not that great - because of future energysecurity - the Indian government is placing alot of emphasis on it. In short, this is likely tobe a future fuel so we are also working onbringing this technology into the country.

In Europe there have been numerouscampaigns and developments aroundmaking commercial vehicles safer forcyclists. Are there any specific safetyissues that Tata is looking to resolve inIndia?

We are very much attuned to the variousmarket trends which are happening towardsimproving commercial vehicle safety. Forexample, all of our vehicles have ABS as anoption. As of now there’s no mandate per seon ABS, but we are working to bring it in asa standard fitment through various suppliers,and by making customers more aware of thesafety concern. We are also looking atincorporating technologies like ESP, advancedbraking systems and adaptive cruise control.All of these technologies have been testedand we are now looking for the rightopportunity to introduce them.

Which emerging markets do you thinkwill be the most important for Tatacommercial vehicles in the next tenyears?

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

duty. We are also now expanding into placeslike Indonesia, Malaysia, Vietnam and Australia.We very recently launched our pickups andpassenger vehicles in Australia, and inIndonesia we launched our passengerproducts and will very soon be launching ourcommercial vehicle products.

Automated manual transmission iscurrently regarded as the nexttransmission shift for Indiancommercial CVs - is this going to bethe case at Tata?

Yes, we are already in the process of developingAMT with partners and very soon will be ableto launch in the Indian market. I think a shiftfrom manual will happen, but it will be gradual:customers need to be taught of the advantagesand what can be achieved.

There has been increasing competitionfrom the likes of Ashok Leyland andMahindra in the mini truck segment -an area that Tata has dominated withits Ace line. Do you see that as a threatat Tata?

I don’t think we have lost any market sharebecause of the introduction of thesecompetitor vehicles. Obviously, at one pointwe had 100% market share, which you can'treally maintain in a competitive environment.Today we hold a very healthy market sharein this segment and have a lot of updates andnew developments on these platforms, so weare very confident of maintaining our marketleadership.

In general, commercial vehicles in Indiaare expected to see an increase inpower density over the next five years.Do you think that the Indianinfrastructure is ready for this?

This shift to higher power density vehicleswas expected maybe half a decade ago, butit has not happened to the extent that wasexpected. There has been a shift from, say, alow power of 140, 160, to 180 and it isslowly inching towards around 230. Thereare some segments in which even highpowers have already been introduced andthey are getting accepted, but what we seeis the infrastructure growth not living up toexpectations.

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

Rachael Hogg

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


At the 2013 Frankfurt Motor Show,Chinese OEMs displayed much more

innovative design concepts than in the past.Constantly accused of ‘copycatting’ westernOEMs’ vehicle design, China’s carmanfacturers have finally proved their designprowess.

This effort has been compounded by arecent wave of foreign car designers beinghired by Chinese companies. This is nodoubt a virtuous trend but it may still takemany years before the copying of cardesigns will reduce. Meanwhile we havebeen left to ask whether design theft is overfor good: are Chinese companies movinginto a new phase of R&D?

Taking a more critical view of things, itis true to say that what happens at motorshows does not necessarily reflect what issubsequently seen on the roads. Although itmay well be true that full copies of anothercar’s outer design are not as frequent asbefore, other vehicles do remain a majorsource of inspiration for domestic OEMs. Bysimply observing what is driving on theChinese roads, it seems that the creativity ofChinese car makers is more focused inengineering patchwork copies, i.e. cars whichare a ‘patchwork’ of different existing designs.

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

This question must be contextualised: thevast majority of Chinese OEMs produce andsell cars for the Chinese market only. Fewhave ventured, and will venture, in the nextfew years into other more economically andlegally complex markets such as the EU andthe US. At present, Chinese consumers arenot technically as mature and demanding aswestern consumers, cars are first andforemost a status symbol, the gateway to the

Are Chinese OEMs still copying western cardesign?Paolo Beconcini

DESIGN

middle class. Therefore, these purchasersfocus more on the outer design of vehiclesthan technology, safety and performance.

Given that not all buyers can afford foreignbrands - and half of all purchasers are firsttime buyers - most consumers seeksomething from the domestic market whichmay still recall the glamour of western brands.Culturally speaking, a Chinese consumer doesnot feel ashamed by driving an ugly version ofa renowned car brand and model.

Pushed to imitate

Imitation may be the sincerest form offlattery but Chinese OEMs do not perceivethis as being in any way a bad thing. Theydo not necessarily copy in order to trickconsumers; often, the company websitestates with pride that their designers hadconceived the model after having diligentlyabsorbed and digested technical learningfrom western companies. For the originaldesigners, it is a blatant admission of havingbeen copied, for the secondary OEM, it isa statement of their business philosophy.

It cannot be denied that Chinesemanufacturers have no own tradition ofR&D in the automotive sector. Based ontheir history, and on the cultural principlesstated above, copying outer shapes of carsis indeed a way for Chinese OEMs to gainknow-how and experience in car design. Adeveloped R&D department in the designfield is the sign of a reached maturity for acar company but Chinese OEMs are simplynot yet there. From their perspective,looking at what others have done is surely away to gain that much needed knowledge ofproportions and lines - although it is indeed

an illegal way of going about things.

But competition and consumer demand,requiring the launch of new models at afaster rate, may also be to blame. Companieswithout their own R&D traditions can copewith this pressure by exploiting what othershave made, and save a lot of time and moneyin the process. However, consumer andcompetitive pressures are not the onlyfactors plaguing domestic OEMs: theChinese government’s five year plan for theautomotive industry, issued in March 2011,requires manufacturers to account for 50%of sales in the internal market. In truth it isestimated that Chinese cars now make upfor almost 40% of the country’s sales. OEMsare being pushed to increase the tempo but,instead of building up their own R&D, theyare simply exploiting and combining what isalready popular on the market.

A sense of impunity is also holding domesticOEMs back from not copying. This may verywell be due to the fact that copiers are oftenpartners of the copied: the foreign jointventure partner will often be reluctant toseek a hard confrontation with the muchneeded local partner for many reasons. Evenif a hard stance is taken against them, it ishighly likely that the foreign company will beforced to accept compromises.

On the other hand it may be due to the lawitself: aside from a few exceptions, mostwestern OEMs do not succeed at pressuringenforcement in China. While many haveblamed conniving judges and politics, inreality, legal mistakes by foreign companieshave given an excuse for courts to issuejudgments that were indeed unfair, but wereactually formally correct from a legal point

of view. Forgetting to register suitable andproper IP rights for a design is a mistake thatmany still make. Differences between legalsystems are often overseen, creating patentweaknesses and the risk of invaliditydeclarations.

Change afoot

Recent auto shows, like Frankfurt andShanghai, have certainly given reason forforeign OEMs to be optimistic: they can takeconfidence in the fact that some Chinesemanufacturers have decided to show thecourage of displaying original designs.However, this trend appears to be clearevidence of an increasing bad faith ofChinese car manufacturers, rather than theoft-quoted sincere flattery statement.

While the design copycat issue must begradually overcome in the coming years,other IP infringement issues are already ofa more pressing nature: top of the list is thecounterfeiting of spare parts. This has beenan ongoing problem and is surely of biggerconcern to foreign car manufacturers dueto the gross safety implications. Trademarkgrabbing and illegal exploitations are also anongoing problem for many OEMs, whichmay cause more damages on a daily scalethan a once in a while copycat car.

As for the future, once the Chinese havereached their outer design maturity, andconsumers are more educated anddemanding, the battlefield will move fromouter design to patent disputes on in-cartechnology.

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

DESIGN

www.awmegatrends.com Megatrends | 23

CAPTIVE ENGINEERING CENTRES


In the future, the majority of the increasein global passenger car sales will takeplace in emerging markets. This will have asignificant effect on the expected salesdistribution of western OEMs: bothEuropean and US manufacturers will seetheir share of sales generated in the BRICcountries shift from the current 21-28% to27-41%.

In addition, the importance of westernmarkets as production hubs will decline

steadily: the volume of passenger carsproduced in Europe as a share of globalproduction has already decreasedcontinuously from 22% in 2009 to anestimated 16% in 2013, and will reach around15% in 2019. A similar picture can beobserved for production volumes in the US,which will drop from an estimated 13% in2013 to 11% in 2019. At the same time, theproduction share of the BRIC countries willincrease from 22% in 2009 to an estimated40% in 2019.

To participate in this development, and theresulting sales growth shift towardsemerging markets, OEMs must adaptproducts and engineering processes to localrequirements.

This process of localisation andcustomisation of products to emergingmarket needs can be implemented in 4 steps.The first comprises the de-contenting ofglobal products, combined with low-costproduction and purchasing.

Step two requires a global platform with localcomponents, offering the possibility to realisefurther cost-saving potential. The next stagecombines designated concepts for low costmarkets with the integration of localsuppliers. Very often, partnerships and/orjoint ventures with local companies pave theway for a fast and effective realisation of sucha low-cost product.

Finally, the fourth step requires theestablishment of a product creation process,specifically tailored to the requirements,needs and capabilities of emerging markets.This low cost development process must bebacked by additional low cost processeswithin the organisation, for example adjustedtesting and validation. This can help cutproduct costs by 20-30%.

R&D localisation in emerging markets

The need for western manufacturers to localise their R&D activities in emerging markets is everincreasing. Primarily due to a shift in production and sales volumes, it has been intensified by thenecessity to address local market requirements

Roland Berger’s Dr Wolfgang Bernhart, Dr Wilfried Aulbur, Ludwig Fazel and JunyiZhang discuss the success factors for captive engineering centres

Figure. 1: Global passenger car sales progression

24 | Megatrends

CAPTIVE ENGINEERING CENTRES


Implementation

The reasons for OEMs to increase theirpresence are manifold. On one hand,emerging markets have become major globalautomotive powerhouses and areincreasingly gaining importance as hubs forinnovation. On the other hand, emergingmarkets strongly differ from establishedwestern markets and are characterised byspecific requirements, resulting in the needfor local adaptation and customisation. At thesame time, western OEMs are facingincreasing cost pressure in emerging marketsdue to the rapidly improving ability ofemerging market players to compete forcustomers. Furthermore, greater complexityand increasingly shorter product lifecyclesmake it necessary to adjust products tospecific customer needs in emerging marketsover a short period of time. Local regulationsalso demand market-specific productofferings, and have significant impact on therequired flexibility of the global R&Dorganisation.

All of these factors are pushing westernOEMs to establish local R&D activities inemerging markets. Generally, this can be donein two ways: through collaboration withengineering service providers or via the set-up of a captive engineering centre. At least atfirst, collaborating with an engineering

service provider might be a fast and cost-effective way to cover local market needs.However, some severe risks arise in the mid-and long-term. The security of critical know-how cannot be guaranteed when partneringwith a local engineering service provider.Knowledge, especially in R&D, will becomeever more important as a competitive factorfor differentiation, and so this lack of securityposes a significant risk for OEMs. Moreover,working with an engineering service providerdoes not offer the same opportunities that alocal R&D organisation can with regards tobuilding up and sharing knowledge with theglobal company. Only a wholly-owned localR&D organisation will pave the way for globalknowledge sharing with emerging marketsand provide an adequate link to globalstructures. For these reasons, establishing acaptive engineering centre is clearly thebetter way for western OEMs to localiseR&D activities and build up know-how inemerging markets.

Clarification

The business scope of the local R&Dactivities must be clearly defined and alignedwith central R&D, as well as other globalR&D departments. This makes it possible toclearly allocate responsibilities and avoidduplicate work. After defining the businessscope for local R&D activities, a specific R&D

centre setup should be fleshed out. The stepsrequired to establish a local R&D centremust be identified and a concept for theoverall organisational structure must bedeveloped, which also includes the specificfunctions to be covered by the localengineering centre.

Furthermore, the position and role of theR&D centre must be clearly defined. Thisincludes its positioning in the OEM's globalnetwork as well as its integration into theglobal R&D organisation. Dedicatedfunctions should be installed to support thisintegration of local R&D, for example,assignment of expatriates and roadmaps forknowledge transfer. Finally, a detailedroadmap for the implementation of the localR&D centre must be developed.

Companies setting up local R&Dorganisations have to face some seriouschallenges. However, these can be counteredby bearing in mind several success factors.

One major challenge is the historically grownR&D footprint of western OEMs with a clearfocus on headquarters. This leads to a lack offocused capacity and competence built up inlow-cost countries. OEMs therefore need totransfer respective research capacities toemerging markets in order to effectivelyutilise low-cost engineering locations andthereby balance their R&D capacity on aglobal level.

Moreover, an insufficient differentiationbetween core and non-core competenciescan often be observed. By analysing andadjusting core competencies to optimisedevelopment depth, cost advantages can beachieved and capacity can be made moreflexible.

Additionally, a homogenous setup of OEMs'global engineering units with similar functionsmeans that efficiency levers cannot fully beexploited and work may be duplicated. Thiscan be overcome by creating globalcompetence centres with clearly assignedresponsibilities and leads for specificdevelopment fields.

OEMs establishing local R&D capacity alsohave to contend with a lack of clearstructures and processes for transferringglobal R&D know-how to the localorganisation and vice versa. Implementingthe right set of processes enables the rapidand effective set up of local R&D activities,as well as leveraging both regional and globalknow-how.

Dr. Wolfgang Bernhart is Senior Partner of theAutomotive Competence Center; Dr. WilfriedAulbur is Managing Partner - India; Ludwig Fazelis Senior Consultant at the AutomotiveCompetence Center; and Junyi Zhang is thePrincipal of the Automotive Competence Centerat Roland Berger Strategy Consultants.

> Product creation process (PCP) and processes adapted to customer expectations per country (e.g. for India) can reduce product costs by 20-30%

> Apart from a global platform, dedicated low-cost products are requi-red (e.g. low-cost exhaust gas after treatment)

Cost saving potential [%]

> De-contenting global product

> Low-cost production > Low-cost purchasing

> Global platform with local components

> Engineering in HQ

> Low-cost concepts> Integration of low-cost

suppliers> Partnership/JV

> Low-cost PCP> Low-cost processes> Adjusted testing/validation

LOW-COST ENGINEERING

DEDICATED LOW-COST PRODUCT

LOW-COST FOOT-PRINT/PURCHASING

GLOBAL PLATFORM/ MODULAR KIT

ADVANTAGE

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

Figure. 3: Localisation and customisation in the Indian CV market

Megatrends | 25


When ‘hacking’ is brought up inconversation, we invariably imagine a

traditional computer system, wired up to awall, infected by a virus usually downloadedfrom the internet. However, as the connectedcar becomes more intelligent, and OEMspursue both autonomous and semi-autonomous functions, car hacking is startingto be considered a real security threat.

Hacking occurs when the car’s computersystem is accessed illegally via its connectivityfunctions. The outcome could be anythingfrom data and/or vehicle theft to vital safetyfunctions being deactivated.

Take the example of Megamos Crypto: thissecurity system is used by several luxurybrands in the Volkswagen Group, includingAudi and Porsche, to pair a key with each car.It works through a coded algorithmtransponder built into the car’s keys, whichuses radio-frequency identification (RFID) totransmit an encrypted signal which in turnactivates and deactivates the vehicle’simmobiliser system. Previously presumedsafe, Megamos Crypto was hacked this yearby a UK-based computer scientist, who hassince been banned from revealing thecompromising codes by High Courtinjunction - at the risk of millions of vehiclethefts if the material was to be published.

But, said Alex Fidgen, Director at IT securitycompany MWR InfoSecurity, vendors areunwise to block security research: “theyshould work together with researchers tounderstand the nature and potentialconsequences of the threats they are facing.

“It is feasible that an exploitation of anynumber of embedded devices within a carmight allow an attacker to gain control. Forinstance, this would have serious consequencesif the brakes were applied at high speed.”

Indeed, veteran hackers Charlie Miller andChris Valasek recently discovered a way toforce a 2010 Toyota Prius to stop suddenly athigh speeds or accelerate without the driver’sfoot even being on the gas pedal. Likewise, theyclaim to be able to disable the brakes of a2010 Ford Escape at very low speeds. The duohad to be seated in the car with their laptopshardwired into the vehicle to access the car’ssystem, but it is nevertheless a worrying factfor OEMs - not to mention drivers.

Remaining stoic, Ford responded to thehacking by saying that since the attack was not“performed remotely” but required “highlyaggressive direct physical manipulation of onevehicle over an elongated period of time,” andit most likely did not pose “a risk tocustomers and any mass level”.

In a 2013 Automotive World TechnologyRoadmap, researchers found that 79%of survey respondents thought thatconnectivity, safety, security and dataprivacy in the connected car arecompatible. However, 16% of thosesurveyed qualified this with commentsthat clearly indicated this is anachievable ideal, rather than a currentreality, with some referencing thesecurity systems available for personalcomputers and mobile phones, whichare largely still vulnerable toenterprising hackers.

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

Technology Roadmap:

Connected Vehicles

CAR HACKING

CAR HACKING


Despite this, Fidgen commented,“Manufacturers do not seem to haveconsidered the security threat when usingembedded computer systems. Cars arebecoming increasingly more computerised,particularly supercars which sell for hundredsof thousands. But not enough thoughtappears to have gone into securing thesystems which leaves the cars wide open totheft and the misuse of computerinformation.”

Privacy goes public

Safety is not the only concern here: a teamat the University of South Carolina andRutgers, found that, using the RFID tags intyre pressure monitoring system, a car’sjourney could be tracked, compromising thedriver’s privacy. In a similar investigation in2011, researchers from the University ofCalifornia, San Diego, and the University ofWashington were able to use Bluetooth andWi-Fi to hack into a vehicle’s connectivitysystems from a limited distance. The lattergroup decided to withhold details of whichcars they were able to “own” for fear of theknowledge would be used by criminals.

However, that is not to say that any greatamount of data would necessarily be storedin the car - as it would on a computer orsmartphone, available for hackers to access.Speaking to Autoline, Nick Cohn, SeniorBusiness Developer at TomTom reassuredthat “All of our systems are engineered sothat there is no individual information orconnection possible by anybody externallyor even internally. [Security] is high on thelist but more in terms of protection thanspecifically hacking.”

In truth, some compromises might benecessary to achieve the effective operationof safety and security functions. In August2012, a Harris Poll of US drivers saw 76%expressing fears about connected vehicles,with 62% concerned that connectivity mightcompromise their privacy through, forexample, monitoring where they drive andhaving insurance premiums increased

through insurers monitoring their drivinghabits. While signing up for pay-as-you-drive,or pay-how-you-drive, policies is optional, ifthe security of GPS data cannot beguaranteed, surveillance may be possible. Thefact that TomTom reportedly sold driverbehaviour data to Dutch police, helping thelatter target locations where there wereoften speeding vehicles, will be of no comfortto those concerned about privacy - despitethe fact that the TomTom data did notactually identify individual vehicles.

The potential danger of car hacking and itsuse by criminals has not been lost on lawenforcement bodies in both Europe and theUS. The National Highway Traffic SafetyAdministration (NHTSA) has launched acyber-security research programmeinvestigating car hacking, and hopes to setup a taskforce focusing on V2V technologieswhich share information such as trafficconditions to other drivers.

Regardless, it seems that even the existingtechnology which drivers take for granted -such as remotely unlocking a car - is still acause for concern. If cars can be hacked intoby researchers like Garcia, the concern thatreal life hackers with malicious intentions willhave no problem accessing vehicle controlsystems is completely founded. But, given thatthe most successful attempt so far was bytwo experts who were inside the vehicle,OEMs like Ford are safe for now with arelaxed attitude.

But, warned Fidgen, now is the time to startworking on connectivity security. “Carmanufacturers continually try to upstageeach other with the latest computer gizmosfor vehicles. They are on a never-endingtreadmill to try and keep ahead and offertheir customers the latest technology.However, they now need to take a step backand look at how security should beembedded into that technology.”

“Connectivity, either between vehicles, orbetween vehicles and smartphones,opens the door to hacking, either formotives of theft [stealing owner data] ormalice [altering the function of the car].We do not allow passengers on planes tosync with the aircraft’s computers. Arewe sure we want to do this with cars? Ahacked smartphone is an annoyance. Ahacked car is a death trap ”- Glenn Mercer,

President of GM Automotive

In 2011, Siim Kallas, European CommissionVice President and Commissioner for

Transport, outlined proposals to bangasoline and diesel-engined cars from citycentres by 2050.

Designed to cut reliance on oil and reducecarbon emissions by 60%, the plans wouldsee the use of conventionally-fuelled carsbeing halved in urban transport by 2030,before being banned entirely by 2050.

At the time of Kallas's announcement, the

UK was one of several countries to statefirmly that it would not be supporting theEC's intended rule. UK Transport MinisterNorman Baker was very quick to say that theCommission should not be "involved" in thetransport choices of individual cities.

"We will not be banning cars from citycentres any more than we will be havingrectangular bananas," Baker told the BBC.

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

August, when UK political party the LiberalDemocrats announced proposals to allowonly electric vehicles and ultra-efficienthybrid cars on the country's roads by 2040.Gasoline and diesel commercial vehicleswould still be allowed, however.

But while legislators may be keen to implementthis strategy, the industry has been left towonder just how such a rule would affect theEuropean automotive industry. Here, sixexperts discuss the future of the internalcombustion engine in Europe.

A frosty future for the ICE?Ruth Dawson

THE PANEL

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

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

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

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

Dr Wolfgang Bernhart is Senior Partner in theAutomotive Competence Center at Roland BergerStrategy Consultants.

Dr Colin Herron is Managing Director at ZeroCarbon Futures.

Dr Wolfgang Bernhart: Definitely not. Iwould rather have expected an argumentlike cutting fine particle emissions or similar.On the other hand, I would expect a veryhigh degree of plug-in hybrids or batteryelectric vehicles to be operated in citycentres [by 2050] anyway.

Ian Henry: The EU is, in my view, trying toset the bar excessively high now, to settle onsomething a little bit lower once they havehad negotiations and so forth.

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

into consideration - what the publictransport system is like, for example;whether it is feasible for people to get intothe city centre by another method. Just anoutright ban is probably not necessary, andwith it being so far into the future, it's kindof hard to see how things will change by then.

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

ICE EUROPE


AMB: Developments at the moment showthat there is still a place for the ICE. Therewas talk at one point that everything will beelectrical - hybrid at the very least - but Ithink that there have been so manyinvestments made in developingpowertrains and engines, that so far OEMsare doing a good job of improving fuelefficiency without having to make thesealternative fuel shifts.

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

of costs. The ICE will be complemented atfirst by hybrids - and here CNG could alsoplay a bigger role in the future.

A complete replacement of the ICE is onlypossible if at least one of these conditionsapply: development of new rechargeablebattery chemistries, or replacement ofplatinum as a catalyst in membrane electrodeassemblies. Currently both developments arein early stages and might need any time from15 to 50 years to be usable.

Yeswant Abhimanyu: Quite honestly, Ithink we are starting to look at trendswherein dependency on the ICE isreducing. If we take gasoline engines, we'reseeing downsizing...a trend towardsreducing dependency on the ICE butwhether or not it will be replaced orcompletely banished, we will have to waitand see. The crux of the matter is thatwhatever is being done in terms ofproducts and solutions, it's all being aimedat sustainable mobility.

Dr Colin Herron: By 2050, thetechnology will have already advancedsufficiently to address the issue of internalcombustion engines polluting city centres.It’s a very safe ban to propose as, in thetimeline outlined, city centres will be full ofpredominantly electric-driven commercialvehicles - not due to a ban, but becausethey will deliver the best transport option.It is not a question of fairness, as thesituation is driven by a worldwiderequirement for reduced emissions.

However, cities will have to provide a safetynet for long haul drivers - perhaps a simpleedge-of-city hire system in a similar way toParis’s Autolib’ scheme.

Greg Archer: A simple ban would bea...technology specific policy and as suchwould not be smart regulation. But it isentirely reasonable to specify that vehiclesused in cities should meet environmentalstandards. If an ICE can meet thesestandards they could continue to be used in

cities - but whilst technically it would befeasible, there will almost certainly becheaper options.

AMB: Developments at the moment withincremental standards are pushing OEMs inthe right direction anyway and car makers areseeing for themselves that there is definitelya demand. Look at fuel prices - it’s just onefactor but that is what people will be takinginto account: they will want cleaner enginesfor themselves, for their lifestyle choices.

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

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

WB: Only a scenario when emissionslegislation is gradually hardened and locallegislation is used is realistic. A ban ondevelopment of new petrol or diesel modelswould not be in line with freedom of industry,and other markets - which are much larger thanthe EU27 markets - would still be allowed ICEs.

AMB: You need to give the industry andconsumers a period of time to get used to it,so I don’t think it could be an outright ban.They would have to do somethingincrementally and back it up with othermeasures in terms of trying to promote publictransport or some other form of mobilisation.

GA: The best approach would be aprogressive tightening of the environmentalstandards vehicles must meet to enter cities.Low emissions zones already exist, such asin London for trucks. This could be extendedto cars with standards progressivelytightened to ban the most polluting vehicles;it is entirely feasible to conceive a systemwhich, in parallel to banning the mostpolluting vehicles, raises the costs formoderately polluting vehicles with discountsfor cleaner ones. Knowledge of a future cut-off date for polluting vehicles would makethese an increasingly unattractive purchase,and residual values would decline as the

market contracts, making clean vehicles abetter initial purchase.

YA: It really is very dependent on legislativeemissions in place in any particular region.Gradual transition is the best way to go aboutit: if we take the examples of Euro V and EuroVI, and the ACEA approach, it’s gradual. Havingsaid that, even if it’s going to be a jump, thestakeholder who can enforce that is thegovernment and legislative bodies; they drivethe uptake of different technologies and fueltypes. That is one of the key reasons why wesee so many differences between theEuropean and North American regions.

How do you think such a regulation should be implemented?

ICE EUROPE


IH: They already are. Look at Ford Ecoboostengines: they are getting comparable [tohybrids]. And if they’re not there already, theywill get there at some point.

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

carbon vehicles is just the tip of the iceberg.With EV technologies, more efficient formsof manufacture, optimisation of supplychains and low carbon energy productionare all areas which can be further exploredto reduce the overall ecological impact ofcommercial and domestic vehicle use.

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

challenging for the IC engine to be cleaner,greener and so on. The driver here is emissionsnorms. The key reason why OEMs are spendingon this is primarily to evade any fines or feesthat they will probably have to pay if they arenot compliant with these norms in the future.Now, hybridisation and electrification ofpowertrains is another strategy OEMs areadopting. We’re seeing hybrids as a goodbridge, a transition from the ICE to increaseduse of battery technology in electric vehicles.

Will a downsized engine ever be good enough to competewith a hybrid engine?

YA: OEMs have already taken that steptowards investing in alternative powertrainsfor the future. The investments for CNG, forexample: the move towards and investmentsin renewable sources like wind energy, andreusing and saving surplus power. These areimportant steps that OEMs themselves havestarted making today in view of providingalternative powertrains in the future.Whether it’s electric or hydrogen based, biobased or natural gas, OEMs have alreadystarted to take that very seriously and are allmoving in that direction in Europe.

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

all sorts of new technologies and trying tomuscle in on it. Once something goes mass-market, scalable, then I would have thought amajor player is going to buy them up.

GA: New entrants are unlikely to develop asubstantial market share, but OEMs could findthemselves being a simple supplier to othernew mobility companies - like Google,Microsoft - who would buy vehicles fromthem as a commodity. Urbanisation andstandardisation, together with a growth inshared use vehicles will inevitably mean fewerplayers and lower sales. The premium sectorwill probably survive, but mainstream supplierswould find increasing competition, squeezed

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

WB: Because of the higher cost burden, andexisting - and remaining - overcapacities inthe EU market, fierce competition will stay.The increased complexity of the technologyportfolio will also raise the bar regarding aminimal critical size of OEMs; smaller playerswill only survive in partnerships to gaineconomies of scale. Alternative powertrainplayers will even face tougher challenges,since they do not have the economies ofscale in all other systems as well - forexample, connectivity, advanced safetysystems, new lightweight materials and so on.

What would this rule, if implemented, mean for OEMs and themarket in general? Would there be a new wave of alternativepowertrain players gaining more ground? Could establishedOEMs keep up?

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

- Dr Colin Herron, Managing Director, Zero Carbon Futures

ICE EUROPE


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SAFETY

The market for crash preventiontechnologies is set to become much more

competitive in the next few years. Althoughthe sector’s focus is currently on autonomousemergency braking (AEB) - which promises tohave the greatest impact on collision numbersto date - there is still a long way to go beforethis technology can show its full potential.

As Managing Director of the Institute forRoad Safety Research (SWOV), Peter van derKnaap has no routine. “Excellent researchstarts with useful curiosity,” he says. It is thisinnate passion that brought van der Knaap toSWOV after a career in policy analysis andevaluation research with the NetherlandsCourt of Audit and the Ministry of Finance.Founded in 1963, SWOV is the centre pointfor road safety research in the Netherlands.The Institute’s objective is to contribute toand improve all aspects of road safety,including infrastructure, maintenance andtechnical transport developments.

Safety assessment

According to van der Knaap, the safety goalsof European OEMs are a “race to the top”,with manufacturers pushing independent carsafety assessments to rank with four or fivestars. Although certainly a positive forautomotive safety now, in the not too distantfuture it will become difficult for vehicles toachieve a five star rating without AEB. Anotherdownside is the fact that the rating system maysoon start to lose its value, “It’s no use if everycar gets the highest score, the incentive toimprove safety further is lost, as is informationto the car buyers,” says van der Knaap.

But van der Knaap does not believe thatcreating a new rating above five stars isnecessarily a good idea: “Instead of creating anew category, we should continue to push theambitions for safety further and further. Thatmeans we must continue to set higher andhigher standards and ever morecomprehensive rating schemes for crash-testing cars,” he comments.

Of course communication is important for

car manufacturers and consumers alike, so ifa model passes a more sophisticated crashtest, the OEM should, in van der Knaap’sbook, deserve the credit. “A good exampleis the new Euro NCAP Advanced initiative, anew reward system for advanced safetytechnologies, complementing Euro NCAP’sexisting star rating scheme.”

Euro NCAP introduced its advancedinitiative scheme in response to the rapiddevelopment of new technologies for whichthere are currently no independentassessments. By rewarding advancedtechnologies, the safety organisation is nowproviding an incentive to car manufacturersto accelerate the standard fitment ofimportant safety equipment across theirmodel ranges.

An important recent addition to Euro NCAPratings is the aforementioned AEB, but, saysvan der Knaap, it is just one of manymeasures needed to improve the safety ofour cars and roads. “The next thing thatshould perhaps be looked at is the way carmakers make sure new safety systems will notlead to less alert drivers.”

Global view

Halfway through 2013, Global NCAPchairman Max Mosley wrote to the heads ofRenault-Nissan, General Motors and Suzuki,urging them to apply the UN’s minimumcrash safety standards to global passengercar production. Despite this, best-sellingglobal brands continue to provide sub-standard safety protection, outside ofEurope. In South America, the Renault ClioMio scored zero stars and zero points,proving unstable in crash tests with anunacceptably high force on the dummies’heads. The Nissan Tsuru, Suzuki Alto K10 andChevrolet Agile all also failed to gain anypoints or stars in testing.

Improvement in car safety across the worldis crucial, and van der Knaap expects theserequirements to keep developing as theworld becomes more interconnected.

“People will expect their cars to be up tostandard in every part of the world. And thatincludes places such as South America andAfrica,” he states. “Yet there is always a pricetag connected to safety, and it is only rationalthat we also look at local road infrastructure,awareness, training, and education andemergency response systems. Improving roadsafety depends on all of these elements. Weneed safe cars on safe roads, driven byresponsible drivers. That is vital.”

Autonomous vehicles

Self-driving vehicles have certainly generateda lot of buzz in the automotive industry thispast year, and van der Knaap predicts thatdriverless cars will present many advantagesin time saving, cost, the environment, spaceand, of course, safety. “I predict we willwitness the end of cars as we know thembefore the end of this century,” says van derKnaap. “It is only a logical development.”

Yet without proficient safety measures, thereis a bumpy road ahead. The transition periodto autonomous cars presents many challenges.Van der Knaap’s main concerns are with thereliability of systems such as M2M technology:“If you are warned 50 times for an unexpectedpedestrian through car-to-phone technology,what will that mean for the 51st person thathappens to walk around without a cell phone?”

Despite this, van der Knaap believes thatautonomous cars will be accepted ontoEuropean roads, just like the driverless publictransport systems already available in otherparts of the world. Before this can become areality though, van der Knaap suggests that twothings are absolutely vital. “First, there must be100% safety. Research shows that people areless willing to accept risk if they have tosurrender themselves to a system or totechnology. Paradoxically, we feel safer when weourselves are behind the steering wheel. Talkingabout that steering wheel, that is the secondthing: we need to get accustomed to carswithout steering wheels and gas and brakepedals. You truly have to surrender yourself tothe machine.”


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

CO2 EMISSIONS

The industry-wide 2015 European CO2emissions target of 130g/km is used as an

overall average with each manufacturerhaving individual targets based on the averagekerb weight of vehicles they produce. Despitethis adjustment, some manufacturers arecloser than others to achieving their goals.

PSA Peugeot Citroën is currently ahead ofany other volume manufacturer in the raceto meet the 2015 goal: it has already achievedits target by a margin of 3.5%, and could avoidfines with no further development, providedit keeps selling the same mix of cars that itdid in 2012.

This result can be attributed to their efficienteHDi and Hybrid4 technology, the success ofthe Peugeot 208 and its new small petrolengines, and sales of electric cars.

The latest hybrid, fuel-saving and efficienttechnologies of Toyota and BMW have alsohelped both manufacturers exceed the2012 and 2015 targets. Toyota hasover-achieved on its 2012 target bythe greatest amount of anymanufacturer, beating it by 21%,leaving a 2.5% margin over2015; BMW has exceeded its2012 target by 12%, and hasa 0.03% margin over 2015.

Geely Group, Renault,Volkswagen Group, Ford,Daimler and General Motorsare also well on track tomeet the 2015 targets: allrequire improvements of lessthan 3% on average.

34 | Megatrends

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

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


Are wenearlythere yet?

CO2 EMISSIONS

Although the Fiat brand recorded the lowestemissions in 2012 out of the top 20 volumebrands (at 119.8g/km), Fiat-Chrysler as agroup still need to make a 3.7% improvementfor 2015.

At the other end of the spectrum, someOEMs will have to take other measures toavoid hefty fines in 2015. The EuropeanCommission has acknowledged that somelow-volume manufacturers are not suited tothe kerb-weight based system, allowingthem to pool with other manufacturers fora combined target, apply for a target basedon a 25% reduction in emissions comparedto 2007, or agree on an individual goal withthe EC.

Tata Motors, Porsche and Subaru will be ableto avoid fines if the OEMs apply to meet the25% reduction but this method does notwork for all; Honda, for example, beat the2012 target based on kerb-weight by 3.1%,but they would have failed by 6.2% if they hadused the 25% improvement as a target.

Segment shifts

Last year, JATO’s CO2 report highlighted thedifficult balancing act between loweringaverage emissions and profitability. Low-emission cars tend to be smaller, lightervehicles which are cheaper to buy and havelower profit margins. Although it still remainsa challenge, manufacturers are makingprogress in improving the emissions of bothlarger and premium cars.

In 2012, the luxury segment made significantprogress in bringing emissions down. Withaverage reductions of 10.8g/km, it has

achieved the biggest improvement inemissions between 2011 and 2012 of anysegment. This improvement came primarilyfrom the 3-litre diesel versions of the BMW7-series and Mercedes-Benz S-Class.

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

segment was the third biggest market in2012. The segment’s jump from just over 5%in 2003 to 12.7% in 2012 is the largestincrease in market share over the lastdecade. Despite increased sales of thesestereotypically thirsty, heavy vehicles, overallemissions have continued to fall, highlightingthe industry’s hard work and progress.

Consumers have been drawn to the SUVsegment as developments have aimed tocounter traditional compromises inperformance, handling and fuel consumption.The latest generation of crossover vehiclesare a prime example, offering similar benefitsto full size SUVs, but they are smaller, lightervehicles, with eco-friendly options such astwo-wheel-drive only.

Other brands in the luxury segment are alsomaking impressive progress. Somewhatsurprisingly, Bentley has made the mostprogress of any brand. The introduction of newand updated models featuring fuel-savingtechnology has reduced the brand’s averageemissions by over 100g/km compared to 2011.

Diesel driving progress

The continued popularity of dieselvehicles is also playing an importantrole in how countries in Europereduce CO2 emissions.

In 2012, diesel was again the most popularfuel choice among new car buyers inEurope, accounting for much of thereduction in CO2 emissions over thecourse of the year. Diesel-fuelled carsaccounted for 54.6% of the European newcar market in 2012 and have seemed torecover from the scrappage-affected marketof 2009, which saw a spike in small petrol-engined cars.

Portugal took the top spot again in 2012 asthe country with the lowest average CO2car emissions; it is little surprise that over70% of the country’s cars are diesel.

Greece recorded the most significant fall inaverage CO2 emissions for the third year in arow. This is the result of several factors: astruggling economy that has severely reducedsales of larger cars, significant improvements tothe efficiency of smaller petrol-powered carsand diesel penetration of the market risingfrom less than 3% in 2009 to over 40% in 2012.This huge rise in diesel-fuelled cars is the resultof a ban being lifted which prevented the fuelbeing used for private vehicle use.

However, with continued improvements inpetrol car efficiency resulting in better fueleconomy, low emissions and, as a result, lowcost - or in some cases free - road tax,consumers are still being drawn to smallerpetrol-run cars. The question remainswhether diesel will continue to dominate theEuropean car market in the future.

2015 and beyond

The majority of car OEMs and Europeancountries appear likely to meet their 2015targets. All high-volume manufacturers haveachieved the legal target for 2012 and all themedium-volume manufacturers have reachedeither the main or optional target.

It is encouraging to see that the newgeneration of eco-friendly and low emissionsvehicles are quickly becoming the norm, andthat local governments are continuing towork with consumers and manufacturers toencourage the purchase of cars with lowerCO2 emissions. The success of EVs will alsocontinue to play an important role in bringingdown emissions overall.

However, with some manufacturer groupsstill at risk of missing their individual 2015targets, the industry cannot afford to rest onits laurels. As economic uncertainty remains,it will be interesting to see how the industrycontinues to improve emissions and draw inconsumers, and how they will respond tochanging government car tax policies. Butone thing is certain: this momentum ofchange must be sustained if the EU targetsare to be achieved in 2015 and beyond.

Gareth Hession is Vice President of Research atJATO Dynamics


www.shell.com/lubricants

KEEPING YOU GOING, WHATEVER THE CHALLENGE.

WORKS HERE.

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

Why is now the time to invest inlow viscosity lubricants?

Primarily to get better fuel economy, but

there has also been a realisation that, in the

past, lubricant viscosities were on the

conservative side. In Japan, OEMs have gone

to much lower viscosities than in Europe or

the US, there have not really been any

detrimental effects but there have been

benefits in terms of better fuel economy for

Japanese vehicles.

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

There is an interesting side to this: the rest

of the emissions legislation is focused more

on after-treatment devices and we have to

take some useful additives - sulphated ash,

phosphorous and sulphur (SAPs) - out of oils,

some of which provided wear protection. So

when we go to a lower viscosity oil for

better fuel consumption, we have to find

some additives that still give wear protection

but don't contribute to this SAPs level, which

affects the after-treatment compatibility.

Shell has been trying to change publicperception of low viscosity and syntheticlubricants - how is this progressing?

Some are put off the use of synthetics by the

price, or the worry that there may be other

issues with them, but we have quite a lot of

demonstration material which shows the

benefit of synthetics in terms of fuel

economy. In the past, 'synthetics' generally

meant poly-alpha-olefins, which are quite

expensive. There are a large number of

alternatives now appearing like group two

and group three based oils, which are more

cost effective. Certainly in Europe for

passenger cars, a lot of OEMs recommend

synthetics or semi-synthetics, whereas 20

years ago it all used to be mineral oil.

There's been a big shift, certainly in Europe,

towards synthetic oils and there is enough

data to support that they do what we think

they do, and that's before the potential of

fines for OEMs comes in - that will change the

economics even more in favour of synthetics.

How do reactions to low viscositylubricants vary from region to region?

Japan has led the way in lower viscosity

engine oils. To some extent, in the US they've

gone to lower viscosity engine oils. In Europe,

we've tended to go to lower viscosity oils but

not quite as low as the US or Japan, primarily

because certain markets have very

demanding driving conditions. We have a lot

of diesel cars in Europe, so we tend to have

quite a lot of additives to give the required

protection - and that tends to make the fuel

economy performance slightly worse.

How have new low emission enginesaffected lubricant development?

We've seen a move to a lot more downsized

3-cylinder engines: having a smaller engine

with the same power tends to put a lot more

stress on the lubricant, so you need to put

more antioxidant in the lubricant, and again

think about protecting against wear.

Some solutions coming out are likely to make

it even more difficult to lubricate the engine,

which is going to make it more of a challenge

to develop lubricants which work in these

components.

The other thing which may happen is,

particularly in Europe in 2020, CO2 limits

of 95g/km are so severe that you may get

different OEMs coming up with different

solutions. We'll need to be fairly nimble to

be able to lubricate these different

hardware solutions, which may appear in

the marketplace.

How is Shell working as a design ordevelopment partner?

Many OEMs have realised that the lubricant,

rather than just being an afterthought, is

actually an essential design element. One

problem that has happened in the past is that

when OEMs design a new engine, they

generally design it using the oil they currently

use, so when the engine is launched years

later it has effectively been developed on an

oil which is out of date. If the OEM works

with a lubricants company to develop both

the engine and the oil at the same time, they

potentially can get bigger benefits than if they

just designed the engine. To a certain extent

we can help design a lubricant which can get

more out of their engine or transmission.

But it's not solely OEMs that Shell is working

with: we are involved with the Energies

Technology Institute, a government private

partnership trying to improve the fuel economy

of transport fleets in the UK by 30%. The OEM

involved has completely redesigned the truck

as a system, allowing the lubricant temperature

to go up to 120 degrees Celsius, because they

can then do away with all the coolers and fans

which take up quite a lot of fuel. They're coming

up with different solutions which help to

improve truck fuel economy but if the end

solution involves an increase in lubricant

temperature then we need to make sure our

lubricants survive.

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

There are more and more novel materials

being used in engines: in the past we only had

to lubricate steel against steel, nowadays

we're seeing lots of coated components with

ceramic or diamond-like carbon coatings

which respond differently to lubricants, so

we're having to find the optimum product for

these different materials.

Rachael Hogg discusses developinglubricants from the word go with ShellLubricants’ Senior Technologist

Fifteen minutes with...

Ian Taylor, Shell

INTERVIEW


MOTORSPORT

Race on Sunday...tweet on Monday

‘Win on Sunday, sell on Monday’ neatlysummarises the sales strategy that

led to a golden age for motorsport in thesecond half of the twentieth century. Runningcars that were often closely related to theirroad going sisters, brands from the esotericto the everyday forged powerful reputationson the track. But as the new centuryblossomed, motorsport became less relevantto the volume car buyer and factory supportwas gradually withdrawn. Today, performanceis measured in grams of CO2 per kilometrenot in mph, and the reassuring safety of race-proven disc brakes has been replaced byelectronics that will never be seen on track.

Richard Taylor is clear that now is the timeto reassess the potential of motorsport.Taylor is Motorsport Business Director atProdrive, one of the world’s most successfulmotorsport companies and the only onewith victories in every major global formula.Having spent 20 years at the company -including a period leading the Subaru WorldRally Team that put a blue Impreza Turbo onso many a young man’s most wanted list -Taylor understands the synergies betweenmotorsport and brand development. Sittingin his office in Banbury, UK, he produces acompelling argument for a renaissance inOEM support for motorsport, but not as weknow it today.

Taylor starts by taking Formula 1 out of thisconversation: “It dominates the media, isoutrageously expensive and immediately

shifts people’s perceptions. Mentionmotorsport to brand directors and becauseof Formula 1, they put up barriers,” Taylorsays. “Take that out of the equation and weare left with a fast-revitalising industry withtremendous potential for customerengagement at a cost that is dramatically lessthan most OEMs realise.”

The foundations of his confidence are builton far more than reviving old glories. At theheart of this rebirth are fundamental shifts inboth the structure of the automotiveindustry and in the promotional toolsavailable. Newly globalising vehiclemanufacturers, growth in developing markets,and the remarkable potential of social mediaare transforming how brands engage withtheir target audiences. Motorsport isn’t theonly solution, but if Taylor is right, it offerstremendous potential for those OEMs withthe vision to do things differently.

Challenger brands

When a brand is coming from behind, it hasdifferent objectives to established leaders:imagine Porsche or Ford taking part inmotorsport without a commitment to win. Butfor a rising brand, simply being on the podiumchallenging these names is a tremendousaccomplishment that will immediately lift globalperceptions and associate the company withthe highest levels of achievement, sprinkling atouch of the motorsport glamour that mostmanufacturers think they can no longer afford.

www.awmegatrends.com38 | Megatrends

Richard Harrington speaks to motorsport experts Prodriveabout how social media, globalising vehicle brands and dramaticcost reduction are breaking a new dawn for what used to be amainstay of vehicle promotion

MOTORSPORT

Race on Sunday...tweet on Monday


MOTORSPORT

“I think of these new OEMs as challengerbrands,” says Taylor. “Many have excellentproducts, but they have a long way to comein people’s perceptions. They need to makeup ground very quickly so they can increasevolumes and push up margins. Motorsportcan validate values of quality, technology anddurability at an astonishing pace - and itdoesn’t have to be expensive. The cleverstrategy for challenger brands is to aim foran appropriate level of success. The differencein cost between going all-out to win andaiming to be on the podium alongside thebig-budget teams is dramatic.”

The real key to success, however, is howmotorsport is used in vehicle sales andmarketing. “It’s about finding new ways totake the brand values to the buyers, usingmotorsport to wrap them in exciting,compelling stories that create engagement,”explains Taylor. “Social media is made formotorsport. The excitement of everythingfrom testing and travel to the race itselfprovides the stories and materials that bringa brand to life.”

Has anyone not heard of Nissan’s adventureswith the advanced DeltaWing enduranceracer? This very low cost programmecleverly delivered messages about innovationand environmental sustainability, using a mixof traditional, online and social media togreat effect. It also helped with thechallenging recruitment of engineers, byimproving their perceptions of Nissan as astimulating place to work.

Social engagement

Having a robust strategy for delivering valuefrom the programme is absolutely critical. Inpurely motorsport terms, the Lancia Integralewith 46 WRC victories was substantially moresuccessful than the Audi Quattro with 23, butLancia failed to tell their market. One of themost exciting aspects of today’s newmotorsport opportunities is that they arebeing developed to complement social media,which is revolutionising customer engagement.Land Rover’s social media pre-launch of theEvoque, a textbook success story that burst

through their already ambitious targets, justshows what can be achieved if the rightapproach is employed.

“Motorsport is visually dramatic, it’s populatedby colourful people doing heroic things, it tellsa story and it can be localised. That makes itperfect for online customer engagement,” saysTaylor. “Local sales organisations can developa strong following for their local heroes, whocan be drivers, designers, anyone with aninteresting role in the team. Social media cantake the excitement of the motorsport storyinto everyone’s home.”

Moving forward

But even this is now yesterday’s technology.The very latest social media campaigns allowcustomers to race against their heroes,alongside top drivers on the same circuits.“Motorsport is data rich,” says Taylor. “Wecan track the driver’s heart rate, the car’spower output, the cornering forces - andyou don’t even have to be sitting at a PC asit can all now be delivered to a phone. Withthis level of customer engagement, visits todealerships by motorsport cars or driverscan attract large numbers of potentialbuyers, as well as local press coverage.

“It’s about making everything worksynergistically, using carefully chosenmotorsport activities to feed customerengagement materials into a wide range ofcommunications channels.”

Prodrive’s budget for running the all-conquering Subaru team is reported to havebeen around €25m (US$33.68m) each year.Today, Technical Director David Lapworthbelieves they could achieve similar results forjust €10m (US$13.5m) a year. “Part of that isdue to the new modelling systems thatProdrive has developed to drive cost outwithout affecting performance, but it is alsoa huge compliment to the FIA for theircommitment to eliminating many of theexcesses of past decades,” he explains. “Engines are a good example: in WRC, the topteams would run one engine per car per raceand the engine design would be heavily

bespoke. Today, engines are much closer to theroad car units and each car is allowed only twoper season.” Driver salaries are also notprohibitive. “Today, most top drivers come withtheir own sponsorship and are not a majorpart of the cost equation,” confirms Lapworth.

So what are the rising races that OEMsshould be evaluating? Taylor says there arefour fast-developing series which offerattractive cost/benefit equations: the new FIAFormula E Championship for open-wheelelectric race cars; the Dakar endurancechampionship for off-roaders; the revitalisedRallycross series with its clever localparticipation and media options; and the FIAWorld Rally Championship, which is verystrong in many developing markets.

Dakar, for example, already has five millionlive WRC spectators and a TV audienceapproaching one billion across 190 countries.Online streaming adds another five millionjust from YouTube. Rallycross is a completelyre-modelled sport packaged specifically forTV with short races and wheel-to-wheelaction. It attracts a young audience with localheroes, most notably in the US, Europe andBrazil. It is ripe for local engagement throughsocial media and already attracts major globalbrands like Monster.

“The key point about these series is that,following the loss of tobacco and bankingsponsorship in the major markets, they arebeing re-engineered with OEM benefits inmind,” says Taylor. “We are on the cusp of anew era in professional motorsport where theseries owners design their events around thebenefits needed by a new generation of savvyvehicle manufacturers, and affinity brands whounderstand how to use the materials itgenerates to engage with their audiences.”

But what is the likely cost? “We coulddevelop a competitive rally cross car and runa two car team in ten events, covering theUS, European and Brazil, for less than €2m[U$2.7m] a year,” says Taylor. A competitiveDakar entry, with events in Russia, SouthAmerica, the Middle East and the US, wouldcome in at around €6 million (USS$8.2m)


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

40 | Megatrends

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THE BIG PICTURE


This quarter has seen Nissan push ahead with efforts to take itsEV technology from the Leaf into the commercial segment. The

OEM announced in September that its second all-electric massproduction model based on the NV200 van, the e-NV200, is set tolaunch next year and will be targeted at the urban delivery segment.The van has been undergoing trials at several large commercial fleetsover the past few years - most recently announcing British Gas -and has, so far, received positive feedback.

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

units made up the city’s fleet, netting the OEM up to US$1bn.Despite the positive feedback received from the commercialsector for the electric NV200, the Nissan taxi project was metwith opposition from the start. Perhaps most damming, theSupreme Court ruled in late 2012 that the New York City Taxi &Limousine Commission had wrongly awarded the contract to theOEM, as the original mandate had called for a hybrid vehicle.

But things are not as bleak as they may seem: although Nissan’sTaxi of Tomorrow ambitions have been crushed, praise for the e-NV200 has been such that Nissan is now developing a model thatwill take its EV system into the light truck segment: the e-NT400.

From EV to CV

THE BIG PICTURE


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

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

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Meeting the 2014 US fuel efficiency andgreenhouse gas emissions targets is

clearly a challenge for all commercial vehiclemanufacturers, but Volvo Trucks NorthAmerica (VTNA) has a plan: all of the OEM’sMY2014 engines will offer fuel efficiencyimprovements as a result of optimised andenhanced engine componentry. But they willnot be stopping there: according to EdSaxman, Alternative Fuels Product Manager,Volvo Trucks North America, an engine canonly operate efficiently if all other constituentparts of a truck - such as the aerodynamicsof the cab and trailer - work efficiently too,and by factoring in these optimisations, VolvoTrucks North America can be ahead of thegame when it comes to US regulations.

“Volvo Trucks is proud to say that in meeting2014 regulations, there is no need for ourproducts to incorporate a mandatory idleshutdown or the mandatory road speedlimiter,” declared Saxman, “due to theinclusion of all these other parameters indevelopment of our engine technology.”

Although still somewhat controversial, VolvoTrucks regards alternative efficiency solutionssuch as lower viscosity and syntheticlubricants an important factor to themaintenance of their vehicles. VTNA workswith major lubricant providers on an ongoingbasis to develop new and innovative solutions

for fuel efficiency, without sacrificing durabilityor reliability targets. “We believe that thesematerials help trucks to use less fuel andenergy, while enhancing durability andprolonging engine life,” Saxman commented.

One size: not for all

It may be too early to predict thepenetration levels of unconventionalpowertrains at Volvo Trucks in forthcomingyears, but Saxman is sure that truck buyersand fleet operators are going to beinterested in natural gas, hybridisation, orother alternative technologies, saying that,“Initial interest has been very strong andwill continue so long as there remains astrong price difference between diesel fueland its alternatives.”

However, Saxman emphasised thatalternative fuels are by no means “one sizefits all”, and that VTNA is focused on offeringa range of solutions that take into accountthe wide variety of trucking operations inNorth America. “Alternatively-fuelled vehiclesoffer a strong opportunity for some motorcarriers, but we believe diesel will remain themost prominent commercial motor fuel forthe foreseeable future.”

Alternative powertrains are not onlybeneficial to the OEM: customers purchasing

a Volvo truck equipped with a 2014 VolvoD11, D13 or D16 engine will see an increasein fuel efficiency ranging from 2-5%. Saxmansaid, “This will offer a significant return oninvestment for fleets and owner-operatorschoosing Volvo.”

The 2014 Volvo trucks are just the mostrecent powertrain improvements that haveresulted in fuel efficiency benefits forcustomers. The introduction of advancedaerodynamic components - includingredesigned mirror heads with aerodynamicshrouds and arms, redesigned hoodmirrors that increase visibility, andadditional ground effect features below thebumper and side fairings - have alreadyimproved the efficient design of Volvo VNmodel highway trucks.

In the long term, VTNA will remain focusedon providing solutions to address a widerange of customer needs, adapting togrowing demand by building natural gas-powered versions of its VNM and VNLmodels. The OEM also plans to introduce aproprietary Volvo D13-LNG compressionignition engine for use with LNG, along withother potential renewable fuels andinexpensive diesel alternatives. “Weannounced in June 2013 that we plan tocommercialise trucks powered by dimethyl-ether,” Saxman added.

In October this year, Gӧran Nyberg,President of Volvo Trucks North AmericanSales & Marketing, welcomed the movetowards fuel sustainable fuels, saying thatthe OEM, “is committed to designing andengineering fuel-efficient technology thatoffers our customers solutions to reducetheir fuel consumption and positively affecttheir bottom lines. Volvo Trucks is equippedwith 2014 engine technology and willdeliver substantial fuel efficiency benefits,while also providing the power andperformance customers expect from aVolvo powertrain.”

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

Rachel Boagey

VOLVO TRUCKS


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

DATA CENTRES

BMW is not an IT company, and yet it hasconfirmed that it is building its own datacentre in Iceland. So why would a carcompany make such an investment? Wouldit not be easier to pay for a 24/7environmentally-friendly managed serviceoffered by one of the major experienceddata centre providers?

Mario Müller grins. Were it so easy, saysBMW’s Vice President of IT Infrastructure,the OEM would be happy to do that. “Butour requirements mean we need to haveour own data centre right now,” heexplains. “Of course, we’re not an ITcompany! We build, develop and sell carsand motorbikes. And we have a greatfinancial services organisation. We currentlyhave more than three million carsconnected to our IT infrastructure. I thinkit will be more than ten million by 2020. Wegive our customers real time trafficinformation. That means every threeminutes all our cars receive an update. Thisreally takes those of us from the IT sideinto the end-user business, instead of onlyserving the company’s internal IT needs.Sales are going pretty well so we're happyabout that. The customers like ourproducts and the service that we offerthem. More than 95% of our new cars willhave built-in technology to get them onlineand connected, so it depends then howmany cars we sell.”

BMW currently operates an enterprisedata centre in Munich, Germany. It also hasregional data centres in Spartanburg, SouthCarolina, Oxford in the UK, and in SouthAfrica to support its manufacturing

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

In 2012, BMW had around one millionconnected cars on the road, and wasreceiving over one million data requestseach day. At the time, this was equivalent to600MB of data per day. The company nowhas three million connected cars on theroad, and looking beyond 2018, it isexpecting to have 10 million connectedcars making over 100 million data requestseach day. That equates to 1TB of data everyday, and it is because of this growth inConnectedDrive and other services thatBMW is so keen to create what it calls itsown 'Private Cloud'.

Carbon-free clouds

The OEM has already been using VerneGlobal’s data centre on a former NATObase in Keflavik, Iceland - the host countryof its future data centre. The Keflavik sitecurrently hosts high-performancecomputing (HPC) applications such ascrash test simulations, CAD/CAE, andaerodynamic and liquid fuel calculations.The OEM is now building its own datacentre near Reykjavik, where it will host itsPrivate Cloud. This will be capable ofaccommodating the existing crash test andother simulations, as well as the risingdemand for connected car-related data.“We have a green energy data centre inIceland where we are currently running fivehigh performance computer cells. Each cellhas approximately 130 servers. We'reexpanding that up to ten cells by the endof 2013. The data centre there is 100%

carbon free, and that is important if you'retalking about carbon emissions, especiallyfor an auto company.”

A cold climate and an abundance ofenvironmentally-friendly energy sourcesmake Iceland an ideal location for datacentres; natural air is used to cool theservers, and electricity is 100% carbon-neutral thanks to hydro and geothermalpower. Ten HPC cells consume 6.31GWhof power annually, says BMW; running suchcells in Germany would create 3,570metric tons of CO2 emissions.

Once the new data centre is in place, willBMW’s investment in cloud computing benoticed by its customers? “I hope so,because one of the biggest challenges thatwe have, whether it's for the companyitself or for our customers, is for oursolutions to have the best possibleresilience. We have pretty good quality inthe company on the IT side. For instance,data availability in 2012 was above 99.96%of the entire availability around the world.That's a very good result from my pointof view. On the other hand, our plants arerunning at 120% capacity right now andit's pretty hard to get downtime for anymaintenance or patches that arenecessary, so we need solutions that donot require any maintenance.Maintenance is a planned incident, frommy point of view, because IT availability isnot there for a given amount of time. Thesolutions that we have to build have to bemore resilient, with real zero downtime,and always up for the customer, whetherinternal or external.”

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

Martin Kahl


DATA CENTRES

Car companies are notoriously slow atcatching up with technology that may not bedirectly related to the vehicle, and Müllerwholeheartedly believes that the industrymust keep up.

“I think you could always be further ahead!Agility and speed will be more and moreimportant in the future. You have to be fast.You have to offer what a customer wants, andget it implemented without working 12 or 24months to get something done. Thetechnology that we see right now in the carenvironment gives us this opportunity todevelop our products much faster. You just getthe infrastructure online and in a minuteeverything works. You can do the test there,get an implementation, and it's horizontallyscalable. It gives you the resilience that youneed. Besides that, in the BMW Group, we alsohave financial services. That's a differentenvironment from the manufacturing,development or sales environment, so we haveto cover everything. It's a wonderful situationbecause we get information and ideas fromother colleagues across the company, and it'seasier to understand their needs, and what wehave to implement to serve them.”

Cloud computing is growing rapidly. GM hasrecently invested in a large data centre in theUS, and is constructing a second. Long term,OEMs' ownership of cloud data storagecould potentially change the way carsinteract with their drivers, and other vehicles.

BMW: the only automotive OEM in the ODCA

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

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

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

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


“The BMW Group is leading edge. All theother OEMs will have to do it sooner ratherthan later. That will lead to greaterenhancement in the future. If you think abouthighly, or even fully autonomous driving in thefuture, you need much more capacity in theback-end and it is not possible to hosteverything in the car. That might be tooexpensive for the customer. So IT workingtogether with colleagues in the developmentdepartment on the electronic side is thefuture, from my point of view.”

Server capability

The rapid rise in connected car data requestsraises the question of whether the servercapacity exists to support the growingnumber of connected cars and the vastquantities of data that are expected to betransferred in 2015 and 2020. “Right now, Ithink we are pretty well prepared to handleeverything through to 2015 or 2016. Butthere will come a time, if you're thinkingabout highly autonomous driving, when youneed more capacity around the world, so wehave to think about how that will work forus in the future.”

Autonomous cars have added a newdimension to the number and type ofautomotive data requests. There is growingindustry acceptance that, from 2020, we willsee cars with some autonomous drivingcapability on our roads. This will requireconsiderable on-board and off-boardcomputing power. Müller believes thecompany has sufficient server capability forthe ConnectedDrive services that BMWcurrently offers; however, when it comes toautonomous driving, he says changes andnew technology will be required to supportsuch functions

Nissan has promised to launch self-driving carsby 2020. Daimler’s Dieter Zetsche was drivenon stage at the 2013 Frankfurt motor show(IAA) by an autonomous car, and Mercedes-Benz has run the S 500 Intelligent Driveautonomously over 100km through normaltraffic in Germany. Despite testing suchtechnology, BMW, an OEM which prides itselfon the driving experience, has so far beenquiet on plans to launch autonomous cars.

“For BMW, both [autonomous driving andthe driving experience] are important. Firstof all, if you would like to drive yourself, youshould have a great car with greatacceleration and great handling for realdriving pleasure. On the other hand, thereare situations, maybe in heavy traffic in themorning, when you don’t want to driveyourself, and you would like other solutions.BMW is leading edge in technology. You willsee something in the future from us inautonomous driving.”

At the GENIVI Alliance’s recent event in SanDiego, Open Automotive 13, John Ellis, Ford’sGlobal Technologist and Head of the FordDeveloper Program, called Ford an IT company.Look at the IT activities at some of the majorOEMs, and his comment might soon apply tothe broader automotive industry. Contract ITstaff are being hired as salaried staff; ITdepartments are being moved from the back-room into the customer-end of the business;and OEMs are beginning to see data centres asprofit centres rather than cost centres.

Centering on data

GM opened its first in-house data centre in 2013 in Warren, Michigan, with aninvestment of US$130m; construction of a second US$100m data centre expansion inMilford, Michigan began in the summer of 2013, and is expected to be operational by2015. The investments are part of GM’s 'digital transformation' strategy, designed togive the OEM full control of its IT by consolidating its 23 previously outsourced globaldata centres into two by 2015.

Air flow, temperature control and energy consumption are key issues for any datacentre. GM’s investment has been designed to reduce the OEM’s enterprise ITinfrastructure energy consumption by 70%, and the OEM’s focus on environmentally-friendly construction at the GM Warren Enterprise Data Center resulted in a LEEDgold award. Likewise, Honda’s North American Data Center in Longmont, Colorado isable to use outside air around 40% of the time to cool equipment.

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

DATA CENTRES


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THE AUTOMOTIVE ARCHITECT

Gordon Murray’s ten-year-old smartRoadster sits in pride of place outside

Gordon Murray Design (GMD) in Shalford,Surrey. The head of the company, famous fordesigning and building the McLaren F1 roadcar muses that he has never been able to buyanything better, in terms of drivingexperience and relatively low cost. But allthat could now change, thanks to GordonMurray Designs’ unprecedented new iStreammanufacturing process.

The automotive industry has always beenevolutionary, but iStream really is arevolutionary process. “We still make carstoday exactly the same way, yet we've got a

lot more automation and efficiencies but westill, fundamentally, get a sheet of steel, stampsome panels, weld them together, paint them,put the bits on and that's your motor car,”says Murray. “So this is very disruptivetechnology. It's tearing up the rule book andstarting again.”

At the 2013 Toyko Motor Show, after monthsof speculation, the first company went publicabout its partnership with GMD and its plansto utilise iStream. That company was Yamaha.Not traditionally associated with thepassenger car industry, Yamaha presented itsnew Motiv.e city car alongside images ofseven other potential vehicles and the first

look at the iStream process, which had untilthat point only been shown under non-disclosure agreement to potential customers.

Gordon Murray has been working oniStream since his days at McLaren. “I setmyself a task while I was still at McLaren ofcoming up with a composite system ofmaterials and a way of industrialising thatand fixing the point loads to it, to achievethe two main advantages, which were toreduce weight and reduce capitalinvestment.” Most of Murray’s McLarenteam subsequently joined him at GMD,which he describes as, “Really just the sameteam with a different name on the door.”


The automotive architectIn this exclusive interview, former Formula 1 designer Gordon Murray discusses his innovative iStreammanufacturing process, industrialised housing and supercar dreams

Rachael Hogg


There are a number of direct and indirectbenefits of the iStream manufacturingprocess compared to the traditional methodof metal-stamping - the first of which isweight. Generally, OEMs save weight byadding more money, switching from steel toaluminium, magnesium casting or carbon fibre- all very expensive options. iStream,however, employs a separate assemblyprocess: major components, the powertrain,wiring harnesses, brakes and suspension canbe directly fitted onto the chassis before thepre-painted body panels are fitted near theend of manufacturing.

Flexibility

iStream uses manipulated tubes and amonocoque panel which are both low cost,but also allow flexibility. “If you want to planto make a car in three different lengths ortwo different widths, it's largely just rewritingsoftware,” says Murray, “because thehoneycomb panels are very stiff and stable,we can create great big openings in thestructure, which means that we can build onemotor car that will take several powertrains;with stamped steel it's very difficult to dothat. Normally a hybrid car and a petrol carare two different architectures.”

A side advantage of iStream is durability.Murray explains, “With a continuouslybonded structure like iStream, you havesomething that's much more durable. So, notonly will it not start rattling and squeaking,but it will retain its crash-ability for muchlonger into its life.”

The vehicle is therefore much safer and “youget a much stronger, stiffer vehicle. Or safetycell, like a racing car. I'd like to see manymore cars out there being safer and moreefficient,” says Murray. The structure alsooffers other perks such as the reduction ofvibration and harshness, and a structurewhich is “self-damping”.

One limitation of the iStream process iscapacity. While “a typical iStream model is30,000 to around 120,000 a year,” if GMDwas approached by someone who wanted to

mass produce 400,000 low-cost vehicles ayear, but was not necessarily interested inweight-saving, “you wouldn’t entertainiStream.” Yet there is also a limitation at theother end of the scale. Murray suggests thatif someone was making less than 10,000vehicles, it would be easier to hand-make,“like the specialist sports car companies do.But those are very expensive products.”

Initially GMD perceived problems withmanufacturing larger vehicles such as B- andC-segment cars due to the use of plasticpanels. Typically, the outside iStream panels arenot part of the monocoque and generallyinjection moulded plastic would be used.However, as the size of a vehicle is increased,the flush and gap quality is more difficult tocontrol within a plastic panel. “We're workingon a bigger product now which has gotaluminium skins on the outside - non-structural, but aluminium,” says Murray. “Theyget away with that product. So a limitation wethought was there probably isn't any more.”

Two seats to three tons

While there has been much talk about iStreambeing used to create smaller vehicles, GMD isworking on an entire range of products, froma two-seater city car, to a three-and-a-half tontruck. And, as Murray says, “We're a bunch ofdesigners, so if a customer comes along witha product we think could be suitable, we tendto come up with solutions for them, becausethat's what we do.”

So what is the potential for iStream over thecoming years? The iStream relationships arelong-term, so the business would only needtwo or three contracts to ensure success.However, having made a conservative scoutaround the world - except in China - Murrayis positive that GMD could sell 35 licences.

In established markets, iStream offers OEMssomething to combat emissions legislationfines. “It's an absolute antidote for fuelconsumption and CO2 in established markets,and it increases levels of safety while it's savingweight,” Murray says proudly. While OEMs areexploring multi-niche vehicles, wanting tocreate a variety of powertrains, iStream canachieve this on the same production line andon the same platform. “Who is going to winthe powertrain race? Or the fuel race? Peopledon't really know. And, with all that uncertaintyand change, we can supply a very flexiblesolution to somebody that doesn't quite knowwho the winners are going to be, rather thaninvesting £2bn (US$3.2bn) in a new stampedsteel platform and be stuck with that.”

For emerging markets, the main benefit ofiStream is increased safety. “There's a big pushfor Global NCAP to bring up the safety levelsin developing countries and developingmarkets. And just by its nature, iStream will bea much safer vehicle in those markets,” Murraycomments. The capital investment is alsolowered and gives manufacturers the chanceto “dip a toe in the water” by spending afraction of the cost of a metal stamping plant.


Crossroads

The turning point for GMD was 2008. Whenthe business opened in 2007, there was hugeconcern about how the team would convinceOEMs of the benefits of iStream. However,fuel prices rose, the financial crisis hit and,Murray says, OEMs finally sat up and paidattention: the old method of producing a carfor ten years with two variants and recoupingthe investment back in six years no longerworked. People stopped buying cars, theattitude of younger buyers changed andbrand loyalty was nowhere near as strong.

Although GMD did not expect to developpartnerships with more start-ups or thosenot involved in the automotive industry, likeYamaha - because “iStream gives a newcomera chance to leapfrog OEMs, so for them, notonly are they catching up, they have astructure that’s lighter, stiffer, more durable,safer and more flexible from the point ofview of product strategy” - the oppositehappened. GMD is now working with sevenOEM projects and two start-ups, whichMurray cannot currently discuss further. “It'sso frustrating not to be able to talk to peopleabout it, but it's entirely a customerprogramme and it's entirely up to thecustomer when they go public.” He didhowever hint that there may be one or twomore partnership announcements in 2014.

While interest from OEMs may have beensurprisingly high, Murray says GMD has “a fullsuite of tools, to help somebody get from anidea on a bit of paper to the cars coming offthe line. We could very, very simply make anApple or a Google or a Sony or anything likethat. And because iStream doesn't need themassive investment that stamped steel does,the risk - there will always be a risk - is but afraction of what it would be if they tried todo it any other way.”

Gordon Murray has consistently managed toturn his personal ambitions into successfulbusinesses and found just the right gaps in themarket. Most recently, his attention has beenfocused on the “huge gap in the market, inEurope in particular, for a low cost simplesports car,” similar to the smart Roadster, “acar delivered in fun,” but better connected.iStream would be perfect for this, saysMurray. “Roadsters are notoriously difficultto make stiff and strong enough with no roof.With iStream, once the monocoque isbonded into the frame, we can have all thestrength, if we want to, in the lower part ofthe car so it's absolutely perfect for a littlelightweight roadster.” He was keen to stressthat this would not be another PorscheBoxster, but something most people couldafford as a little car - and fortunately, healready has some customers talking aboutsuch a vehicle.

Planes, trains and automobiles

Murray also believes that iStream could beused to manufacture industrialised housing,planes or railway coaches, but was keen tostress that GMD’s main focus would remainin the automotive sector because it is “whatwe know”. In fact, the company has alreadybeen working with the Brazilian governmenton applications across other sectors. Murraysays, “The one that particularly interests meis industrialised housing; I think there's a lotof future there.”

In Brazil particularly, GMD plans to look atthe materials and waste produced there;see what composite technology could beapplied, and how resources could be usedeffectively. “We need to look at how youcan take a country's waste, or by-productsfrom production, and turn them intosomething useful. Brazil's a fascinatingmarket. Outside China it's probably thebiggest opportunity for growth and newideas and concepts.”

With several other projects already welladvanced, including one ahead of Yamaha,iStream products will hopefully be seen onroads in the next few years, perhaps even asearly as 2016, says Murray. “The next big hillto climb is to actually get some signedcontracts and iStream products on themarket. My next target, before I get dilutedwith houses or aeroplanes or anything else,is to see people driving around in iStreamvehicles and as many as possible, safer, lighter,better handling, all the benefits.”

For Murray, a man who constantly craves anew challenge, what will be next after hesuccessfully gets iStream vehicles on ourroads? “There's another personal ambition.I think I've probably got one more supercarleft in me. When we've got iStream up andrunning, I might take a selected bunch fromhere, because I've still got a lot of peoplehere that did the McLaren F1 with me. Wewere such a powerful team and we still are.So I think I’d like to do the supercar, and itwon’t be anything like these 1.5 toncomplex things out there. It’d be another bitof art really.”


I've probably got one moresupercar left in me

“”

52 | Megatrends


I N N O V A T I O N I N T H E A I R ,N O W S T A N D A R D O N T H E G R O U N D .

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Major brands such as Audi have alreadyrecognised that LTE is the future of

mobile connectivity, by planning to bring LTE-connected vehicles to market as early as2014. With improved range and connectionspeeds up to 100 times faster than 2G and3G, LTE is set to enable unprecedentedapplications in the vehicle.

However, from an engineering perspective,LTE still presents some significant challenges.To design an effective LTE-connected carsystem, the industry needs to understandwhere LTE networks are today, where they’regoing and what attributes in-car systemsshould have to bridge that gap.

With the ability to connect cars over LTEnetworks - effectively bringing wiredbroadband speeds to the wirelessautomobile - a wide range of newapplications will become available in thevehicle. Services like Internet-streamed video,music and even video conferencing (usedfrom the passenger seat or backseat, ofcourse) are just the first that spring to mind.

These applications will benefit not only fromthe supercharged capacity and range of LTE,but from the much lower latency of LTEsystems - latency often being the mostcritical factor in delivering a high quality-of-experience to the user. But the potential forLTE-connected car applications goes beyondentertainment and consumercommunications. For example, superfastcommunications could enable new safetyservices, such as the ability to stream videoof road conditions recorded from othervehicles in real time, or receive alerts whencars ahead stop suddenly. In theory, the LTE-connected car could become a portal for allsorts of new services.

These, and other possibilities, are generatingtremendous excitement across the industry.But, whilst we may be close to realising thepotential of LTE-connected applications,some important barriers remain. The biggestobstacle is the fact that it will be a whilebefore LTE coverage catches up with LTEdevices and applications. Operators aroundthe world are busy deploying LTE networks

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

Sporadic coverage

For a while to come, there will be plenty ofregions where LTE is restricted to high-densitypockets of coverage, separated by large areasof 3G or even 2G service. Vehicles frequentlycross borders and therefore may need broadroaming capabilities to avoid losingconnections. Thus an LTE-connected car needsadvanced multi-mode capabilities, - this meansradios for 2G, 3G and 4G technologies, usuallyin multiple band combinations.

These multi-mode systems also need to beintelligent. It is not enough just to havedifferent cellular radios. The LTE deviceneeds to be smart enough to know whichone represents the best possible option atany given moment and as the vehicle travelsat speed.


Looking down the road:

the LTE-Connected CarOlivier Pauzet

LONG TERM EVOLUTION

Another complexity that designers need toaddress is how to maintain a goodconnection, even with less than optimalcoverage. Under the best circumstances,LTE requires a more sophisticated antennasystem than 3G and 2G. LTE uses multiple-input multiple-output (MIMO) antennas, forwhich antenna placement, coherentdistance (i.e. separation) polarity and otherfactors are extremely important.

In many regions, LTE operates at lowerfrequencies, below 1GHz. The ability todeploy LTE at lower frequencies is a majorbenefit for operators, as it provides improvedrange over most 3G services, and allowsoperators to ’re-farm’ their existing 2G or3G spectrum and cell sites for LTE.

The flip-side, however, is that lowerfrequencies tend to be much noisier. So, notonly do LTE system designers have to addressmore complicated antenna requirements, butthey also have to address them in a moredifficult environment. In addition, since manyoperators are rolling out LTE services usingtheir existing cell sites, the placement of thosesites may not be as ideal from a coveragestandpoint as a cellular network built fromthe ground up for LTE. Put it all together andyou have a big warning sign for LTE connectedcar designers: fail to devote the proper timeand resources to antennas and your users willabsolutely notice.

Beyond these considerations, it is importantto understand that, while LTE is clearly thetechnology of choice for next-generationcellular services, it is still very much anevolving technology. For example, attentionis already beginning to turn to the expansion

of LTE services, including LTE Advanced, todeliver even faster speeds.

What this means is that you cannot build asolution designed specifically for LTEnetworks as they exist now. You need to buildin flexibility to adapt the solution as LTEtechnology itself continues to evolve, inaddition to how the coverage of LTE serviceschanges over time market by market.

Building a better connected car

Clearly, some challenges remain before wewill see the full-scale vision of the LTE-connected car realised in every driveway. Butthe promise and momentum of LTE are toogreat to ignore.

As system designers evaluate LTE devices andvendors in the coming months, there areseveral words of advice they would be wiseto adhere to: choose cellular vendors withproven expertise building LTE, 3G and 2Gdevices that operate successfully in real-world multi-mode environments; look forwireless providers with expertise in the oftenoverlooked field of antenna design and

testing, and that have proven successesdelivering different types of devices - USBmodems, hotspots, networking devices - inmany parts of the world; seek outprogrammable wireless solutions withoperating system-like capabilities, if not actuallightweight operating systems. You will needthis headroom to keep pace with evolvingrequirements; select wireless solutions thatcan be maintained and upgraded over-the-airto always keep communication devices up todate; choose partners who have closerelationships with operators in marketsaround the world and experience certifyingsolutions for multiple networks. Thisexpertise will be extremely important as youshepherd your system through thesometimes difficult certification process.

There can be little doubt: LTE is the futureof in-vehicle connected services. By makingsmart choices now, system designers can beconfident that their solutions will fulfil thefull promise of the connected car - in 2014and beyond.

Olivier Pauzet is VP of Marketing and MarketStrategy at Sierra Wireless.

LONG TERM EVOLUTION


March 18th 2013, The Henry, Dearborn, Detroit, MichiganTickets from $Free!*

The third annual Automotive World Megatrends USA summit will feature three separate streams focusing on today's hottest automotivetopics: 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:

Sponsors

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

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

Matt Jones,Jaguar LandRover

Kyle Walworth,Teleca

Dr Ann Marie Sastry,Sakti3

John Waraniak,SEMA

Joel Hoffmann,Intel

Stephen Tarnutzer,DGE

Meridith Guerriero,Google

John German,ICCT

3 Streams / 48 Expert Speakers / 350+ Delegates

CE MEETS OEM


CCaann tteecchhccoommppaanniieessbbuuiillddccaarrss??Martin Kahl

The idea of a non-traditional automotivecompany launching a car is something

that delights analysts, worries the traditionalindustry, and is treated by the public in equalmeasures of fascination, concern and apathy.

For years, there has been talk of Applelaunching an ‘iCar’, something that Steve Jobsreportedly dreamed of doing. The companyhas been quiet on such an idea for some timenow, but it is openly developing and launchingin-car technology, for now within the area ofinfotainment. In late October this year,Berenberg analyst Andaan Ahmad suggestedin an open letter to Apple that it should buythe EV manufacturer Tesla. Music to ElonMusk’s publicity-conscious ears, but could thecar company - once referred to as the Appleof the automotive industry - really end upbecoming Apple’s offering in the car world?Or might Apple try a more organic approach,

perhaps using a contract manufacturer tobuild its self-developed cars?

Another household name with theautomotive industry firmly in its sights isGoogle, which has for some time been testing‘self-driving cars’ in Nevada, guided by its ownGoogle Chauffeur software. Whilst these carshave to date been heavily-equipped versionsof mainstream cars like the Toyota Prius, it isnot inconceivable that Google would developits own product. Again, production could beoutsourced to a contract manufacturer, likeValmet or Magna Steyr, or to a traditionalOEM with spare production capacity - andthere are certainly many such opportunitiesin Europe at present.

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

Dieter Zetsche believes that the notion of anon-traditional car company entering themainstream automotive industry is far frominconceivable.

“We have seen industry examples whereexactly that has happened. Take steamlocomotives being replaced by diesel andthen electric locomotives: not a singlemanufacturer providing the first technologywas around when the new technology camearound,” says Zetsche. “It would certainly bestupid to believe that because of all theknow-how on your side, nobody else fromoutside the industry can ever challenge you.This is not our position and I think it can beproven by the fact that we have invested inTesla, for instance. And I very muchappreciate this tension and complementaryaction between a start-up and the oldestauto manufacturer.”

CE MEETS OEM

As well as investing in “a start-up”, Zetschesays that Daimler takes seriously anypotential challenges from an industryoutsider, and is working hard to demonstratethat it can develop industry-leadingtechnology in-house. Look at what Daimlerhas shown with the S 500 Intelligent Drive,a modified version of the S-Class, he says.“Using the production car’s existing sensors,just a few more of them, with some storageand some software and algorithms, and thebrains of our engineers, we drove 100km[autonomously] through normal traffic -nobody else has done that. And me drivingon stage [at the 2013 IAA] from the rearseat is not what the other car manufacturerswill do tomorrow either.

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

Daimler’s 4.3% stake in Tesla illustrates howa traditional OEM might respond tochallenges from ‘outsiders’. Indeed, Daimler’sChief Financial Officer, Bodo Uebber, recentlyindicated Daimler’s intention to increase itsco-operation with the electric car company.

Supplier perception

But how would traditional automotivesuppliers respond to the idea of deliveringnot to BMW or Daimler, for example, but

instead to a non-automotive company thatmight launch a car in the near future? TheEuropean organisation which representsautomotive suppliers is Brussels-basedCLEPA. Its President and Chief Executive isJean-Marc Gales who, before joining CLEPA,was head of brands at PSA Peugeot Citroen.“We are not yet at that stage, because sucha company would probably operate bydividing competencies,” says Gales. “BMWhas the competencies, for example, for thecars. Suppliers have the competencies forautomotive systems. And [a technologycompany like] Google provides the softwareand the interconnectivity. Probably thesmartest way of moving ahead would bethrough alliances and joint ventures. I don'tsee a company like Google building up all thenecessary competencies and factories, but Isee a lot of scope for working together onvery defined areas. I think that's how it'sgoing to develop, because I don't know anyventure capital company that really wants alarge manufacturing plant.”

Gales is convinced that technologycompanies will grow their automotiveindustry presence, and that a company likeGoogle could eventually host a stand at aninternational motor show like the FrankfurtIAA. Google did not have a stand at the 2013IAA, something which surprised him. “Lookat the development of stands at the IAA:there are a lot of electronics companies, and

two years ago suppliers had about 300stands. This time it was 370. It's reallygrowing. There's a lot going on, with manynew companies emerging, and there isconsiderable new venture capital going intothose companies.”

In addition to potentially bringing new - anddisruptive - products to market, companieslike Google are conducting research in areasthat perhaps the mainstream automotiveindustry is not. “I'm very interested in that,”says Delphi’s Chief Technology Officer, JeffOwens. “I think they're really moving themindshare space of what could be possible,and I'd like to work with them to help figureit out, or learn as they learn what theopportunities are,” says Owens. “They'retaking an incredible amount of data, and itwould be great to learn even a portion ofwhat they're learning as they figure out whatworks and what doesn't work, the use casesthat are appropriate, the use cases that aren'tappropriate. And if that means we're supplyingproduct to them, I'm good with that.”

From a supplier’s perspective, could Owensimagine a time in the future when Delphimight supply to a non-traditional vehiclemanufacturer? “Well, we do supply to Teslabut that is at least a traditional vehiclecompany with a non-traditional idea. We'reworking with Google on driverless vehicles,as are many of our colleagues. Our radar


CE MEETS OEM

Megatrends | 59

sensors, for example, could bring value tothem [Google] in terms of how they satisfytheir environmental stance. But yes, I don'tknow if they will be a car company.”

Face value

Success and failure in the automotive industry,perhaps more so than any other industry, isbuilt on brand reputation. Anyone coming intothe automotive industry from outside wouldneed sufficient brand firepower to competewith well-established names. Myles Kovacs,President and Co-founder of DUB magazine,sees cross-industry collaboration as the wayforward. “The future of automotive is acomputer with wheels, so the computercompanies should lead this industry in the

future, if they want to and if they’re dedicatedto do it. The collaboration between apowertrain company and a computer companywould be the ultimate collaboration.”

Sascha Gommel, an analyst at Commerzbank,agrees. Rather than building their own cars,Gommel believes technology companies likeApple and Google “will just need prototypesto develop and test their software andservices. I think it’s more likely that they wantto sell their software and services to theestablished OEMs.” The idea of cross-industrycollaboration is one with which Daimler alsoappears comfortable: “We will be fine to co-operate with Google,” says Zetsche.

Interestingly, it is in the area of self-drivingcars that ‘industry outsiders’ currently appearto stand their best chance of success.Although Daimler has launched self-drivingtechnology, it has done so in its top-end S-Class, well out of the reach of most carbuyers. While GM and Nissan have bothconfirmed plans to launch autonomous carsby 2020, Google has been running its self-driving technology in a Toyota Prius, showingthat such technology can be put intomainstream cars, and that it is alreadyavailable, at least in prototype form.

It is for this reason that Mercedes-Benz istargeting technological leadership in thisarea. “We have been pursuing, for decades, avision of accident-free driving,” says Zetsche.The focus for safety technology has shiftedfrom passive to active safety, and “the new S-Class has taken us very close to theexecution of this vision already,” he notes.“All these assistance systems, as a sideproduct, provide autonomous driving. So itwas not our prime target, but it goes alongwith our objective of accident-free driving,”and underlines “our brand's safetysuperiority over any other car brand.”

Autonomous driving, he says, shows Daimler’scapability “where again we are far ahead ofanyone else”, and helps “increase theperception of the brand’s innovativecapabilities”. The S-Class has famously been thecar on which many technology firsts haveappeared, before trickling down to themainstream market.

One of Daimler’s close industry partners isthe Renault-Nissan Alliance. The twocompanies are exploring numerouscollaborative projects, including, at the highend of their ranges, a likely jointmanufacturing project that is expected to seean Infiniti model using the Mercedes-BenzMFA platform; at the small-car end, Renaultwill build a four-door smart for Daimler.Daimler has shown it can make self-drivingcars; as mentioned above, Nissan has said itplans to launch a fully autonomous car by2020. The economies of scale inmanufacturing and technology developmentare all too apparent.

Back to the more general subject of non-traditional companies selling cars: whilst theindustry prepares to accommodate - if notwelcome - outsiders, those outsiders havemuch work to do to lay the foundations of asuccessful non-traditional car companybusiness model. Tesla appears to besucceeding where the likes of Fisker andCoda failed, but as Delphi’s Jeff Owens said,it is doing it in a fairly conventional way.Consumer reaction to the idea of outsidersselling cars varies from, “They don’t knowanything about making cars” to curiousinterest. A recent report by KPMGconcluded that consumers would trusttechnology companies like Google and Appleover mass-market OEMs such as Nissan toproduce an autonomous vehicle. Asked torank their trust in companies producing anautonomous vehicle, and their willingness todrive one, respondents scored Google andApple highest, closely followed by Mercedes-Benz, with Nissan and Chevrolet trailinglower down the scale. But ask consumerswhether they would trust a technologycompany or a traditional vehiclemanufacturer to make a family hatchback ora high performance sports car, and theanswer would probably be very different.


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

Dr Dieter Zetsche, Head of Mercedes-Benz Cars

“”

AUTONOMOUS VEHICLES

Despite a strong start, the NationalHighway Traffic Safety Administration

(NHTSA) has declared that the permissionswhich prevail in Nevada, Florida, andCalifornia for automated vehicles will only beapplied for testing purposes and none other,until proven completely safe. For the samereason, European legislation - and the variousdisparate versions in each member state - hasthus far not taken a call on what sort ofautomated vehicles can be permitted onpublic roads for personal use. Although thepurpose of the automated driving initiative isaligned with taking road safety to the nextlevel, the biggest nightmare for allstakeholders involved - OEMs, suppliers andlegislators alike - is the accident liability in the

event of an automated vehicle colliding witha pedestrian or another vehicle. This could becaused by various factors: glitches in variousECUs, false-negatives (missed warning),hacking and related cyber-security threats,wrong override by driver, and failure torecognise a corrective override commandfrom a driver are just a few such examples.As a matter of fact, these convolutions havealready delayed OEMs from launchingautomated vehicles. Some, includingMercedes-Benz and Audi, have developedproduction-ready driverless cars, but havechosen to disable the functionality due to thelegislative and real-world imperatives.

Consumer appetite for vehicle automation

can be classified in terms of what extent ofvehicle automation they may digest. Whenoffered freebies worth a few thousanddollars, some consumers opt forinfotainment features, some for safety, othersfor extended warranty, while another set ofconsumers prefer a mix of all of these. In themost general case, it is only logical to statethat a large fraction of people will still like todrive their cars, letting it drive itself onlyunder certain conditions - and one canapportion anywhere between 10-90% ofdriving time to the term ’certain conditions’.

The Mercedes-Benz E- and S-Class vehiclesof 2014 have proven that they can drivethemselves in adverse conditions without the


Who should be driving your car?Prana Tharthiharan Natarajan

AUTONOMOUS VEHICLES

presence of a physical driver inside. BMW'sautomated vehicle will also ensure that youare pulled over to a hard-shoulder if you faintor fall asleep while behind the wheel.Volkswagen's Temporary Auto Pilot (TAP)expects the driver to pay complete attentionto the road, even if not actively driving thevehicle, expecting the driver to take over atany point, when prompted. Audi's piloted

driving feature will let you get out of thevehicle, right in front of the lobby at a hotel,while you can use a smart-phone app to parkand retrieve it. The same feature is extendedto a piloted driving mode, when the driverhands over the driving tasks to a virtual co-pilot, i.e. the vehicle itself. Most of theseinnovations can be done if state-of-the-artADAS and connectivity features are

leveraged to leave no stone unturned. At therisk of sounding too generic, real-worldchallenges require smarter in-vehicle systems- both for ADAS and connectivity - to makethe vehicle see, feel, and decide like a realdriver would. A classic example of this wouldbe speed-bumps and potholes: while speed-bumps and ramps can be recognised with asmart forward-looking camera aided by radaror ultrasonic sensors, potholes, an openmanhole or any other dug-up area in the pathof the vehicle may not occur to the vehicularsensing systems so very readily.

Google it

Much has been said and written about theGoogle Self-Driving vehicle project.Impressive, as it is, for a non-automotiveparticipant to gain sufficient attention for aproject outside of their core competence,one would wonder whether consumerswould trust the likes of a Google in anymanoeuvre other than navigation, app-basedPOI information etc. Although traditionalOEMs such as BMW, Audi, Mercedes-Benz,


AUTONOMOUS VEHICLES

General Motors, and others are yet to makea firm statement on the confirmed launch ofsuch vehicles at a decided price, the industryis left wondering what exactly Google isdoing here. Traditional OEMs are intent onsemi- or highly-automated modes whileGoogle is going all out to create vehiclesthat do not need a driver inside.

For Google, it is clearly about connecting thedots. They have connected navigation andlocation-based services either throughGoogle Now and Google glasses. They havethe ability to liaise with channel partners toput the internet into cars and ensure thatoccupants spend more time using some sortof Google application. All it takes is a vehiclethat can drive itself so that people maximisetheir time using Google's other products.Take the example of Google Glasses: wearingthem while driving is a punishable offence inthe UK. So Google is trying to shift thedriving responsibility from the driver to anautomated driving module, so that thehuman driver is downgraded to an occupantof the vehicle, free to use Google Glasses, atleast in the eyes of the current law.Legislators and OEMs may be trying toensure that self-driving vehicles reduce theprobability of road crashes, but Google, onthe other hand, is looking at the same as apotential business opportunity.

The best business case for a Google vehicleis to partner with an OEM that does nothave an action plan to launch an automateddriving vehicle in the near future, or with amanufacturer that does not boast the bestADAS and connectivity systems. Google'ssolution should be a packaged bundle thattakes a two-pronged approach in both activesafety and in-vehicle connectivity. Onepossibility is to fit an optional Google-Xadd-on to a capable vehicle model, on thecondition that the OEM would avail of aninfotainment package from Google. Themuch ado about software-over-the-air andfirmware-over-the-air need not result innothing, if this proposition is a reality. Thus,the idea would be one of Google makingAndroid-like automated driving modules,

compatible with a specific list of cars.Should all pieces fall into place, the future willsee a set of OEMs who offer proprietaryautomated cars and the likes of Google fittingcertain other cars with an automationmodule and Google-powered infotainmentunit, lest the occupants be bored to death.No one will be surprised to see Appleentering this space, considering the popularityof the iPhone in markets where automatedcars are likely to be launched first. Indeed, thecomputer giant has already established anautomated vehicle research arm.

Google and Apple are two of the biggestnames to have revolutionised digital mediaand now both are likely to provide an‘infotaining’ environment on the move. Inthe automated driving space, much like theirelectronic advent, one can expect Google tobe hardware-agnostic, creating adaptableplatforms - perhaps even open source -whereas Apple may be looking to leverageits technical prowess in sleek hardwaredevelopment and purpose-built software.

Capable driving, responsible driver

‘Can I order a vehicle online and expect it todrive itself to my garage?’ has been thequestion in the minds of many consumers.Such a scenario may not be possible in theforeseeable future, but what one can expectin the next five years is a vehicle which iscapable of driving itself but still holds thedriver responsible for the driving task. Fully-autonomous cars do not require a human tobe present inside to drive the vehicle. Such avehicle will then not need the samearchitecture as a vehicle of the present day:steering wheel, brake-pedal, throttle, gear-shift etc., can all be removed and the vehiclewould have more space for comfort,convenience, and infotainment featuresthroughout. And if such a vehicle would notneed a driver inside, should there be oneoutside? This is likely to pave way for a wholenew business model for driving-as-a-service.

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

remote site needs to be compatible only withthe interface rather than capable of runningthe background codes - thus vehicles of thefuture may only need to provide inputs to adriver seated outside of the vehicle.

But what is the business case for such amodel? Governments are still not sure ifthey should allow autonomous vehicles forpublic use. Consumers themselves aredivided on whether they would feelcomfortable making their child sit in avehicle that drives itself. While insurancecompanies should ideally support the ideaof automated driving - as such vehicles arelesser likely to be involved in a crash - thereis no single definition of automated vehiclearchitecture or a set of type-approvedvehicles that are automated. The overallsentiment is that human drivers are moretrusted by one and all, rather than machine-vision driving a vehicle. In such a case, asmentioned above, the driver need not evenbe present inside the vehicle to drive it.

Stakeholder cooperation needed for sucha scenario would include road-operators,infrastructure providers (smart-grid, V2X,among others), telecom operators,telematics service providers, insurancecompanies, and fleet operators. Whenthese entities come together and help thelegislation formulate the most practicaland most appropriate set of regulations,we will then have cars that drivethemselves, under someone's monitoring.Even in tunnels, such vehicles can follownon-automated manually driven vehicles, ifconcerns exist about connectivity losses.Whatever may be the outcome, thereneeds to be multiple redundancies such asduplicate telematics boxes, dualconnectivity modules and V2X on top oftelematics and ADAS, to name a few.

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

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


THE BIG PICTURE


Personalisationpays off (or does it?)One of the biggest manufacturing trends of 2013 has been

personalisation: the Opel Adam, Mini’s offerings and the Fiat500 are all available with a wide variety of interior and exterioroptions, so that a driver can make their car truly their own.

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

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

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

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

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

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

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

THE BIG PICTURE


Megatrends | 67www.awmegatrends.com67 | Megatrends www.automotiveworld.com

CAR SHARING

As global emissions standards grow evermore stringent, OEMs around the world

are scrambling to develop new technology inorder to stay competitive - but it is stillunclear where it is all headed.

However, a new report by McKinsey, The roadto 2020: what’s driving the global automotiveindustry?, has predicted a rising trend towardsinvestment in electrical and hybridpowertrains, lightweight construction andaerodynamic technologies. No surprises there,as we can already see this happening. But, whileEVs could ultimately emerge as the solution tothe future mobility dilemma, McKinsey expectsit to be a gradual transition, with internalcombustion engines still accounting for 90% ofcar powertrains by 2020. According toMcKinsey, ICE development will be prolific,with cylinder deactivation or variable valvetiming and lift available at the same time asalternative powertrain advancements.

“As the core future powertrain technologyhas not yet crystalised, OEMs have to facetwo challenges: acquiring, developing andmanaging all the required knowledge; andmanaging the investments and financial risksbehind this portfolio play, given thetechnological and feasibility risks andconsumer adoption uncertainties,” saidMcKinsey Senior Partner Hans-Werner Kaas.

The report also suggested that car sharingcould prove to be a useful testing groundwhen introducing new technologies to themarket, offering customers a low-riskopportunity to become familiar with the nextgeneration of technology. The car share

segment has already emerged as anestablished realm for EVs: the Paris Autolib’electric car sharing programme, for example,now has 40,000 subscribers; Daimler’sCar2Go scheme currently offers electricversions of the smart fortwo in severalmarkets; and in California, Zipcar offers theHonda Fit EV.

“Car sharing allows OEMs to divide therequired interest per car across a highernumber of users,” Kaas explains. “As carsharing is mainly used for local transportwithin a defined range and usage pattern -and, as such, has a higher usage utilisation -investments in new infrastructure arepredictable and more containable.

“These usage conditions also apply for fuelcell-based powertrains and could open thisopportunity. Yet the technology racebetween different powertrains is not yetdecided and leaves the decision on fuel-celled car sharing open.”

Potential

The global car sharing marketplace is evolvingrapidly, with increased membership numbersaround the world and expansion into newsegments such as peer-to-peer. In fact, a recentanalysis by Frost & Sullivan on car sharing inGermany, France and the UK highlighted thatalthough the P2P car share market is atpresent in a nascent stage, it should continueto co-exist alongside traditional car sharing.

The overall market for car sharing, includingP2P and traditional systems, has a

tremendous growth prospect: between 2008and 2012, membership numbers grew morethan 90% to 940,000. Frost & Sullivan expectsto see continued growth, but only ifmarketing activities are stepped up.

“There needs to be a lot of promotionalactivity…to create interest levels which willlead to higher uptake rates of this service,”said Frost & Sullivan Programme ManagerMohamed Mubarak.

Frost & Sullivan maintains that in Europe alonethe car share market has the potential toattract more than 15 million members by2020, “but there is a lot of education andbehavioural change amongst consumers’mobility patterns that needs to take place toachieve such growth,” cautioned Martyn Briggs,Frost & Sullivan Mobility Programme Manager.

The market’s main draw centres on cost andconvenience. The leading reason whichMcKinsey respondents gave for their interestin car sharing was that it was more costeffective compared to owning a vehicle. Thiswas followed closely by the fact that itavoided the hassles of car ownership, and thatit was more convenient than public transport.

Despite this, Kaas warned that the “profitabilityof the car sharing business model is, onaverage, still challenging, but on the move.Nevertheless we see more and moreapplications and pilots, suggesting at least thewillingness to further test the viability of thebusiness mode. Ultimately the economicviability depends on well-defined local usagepatterns, convenience and ease of use.”

Car sharing: the new proving groundMegan Lampinen

It took Peter Dearman 30 years to develophis liquid air engine, tucked away in a tinygarage workshop in Hertfordshire, UK. But itonly took Toby Peters, the Chief Executive ofthe Dearman Engine company, a tiny fractionof that time to decide that he wanted in. Notletting his initial excitement get the best ofhim, Peters took the technology to theUniversity of Leeds to see if the sciencestacked up. Delighted with the positiveresults, he and Dearman teamed up and theDearman Engine Company was born.

How does the Dearman liquid enginework?

The basic principle is if you take 710 litres ofair and liquefy it, you get one litre of liquidair, which you store at atmospheric pressure.You just have to keep it cold, at -196 degreesCelsius, you don't have to keep it underpressure. By introducing ambient heat, theliquid air boils and turns back into gaseousair: it expands 710 times and you can use thatto drive an engine.

Historically, it was treated like a steamengine: you boiled a tank of liquid air andused the head of steam to drive the engine.But Peter came up with this very clever ideawhich was to keep it as a liquid and inject itinto the piston. The void at the top of thecylinder just above the piston is filled with aheat exchanger - water and glycol mixed -into which a small droplet of liquid nitrogenis injected to get very rapid andinstantaneous expansion inside the cylinder.

That then drives the piston down, whichdrives the engine. It exhausts the air toatmosphere and recycles the heatexchanging fluid. Peter's invention wasactually what Andy Atkins [Chief Engineer oftechnology at Ricardo] describes as an‘internal steam engine’ by using this heatexchange fluid.

The clever bit is that by using heat exchangefluid we can integrate the engine with otherengines. So although you can use this as azero emission powertrain for zero emission

vehicles, this is where it becomes reallyexciting. We can actually integrate it with adiesel engine and harness the waste heat ofthe coolant loop rather than the exhaust -the coolant loop is at 90-100 degrees Celsiusand our tank is -196 degrees Celsius.

We can broadly put this alongside a dieselengine, harnessing the waste which could,on a bus, reduce fuel consumption by about25-30%; 30% of every litre of diesel is lostout of the radiator, let alone what goes outthe exhaust.

The internal steam engineRachael Hogg

LIQUID AIR


LIQUID AIR


We can also use it for cooling. If you think ofthe massive amounts of refrigerated vehicleson the roads, about 15-20% of the dieselconsumption is to drive the cooling unit. Wecan use the liquid nitrogen as a far moreefficient and zero emission way of providingthe cooling, thereby reducing the dieselconsumption in towns.

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

We’re doing three applications, starting offwith the cold and power engine: we've got agovernment grant and are working withMIRA on air products in LoughboroughUniversity; we will have a test vehicleoperating next year. We can make significantsavings on diesel consumption and have zeroemission cooling. Equally, modelling showsthat it's quite cheap, so it's got an economiccase as well as an implemental case.

Application number two will be a waste/heatrecovery engine alongside a diesel: we'restarting work on that and see it going on totest beds in 2015. So it's not a case ofeither/or. We're looking at all three becausewe think they are an opportunity. We're notsaying this is a silver bullet, we're realistic. I'mnot saying we're going to be driving aroundin passenger vehicles in the next ten yearsdriven by liquid air.

We do think that the zero emissionapplication has some interesting off-road

markets - mining vehicles, forklift trucks,those sorts of applications, which are stillvery big markets. But the waste/heatrecovery, if you look at buses, heavy goodsvehicles, is very interesting. In Hong Kong,25% of the diesel consumption on a bus is todrive the air conditioning, so if you canreplace that with a zero emission solutionwhere you're also harnessing renewableenergy to replace the diesel, it becomes quiteappealing.

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

Obviously cold refrigeration and power is aglobally growing market. Once you go intoAfrica or Asia, it's under massive, growingdemand both for the transport of food andpeople. We see Asia as a prime opportunityfor this technology.

I'd like to see the UK maintaining the lead.The government is investing very heavily inliquid air technologies: it has funded a newCentre for Cryogenic Energy Storage atBirmingham University so we've now got acentre for development. It is also funding anumber of research projects and ourdemonstration project. We don't want thistechnology to slip abroad. Whilst we'reabsolutely targeting a global marketplace, wewant the technology and the manufacturerand the IP very much to remain in the UK.

Would there need to be anyinfrastructure in place to make it work?

The beauty of it is that the actual broadinfrastructure for manufacturing, the supplychain, is already in place. This is a pistonengine, so you can build the first engine'searly development and first commercialdeployment using existing supply chains.

And, although we talk liquid air, ‘liquid air’ ischangeable with liquid nitrogen; air is 78%nitrogen. And liquid nitrogen is readilyavailable from industrial gases. That meansthat, rather than having to put ininfrastructure, to run a first commercialdeployment, you can use the excess nitrogencapacity within the marketplace. There isalready a distribution network for liquidnitrogen transporters all around Europe,because it's used in many processes. You'llfind it at hospitals, factories, everywhere.

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

Every technology has its own strengths andweaknesses, so I don't think it's a case of thisis better or worse, it is different technology.But I do think that a really big advantage ofthis technology is that you don't have toinvest in infrastructure. We don't have tospend £1 million [US$1.6m] on a differentfilling system, or whatever it is. Equally, withEVs, if you put too many down then you'vegot to reinforce the grid. We don't have thoseproblems. I don't want to start coming outand saying that we see liquid air as replacingEVs or hydrogen. We don't. We see it havinga role within the whole strategy.

Would the engine require any extrasafety reinforcements?

Liquid nitrogen is already actually put onvehicles and used in some instances as acooling solution so its management andsafety is already quite well understood. Theengine itself is going to be operating atrelatively low pressure. It's not a massivelyhigh pressure engine. It's appropriate indiesels. It's all within the bounds of knownengineering. Clearly, it's going to be a newengine and it will require certain forms ofcertification but we're already starting tothink about those.

Are you currently working with anyOEMs or suppliers?

We're working with MIRA and Air Productson engine number one. We're working withLoughborough University, University ofBirmingham, and we are in active engagementwith a number of other partners in theproject. At the moment, we are building thefirst commercial demonstrator, to get testdata and then really start talking to theOEMs. We're getting a lot of interest fromend users because clearly they are the peoplewho, if you can deliver economic savings andenvironmental values, environmental impact,are going to benefit.

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DEVELOPMENT

The ever increasing number of globalvehicle platforms is pushing OEMs to

develop and validate a growing amount ofvariants: although global in a sense, eachplatform must satisfy diverse regionalrequirements, and be tweaked to suit localspecifications. At the same time, it is gettingmore and more difficult for manufacturers toget systems integration right the first time.

The potential for simulation to replace hardprototypes has been debated for many years,with the boundaries being rolled back asincreasingly sophisticated software and fasterhardware continually make new applicationsfeasible. The most tangible aspect of thistrend has been the increasing use of vehiclesimulators which allow engineers toexperience a vehicle virtually, long before aprototype exists.

Unfortunately, meaningful simulation of avehicle’s dynamic properties has been heldback by the evolutionary route taken by the

simulator industry, says Chris Hoyle, TechnicalDirector of UK specialist software companyrFactor Pro. “Simulator platforms have theirorigins in the aerospace industry,” hecomments. “However, the rate of turn of evena modest family car in an emergencymanoeuvre is much faster than a fighteraircraft. To provide effective Driver-in-the-Loopsimulation, we need a different approach withgreater emphasis on the speed of response.”

Most simulators are effective for lowbandwidth, low frequency applications suchas man-machine-interface development andhuman factors studies, but their high massand poor latency (the time taken to close thefeedback loop) - often exceeding 100milliseconds - limits the range of application.To provide realistic simulation of vehiclehandling, dynamic safety systems and otherhigh performance activities requires latencyof less than 50 milliseconds, with highbandwidth communication between thevehicle model and the road surface model.

The leading vehicle modelling tools used tostudy vehicle dynamics are already at thenecessary level to allow Driver-in-the-Loopsimulation. But the missing links have beensuitable high-bandwidth software to close theloop quickly enough through the driver, andmotion platforms with lower inertia toprovide quicker responses.

Using lessons learnt in the highest levels ofinternational motorsport, the latestgeneration of motion platforms aresignificantly more dynamic, assisted by off-platform mounting of the entire vision system.The new approach, complemented by recentadvances in software that speed up the visual,aural and other cues to the driver, could usherin an era of unprecedented progress towardsthe full simulation of vehicle dynamics.

“The potential benefits for the automotiveindustry greatly outnumber those formotorsport teams,” explains Hoyle. “Bysupplementing engineering data withsubjective ‘feel’ in the early concept stages ofa new vehicle programme, years before realvehicle hardware is available to test, betterdecision making becomes possible, avoidingcostly revisions later.”

The complex interactions between dynamicsystems, such as passive chassis behaviour,electronic stability control and driverworkload management can be studied moreeffectively, in complete safety, with a level ofrepeatability not possible in ‘real world’testing. For example, the evaluation of SUVroll-over stability would be transformed bythe freedom to repeat limit manoeuvres, timeafter time, without variations in tyre grip,cross wind and other conditions.

“Such is the fidelity now available, even thecabin NVH levels of alternative drivelinemountings can be evaluated or the effect, onhandling, of long term deterioration ofsuspension bushes,” added Hoyle. “Imaginethe improvement in major purchasingdecisions made possible by virtual testing ofthe alternative technologies from competingsuppliers, early in the concept stage of a newvehicle programme. The benefits of differentsolutions could be compared and rankedprior to any hardware investment, allowing amore optimal selection to be made, based onmuch higher confidence levels.”


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

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COMMENT

While most safety technicians areconcerned with the road ahead, Tesla

is looking back. Ever the innovator, the youngOEM is trying to change our view of the car - or rather our view in the car - yet again.The electric vehicle company wants to buildits models without side mirrors, replacingthem with cameras and internal displays,making the body more streamlined, and thusmore energy efficient.

Removing the side mirrors is no new idea butit has not yet been found in real worldapplication. Several motorshow concepts havefeatured cameras instead of side mirrors - infact, the original Model X design had camerasbuilt into the doors with video displays insidefor the driver to see the road behind.

However, safety concerns have constantlyheld back this push towards mirror-less cars:by the time the North AmericanInternational Auto Show in Detroit rolledaround this year, Tesla had conceded that itsdesign did not meet government standardsand so the mirrors were back again.

But what benefit can going mirror-less trulyhave? Several commentators have suggestedthat side cameras with night vision would dowonders for safety. This writer, however, isslightly more sceptical: surely another vehicle’slights behind a car are enough to gaugedistance and timing. Evidently it has workedwell enough until now so introducing a newsystem seems a little frivolous, especially whencameras are far more likely to develop anelectrical fault than a simple reflective surface.

In a world where EV sales revolve aroundbattery life, there clearly is a benefit to

making a vehicle more streamlined butwouldn’t Tesla’s efforts be better focusedelsewhere? Yes, removing side mirrors cangive up to a 6% boost in energy efficiency, andseemingly add a little extra style to the Teslarange, but some would say the OEM is betteroff focusing its extensive resources on thematter of the battery itself.

Volvo has just completed a three and a halfyear European Union research project inpartnership with Imperial College Londonand nine other participants - none of whomwere car manufacturers. The conclusion wasa “revolutionary concept” which saw bodypanels serving as batteries, charged throughbrake energy regeneration and by electricalgrid. Volvo believes that the completesubstitution of existing EV components withthis technology could cut weight by 15%,boosting overall efficiency at a rate muchmore impressive than the mirror-less 6%.

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

electronics experts. In the consumerelectronics world, companies like Apple,Google and Facebook thrive by beingsecretive and cool. By adopting a similartactic, Tesla’s PR department has, some wouldsay, been truly wise: from the beginning, eachmodel has been all about being impressive,and a mirror-free, super streamlined carcertainly would be just that. Even its chargingstations aren’t just chargers, they’resuperchargers. The style, the range, even thename are all very cool. They want to be a coolbrand. So it is no surprise that it recentlybrought Apple’s former Vice President of MacHardware Engineering Doug Fields on boardto deal with new vehicle development - andto no doubt bring a bit of Apple’s strongimage along with him.

However, there is that old adage about lookingafter the pennies and the pounds will lookafter themselves: Tesla may be wiser taking aleaf out of a more established OEM’s book,and building consumer confidence throughproven technological offerings - or risk goingthe way of so many tech - and EV - companiesand falling out of favour with the masses.

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TELEMATICS

Cars are becoming more intelligent, that iscertainly clear. The average family saloon

now has more computing power than Apollo11, the shuttle that first took man to themoon.

One major aspect of this ‘intelligence’ is howthe information a car gathers is transportedto the manufacturer and stored. This data isprimarily used for logging drivers’ habits forinsurance companies, tracking how vehiclesperform for product development andproviding early warnings of any problemswith parts. However, there is now an evolvingusage of data in other areas - such asmarketing and customer management - thatcould turn out to be highly valuable formanufacturers and dealerships.

This is not just about what motorists shouldbuy next based on how they drive, knowingwhen and where they drive, and how longthey spend behind the wheel, opens up hugeopportunities for the industry to build amore relevant and meaningful relationshipwith customers.

The amount of information our cars nowstore, and transmit, is enormous. Everysecond, a telematics device will produce adata record including information such asdate, time, speed, longitude, latitude,acceleration or deceleration, cumulativemileage and fuel consumption. These data setscan represent approximately 5MB to 15MBannually per customer. With a customer baseof 100,000 vehicles, this represents more than1 terabyte of data per year.

For large manufacturers, dealerships andfleet management businesses, all of asudden a Big Data challenge has arisen, withmany left wondering how this data shouldbe stored, accessed and used. But whilesome may be puzzling over this, others are

reaping the rewards of one of the mainbenefits of telematics data: improvedcustomer experience. For example, interms of location, vehicles can alreadyprovide information on what is local to thedestination on any journey; this is alreadybeing expanded to provide link-ups withhotels and restaurants, with the intentionof supplying offers and booking adviceeither en-route or prior to journey.Customer convenience could also benefit:by using car location information and datafrom car park owners, the vehicle can findthe nearest car park with spaces andprovide costs.

Manufacturers can use this extension of thevehicle to build a longer term, moreinteractive relationship with drivers, helpingto persuade them to stick with the samebrand. Research from St Ives Group hasshown that on average it takes betweenone and four months after a customer hasdecided to change their car to actuallyreach the point of purchase, with half ofthat time spent committing to the decisionto buy a new car. With average carownership around three years, an OEM hasat least two and half years ‘alone’ with thecustomer to influence their next buyingdecision. However, only 27% of consumersreach the trigger phase of knowing theexact details of the make and model theywant to buy. So there can be no doubt thata lot of work is needed by brands to buildlonger-term loyalty, and data can play a hugepart in this.

Of course, it is not just the manufacturerswho will benefit from telematics in cars, asthe way in which we buy cars changes, so willthe role of the dealership. Using datagathered in-car provides an opportunity tocreate a dealership experience that isinteractive and engaging too.

Already, specialised systems are available tohelp buyers configure all infotainment optionsin a vehicle to specific requirements; it seemsonly a matter of time before this is extendedinto a full dealership concierge service. If thedealers have access to the correct data, theycould pre-empt service dates, set up and havea courtesy car ready for you, and ensure youare looked after while at the dealership itself.By building this more enjoyable, personalisedand hassle-free experience, dealers can createa lasting relationship with purchasers.

This, of course, creates an interesting dilemmafor the manufacturer: the dealership buildinga good relationship is only beneficial if itsbrand is the one being sold. If the dealershiphas a range of options to sell, that creates aclear and present danger for the manufacturer.

Another stumbling block to the benefits oftelematics data is the fact that it is still unclearwho actually owns it, and how it should beshared. The data will automatically be sentback to the manufacturer from the car, butthe data in itself it is not as interesting oruseful as it would be if the OEM was awareof who drove the car. But the dealership canhelp complete this loop, both in terms of whoinitially buys the car, and also who brings itback for a service or buys it on re-sale.

Looking across the market, use of telematicsdata will continue to increase as vehicles getsmarter, revolutionising the way that brandsinteract internally and with customers.Potentially it is only a matter of time beforethe car could directly compete with the phoneand tablet to become the biggest ‘smart’industry. Inevitably there will be issues of trustand data security, but man did not set foot onthe moon by keeping it a secret now did he?

Scott Logie is Strategic Marketing Director, StIves Group

Big Data, bigger opportunitiesNow is the time to make the most of the data already coming out connected cars and improvecustomer experience, writes Scott Logie


CES


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

CES


The consumer electronics andautomotive industries have finally

begun to converge in the cockpit. Areyou surprised it has taken this long forit to happen?

I am thrilled that it is happening. Consumersare looking at the technology in cars and it isa very influential part of their buying decision.People want what they have in their homeson the go - they want it in their car and alsotied into safety features and everything else.

There has been talk of an emerginggulf between Silicon Valley and Detroit.Do you agree?

I have a home in Detroit and travel to SiliconValley; I am also leader of the ConsumerElectronics Association, and the CES, and I seethose two cities and philosophies growing veryclose together. Silicon Valley sees its future asmobile; part of being mobile is the automobile.Just about every car company has establisheda presence in Silicon Valley, and Silicon Valleytravels to Detroit, so to speak. There is noquestion that there is a conflict: whereconsumers used to want to know about 0-60,now they want to know about thetechnologies in the car, how they can take theirhome and mobile environment with them.

The ability of car companies to allow theirinnovation cycles to integrate the latesttechnology is a challenge. It used to be a war,now it is a symbiotic relationship wheretechnology companies are working with carcompanies to ensure their cars are upgradable.And instead of being enemies, there is noquestion that car companies and technologycompanies are strategic partners now. Therehas been a dramatic shift, from a quasi-hostileenvironment ten years ago, to car companiesnow being unable to innovate in the cockpit asquickly as aftermarket companies.

Many new companies coming into theautomotive industry are non-traditional suppliers, particularly in theinfotainment market. Do you see themstruggling to win business from OEMs,or are OEMs ceding control andallowing them in?

I would never say that car companies areceding control. Car companies want toensure that they can make money, and createproducts that consumers will buy, maintainingthe integrity and safety which they need toprovide. They also want to be viewed aswelcoming of innovation and technology andthat is why there are strategic partnershipsforming. There are great companies out theresaying they want to be technology leaders.They are global companies, innovative,sensitive to cultural and market differences -whether in terms of the design or the colourscheme or the icons. This is a greatopportunity for technology companies andcar companies to come together.

There is clearly plenty that theautomotive industry can learn fromconsumer electronics. Is there anythingthat consumer electronics can learnfrom the automotive industry, or is it aone-way street?

Oh, it is definitely a two-way street. Overthe next 20 years, we will see atechnological transformation to driverlessvehicles, and that has many ramifications. Ifyou have driverless vehicles, you haveessentially a home environment in the carthat could be used for all sorts of consumerelectronic products. There are ramificationsthat affect the fundamentals of an economy,from the insurance industry to carownership concepts; the effects of shift todriverless cars are huge, and it is going torequire a partnership between theautomotive industry, the technology

industry and all other stakeholders that areout there to get to this destination. Thedestination is, clearly, an environment wherepeople can get to where they want, have agreat experience along the way, and they cando it in total safety.

In order for that to be successful, itneeds to happen across the vehicleparc, and the majority of cars in anycountry are not connected - andcannot be connected - opening upopportunities in the aftermarket. Whatrole will vehicle manufacturers and thebig suppliers play in the aftermarket?

Traditionally, the aftermarket has been thepacesetter. Smartphones got into cars throughthe aftermarket. We are going towards afuture that will certainly involve the driverlesscar, with greater levels of safety and collisionavoidance. There is a clear path from passiveto active collision avoidance, alerts andautonomy. It will be a combination ofaftermarket and OEM, and it will be in wayswe cannot predict - but it will almost certainlyinvolve collaboration. Governments will stepin with mandates; as long as that is done in apositive way which does not force us to freezeor regress technology, I think we are okay.

The great debate in the US today is overbackup alert systems. A generation ago it wasabout airbags, and a generation before that itwas about safety belts. These becometechnologies that you come to rely on.

In the past, you would learn about thingsthrough rental cars, but I do not think that isthe case anymore. Take the example of arental company charging you per day fornavigation: it is free on your smartphone!Fleet car companies are no longer a way ofintroducing technology. The aftermarket andthe car companies themselves haveleapfrogged beyond that.

LUBRICANTSLUBRICANTS


“Why don’t powertrain engineers consider the lubricantspecification at an earlier stage of the design?” asks Hall. “An

optimised design cannot be achieved without matching the load,temperature and durability requirements to the available lubricantproperties. The alternatives are inefficiency through overdesign, or earlyfailure through underdesign.”

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

Hall cites hybrid vehicles as a prime example of these trends: “The additionof an e-machine between the engine and transmission, to create a hybridpowertrain within an established vehicle, squeezes the package spaceavailable for the transmission yet increases the torque input by as much as30% in some cases.

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

“Lubricants can be technologyenablers, not just commodities”

As global pressure to reduce CO2 emissionsincreases, conventional powertrains are beingheavily revised to improve efficiency. A key enablerfor each leap in technology is the correct choice oflubricant, but in many cases, the choice is madetoo late in the design process.

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

LUBRICANTS


The ‘right’ oil in such circumstances wouldhave higher film strength to provide greaterprotection of the loaded metal surfaceswhich would otherwise be forced intocontact. “Under very high loads, it’s moreabout surface chemistry than conventionallubrication,” he explains. “When a fully ladenEV, such as a delivery van, pulls away from astandstill, the maximum motor torque isavailable from zero rpm and is carried by asingle pair of meshing teeth at the final drive.The contact stresses won’t break the teeth,but without suitably formulated oil they willlead to micro-pitting and, eventually, cracking.Developments like nanotechnology areallowing oils to be created that adhere moretenaciously to the metal surfaces, protectingthem under more extreme loads.”

The superior load capacity of the latest oilsalso helps OEMs to minimise the overall sizeof the final drive assembly, helping to satisfyunderfloor packaging requirements. Thetraditional approach to propshaft packagingoffsets the shaft some distance below thedifferential centre line, creating geargeometry with high levels of sliding at themesh. By adhering more strongly to metalsurfaces, the best oils can provide greaterwear resistance and lower friction underconditions of sliding contact.

The search for improved efficiency also leadsOEMs towards reduced oil levels intransmissions and differentials, as churninglosses are directly related to the depth ofimmersion of the rotating gears. Cooling

becomes an issue if the oil level is set toolow because the lubricant is the primarymeans of managing the temperature of themeshing gears.

Downsizing quality

Hall makes some interesting revelationsabout the latest engine technologies, too,beginning with the trend towards stop-startoperation, now widely used. “Most peopleare aware of the effect of oil viscosity, in thatefficiency is reduced at lower temperaturesbecause the oil is thicker, but few realise thatfilm strength is also affected bytemperature,” he explains. “Many oiladditives only react chemically from around70 degrees Celsius upwards, so they don’toffer the same protection when cold. Indeveloping oils with a consistent filmstrength across a wide temperature range,we have benchmarked some examples withquite obvious shortfalls in film strength atcertain temperatures. This could be an issuewhen temperatures fluctuate, such as instop-start operation.”

Downsizing strategies present a range ofchallenges for lubricating oil, as a result of theincreased thermal and mechanical loadsassociated with a higher power output perlitre of displacement. Engines with fewercylinders typically also have smaller sumpswith lower oil capacity, yet longer drainintervals are required by the market. At thesame time, OEMs require thinner oils toreduce viscous friction within the engine.

“Even the shift from port injection to directinjection on a petrol engine can cause a 30%increase in bearing load,” Hall comments.“When you add the effect of turbo- orsupercharging, cylinder pressures can doublewith higher torque across a wider rev range.When a four cylinder engine replaces a six,the number of bearings is reduced butpackage limitations constrain any increase inbearing width.”

For large multi-cylinder engines, deactivationof several cylinders at times of light loadoperation is a well-established method forimproving efficiency, but according to Hallthere are consequences for the engine oil.“Normally the oil film on the bore in a firingcylinder is 0.5 to 1.0 microns thick,” heexplains. “In a motored cylinder it increasesto as much as 30 microns and is expelled ina single firing event once the cylinder is re-activated. In order to avoid poisoning thecatalyst, oil with a low sulphur, ash andphosphorous content - low SAP - must bespecified.”

For Hall, the answer is clear: powertrain anddriveline developers must consult lubricantspecialists early in the design process toestablish what can be achieved.

“It can make the difference between arobust design that handles the maximumloads within the minimum packageenvelope, or a compromised solution that isnot fully competitive,” he says.

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WHAT SHOULD BE POWERING THE ALTERNATIVE POWERTRAINS?

THE MOBILE OFFICE: HOW THE INTELLIGENT CAR WILLCHANGE THE WAY WE WORK FOREVER

INTERVIEW: HUGUES VAN-HONACKER, POLICY OFFICER, DGMOVE, EUROPEAN COMMISSION

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PLUS INSIGHTS FROM TWO TOMORROWS, THATCHAM, INFOR AND BWI GROUP

As a growing middle class in Africa createsa wealth of opportunities for consumer

industries, it is not surprising that the regionhas attracted the interest of the automotivesector. Even in markets where low incomesmean new car sales are mostly togovernments and a small elite group, demandfor commercial vehicles is being driven byinfrastructure spending and growth in heavyindustries such as mining.

However, the developing nature of many ofthese countries means that bringing productsto market can involve a range of logisticalchallenges depending on market dynamics.The automotive industry is growing at varyingrates throughout the region, which meansthat there is a mixture of pure importers,countries in the early stages of domesticassembly, and those engaging in full-scaleproduction with the potential for export.Each will find different demands placed ontheir logistics network, and for automotivemanufacturers, the challenge lies in finding thebest route to a high-growth market.

Based on findings from Business MonitorInternational (BMI), Namibia has shown itselfto be one of the region’s standout countriesfrom a logistical standpoint. Having analyseda mix of countries (excluding South Africa),chosen for their demand, production ortrade potential, Namibia outperformed inseveral categories, assessed against metricssuch as external connectivity, cost to importand export, and associated red tape.

Perhaps of most interest for internationalfirms looking to access the region is thecountry’s gateway potential. Based on datafrom UNCTAD Stat and the WorldEconomic Forum, BMI found that Namibianot only ranked highly for its linerconnectivity, but also topped the rankings forthe quality of its port infrastructure. Thismeans ongoing investment and developmentis reducing the risk of bottlenecks, helpingports such as Walvis Bay cope with goods fortransit to neighbouring landlocked statessuch as Botswana and Zambia, as well assatisfying domestic demand.

Southern African states such as Namibia andBotswana also ranked highly for their internaltransport networks, which are vital forgetting goods beyond the ports to theirintended markets. The southern states haveclearly benefitted from development relatedto their resource industries, resulting in highscores for the quality of their road and railinfrastructure.

One key takeaway, however, is that for all ofthe countries analysed, it is cheaper toexport than import, which bodes well for theindustry’s longer term development as partof the global supply chain. Ghana stands outas the leader in cost terms for both importsand exports, but its underdeveloped internaltransport network is a drawback to itspotential as an automotive hub.

This may explain why, while Ghana is morecompetitive on cost, BMI sees moreinvestment in export-oriented vehicleproduction heading to Kenya, which scoresbetter for its internal network and iscomparable for its port infrastructure.Therefore, as some governments in theregion actively seek to attract investment indomestic vehicle production, thisrequirement for a fully integrated logisticsnetwork perhaps highlights the need forinvestment on their part too.

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

This article first appeared in the Commentsection of AutomotiveWorld.com. For more expertinsight on and analysis of the global automotiveand commercial vehicle industries, visitautomotiveworld.com/comment.

The Comment column is open to all industrydecision makers and influencers. If you would liketo contribute an article, please [email protected].

Navigating logistics challengesin AfricaAnna-Marie Baisden

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Automotive World Megatrends Magazine – Q4 2013

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