automotive world megatrends magazine – q2 2013

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megatrends Q2 2013 MAGAZINE iconcept genevai The mobility ideas which lit up this year’s motor show iMIST marketsi The new BRICS? iComposingi iconnectivityi Symphony Teleca orchestrates infotainment in a discordant market iBosch iNDIAi ...and the emerging market’s hunger for technology iFORMULA Ei Putting EVs streets ahead with insights from Frost & Sullivan, eos intelligence and roland berger

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Quarterly publication covering a range of forward-looking topics from the automotive and commercial vehicle industries, from concept through to aftersales.

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Page 1: Automotive World Megatrends Magazine – Q2 2013

megatrendsQ2 2013 M A G A Z I N E

iiccoonncceepptt ggeenneevvaaiiThe mobility ideas which lit up

this year’s motor show

iiMMIISSTT mmaarrkkeettssiiThe new BRICS?

iiCCoommppoossiinnggiiiiccoonnnneeccttiivviittyyiiSymphony Teleca orchestratesinfotainment in a discordant market

iiBBoosscchh iiNNDDIIAAii...and the emerging market’shunger for technology

iiFFOORRMMUULLAA EEiiPutting EVs streets ahead

wwiitthh iinnssiigghhttss ffrroomm FFrroosstt && SSuulllliivvaann,, eeooss iinntteelllliiggeennccee aanndd rroollaanndd bbeerrggeerr

Page 2: Automotive World Megatrends Magazine – Q2 2013

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Page 3: Automotive World Megatrends Magazine – Q2 2013

Megatrends | 2www.automotiveworld.com

AutomotiveWorld Megatrendsmagazine

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

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

Registered number: 04242884VAT number: GB 815 2201

Chief Executive:Gareth Davies

Editor:Martin Kahl

Publications Editor:Ruth Dawson

Subscriptions andAdvertising:Gavin [email protected]

Copyright AutomotiveWorld Ltd 2013

Welcome to Megatrends Q2 2013

As the industry slows down for summer, weare looking back on what has happened overthe past quarter - and how it will impact theindustry long-term.

February saw delegates gather for AutomotiveWorld’s annual Commercial Vehicle Megatrendsconference in India; one month later, industryleaders met in Detroit for AutomotiveMegatrends USA, and the first Marketing Summit.

Held at a crucial time for the market - as theCV industry eagerly awaited the 2013/14budget - CV Megatrends India proved to be theperfect forum for speculation on theindustry’s prospects, both long and shortterm. Read up on what happened at all threeconferences from page 12.

As the automotive market in India continuesto cause concern, many OEMs and suppliersare looking for new emerging economiesinto which to expand. On page 21, ManmeetMalhi of EOS Intelligence analyses theopportunities and challenges for OEMs inthe new MIST markets.

Back in Europe, the 83rd Geneva MotorShow saw OEMs release the first wave ofconcept vehicles on the continent.Althoughnot all are planned for production, thetechnological innovations and inspirationsmark a step change in tactics going forwardfor several manufacturers.Take a look atour review of the biggest and brightest onpage 17.

As well as taking a look back, we lookforward at longer-term industrydevelopments. This year’s Formula 1 may bedisappointingly controversial, but eageranticipation is growing for its new electricvehicle sister series. On page 25, Martin Kahl

speaks to Lord Paul Drayson, founder andChief Executive of Team Drayson, andQualcomm Dr Anthony Thomson about howFormula E is going to bring the spark back tothe EV market.

While Formula E is looking to help changeinner city mobility, inner city logisticsstrategies will need to change too. On page33, Frost & Sullivan’s ArchanaVidyasekarexplores the new logistics models that willchange the way we order and deliver things inincreasingly populated urban areas.

The connected car is a term we’re all veryfamiliar with and, while advancements areever ongoing based on current trends, truesuccess lies in a far-reaching future focus. Onpage 55, Harman’s Vice President and Co-President of the Infotainment and Lifestyledivision, Michael Mauser, speaks toMegatrends about the “unique” environmentof the car and why connecting withconsumers is so important.

Delving deeper into the realms of infotainmenton page 46,Martin Kahl investigates the prosand cons of using HTML5 for in-carconnectivity, while, on page 37, Dean Miles,SeniorVice President at SymphonyTelecadiscusses the connected vehicle experiencefrom a service provider’s perspective.

We hope you enjoy this issue of Megatrendsmagazine and, as always, we welcome yourthoughts and suggestions; email us [email protected].

Ruth DawsonRuth DawsonPublications Editor,AutomotiveWorld

Editor's welcome

Page 5: Automotive World Megatrends Magazine – Q2 2013

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Page 6: Automotive World Megatrends Magazine – Q2 2013

>On the cover25 | Formula ELord Drayson and Dr AnthonyThomson discuss charging the EVmarket with a new motorsportseries

17 | Concept GenevaRuth Dawson analyses the conceptvehicles that lit up the 2013 GenevaMotor Show

60 | Bosch, RBEI and India’simmense hunger fortechnologyThe in-house supplier with a globalreach discusses modularapproaches and the Indian market

37 | Composing connectivitySymphony Teleca talks orchestratinginfotainment in an industry whereeveryone plays a different tune

21 | MIST: the new BRICS?As growth in the BRICS marketsfalters, new players are beginning toemerge

ContentsQ2 2013

www.automotiveworld.com5 | Megatrends

99 The fastest EV in the West

3300 Building products around predictions

2244 OEM consolidation helpsgrowth amid slowing Indiandemand

3333Urban logistics 2020Frost & Sullivan’s Archana Vidyasekar looks at the future of logisitics in anincreasingly urbanised world

4411Customising aftersalesThe rules of the automotive game are changing and aftersales should be moreimportant to OEMs than ever before

Page 7: Automotive World Megatrends Magazine – Q2 2013

Megatrends | 6www.automotiveworld.com

>Also in this issue12 | A stormy start for IndiaAs India eagerly awaited the 2013/14 budget, CV experts discussed wherethe market was headed

13 | Conformation or flexibility?Strategy by sector was the core theme at Automotive Megatrends USA 2013

14 | Marketing Summit USA 2013Clicks, bricks and likes get social at AutomotiveWorld’s first marketing event

31 | Industry viewpoint: battery electric vehiclesHave BEV sales been disappointing, or have they reached a realistic level for anew technology?

51 | Industry viewpoint: light vehicle safetyAs the industry races to reduce fatalities in an increasingly mobile world,active and passive safety technology continues to advance

4433 Public transport getspersonalised

5544 AMT: the future of Indiantruck transmissions?

6633 Big Data, big brother?

6699 IPI tax reductions: theoptimum opportunity forBrazilian investment

6677 Connecting withintegration

4466HTML5: the most significant HMI development for 15 years?A fusion of HTML, CSS and JavaScript fit for across the board use - or something tobe viewed with caution? Martin Kahl investigates HTML5 in the auto industry

5555Clouding the futureDriven by cloud computing, future proofing and new safety concerns, Harmanknows just what consumers want from its connectivity features

Page 9: Automotive World Megatrends Magazine – Q2 2013

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Page 10: Automotive World Megatrends Magazine – Q2 2013

THE BIG PICTURE

9 | Megatrends www.automotiveworld.com

It’s been a busy quarter for Detroit Electric:first the Michigan-based electric vehicle start-up announced the world’s fastest pure-electricproduction car; then, at the end of April, camethe news that it would be partnering withGeely to bring EVs to China.

The SP:01 (pictured) is a limited edition two-seater sports car which boasts new standardsfor performance and handling in EVs. With atop speed of 155mph (249kph), the car can go0-62mph (0-100kph) in 3.7 seconds.

Each SP:01 features a mid-mounted 201 bhpelectric motor, delivering 166lb ft oftorque. The battery has an energystorage capacity of 36kwh,which gives a range ofalmost 190 miles(305km), tested tothe New EuropeanDriving Cycle(NEDC)standard.

Using a Detroit Electric home charging unit,the battery can be fully charged in just 4.3hours. The body consists of a lightweightaluminium platform with a carbon fibrebodywork, similar to those used in Formula 1vehicle chassis.

“The SP:01 will be exclusive, luxurious andtechnologically advanced,” says Albert Lam,Detroit Electric’s Chairman and ChiefExecutive. “It is a milestone in the history ofthe Detroit Electric brand, but also asignificant development for theinternational EV

sector. The car will allow us to demonstrateto the world our ability to build an excitingand innovative product, one that displaysoutstanding performance coupled withstrong green credentials, and whichdelivers an exhilaratingdriving experience.”

The fastest EV in the West

Page 11: Automotive World Megatrends Magazine – Q2 2013

THE BIG PICTURE

Megatrends | 10www.automotiveworld.com

And it seems Lam did not have to wait longfor the worldwide impact of the SP:01 that hewas hoping for. Announced at the ShanghaiMotor Show, Detroit Electric’s strategicpartnership with Geely will bring a newdirection to the Chinese EV market.

The two OEMs plan to co-develop both pureEVs and related electric drive systems underGeely’s Emgrand brand. The first model, theEC7-EV, is expected to go on sale in the firstquarter of 2014 with medium-range (165kmper charge) and long-range (258km percharge) options. Although the EV will onlyinitially be sold to business users and publicsector organisations, the partnership isforecasting sales of 3,000 units in the first 12months, and 30,000 in three years’ time.

Page 12: Automotive World Megatrends Magazine – Q2 2013

is coming to Europe...

November 12th 2013,Radisson Blu Royal Hotel,Brussels, BelgiumTickets from €Free!*

Commercial Vehicle Megatrends Europe 2013 will bring together keystakeholders to discuss the business models, technologies and trendsthat look set to shape Europe's commercial vehicle idustry over the nextten years and beyond.

Expert speakers, fantastic networking opportunities and cutting edgetopics focusing on fuel efficiency and market outlook, will make this anunmissable event.

Speakers confirmed so far include:

Co-Sponsors

Knowledge Partners

®®

*Automotive World Single-User (max 1 ticket) and Company-Wide (max 3 tickets) Site License customers are eligible for free passesto this event. Employees of vehicle manufacturers are eligible for free passes to this event (max 5 per company).Full ticket prices canbe found at http://cvmeurope2013.automotiveworld.com/registration Terms & conditions apply.

Click here for more details orcall +44 (0) 2920 709 302

Norbert Dressler,Roland Berger

James Hookham,FTA

SebastianGundermann,Roland Berger

MarkSealy,Norgren

Denis Naberezhnykh,TRL

Sandeep Kar,Frost & Sullivan

Dr Ajit Jindal,Tata Motors India

Artur Koba,Eaton

1 Stream / 4 Workshops / 16 Expert Speakers

Page 13: Automotive World Megatrends Magazine – Q2 2013

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As the industry eagerly awaited the 2013/14Union Budget, Automotive World’s CommercialVehicle Megatrends India 2013 took place,allowing a unique insight into the hopes andfears of the commercial vehicle industry for theyear ahead. The slowdown across theautomotive and CV sectors saw India’s

automotive trade bodySIAM petition the

government earlier thisyear to initiatemodernisation andemission controlprogrammes, and toreduce excise duty inthe budget.

Speaking at theconference, MarcLlistosella, ChiefExecutive Officerand ManagingDirector of DaimlerIndia CommercialVehicles (DICV),commented on CVsales, calling theoffering of aggressive

discounts a“venomous

game”.

According to Llistosella, “uncontrolleddiscounts” seen in the Indian CV market oflate, have caused the residual value of usedtrucks to deteriorate, translating into an assetloss for fleet owners.

Looking further down the supply chain, ErichNesselhauf, Vice President of Procurement andSCM at Daimler, said that market conditionshave put together a storm for the Indian truckindustry. A transition in the entire automotivesupply chain is in order, he said, thanks tochanging market and customer needs.

Supplier trends

One key trend that will affect CV componentsuppliers in the future is the increasingcomplexity of products - which will demandmore research and development - andmodern technology, Nesselhauf said.Consolidation will also affect supplierselection and relationship management: lack oftechnology knowledge, and R&D capability willsee some suppliers who are Tier 1 at present,falling to Tier 2 or 3.

Meanwhile, monitoring and maintaining cost ofquality will require greater transparency andexchange of knowledge: “You have to monitoryour supplier, control your costs and helpeach other,” Nesselhauf observed.

In order to become globally competitive,Indian component manufacturers need toinvest more in modern equipment andautomation. Suppliers will also have toenhance R&D competence and reputation, andmodernise logistics fleet management systems.

Rajiv Bajaj, Principal at Roland Berger StrategyConsultants, too acknowledged that thesupplier segment’s margins are constantlyunder pressure, as componentmanufacturers are sandwiched betweenOEMs on one side and raw material

suppliers on the other. In recent years, risingcosts and slowing growth have hit theperformance of Indian suppliers and pastadvantages they once held have been eroded.

Safety worries

Away from financial distress, both OEMs andsuppliers alike are turning their attentions tothe safety concerns currently plaguing the Indianautomotive and CV industries. Despite havingjust 1% of the global vehicle population, Indiaaccounts for 8% of recorded fatalitiesworldwide. Over the last few years, the markethas topped the list with regards to roadfatalities, at 142,000 as of 2011. An estimated 3%of the Indian GDP is lost due to road accidents.

Wabco, a manufacturer of braking productsand systems, believes that anti-lock brakingsystems (ABS) are the way forward for the CVsegment to address safety concerns in thecountry, as this technology is more mature,accessible and economical in the long run.

In India, as in other economies, CVs are keycontributors to the economic growth of thecountry. Accidents, however, cause a significantloss. There is, according to Dr Chitra Rajan,Safety and Reliability Expert at MahindraSatyam, a need for safety compliance in thecountry. Doing so will reduce vehicle callbacks, insurance claims and product returnsbefore warranty, she said.

At present there is no specific functionalsafety standard for CVs in India. However,there is growing demand from the sector toextend ISO 26262 to CVs. “This is a wellstructured process,” said Dr Rajan. “As of nowwe don’t have a specific functional safetystandard...ISO 26262 states that your design issafe enough...it increases market potential.”

David Isaiah

A stormy startfor India

CONFERENCE REVIEW

Page 14: Automotive World Megatrends Magazine – Q2 2013

CONFERENCE REVIEW

13 | Megatrends www.automotiveworld.com

Every industry decision is dominated by onebig question: how can an OEM give consumerswhat they want? At Automotive Megatrends USA2013, two experts from different sectorspresented their views on conforming tostandards already set and being flexible to suitthe market and profit margins.

Follow the leader

In the realms of connectivity, consumersexpect in-car features to match what they areused to on their consumer electronic devices.However, these expectations are not based onwhat other OEMs offer, but on what hasalready been seen on tablet computers andsmartphones, said Matt Jones, Vice President ofthe GENIVI Alliance. Looking to the future,consumers are unsure of what features theywill want in-car, but they do know that theirexpectations will be based on what is alreadyavailable in the app store.

This striking statement seems somewhat atodds with the tech industry ethos of drivinginnovation to new frontiers. However, to meetconsumer desires, Jones said, automotiveOEMs should develop hardware that is easilycustomisable and can be updated to be in linewith what is available in the consumerelectronics industry.

The most important requirements comingfrom OEMs are almost opposite to thisconformity: OEMs still must maintaindifferentiation, have a strong USP and reducethe time from development to market launch,as well as the total cost of ownership - allwhile maximising profits. The traditional routeof getting locked into proprietary hardware istherefore not compatible with flexibility.

The GENIVI Alliance’s work attempts to satisfyboth business and customer demands: its aim isto build relationships between industry bodiesthat have traditionally been closed and non-collaborative. Citing the Alliance’s diagnosticdata, Jones pointed out that, in reality, there isno need for - and certainly no consumerinterest in - numerous proprietary technologiesdelivering the same thing. The automotiveindustry needs to take inspiration from personalcomputing where, in most cases, software andhardware operate independently of each other.

Adapt to survive

Under the hood, powertrain players are takinga much more open approach to development.Consumer desires tend to drive the industrymostly through actual internal marketmovement, rather than customer preferencesfrom outside trades.

“We believe that there are markets andcustomers for all different types of fuels, andthose fuels and those customers exist indifferent regions…So we have to be flexible,which is the key,” said Mike Tinskey, Director,Vehicle Electrification and Infrastructure, Ford.

Citing electric powertrains as an example,Tinskey commented that, although media hypehas turned to focus on electrification’s falsestart, the market has “doubled essentially inthe past year”. When hybrid vehicles were firstlaunched, it took around eight years for thesecars to gain around 2% of the total US market.Between October 2011 and October 2012,hybrids, plug-in hybrids and electric vehiclesaccounted for 4% of car sales.

Although not a dramatic change, it is exactly whatFord expected: “It’s minor growth, it’s becomingmore of a mainstream product, and that productis essentially allowing others to startunderstanding and accepting plug-in hybrids.”

According to Ford data, interest in hybridvehicles has gone up 23%. Plug-in hybrids havefared very well too, with one person in fourwilling to consider purchasing, thanks to highefficiency and low operation costs.

Ruth Dawson

Conformation or flexibility?

Page 15: Automotive World Megatrends Magazine – Q2 2013

CONFERENCE REVIEW

Megatrends | 14www.automotiveworld.com

MARKETINGSUMMIT USA 2013Connecting clicks, bricks and likes

How will OEMs market their products in thefuture? Who will their customers be, what willthey be expecting, and how will OEMs knowwhat customers really ‘like’? What will bemore important - a valuable product or brandvalue? Clicks, bricks, likes and connectivity willall play fundamental roles in the future ofautomotive retail, and those four termssummed up the core themes of AutomotiveWorld’s Marketing Summit USA 2013.

A key issue is not how the dealership of thefuture will look, but whether there will evenbe a place in the future for brick-baseddealerships. Analyst Glenn Mercer, quotingNADA research on the operations of US cardealerships, claimed that, to date, not a singlecar sale had been conducted exclusively onlinein the US, including the complete transactionand all accompanying paperwork, without theneed for a traditional dealership visit. VishwasShankar - referencing Frost and Sullivan’sBricks and Clicks study on the future of carretailing - provided a confident forecast,however, of four million cars being sold onlineglobally by 2020, equivalent to 4% ofnew car sales.

Clicks: online sales and marketing

The need for a brand to be online isundisputed - but how do you measure thefinancial return of an online advertisingcampaign, or make money from a Facebook‘like’? What is a click worth? And how do youturn it into real money?

Being online and ‘social’ is about more thanjust direct sales, emphasised Mary Henige,GM’s Director of Social and DigitalCommunications. It’s about getting the rightmessage out there, developing the brand, and“having a conversation with consumers”.

John Waraniak, Vice President of VehicleTechnology at SEMA agreed: people do notbuy things, they buy into things. Frankfurt,Detroit and Tokyo are motor shows forpeople who like cars; SEMA is for people wholove cars, and attendance has never been sohigh, attracting 60,000 visitors in 2012. SEMAis for car owners looking to personalise theirvehicle after purchase. For those OEMs savvyenough to get in on the game, it is about morethan a separate aftermarket business - it is anextension of the brand. That’s why, Waraniaksaid, brands should market with theircustomers, and not to their customers.Quoting from Graham Brown’s book All isSocial, Waraniak explained that the 10-29 yearolds of ‘Gen O’ “will be the generation thatshows the industry the way forward in hownew technologies, apps and products will beused to optimise the customer experience”.

The role of the car

Many see the role of the car changingfrom an object of desire into an aspect of

the ‘internet of things’ - one more tool in the

box that includes everything from publictransport to domestic appliances. The car inthe ‘internet of things’ knows when you areleaving the office, prepares your personalsettings, selects an appropriate route based ontraffic and your habits, and even sets thetemperature in your house before you arrive,said David Miller, Chief Security Officer atCovisint, the event’s lead sponsor.

But will people even buy cars in the future? Inthe internet ofthings, privatevehicleownershipcould besuperseded bycar sharing,which mighttake one oftwo forms:car poolsowned andoperated byfleets, where registeredmembers use vehicles on demand, perhapspaying by the hour; and private users rentingout their cars when not in use. IBM’s JoeSpeed believes that, were the infrastructure inplace, cars that would otherwise sit in thecompany car park for eight hours could provea lucrative source of income for officeworkers.

And if car sharing, not car buying, is to be thesource of income for the automotive industry,then the financial value lies more than ever inthe value of the brand, not the product. It istime to get marketing.

Martin Kahl

Page 17: Automotive World Megatrends Magazine – Q2 2013

is coming to Europe...

November 13th 2013,Radisson Blu Royal Hotel,Brussels, BelgiumTickets from € Free!*Automotive Megatrends Europe 2013 will bring together key stakehold-ers to discuss the business models, technologies and trends that look setto shape Europe's automotive industry over the next ten years and beyond.

Expert speakers, fantastic networking opportunities and cutting edgetopics, including safety, connectivity and powertrain, will make this anunmissable event.

Speakers confirmed so far include:

*Automotive World Single-User (max 1 ticket) and Company-Wide (max 3 tickets) Site License customers are eligible for free passesto this event. Employees of vehicle manufacturers are eligible for free passes to this event (max 5 per company).Full ticket prices canbe found at http://ameurope2013.automotiveworld.com/registration Terms & conditions apply.

Click here for more details or call +44 (0) 2920 709 302

Co-Sponsors

FLUID TECHNOLOGY

Knowledge Partners

3 Streams / 48 Expert Speakers / 1 Day

Floris Van DeKlashorst, Nokia

John Leech,KPMG

Richard Robinson,Strategy Analytics

Gert-Jan Vogelaar,Punch Powertrain

Mathieu Meyer,KPMG

Robert Acker,Harman

Wolfgang Bernhart,Roland Berger

Alexander Asner,Elektrobit

Nick Ford,Frost & Sullivan

Michiel Van Ratingen,Euro NCAP

Scott Sedlik,Inrix

Nicolas Burger,Tomtom

Al Bedwell,LMC Automotive

Dr Ajit Jindal,Tata Motors India

Klaus Kompass,BMW Group

Yoram Berholtz,Red Bend

Rudolf Hemmert,Delphi

Thomas Broberg,Volvo Cars

Page 18: Automotive World Megatrends Magazine – Q2 2013

ON THE FLOOR

17 | Megatrends www.automotiveworld.com

Concept GenevaKicking off the 2013 run of European motor shows, the 83rd Salon International de l’Auto inSwitzerland was home to new ideas that ranged from the impossibly expensive to the practicallyinnovative. RRuutthh DDaawwssoonn analyses the concept vehicles that lit up the Geneva Motor Show

Page 19: Automotive World Megatrends Magazine – Q2 2013

ON THE FLOOR

Megatrends | 18www.automotiveworld.com

Pininfarina Sergio

Probably the most highly anticipated designconcept at the show was the PininfarinaSergio. Sitting on a fairly understated stand,the not-so-understated Sergio is the type ofcar that turns heads - of course, you wouldexpect as much from this Italian design house.

According to Pininfarina Design DirectorFabio Fillipini, the car’s design was motivatedby the company’s best sports cars: Ferraris ofthe 1960s and 1970s designed under Sergio

Pininfarina himself - in particular the DinoBerlinetta special 1965, Ferrari 250 LM, P5,Modulo and Mythos.

Classic design cues are mixed with subtlemodernity for the new Sergio, making thisthe perfect tribute to the car’s namesake. Themost obvious feature is the lack ofwindscreen: like rival Lamborghini’sAventador J concept unveiled at Geneva2012, the sculpted bonnet deflects airflow

and channels it over the passenger’shelmeted heads.

The Sergio is powered by a 4.5-litre V8 enginegenerating 570 hp; it reaches 0-62mph (0-100kph) in just under 3.4 seconds and has atop speed of 199mph (320kph). The car is setto go into production, but with a price tag ofaround €3m (US$3.9m), it is hardly surprisingthat Pininfarina expects to build only five orsix Sergios.

Toyota i-RoadSitting between a motorcycle and a microcar,the Toyota i-Road was certainly the mostsurprising electric commuter concept at theshow. The three-wheeled, two-seater city carfeatures active lean technology which tilts thevehicle when turning, using an actuator andgearing mounted above the front suspension.An ECU calculates the depth of the lean usingthe steering angle, gyro sensor, and vehiclespeed information to make sure the rideremains smooth with no risk of falling over.

By comparison with what would be itsbiggest competitor, the Renault Twizy, the i-Road is narrower - despite being able toaccommodate a driver and passenger side byside - shorter in length, and is fully enclosed.The i-Road has a 30 mile (48km) range andtakes three hours to recharge fully from ahousehold socket; the Twizy has a 50-62 mile(80-99km) range and takes only 30 minuteslonger to charge. However, the i-Road doescome with a range of connectivity options,

such as a stereo, heating and Bluetooth.What use they would really be to drivers ona complete 30 mile trip, though, remains tobe seen: all are powered by the car’s own battery.

Although production has not been confirmedby Toyota, the potential success of the i-Roadagainst the Twizy could depend largely onconsumer perception of the two OEMs’brands in the European market.

Page 20: Automotive World Megatrends Magazine – Q2 2013

ON THE FLOOR

19 | Megatrends www.automotiveworld.com

Mitsubishi GR-HEVThe first of Mitsubishi’s concept vehicles at theshow, it was the design of this pick-up truckthat really got people talking. Prescribed with a“strong dose of aerodynamic chunkiness”, thisconceptual successor to the OEM’s pick-upline moves away from the traditional squareddesign of the segment into a new, more

muscular ideal; the sharp lines of the exteriorare softened by subtle sweeping curves and arounded end which appears to lift slightly.

The GR-HEV also sees Mitsubishi taking itsfirst steps into the realm of hybrid pick-uptrucks. The vehicle features a 2.5-litre diesel

hybrid powertrain which can run as a pure EV on demand, meaning CO2 emissions sitbelow 149g/km despite the truck’s size(5.4m/17ft long). The e-motor helps the dieselengine give a low end response with high endtorque, offering quieter acceleration and highspeed cruising.

Mitsubishi CA-MiEV

Mitsubishi’s other offering at Geneva came inthe form of the CA-MiEV. A suburban EV withenough range to last the average Europeandriver one week, the CA-MiEV could be anexcellent rival to Tesla’s Model S.

Substantially bigger and more powerful thanMitsubishi’s existing e-car, the i-MiEV, thisconcept, along with the aforementioned GR-HEV, marks a step-change in Mitsubishi’salternative powertrain outlook. Although the‘compact advanced’ MiEV is not planned forproduction, the vehicle does make use of

several technologies which, Mitsubishi hasconfirmed, will be brought in across variousranges in the mid to long-term.

The car has a range of 186 miles (300km) witha battery capacity of 28kWh and an 80kWmotor offering 107 hp. Like the Model S, theCA-MiEV’s flat battery pack also leaves roomfor a range extender to be fitted, and the caris further complimented by WiTricity wirelesscharging functionality.

The CA-MiEV is a clever competitor in an EV

market which marvels at innovation in designstandards. Although it still features the egg-likeshape of the i-MiEV, the newer concept issleek, modern and much more fashionable.Under the hood, the range of this vehicle iscarefully placed to sit at a distance untouchedby Tesla: the CA-MiEV can outlast a basemodel Model S by 26 miles on a smallerbattery of 28kWh compared to Tesla’s 40kWh.Although the upper level Model S boasts a300 mile range, this mid-market offering couldcapture a crucial segment of consumers ifpriced accordingly.

Page 21: Automotive World Megatrends Magazine – Q2 2013

ON THE FLOOR

Megatrends | 20www.automotiveworld.com

Kia ProvoThe Provo is a “new DNA interpretation” forKia and - should the car be put intoproduction - a move into what could be alucrative area of the market for Kia: the hybridB segment.

Presenting itself as a Mini rival, at least in looksif not in powertrain, this concept has a1960s/70s feel to it. Appealing to a young,urban demographic, the Provo stands outfrom the crowd as subtly as possible, making

the car quite an enigma to those who try tounderstand it. While the exterior is fresh, witha green and orange paint job on a musculardesign, the interior is a few steps upmarket,with a quilted leather, wave seat bench in thefront which swivels to let passengers into therear. The retro versus modern clash iscertainly very trendy in other markets at themoment, but no other OEM has attemptedsuch a bold design mix - making this a verybrave choice indeed for the Korean company.

The Provo’s 1.6-litre turbo engine featuresKia’s first seven speed transmission, along withregenerative braking power capture and ‘creepmode’ - electric only operation at low speeds- both ideal for the inner city traffic of today.

If this concept does appear on the roads, it islikely to be in Europe only. But, given thetrendy, muscular design and hybrid powertrain,the Provo could well prove to be an excellentcompetitor for Toyota’s Yaris hybrid.

InnovativeMobilityColibri

Micro EVs are nothing new - just look at theaforementioned i-Road or the GN-EV - butthis new concept from German manufacturerInnovative Mobility is probably the most habit-focused of all. Although at first glance it is notas impressive as its two-seater counterparts,the potential for this little car is huge.

Like the i-Road, the Colibri is a thoroughlymodern vehicle, looking to solve thecommuter problems of today. Unlike the i-Road, however, this one seater boasts a 110km

(68 miles) range on a 6.5kWh battery, and willcharge fully in just two hours at home, or upto 80% in 20 minutes on a public socket; thebattery lasts 2,000 charges, eight years or220,000km (137,000 miles).

The car is just 2.75m (9ft) long and 1.8m(5.9ft) wide with gull wing doors and animpressive 180 litres of trunk space. Two ofthese cost efficient city cars can fit into oneparking space, potentially solving another citymobility problem.

Orders for the micro EV will start in 2014,with delivery expected in 2015. InnovativeMobility aims to build 17,000 vehicles a yearand believes there is a market potential of500,000 customers for cars like this. Althoughit costs just €10,000 (US$13,000), theprospect of battery rental fees may be off-putting for some consumers. But, with anintegrated touchscreen and smartphoneconnection, the concept could well see abright future as part of a car sharing fleet.

Page 22: Automotive World Megatrends Magazine – Q2 2013

EMERGING MARKETS

21 | Megatrends www.automotiveworld.com

M I STAs both economic and consumption growth in the BRICS nations lose momentum, global investors arelooking to a new set of emerging countries: Mexico, Indonesia, South Korea and Turkey.

The MIST economies present widely varied economic and demographic platforms for growth and, whilethe automotive markets across these countries seem to provide several opportunities for expansion toOEMs, they also present a number of challenges

MMaannmmeeeett MMaallhhii,, EEOOSS IInntteelllliiggeennccee

the new BRICS?

CHALLENGES

Occasional bans are issued in Brazil andArgentina on Mexican vehicle imports, aswas the case in 2011, when domesticautomotive manufacturers in thesecountries suffered heavily from strongimports from Mexico. Unless Mexicoimproves lobbying for its automotiveindustry, it will be difficult for the country to properly position itself as a regionalmanufacturing hub.

OEMs in Mexico face another hurdle in theform of stricter emission controls, whichthey fear will increase the cost of production.The Mexican government is trying toimplement fuel efficiency rules to curbcarbon emissions, aligning them with USnorms. However, OEMs are blocking theinitiative, claiming that the proposed rulesare even stricter than those in the US. Bothsides have been at loggerheads for over sixmonths, sending out mixed signals topotential investors.

OPPORTUNITIES

Mexico has free trade agreements (FTAs)with more than 44 countries across theAmericas and the European Union. Thecountry avoids a 10% tariff levied on US-built vehicles sold in Europe, therebyproviding OEMs with an incentive to shiftproduction from the USA to Mexico.

Located between North and SouthAmerica, the country has emerged as apreferred sourcing destination formaterials and parts, for companies lookingto cater to both the US automotivemarket, and to South American countriessuch as Brazil and Argentina.

OPPORTUNITIES

Turkey is a safe long-term bet, both forOEMs looking to cater to the domesticmarket - the country has a relatively lowvehicle penetration rate of 100 vehiclesper 1,000 people coupled with anexpanding middle class - and export toEurope, the Middle East and Africa, thanksto its proximity to these regions.

Since 2009, the Turkish government hasbeen offering incentives to OEMs tomanufacture vehicles in the country. Inearly 2013, the country doubled tax breaks(now up to 60% for new investments) inthe sector and also began to offer otherrebates to further incentivise vehiclemanufacturing in the country.

CHALLENGES

Labour unions in the EU are against thetransfer of automotive production toTurkey. Likewise, some vehiclemanufacturers prefer to move to otheremerging economies such as China andIndia which have experienced rapidgrowth in productivity.

Turkey needs to look at overhauling its taxsystem for the automotive industry.Currently, special consumption tax andVAT raise the domestic purchase price ofvehicles for Turkish consumers by 60-100% of the pre-tax price.

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EMERGING MARKETS

www.automotiveworld.com Megatrends | 22

CHALLENGES

The Indonesian government has plans toincrease fuel prices in order to generatefunds for infrastructure. However, this risewill undoubtedly increase the total cost ofvehicle ownership and maintenance, whichmay stifle the currently buoyant demand.

To prevent the risk of a car loan bubble,the government has reduced the loan-to-value ratio to 70% when borrowing frombanks - essentially forcing buyers to pay alarger deposit. As loans account for nearlythree quarters of all new car purchases inIndonesia, this lower loan-to-value ratiowill have a definite impact on sales.

SUMMARY

Mexico and Indonesia stand out in thecurrent scenario as the most attractiveeconomies within the MIST group. WhileMexico is destined to play an importantrole in global automotive manufacturing,Indonesia promises to be one of the hottestdomestic markets in the years to come.

Market performance in 2013-2015 will beindicative of which MIST country has thebest opportunities for the automotivesector looking forward, as the worldcontinues to recover from the global crisis.

Manmeet Malhi is a Senior Analyst at EOSIntelligence (www.eos-intelligence.com).

OPPORTUNITIES

With current vehicle ownership inIndonesia at just 32 cars per 1,000 people,and the country witnessing record carsales year-on-year, the underlyingopportunity is clear. In order to reach thepenetration level of developed countries(average 450 cars per 1,000 people), it isestimated that Indonesia needs anadditional 108 million cars.

The Indonesian government is keen todevelop the country as a hub formanufacturing green cars and has initiatedthe Low Carbon Emission (LEC)programme, offering OEMs tax incentivesand other support to encourage greendevelopment and manufacturing. In return,a number of leading OEMs are ready toinvest a combined US$4.5bn in theemissions plans.

CHALLENGES

Hyundai, Kia and GM Korea suffered recordlosses in 2012 due to strikes by theirrespective labour unions, which weredemanding higher wages, the abolition ofthe graveyard shift, and permanent positionsfor a higher proportion of contractworkers. Although a deal was signed tobring an end to the strikes, OEMs need toensure such a dispute does not happenagain: a repeat performance is likely to

severely impact South Korea’s attractivenessas a global production hub.

The Won has been strengthening againstboth the US dollar and the Yen since mid-2012, significantly eroding thecompetitiveness of South Korean OEMs.OEMs will have to review their positioningin the international market if the SouthKorean government does not take anymeasures to correct the exchange rates.

OPPORTUNITIES

South Korea has aggressively pursued FTAs,especially with the US and the EU, on partsand components tariffs, thus reducingrestrictions on both sides for OEMs. Withthese agreements now taking effect, theSouth Korean automotive market is finallyopening up to foreign manufacturersthrough automotive imports, which grewto 10% in 2012 from 2% a decade ago.

European OEMs have benefitted the most,as tariffs on large vehicles have fallen from8% to 5.6%, thus making EU vehicles morecompetitive in South Korea’s largeautomotive marketplace.

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It’s easier to cross borders

when you’re not carrying any baggage.

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To make the most of your company’s growth into new markets, it’s sometimes important to let go of old habits. Find out how we can help you seize opportunities to grow at ey.com/automotive See More | Growth

Page 25: Automotive World Megatrends Magazine – Q2 2013

INSIDE THE INDUSTRY

OEM consolidation helps growthamid slowing Indian demandRRiiddddhhiimmaa SSaaxxeennaa aanndd SSaavviitthhaa KKrraammaann,, MMeerrggeerrmmaarrkkeett IInnddiiaa

Growth of the passenger car segment in India is witnessing a gradualdecline, triggered by rising inflation, high cost of debt, and poor monsoons,which in turn have impacted consumer spending.

The drop is in excess of 26% - the highest in more than a decade,according to the Executive Director of the Society of Indian AutomobileManufacturers (SIAM), Sugato Sen. OEMs are consequently revisiting theirstrategies in an attempt to remain competitive, with a focus on productdesign, pricing and distribution. Moreover, companies are further lookingat consolidation as a means to gain economies of scale.

Of the 17 players present in the market, only four - Tata Motors, Hyundai,Mahindra & Mahindra, and Maruti Suzuki - have achieved economies of scale.The trend for consolidation has already begun with OEMs sharingmanufacturing facilities, sourcing technology and jointly launching new models:Maruti Suzuki has been sourcing diesel engine technology from Fiat India; theRenault-Nissan Alliance shares production; while the joint venture betweenGeneral Motors and Shanghai Automotive Industry Corporation (SAIC) is setto launch a number of models from the latter’s portfolio.

With increasing competitive pressures and a reduction in customerownership, OEMs need to regularly launch new models and upgradeexisting ones to remain competitive. In response, alliances are likely to gain

momentum as companies look to rationalise their investments andmaximise reach through technology, manufacturing and distribution.However, consolidation in the form of company acquisitions is unlikely asthe mid- to long-term prospects for the market remain bright. Automotivepenetration in India is still low compared with other developing economiessuch as China, Malaysia and Brazil: Malaysia has 300 cars per 1,000 people;China has 40 cars for every 1,000 and there are 750 cars per 1,000 inEurope. India, on the other hand, has just 12 cars per 1,000.

It is hard for any foreign players to tar India as a market without potentialgrowth - and one that will continue to be so at least in the medium term.India is still growing and this slump in demand is a mere temporary glitch.

Several foreign players are yet to enter India but are looking for the righttime and the right partners to do so. OEMs are looking at new ways ofbringing consumers on board primarily through focus on small cars andlaunch of diesel variants, the latter of which has seen a rise in popularity asthe cost of diesel is cheaper compared to gasoline. Diesel-run cars nowaccount for 45% of the total passenger car segment - a figure that was 22-25% two years ago. Indeed, the majority of new launches for 2015 havediesel engines. The Ford EcoSport, Honda Amaze, Honda Brio Diesel,Honda City Diesel, Chevrolet Enjoy, the new Skoda Octavia, Tata’s MiniAria and the Volkswagen up! are all set to hit the market.

This article first appeared in the Comment section of AutomotiveWorld.com. For more expert insights and analyses of the global automotive and commercial vehicleindustries, visit automotiveworld.com/comment.

The Comment column is open to all automotive industry decision makers and influencers. If you would like to contribute an article, please [email protected].

www.automotiveworld.com Megatrends | 24

Page 26: Automotive World Megatrends Magazine – Q2 2013

MOTORSPORTS

25 | Megatrends www.automotiveworld.com

MMaarrttiinn KKaahhll talks to Lord Drayson, founder and ChiefExecutive of Team Drayson, and Qualcomm Dr AnthonyThomson about how new racing series Formula E isexpected to charge the EV market

Formula E

Page 27: Automotive World Megatrends Magazine – Q2 2013

MOTORSPORTS

Megatrends | 26www.automotiveworld.com

According to Team Drayson’s founder, ChiefExecutive and Team Principal Lord PaulDrayson, “Formula E is a recognition by theFIA that global pressures and concernsaround climate change, in particular airpollution caused by vehicles in cities, areincreasing pressure on the automotiveindustry. Motor racing lacks a championshipwhich provides a platform formanufacturers to showcase what they aredoing in this area, to compete and toaccelerate the development of relevanttechnology. With the growing importance ofEVs, Formula E creates a new championshipto enable them to compete.”

The aim of Formula E is to make thechampionship as relevant as possible, in termsof the race locations, the type of racing andthe specifications of the cars. By racing onpublic roads in city centres,” says Drayson,“we’re taking the race to where the peopleare, where the challenges around air pollutionare most keenly felt and where mainstreamEVs would be driven.”

One of the specific goals is to show EVs in anew light. “There’s a need for the car industryto enthuse the millennial generation. Thischampionship will be targeted at people in theteenage to low 30s age-group, which is soimportant for early adoption of EVs. EVs havebecome perceived as being quite dull, so hereis an opportunity to redefine the electricvehicle. The old saying is, ‘race on Sunday, sellon Monday’. We haven’t had the opportunityto do that with EVs. Formula E is going toprovide that opportunity.”

Motorsport has launched many significantpowertrain innovations that have later foundtheir way into mainstream cars. In May 2013,an Aston Martin Rapide S became the firsthydrogen-powered car to make an official gridstart in an international motorsport event,when it made its debut at the Nürburgring 24Hours race. In recent years, hybrid technologyhas been used by Le Mans race winners, andFormula 1 has introduced KERS and is pushingengine downsizing.

“Hybrids are increasingly a central part ofmotorsport competition but there is nothingfor pure EVs. It is strategically important touse Formula E as a mechanism to speed therate of innovation around electric drivetrainsand all that’s associated with electric cars.”

Open wheel, single-seater

Open wheel single-seat racing has beenchosen due to its similarity to Formula 1 cardesign: “Because this is an FIA championshipand is designed to be the top of the pyramidof what we hope will be a developing electricvehicle racing universe, it needs to be theultimate level of racing technology,” Draysonexplains enthusiastically. “And that means openwheel, single-seater.”

When: First race expected in late summer 2014

Where: The nine cities in the preliminary calendar are London, Rome, Los Angeles,Miami, Beijing, Putrajaya, Buenos Aires, Rio de Janeiro and Bangkok; tenth city tobe announced

Partners: Michelin (tyres), TAG Heuer (official timekeeper, official watch and chronographand founding partner of Formula E) and Renault (technical partner in jointagreement with Spark Racing Technologies)

Participants: Ten teams and 20 drivers in 2014

Race format: One-day (Saturday) events; 2.5-3km (1.5-1.8 miles) course; one hour duration;cars equipped with ‘push-to-pass’ technology to encourage overtaking

!Formula E race data!

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MOTORSPORTS

27 | Megatrends www.automotiveworld.com

In the first year, all vehicles will be common.Designed by Italian company Dallara, whichwill also produce the chassis, the cars will bebuilt by Spark Racing Technology (SRT). Toensure the availability of cars for the initialseason, Formula E Holdings (FEH) hasordered 42 cars from SRT for the 2014championship: 40 will go to the teams, onewill be a show car and one car is for crashtesting. Renault is SRT’s official technicalpartner, and engineers from Renault Sport F1and Renault Sport Technologies will workwith SRT to optimise the electric andelectronic layout and performance of thepowertrain. “It involves a huge undertaking toset up a new world championship withcompletely new technology in new cities onnew tracks,” explains Drayson. “To ensurethat the championship starts on time nextsummer, and to make sure that there is a levelplaying field for the teams to start with, thepromoter took the decision to source asingle chassis and drivetrain for the first year.”

McLaren Electronics will provide the cars’electric powertrain, including the electricmotor, the motor control units and batterymanagement. With the 120kW electricmotor and related electronics, “We have themost efficient electric motor in theautomotive industry,” says Dr Peter vanManen, Managing Director of McLarenElectronics. “By racing the vehicles in themiddle of cities, there will be a lot of verysharp acceleration and braking, rather thanhigh speed endurance, which suits thecharacteristics of an electric motor. Anelectric motor provides you with almostinstant torque, so you get great accelerationand regenerative braking.”

From year two onwards, the regulations willallow technology competition, and DraysonRacing has stated that it plans to become aconstructor in its own right. From 2015, it willenter a car based on a new drivetrain

developed from the advanced DRT 4X2-640electric system featured in the Lola-DraysonB12/69EV car that set a new electric record atthe 2012 Goodwood Festival of Speed. “Youcan expect to see a number of drivetrainsuppliers, like in Formula 1,” says Drayson.“The focus will be on the drivetrain ratherthan the chassis and aerodynamics; it will be acompetition between drivetrains.”

Links to mainstream motor sport

Open-wheel, single-seat vehicles are not theonly link to mainstream motor sport. Well-known drivers and racing teams areexpressing an interest in Formula E, andformer F1 driver Lucas di Grassi is the officialFormula E test and development driver. “Agroup of drivers, including several Formula 1and Le Mans drivers, see this type of racing asa fantastic opportunity not just to developtheir careers but also to do something to thedirection the world’s going in,” says Drayson.“Those who have driven an electric car arereally excited about the driver challengeinvolved in the differences to internalcombustion engine cars. In Formula E, you’regoing to see the highest level of professionalracing drivers from all over the world.”

Teams showing interest in Formula E includethose with a background in electrictechnology; teams that have a background intraditional, mostly single-seater racing; andnew teams formed by sponsors andbusinesses that traditionally support othersporting events, who see this sustainablechampionship as providing a very unique andstrong marketing platform. As for establishedvehicle manufacturers, Drayson says aroundfour major OEMs are “seriously looking atparticipating in the championship”.

One of Team Drayson’s partners is Qualcomm,which will provide wireless chargingtechnology. This will be used in the firstinstance to charge static vehicles in the

Drayson pits during the race. “Wireless

Page 29: Automotive World Megatrends Magazine – Q2 2013

charging has the ability to free the electric carfrom the cable,” says Drayson, “so introducingwireless charging in electric racing, the highestlevel of electric vehicle technology, is a greatway to accelerate its adoption, get experienceand speed up development.”

The two companies are also exploringdynamic charging. “Initially, we’re looking atstationary charging or static charging. We havea system already fitted to Drayson’s LMP-styleEV racer to really prove that technology out,”explains Dr. Anthony Thomson, Vice Presidentof Business Development and Marketing atQualcomm. “Over time, the big vision is tomove to higher power in stationary mode andthen move into dynamic charging, where carscan pick up charge, initially when they’recoming into pit lanes, but ultimately on thetrack itself. That is a real game changer. That’swhere we can push the race out from limitedtime to normal race times of 90 minutes. Itwould be a fantastic achievement to completea 90 minute race by charging dynamically.”

Opportunity knocks

Qualcomm sees Formula E as “an opportunityto develop high performance systems in aknown aggressive and high-pressureenvironment,” says Thomson. “We see it as atest bed for advancing the technology. Andworking with someone like Drayson Racing -where we can form a close relationship andget feedback from the race team itself andassist them with the development of newapproaches - is really key for us.”

Seven second pit stops are the reserve ofFormula 1 and, as battery charging currentlytakes significantly longer than seven seconds,Formula E permits teams to change vehicles.“Initially there will be two vehicles per driver,”explains Thomson. “The driver will head outand when his car is out of power, he will comein and swap cars. There will be a Le Mans-stylerun between cars as one starts charging whilstthe driver jumps out and does the next partof the race in the other car.”

Qualcomm is also developing wirelesscharging for mainstream use. Its solutions forFormula E will, of course, differ frommainstream solutions, mainly in power levels.“The system that we developed with Draysonis a 20kW system,” says Thomson. “Most ofthe systems that have been developed forprivate vehicles, taxis and car-share are either3kW or 6kW. So that’s a significant jump inpower. There are other elements to thetechnology in terms of adding lightness, andreally hardening for motorsport. But the keydifferentiator for now is the power level.”

Race EVs on Sunday, sell EVs onMonday?

In addition to the obvious sustainabilitymatters surrounding electric vehicles, thereare broader messages that Formula E aims todeliver. These range from making tyres last fortwo or three races to developing legacycharging networks. Qualcomm has a particularlegacy intention, Thomson explains: “As therace moves on to the next city, the charginginfrastructure would remain behind and be

available to residents. A move to dynamiccharging would result in strips of road arounda familiar area in a city where people can pickup power as they drive. We’re looking to notgo in and bust up roads and then strip out andgo away, but to build. We want to help theearly deployment of electric vehicles not onlyby encouraging and exciting the localmillennial, but by also providing something realfor people to use afterwards.”

“At its heart, [Formula E] shows themotorsport industry recognising that it coulddo more to support the automotive industryin meeting the challenge from climate changeand airborne pollution,” summarises Drayson.“In doing so, it's creating something reallytransformational, which will be hugelyimportant not just for the industry but formotor sport and for the cities that bring it onboard. This championship will make adifference to electric vehicle adoption, and itwill make a difference to the rate oftechnology development and acceptability.Next year, the first year of the championship,will be a new dawn. It’s going to be the firsttime we’ve had such a global championshipand it’s going to make a real difference.”

“From our perspective, this is an opportunityto bring life to electric vehicles and wirelesscharging,” concludes Thomson. “Put it in frontof people who are possibly sceptical or don’tquite understand the potential, and I thinkwe’ll see people being quite amazed at whatelectric vehicles can do. My aim is to showpeople what’s possible, and encourage them tobuy electric vehicles.”

MOTORSPORTS

www.automotiveworld.com Megatrends | 28

Page 30: Automotive World Megatrends Magazine – Q2 2013

OEMs

First Tiers

OSV, Middleware, Hardware, and Services Suppliers

Silicon

www.genivi.org

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

The majority of GENIVI’s work is conducted through the technical and market-ing teams and groups. There are currently six topical “expert groups” – Automotive, CE Connectivity, Location-based Services, Media and Graphics, Networking, and System Infrastructure. The EGs establish and prioritize the technical requirements, identify and enhance components that implement those requirements, and together develop the GENIVI Compliance Statement. In Asia, regional expert groups also develop specific requirements unique to their locations. All of these requirements are collected, reviewed and integrat-ed by the System Architecture Team, resulting in a comprehensive compliance specification.

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

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

Automobile manufacturers and their suppliers use these compliant platforms as their common underlying framework and add to it their differentiated products and services (the consumer-facing applications and interfaces). GENIVI is identifying these common automotive infotainment industry requirements to establish an open and robust baseline from which to develop products for the common good of the ecosystem.

How the GENIVI Alliance Works

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

Page 31: Automotive World Megatrends Magazine – Q2 2013

Building products aroundpredictionsIn this exclusive interview, Benoit Schlumberger, Opel’s Director of Global and Market Industry Analysis,Europe, tells RRuutthh DDaawwssoonn how future trends shape today’s products

Opel/Vauxhall’s new A-segment car, the Adam,marks the OEM’s first steps into a previouslyunexplored area: developing a product aroundfashion and lifestyle trends, with a heavy focuson personalisation and connectivity.

How does Opel structure productdevelopment around fashion trends?

It's really not one thing that we look at, but alittle bit of everything.We look at everyday life,what's happening in other industries and whatother companies are doing. We leverage ourown people: we have engineers working onnew technologies; we have designers trackingtheir field; we look at suppliers; we look atwhat the competition is doing and theirconcept cars; we identify what our customerswant through market research. It's about tryingto be engaged in as many different things asyou can. Put simply, we identify the trends andthen see what we can do about them. Forexample, in the early 1990s, we made catalyticconverters standard in all our vehicles, becausewe knew that it was important for theenvironment, and that society would focusmore and more on this as time went on.

But it's not only the execution of the idea, it'sworking with other members of the GMfamily, partners and suppliers. How we do itcomes down to the specifics of the productdevelopment: adding a technological feature isdifferent to how you make an entire vehicle.

With technology, you might be working morein co-operation with a supplier, but if you doan entire vehicle you would typically do muchof it yourself.

The pace of change in the consumerelectronics sector is much faster thanthe pace at which the automotiveindustry operates. How do you factorthis into product development?

We have recently announced that Wi-Fi willbe in all GM vehicles, starting in NorthAmerica, but it will go worldwide. We don'thave to worry about our system beingoutdated when the next big smartphonecomes out, our vehicles will be able tointeract with any electronic device available onthe market at any point in time. That bringspeace of mind to customers who then don'thave to worry about cable connections - withWi-Fi, everything will always be connectable.

In North America, we’ve hired people fromthe consumer electronics industry and the ITworld, to bring new perspectives from thoseindustries to ours. We do not see ourselvesbeing able to control everything, but we wantto be able to offer a connection to whateveris on the market. It is important to haveembedded technology so that the customerhas a quality screen and sound system in thevehicle that's much better than their portabledevices.

How is thechanging role ofpassenger cars -from something ofpersonal pride to athing of puremobility - affectingOpel’s vehicledevelopment?

There are people forwhom cars arebecoming lessimportant, but thereare also many peoplefor whom cars are

equally, if not more, important. The growth ofpremium brands proves people are willing tospend more money on cars. Customisation isdeveloping significantly and you can see that inthe Mini, the Fiat 500, and Opel’s Adam. Thereis a very significant share of customers whowant to spend more money to have a vehiclethat is more suited to their needs. There isalso a huge aftermarket for wheels andaccessories, so you still have a very largeproportion of people for whom their car isimportant and they are willing to spend a lotof money on it.

What impact has the current economiccrisis had on product development?

The economic downturn means people haveless money - which probably explains Dacia’ssuccess, which is more an A to B method oftransport. And there are people for whomownership is not necessarily important. Thecost of owning a car in big cities is extremelyhigh - people would go to publictransportation in the past, but manycompanies are now working around carsharing, which is very interesting. It's not clearwhether car-sharing will negatively impactownership or whether it's going to be used asa substitute for public transportation or taxis.

In the long term, which business modeldo you think will prevail? Ownership orcar-sharing?

There are many different business models andwe are debating which is best. There is nodoubt that congested cities need to findsolutions. We would love to sell more carsbut the utility for a customer is getting closeto zero and that's not good for them. It's notgood for us as an industry. The market isfragmenting and, at the end of the day, wedon't sell cars, we provide services. Ifcustomers' needs are better met by owningone car instead of two and being able to usecar sharing and other schemes, it's the rightthing to do for the customer and that's wherewe will end up. You don't succeed as acompany if you don't put your customersfirst.

MAKING MEGATRENDS

Megatrends | 30www.automotiveworld.com

The Opel Adam Rocks concept is a “symbol for fashion-led, active drivers wanting to stand out from thecrowd,” says Malcolm Ward, Lead Design Director at Opel/Vauxhall. “Adam Rocks is just one possibleanswer to the question of how new development paths for the absolutely unique car can be forged.”

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31 | Megatrends www.automotiveworld.com

With two years of sales of the first pure BEVsof the modern era now behind us, theautomotive industry is taking a serious look atthe technology’s potential and weighing it upagainst other alternative powertraintechnologies. Have BEV sales beendisappointing, or have they reached a realisticlevel for a new technology? Will BEVs have aplace in the automotive industry of the future,or will developments in other powertraintechnologies make them redundant? Can

OEMs, suppliers and other stakeholders turnBEVs into a successful business activity? Andwhat are the biggest opportunities and barriersto a viable BEV market over the next decade?

The following statistics were first published inAutomotive World’s Technology Roadmap: BatteryElectric Vehicles. Download the report fromautomotiveworld.com/research for moreoriginal research, and exclusive insights fromOEMs, service providers, suppliers and analysts.

of survey respondentsexpect more than 5% ofnew light vehicle salesglobally to involve someform of powertrainelectrification by 2020...

Industry viewpoint:battery electric vehicles

Marketplace

...but BEVs are expected toaccount for less than 5% ofthe electrified light vehiclemarket by 2020

said that the maximumcharging time (excludingquick charging) that wouldencourage consumers topurchase a BEV is no morethan one hour

believe that OEMs shouldcollaborate on platformsand use open-sourceddesign to create economiesof scale

Powertrain

named battery energydensity and/or rangelimitations as the mostsignificant market barrier

Rangesaid that OEMs shoulddevelop cars which acceptcombustion engines as wellas a range of electrifiedpowertrains, includingHEVs, BEVs and FCEVs

thought that 300km (185miles) is the minimum rangeper recharge that BEVsshould be capable of

believe that cost is thesingle factor that couldmost increase BEV sales

Sales

thought that BEV industrystakeholders will make aprofit from battery EVswithin 5-10 years

believe that a sufficient BEVsales volume is necessarybefore investment inrecharging infrastructurecan be justified

named recharginginfrastructure as the mostsignificant factor that couldincrease BEV sales

During the next ten years, I think mostof us are looking at it as being abreakeven type project. We all agreethat we need to be in hybrids and pureEVs, but there’s not a very strongbusiness case at the moment.

Rob Rickell, Engineering Director, GKN Driveline

Over the last two years there’s nothingthat demonstrates to us that the EVmarket is going to take off... we believeBEVs will continue to be a niche marketand that we’re quite a way off for this tobe a meaningful part of the portfolio.

Alex Molinaroli, Vice Chairman, Johnson Controls

””“

FACTS & FIGURESTechnology Roadmap:

Battery electric vehicles

In 2020, we expect to see, out of a global total of 115 million cars, 2.5 million pureEVs, 3 million plug-in hybrids and 6.5 million conventional hybrids.

Robert Bosch (statement)

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LOGISTICS

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Urban logistics is now more relevant andimportant than ever before. There is already aparadigm shift in how products are beingmanufactured - through innovations such as3D printing - and retailed, as consumers buymore and more online. The supply chain, asthe common denominator at all stages of aproduct’s lifecycle, must adapt to thesechanges as quickly and efficiently as possible.

For the most part, urban logistics is concernedwith the final leg of the product lifecycle: lastmile deliveries. The urban supply chain mainlydelivers what are essentially finished goods tocities. Finished goods, however, could varyfrom being a raw material to a constructioncompany, or a finished product taken to aretailer. Depending on the nature of the goods,the urban supply chain differs greatly when itcomes to the mode of transport, warehousingand other services.

This variability and complexity in the urbansupply chain has compelled logistics serviceproviders (LSPs) and other stakeholders to

innovate and better monitor urban freightflows as well as define an all-encompassingstrategy to manage urban logistics. Urbanconsolidation centres, on-the-fly connectivity,smart IT solutions, and automation, in thiscontext, have emerged as critical differentiatorswhen urban deliveries have to be made.

Urban consolidation centres: the huband spoke model

The number of city dwellers is growing and, by2025, Frost & Sullivan expects three out of fivepeople to live in cities globally. Currently, anaverage city dweller from a developed citygenerates about 0.1 deliveries per day,assuming the same ratio for 2025 that is aminimum of 500 million deliveries per day.

To meet that kind of volume, logisticscompanies must consolidate their deliveriesand polarise their fleet. Frost & Sullivanforesees a future when companies will adopt ahub and spoke logistics model, wheredeliveries are consolidated and dispatched.

The large hubs - or urban consolidationcentres (UCCs) - will be found away from thecity, and smaller spokes of distribution will besituated nearer to the city. Large trailers willtravel to big warehouses where products areautomatically bundled and sorted, and small-to-medium sized vehicles will travel from theregional city drop-off points, undertaking alllast mile deliveries.

The UCCs will essentially function as tacticalwarehouses where all the goods destined forthe same route/same type of customers in acity are first consolidated and then shipped.This enables better truck utilisation andwarehouse space, thereby reducing the numberof trucks on the road. These models are in factalready being trialled and tested by companiesin many places, including Ocado and DHL.

On-the-fly connectivity and information-driven logistics

By 2025, every person will have more thanfive connected devices. This essentially meansthat people will have omni-channel touchpoints to suppliers and can, and will, ordergoods from anywhere at any time, demandingit to be delivered quickly. Logistics musttherefore become agile and scale up to offerspontaneous ‘on-the-move’ deliveries.Technology, in that sense, will subsequentlybecome more proactive than reactive.

Connectivity will have to seep into everystage of the supply chain process. Beforedeliveries, the main task is that of orderpicking and processing which, in the future,

Urban logistics 2020 Studies show that the cost of congestion now is through the roof: almost 200% more than what it was inthe 1980s. And traffic is only a part of the urban delivery problem: restricted access in city centres, lack ofparking, and warehousing costs are all contributing to the expense of urban logistics

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In the UK, online grocery retailer Ocado follows a huband spoke approach where all orders are fulfilled from a1.2 million square foot, fully automated warehousingfacility in Hatfield. Deliveries are bundled and forwardedto spokes, from where small Ocado delivery vans pickthem up to be taken to homes. Ocado has achieved over90% accuracy in picking and delivering products on time.The company heavily leverages technology to ensure its

hubs, spokes and fleet are seamlessly connected. The company uses telematics, smart sensors in trucks andwarehouse management systems to track, trace and optimally deliver its products.

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LOGISTICS

Megatrends | 34www.automotiveworld.com

will be highly automated. Although partiallyautomated now, via conveyor belts, RFID tagsand scanners, it will become robotic withsmall automatons moving ten times fasterthan employees, picking and processingorders along automated conveyor belts.

During delivery, route planning andscheduling will become imperative. Usingtraffic prediction tools and predictiveanalysis, companies can optimise their trips.Through geo-fencing and location-basedtracking they can ensure that the trip goesas planned and, in cases of unexpecteddisruptions or changed plans, on-boardvehicle telematics could be used toreorganise the delivery. Being able to leveragetechnology and make proactive deliveries willbecome a key decisive factor for deliveringinto cities, especially with the increasingpressures being placed by the growing marketof online retail on the urban supply chain.

More distribution points thandistribution centres

By 2025, nearly 20% of retail transactionswill be made through online channels and, inleading markets like the US and UK, with

high per capita online spending, this willincrease to nearly 25%. The transition toonline will transform the retailing modelitself with most retailers adopting a hybridbricks and clicks model in the future. Brickand mortar stores are already evolving intomore connected and interactive structures,introducing hybrid bricks and clicks modelssuch as virtual stores.

This growth in online sales has increasedthe demand for e-fulfilment centres andplaced a greater emphasis on last miledelivery. Both these operational taskspresent lucrative opportunities for postaland express parcel companies. Parcels willbecome lighter as products become smaller,and also become more frequent with anincrease in the average orders per week.Customers’ demands for inventory visibility,multiple delivery options and more coldsupply chain services has resulted inretailers and parcel companies alikeintroducing innovative supply chain servicessuch as click and collect; same-daydeliveries; locker boxes/collection points;and, specifically to cater to the growingdemand for cold supply chain services,refrigerated locker boxes.

Access to multimodality and seamlessurban deliveries

There are some interesting examples ofhow cargo trams in Germany and gondolasin Venice have been put to use for deliveringnon-time sensitive goods. To make next dayor same day deliveries, however, a fastoption is required which uses less fuel thanair freight: high speed rail. By 2025, overUS$800bn globally will be spent on highspeed rail projects, some of which areaiming to connect continents, not justcountries. There are two ways in which highspeed rail could influence logistics: it couldfree up more space on the road and railtracks for freight, as more people shift tohigh speed rail, or it could potentially offerexclusive high speed freight services.

The most interesting project in high speed railis the Eurocarex, a train that will run from Lyon,France to St. Pancras international station inLondon carrying only freight. Projects like thiswill cause a modal shift from trucks and

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The centre sub-contracted to DHL at HeathrowAirport is a perfect example of how a consolidationhub works. Heathrow Airport has nearly 323 retailand catering outlets, pubs and restaurants on itspremises. Delivering goods to these commercialentities was becoming increasingly difficult, addingcongestion to the already crowded airport. Throughthis consolidation centre, DHL has managed toconvert 700 inbound deliveries a week into 300 outbound deliveries through consolidation. They haveincreased accuracy to 99% on all deliveries through this model and have since replicated this success in theBristol consolidation centre, which serves the nearby Broadmead shopping centre. On average, DHL hasgenerated a load factor of 90% and made a 70% reduction in total trips made through such facilities.

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Kiva warehouses in the US utilise small orangerobots that can pick and move products fourtimes faster than a human, resulting in muchmore efficient and optimised order processing.They move around in the warehouse usingdirectional bar-code stickers on the floor, whichsend them to a product or order station. Majorbrands such as Gap and Staples are using Kivawarehouses and Amazon, in March 2012,acquired Kiva to integrate its robotic softwareinto its order fulfilment centres.

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Siemens City Logistics Platform utilises RFIDlabelling and satellite navigation to analyse andmanage the flow of information betweendifferent stakeholders, including manufacturers,logistics service providers and retailers. Bybetter managing information, Siemens ITplatforms shorten travel times, reducecongestion, and offer environmental benefits.

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LOGISTICS

35 | Megatrends www.automotiveworld.com

short/mid-range aircraft to high-speed trainswherever appropriate, with services tailored tomeet the demands of the urban supply chain,and priority given to express freight.

Though it may seem far-fetched to connectcontinents by train, the possibility of shippinggoods within a day through these inter-continental high speed rail projects cannot beentirely overruled. Considering the increasingfuel costs in the air-road mix and restrictionsbeing imposed on night-time flights, high speedrail appears to be a highly reliable and viablemodel.

Opportunities in the urban logisticsmarket

By 2020, Frost & Sullivan expects global urbanlogistics spending to increase almost threefoldfrom US$2.5trn now to nearly US$6trn,driven by a sheer increase in consumer tradevolume, B2C e-commerce growth, investmentin sophisticated technology for betteroptimisation, and higher transportation costs.Transportation and distribution activities willaccount for the majority of spending - 55% in

2020 - owing to increases in fuel costs andcity congestion costs.

The percentage of outsourced urban logisticswill vary by city type and area. But, on average,it could be anywhere between 30% and 35%globally. This will grow to over 50% ofspending in 2020 as logistics providers findmethods to organise the supply chain, andlogistics evolves into more of a 4PL concept.

The future is indicative of a shift towardssmarter models of urban logistics. However,there is no homogenous strategy for urbanlogistics as each city has a different spatialpattern, infrastructure and urban setting.Nevertheless, as emphasised earlier, each urbanarea will have unique and customised options atits disposal. Cities will be more proactivelyinvolved with private logistics providers atmitigating the risks associated with urban freightdistribution. Delivering to cities tomorrow willrequire customised solutions and uniquepropositions for each individual urban area.Lobbying, partnership and collaboration withstakeholders will almost become imperative andnecessary in the urban context.

Archana Vidyasekar is Senior ResearchAnalyst and team leader in the visionaryinnovation group at Frost & Sullivan.

The visionary innovation team at Frost & Sullivanhas published a study on urban logistics, entitled“Global Mega Trends and Their Implications onUrban Logistics by 2020” detailing the trendsdiscussed in this article. For more information onthe report, please contact Katja Feick, CorporateCommunications, at [email protected].

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Kiala, a Brussels-based company, offers a fast deliveryservice where parcels are delivered to a convenientcollection point, typically a store, from which thecustomer can collect their item. Through the Kialaplatform, customers can also track their parcels onlineand receive updates and notifications via SMS, email,or phone. The company operates nearly 7,000 KialaPoints and manages up to 145,000 parcels per day.

Over 300 companies are currently using the service, including H&M, Esprit, and BrandAlley. Global carrierUPS recently acquired Kiala in a bid to expand its presence in the B2C market.

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In 2009, John Lewis launched a convenientdelivery option to its customers in the form ofClick and Collect, allowing consumers to pickup products available in-store after orderingthem online. This fulfilment service has sincebecome one of the company’s fastest growingonline channels. Click and Collect accountedfor 22% of all orders in FY2011 (compared to16% for Jan-Dec 2010). In FY2012, Click andCollect accounted for nearly 30% of onlinesales and over 5% of the company’s total sales,having grown at an impressive rate of 40%from the previous year.

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Shutl UK is a London-based start up launched in2009 which offers quick home delivery servicesto internet shoppers in the US and UK.Although the company does not operate aphysical fleet network or warehouseinfrastructure, it offers delivery services byaggregating the capacity of various logisticsproviders through a unique technologyplatform, serving as a fulfilment service thatconnects retailers with local couriers. Theservice allows retailers to offer their in-storemerchandise online by letting the retailer’scustomers reserve their choice of product at astore closest to them. Shutl will then assign acourier in their network to pick up the orderfrom the store and make the final delivery tothe customer. By leveraging a retailer’s ownnetwork of stores, Shutl has redefined the sameday delivery market, offering deliveries in lessthan 90 minutes.

Page 38: Automotive World Megatrends Magazine – Q2 2013

CONNECTED CAR

37 | Megatrends www.automotiveworld.com

As the technical capability to deliver in-carinfotainment increases, so too does concernover the potential for driver distraction. Withlegislation slow to keep pace withtechnological developments, the automotiveindustry is starting to take steps towards self-regulation through various methods -including ‘white labelling’ and the developmentof automotive versions of apps and servicesdesigned to limit the potential for distraction.This process will of course involve OEM andsupplier approval, but there will also beconsiderable upstream work needed fromservice providers too.

In April 2013, Symphony Teleca was elected tothe GENIVI Alliance Board of Directors. Thecompany, headquartered in Mountain View,California, bills itself as a global innovation anddevelopment services company, and specialisesin Ethernet Audio Video Bridging (AVB) andFirmware Update Over the Air.

Automotive is a growing industry forSymphony Teleca, which, including its historyas Teleca, has around 20 years’ experience inthe embedded device and automotive sectors.It has supplied software to various EuropeanOEMs, including Volvo, and enjoyed closebusiness ties with Nokia and Ericsson.

“With many of the technologies from thehandset industry becoming of increasinginterest to the automotive industry, Teleca,with its history of being in the handset market,was in a very good position to capture someof that newer technology and newer businessin the automotive industry,” explains DeanMiles, Senior Vice President of Automotive atSymphony Teleca.

“Around two and a half years ago, wecreated a specific industry vertical forautomotive, and obviously we already hadsome internal customers, which wereautomotive focused, and they all moved in.

But then we started looking for business inthat area. In the last eight months, westarted increasing our standing in theindustry generally, including things like ourmembership of GENIVI.”

Symphony Teleca has two automotiveproducts: Echo Cancellation/Noise Reduction(ECNR), and Ethernet AVB. “Ethernet AVB hasan organisation that looks after it called theAVnu Alliance, and we are on the board. We’realso on the steering committee ofAutomotive Grade Linux, which started lastyear.” Both ECNR and Ethernet AVB are soldthrough a licence model; the rest of theautomotive business is service-based, ratherthan IP-based.

Automotive accounts for around 7% ofSymphony Teleca’s revenue and headcount,says Miles. The largest part of its business isthe supply of software to other softwarecompanies. “We do a lot of work withcompanies like Oracle and Google, whichprovide software as a service, and we havedifferent engagement models with them. Butprobably a quarter of the business is handsets,consumer electronics and embedded devices,which we [automotive] then spin out of.”

Symphony Teleca’s automotive business hasdoubled in size in the last year, “and we seesignificantly above-average growth in thisarea,” says Miles. “For us, the automotiveindustry is going to drive more lines of codeabove the growth of the automotive industryaverage. The amount of software code beinggenerated by car companies is only going togrow, so there's obviously growth there for us,and I would expect to grow faster than theaverage supplier in the market because wehave a unique selling proposition, thanks toour history in open source, handsets, deliveryservices over the air and server-basedcapabilities, which many of our competitorscan't bring together as a package.”

The connected vehicle experience

A typical example of Symphony Teleca’s work,says Miles, would be the creation of acustomer head unit. Here, Symphony Telecaacts as the software integrator, bringingtogether the broad support package, theoperating system, building or sourcing themiddleware, and bringing in and managing thirdparty software, such as navigation, Bluetoothand voice. “We finish that off, put the HMI ontop of it, test it and give it back to thecustomer. And that customer could either bethe OEM, or more traditionally a Tier 1.”

Asked whether the connected vehicleexperience should be delivered through anembedded or a brought-in device, Mileschuckles, “There are many answers to thatquestion! There is the basic telematics questionabout whether it's a brought-in phone or abuilt-in phone modem which providesconnectivity to the outside world. Different carcompanies will choose a different method for it.eCall will potentially change that, when it getstype-approval from the European Community;you would probably need to have a built-insolution, so you might as well piggyback off that.There's a slight change in the market becausethe hardware is so cheap, and telephoneservice providers are changing their pricingmodels to enable multiple SIM cards to reportto the same account, which then mightencourage car owners to have a built in systemin their car attached to their existing account,rather than have two accounts.”

Another aspect of the brought-/built-in debaterelates to whether users want their mediaservices on their phone or in their car. “I thinkthe segmentation here might come down tocar size and value. For lower-end vehicles, youmight have a Mirrorlink-type solution whichreplicates a brought-in app on the head unit.On higher-end systems, you'll have a built-insystem with built-in apps. But those higher-end

Composing connectivityMMaarrttiinn KKaahhll talks to service provider Symphony Teleca about orchestrating in-car infotainment in anindustry where everyone seems to be playing a different tune

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CONNECTED CAR

Megatrends | 38www.automotiveworld.com

car companies probably still need to provide aMirrorlink-type solution because some peoplestill want to see their media on their car andexpect that a higher-end vehicle can do that.The future for a replicated system is prettygood, because both the low-end and the high-end still need to offer that.”

Familiarity and safety

An embedded device replicating the screen ofa brought-in device could help reducedistraction potential by presenting the driverwith a familiar screen. The issues here aretwo-fold, says Miles. In addition to the obvioussafety factor there is the image factor. “Does ahigh-end company which prides itself on safety,or on a certain very distinct brand image,want the pure implementation of an appwhich looks and acts exactly like it does on ahome computer? I'm not sure what theanswer would be, but I suspect it's probably‘no’. There's going to be some work there,both for companies like us and for the OEMs,to modify that app experience. And you canmodify it a little to make it safer butstill appear exactly the same, ormodify it significantly, soyou get similarservices, butthe way

that you interact with it onthe car is completely different.”

As mentioned earlier, Miles believes the issuesof driver distraction, legislation and liabilitywill lead to white labelling, and thedevelopment of automotive versions ofapps.“Car companies probably will not allowdirect access to apps like Facebook - theywould have to white label and approve anyapps that could go onto the vehicle. This iswhy you'll always have an automotive versionof a particular app. Companies like TuneIn andSpotify are already working with carcompanies to create automotive versions oftheir apps. Going forward, there will beautomotive versions of these services, and thecar companies - rather than companies likeours - are the ones that will regulate thesafety and distraction potential of the content.Being very simplistic and cutting access off at acertain speed is not the way ahead - that's ashort term fix. You really need to get into theuser experience and change the interface.Services like Facebook and Spotify, forexample, have so much functionality that a

customisable interface would be of very goodinterest to customers.”

HMI control

Voice and gesture control is being developed,but both are still far from ready to becomethe main means of controlling the HMI. Howquickly will voice and gesture becomemainstream methods of controlling in-carconnected technology? “The voice supplierswould argue they already are,” says Miles.“Voice will really change once you have theubiquitous link to a server, like Siri. Thatincreases available processing power and itsability to understand spwwch. For voice, thereal change will come once higher bandwidthis available to use off-board voice recognition.”

As for gesture control, “this is a bigsubject and slightly more

difficult becauseyou could argue, dependingon how you implement it,that it's also distracting initself, and potentially moredifficult to use than a hard button.”Interestingly, Miles adds, “There willalways be a role for some kind ofphysical button. You can press buttonswithout looking at them. And they’re very fast.”

Other technologies could play a role inreducing driver distraction too, says Miles.

“Head-up displays can help here, and they'redefinitely becoming more affordable andavailable across the OEMs.”

Miles also mentions eye tracking: “Once youcan track the eye location, if it’s linked to ahead-up display, you could have two options:you just look at the one that you want andthen press an ‘okay’ button, and you've neveractually taken your eye off the road directly.Peripheral technologies are out there, whichwill be coming to the market. It's up to theingenuity of the OEMs, Tier 1s and serviceproviders, like us, to capture that and createthe user experience of the future.”

Page 40: Automotive World Megatrends Magazine – Q2 2013

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Page 42: Automotive World Megatrends Magazine – Q2 2013

AFTERMARKET

41 | Megatrends www.automotiveworld.com

The aftersales business is finally gainingimportance in various markets. However, incontrast to new vehicle sales, aftersales havebeen neglected for quite some time and nowneed development and professionalisation.

The global aftersales market is a safe havenwith strong margins for suppliers, independentrepair shop chains and OEMs. Manufacturerson average generate 80% of their profits fromaftersales products and services - althoughthey account for no more than 20% of sales -and this profit share is rising.

But why is aftersales becoming so importantnow? The rules of the automotive game arechanging: current trends will continue to shakeup the industry until 2025, with foursubstantial market developments set toinfluence the customer interface.

Trend one: increasing consolidation

The aftersales business has been characterisedby repair shop insolvencies, mergers andacquisitions for years. New cars need fewerrepairs; less mileage and longer-lasting partshave pushed down the amount of servicerequired. By 2025, the amount of workshoplabour hours is expected to drop by 20-25%.This will shift more power to specific players,forcing others to struggle for survival.

Trend two: downstream business

Players from other industries andintermediaries are using innovative businessmodels and offering new services to gain afoothold in the aftersales market, and occupythe interface with customers. Insurancecompanies are using alliances to channelcustomers into selected repair shops; OEMsare selling spare parts over the counter, andwhite label products are gaining importance.

Trend three: new mobility concepts

Established and emerging players are usingnew technologies to tap into innovativerevenue sources. Specialised online repairshops, for instance, are achievingbreakthroughs with web portals. Among thenew mobility concepts to come out of this,fleet management and car sharing haveemerged as the most important. In 2012,about 700,000 Europeans were sharing some21,000 cars. These figures are expected to hit15 million people and 240,000 cars by 2020.

Trend four: retail experience

So far, no big OEM has customised itsaftersales approach. A surprising fact given thatselling new cars is becoming ever moresophisticated to reach specific target groups.

Customers tend to project this positiveexperience onto aftersales. Providers thatwant to establish long-term relationships mustwork hard to gain loyalty and meet customerrequirements throughout the entire carlifecycle.

To survive, aftersales players must carefullylisten to customers, and provide the goodsand services they really want. Micromarketingwith offerings tailored to each individualwould be ideal. The extreme complexity intoday's repair shops, however, rules that out.The task now is to identify target groups andput together suitable - and profitable -services. The first step for every player,therefore, is a detailed product, service andcustomer segmentation.

More and more providers are competing inaftersales, making authorised repair shops, inparticular, struggle to remain competitive inthe maintenance and repair market. Repairshop chains have developed over the past fewyears, gaining prominence through aggressivebranch network expansion and large-scaleadvertising campaigns, positioning them asplayers offering better value for the money.Customer touch-points offer particularlyvaluable opportunities to spot and meetindividual needs, boosting both customersatisfaction and profits.

Customising aftersales

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delivering the service that customers really want

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AFTERMARKET

Megatrends | 42www.automotiveworld.com

The jury is still out on who will win the nextround, but what is clear is that the winner willbe the company which best meets the needsof individual segments with a differentiatedrange of products and services. In the future,standing out from the competition won't justbe advisable, it will be crucial.

Segmentation

Clearly dividing segments into variouscustomer groups offers similar advantages tomicro-marketing. Players can assemble servicepackages tailored to each segment so that thecustomer experiences the optimum amountof individual attention.

To do this, aftersales players first need amuch better understanding of who theircustomers are and what they need. Using theRB Profiler tool, Roland Berger Strategy

Consultants have recently tested thissegmenting process on the German, US andChinese markets. Using 18 value statements,socio-demographic criteria and usagebehaviours, light has been shed on customerand market values, and those target groupswhich promise companies the greateststrategic and commercial success.

In conjunction with market researcher GfK,4,500 aftersales customers in Germany,China and the US were surveyed. Based ontheir responses, customers were segmentedinto meaningful brand- and value-specificgroups at the national level. Key differencesemerged, not just in service preferences, butalso in demographics, values and servicebehaviour in general.

Naturally, segmenting by brand or repair shopchain would result in even more precise

groupings. But even this analysis revealsdifferences: for example, three of the sixsegments in Germany show a strong preferencefor authorised repair shops and original parts.

To learn more about customers' specificdesires and requirements, the six segmentswere examined under the following categories:general preferences regarding cars; criteria forselecting a repair shop; satisfaction with therepair shop; readiness to switch repair shopsand reasons why; and preferred servicepackages and contracts.

Sustainable strategies

To ensure their aftersales business is set up ina sustainable way, all players must stay on topof format- and company-specific issues.Looking to OEM authorised repair shops, it isclear that their special structure is one oftheir best strengths: they have standardisedprocesses developed by OEMs, where theycan implement brands throughout the entirerepair shop network. However, it must beensured that repair shops do not perceive thisas a further administrative burden.

Independent shops and chains meanwhile havetwo major advantages: transparent, fixed-priceoffers and the option of offering standardservices to key accounts with multi-brandfleets. The customer segmentation approach isideal for such providers because it is notrestricted to a specific vehicle brand, but isinstead based on customers or values. Itunleashes its full potential only after eachmarket player has analysed its own specificcustomer base.

There are many different types of repair shopoffers at the customer interface: premium orbudget propositions; key droppers or activereceipt; fast-lane or airport service; pick-upand collection or receiving stations in citycentres; all-inclusive service contracts orremanufactured parts. Going forward, marketplayers must better cover all of these optionsand have a clear service USP.

Competition is fierce when it comes towinning customers in the lucrative aftersalesbusiness. Consolidation pressure, new playersand mobility concepts combined with risingcustomer expectations are making life tough.Nevertheless, there are strategies for success:businesses just need to go back to the shopfloor and look at what the individual customerreally wants. An essential part of this is anindividual customer analysis to develop adifferentiated range of products in line withideal micromarketing. Aftersales needs torefocus on the most important person in thewhole process: the consumer.

Philipp Grosse Kleimann is Partner, Roland BergerStrategy Consultants, Munich.

Swen Beyer is Senior Consultant, Roland BergerStrategy Consultants, Munich.

Page 44: Automotive World Megatrends Magazine – Q2 2013

THE BIG PICTURE

43 | Megatrends www.automotiveworld.com

While most media buzz of late has been aroundadvances in driverless cars for the individual, ahandful of industry players are looking into makingpublic transport more accessible than ever before.

Similar to Harman’s micro mobility concept, createdin partnership with Rinspeed (see page 55), theTaxicol project is a new species of adaptabletransport. Designed by Mondex Design, the tram-likeTaxicol cars are autonomous vehicles that can self-navigate along predetermined routes, following linespainted onto the road surface. The new concept wasfunded entirely by the General Council of Yvelinesafter being commended in the French locality’sintelligent vehicles scheme.

The electric ‘cars’ are powered by a 60kW enginewith a top speed of 55kph (34.2mph) and anoperational range of 210km (130 miles); each modulealso features a bio-ethanol range extender. Thewhole system above the powertrain, including doors,heating, air conditioning and infotainment features,

are powered by solar cells installed on the roof.Inside the carriage, climate conditions are controlledautomatically and passengers receive route andschedule updates in real time.

Operated bi-modally, the cars can be controlled byan on-board driver or remotely by a control centreworker. Each Taxicol carriage can transport up to22 passengers each, and five of the vehicles can belinked together electromagnetically to form aconvoy for the whole or part of a route. V2V andtraffic systems constantly monitor the position ofthe whole fleet, allowing vehicles to join ontoconvoys or leave as needed. Unlike a tram or train,the only new infrastructure required to run thispublic transport system is the aforementionedpainted lines, reducing the implementation costsdramatically by comparison. If the vehicle meets anobstacle along its route, a system of navigationsoftware, digital cameras and radar, map a new pathfor the car to take until it can return to theoriginal line.

Public transport gets personalised

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THE BIG PICTURE

Megatrends | 44www.automotiveworld.com

Page 46: Automotive World Megatrends Magazine – Q2 2013

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Page 47: Automotive World Megatrends Magazine – Q2 2013

<!DOCTYPE html>

Megatrends | 46www.automotiveworld.com

Described as a fusion of HTML, CSS andJavaScript, by Dr Rainer Holve, Vice President,North America at Elektrobit, the new HTML5standard underpins much of today’s human-machine interface (HMI) development. HTML5was initially designed for mobile webapplications, but its standardised specificationmakes it ideal for in-vehicle applicationframeworks. However, the industry is stilldivided on just how important HTML5 is inthe developing world of infotainment.

According to Intel Automotive Strategist JoelHoffmann, HTML5’s cross-platformfunctionality is one of its greatest attractions:“While previous generations of HTML couldrun on various systems, they generally weretoo sluggish, and you couldn’t get theresponsiveness that you expect from a nativeapplication. HTML5 changes all that. HTML5 isvery attractive to the auto industry becausenow software developers can build oneapplication and run it on a variety of platforms,in a variety of models of cars, and that is ahuge step forward. It still requires co-operation, though, from car manufacturers.They have to open up additional details abouttheir car functions in order for them to beexposed to the application.”

This is where groups like the World WideWeb Consortium (W3C) can help. W3C’sintial focus has been on defining a vehicle dataAPI which will create new opportunities forautomotive services via the web. Intel is set tochair the business group which will eventuallylead to a working group and a new industrystandard. “Participants are coming fromautomakers and technology specialists,including GENIVI, which will bring forward,

with its membership of the W3C, three carOEMs and a Tier 1 supplier to drive theimplementation of that spec,” Hoffman said.

Brought or built?

Another attraction of HTML5 is the role itwill play in solving the built-in or brought-indevice conundrum, by bringing commonalityto HMI development. “Carmakers are

currently very busy trying to get mobileapplications into the vehicle. The way they aredoing it at the moment is mostly by leavingthe app on the phone and just connecting it tothe car. The application remains on the phoneand runs on the phone,” explained Holve. ”Ifyou want the application to run on the carsystem itself, then you need a new applicationframework in the vehicle. There are not manysolutions out there, and that is actually a good

HTML5: the most significant HMI development for 15 years?MMaarrttiinn KKaahhll

HTML5 was initially developed for the mobile web but its standardisedspecification makes it ideal for in-vehicle application

Page 48: Automotive World Megatrends Magazine – Q2 2013

<!DOCTYPE html>

47 | Megatrends www.automotiveworld.com

Separating the interface from the underlying technology and using HTML5 means that all the hardwork is done - at least from an engineering perspective, said John Traynor, Senior Vice President ofProducts and Technology at Bsquare

Page 49: Automotive World Megatrends Magazine – Q2 2013

<!DOCTYPE html>

Megatrends | 48www.automotiveworld.com

thing, because we can pick a commonapplication framework that all app developerscan use. HTML5 is a good candidate for that.”

Bsquare’s Senior Vice President of Productsand Technology, John Traynor is, however, morebullish on the importance of HTML5 forautomotive IVI: “When it comes to thehuman-machine interface and the userinterface inside the vehicle, I don’t think in thelast ten or 15 years there has been a moresignificant technology that has come along. Ithas really allowed automotive manufacturersand Tier 1s to display the types of things insidethe cabin that users really want to see in theirautomobiles.

“A lot of older technology had peoplefocused on the technology itself, rather thanthe user experience inside the cabin,” Traynorstated. “Separating the interface from theunderlying technology, and having HTML5 -which is much easier to use, more common,and deployed on more vehicles - means that,from an engineering perspective, the hardwork is done. Everyone can now focus on theuser experience at the top of the stack.”

OEMs embrace HTML5

At the 2013 Consumer Electronics Show(CES) in January, Ford and GM opened theirAPIs to the open source community, and, inFebruary, Ford contributed AppLink to theGENIVI Alliance. “The decision by Ford toopen AppLink as a BSD open-source licenceproject under the GENIVI projects banner ishuge for the entire automotive industry,” saidMatt Jones, Vice President of the GENIVIAlliance. “And it is huge for all those appdevelopers that previously had no real way to

enable their application to work in a sensiblemanner in a vehicle.”

Ford-branded mobile applications and websitedevelopments are HTML5-enabled, said DougVanDagens, Global Director of ConnectedServices at Ford Motor Company. “Weleveraged HTML5 when we developed ourmost recent apps and website for our PHEVvehicles. We've adopted it in all of ourproducts going forward on the cloud side. Weunderstand what that offers, the efficiencies itenables and why that's a popular technology.”

GM is also using HTML5: its new softwaredevelopment kit (SDK) is designed to enabledevelopers to work with GM to design, testand deliver relevant, customisable andseamlessly integrated automotive apps, anduses the HTML5 JavaScript framework.According to Phil Abram, GM’s ChiefInfotainment Officer, the OEM has designedthe SDK “so that developers only have towrite the software code once to address theentire population of vehicles and end users.Developers can repurpose existing tools andcode as long as they’re consistent withapplicable licenses.”

Other standards are available

Industry fractions are apparent, however, withnot everyone taking up HTML5 so readily.Justin Moon, a member of the automotivebusiness development team at QNX, believesthat whilst it is essential to embrace HTML5,there are other ways of developing theautomotive HMI. “HTML5 is absolutelyenormous in this space. We’re talking about anopen standard, something that’s beingleveraged in so many other environments.

Think of the mobile space: the majority ofdevices being put out in the market will beHTML5-enabled, or at least have the capabilityto render HTML5 content. What’s reallyimportant is to understand that there is aplace for HTML5 but there is also a place fora hybrid approach to creating an HMI. HTML5would be the open standard for applicationdevelopment, but there is also a place fornative graphics and things of that nature, andthe ability to seamlessly stitch those designstogether to create one cohesive experience.”

Garmin, too, is looking cautiously at the roleof HTML5 in its product development. “Weshowed a fully integrated glass cockpitsolution at CES using HTML5,” said MattMunn, Managing Director of Garmin’sautomotive division. “It has some strengths,there are also some weaknesses. We will haveboth HTML5 and other alternatives for HMIdevelopment for various customer needs.”

Dean Miles, Senior Vice President ofAutomotive, at recently-elected GENIVIboard member Symphony Teleca, believesHTML5 will make a difference, but thatconsiderable development is yet to be done.“There are websites out there already whichare HTML5-based, so the next generation ofcars, and even the current generation, need tobe able to access that information.

“But how far do you take that HTML5browser and technology into the vehicle’s IVIsystem? Do you make a fully HTML5-basedHMI, with all the benefits of instantly availablesingle platform apps that it empowers? That isdifficult, because there are still changes toHTML5 coming down the pipe from theconsortia, which are yet to be defined. Thereare also some specific limitations to what youcan do with HTML5 today. So, can the currentimplementation of HTML5 deliver a full high-end OEM experience? Today, I think theanswer is probably no. But that certainly willchange. It's just a question of when.”

Taking a more cautious view of HTML5, PeterBalogh, Co-founder and Chief Executive ofNNG said, “Lots of companies in the industryare currently using HTML5 the wrong way forthe wrong reason. The challenge is to figureout how to make something more structuredand reusable in HTML5, and not create messyspaghetti code in the process.”

Elektrobit’s Holve summarised HTML5’sprospects enthusiastically, but cautiously:“HTML5 represents a promising technologyto get the mobile app from the phone into thecar, which enables new use cases, and reducesthe dependency on the phone and theecosystem that comes with its brand.”

Whether full industry uptake will happenremains to be seen but, as with previous codelanguages, the question of implementation maywell be superseded by a new HTML6 or othercoding development.

Page 50: Automotive World Megatrends Magazine – Q2 2013

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Page 52: Automotive World Megatrends Magazine – Q2 2013

51 | Megatrends www.automotiveworld.com

As the industry races to reduce fatalities in anincreasingly mobile world, active and passivesafety technology continue to advance; and sotoo, does connected car technology, raisingnew problems in driver distraction.

The following statistics were first published inAutomotiveWorld’sTechnology Roadmap: LightVehicle safety. Download the report fromautomotiveworld.com/research for moreexclusive insights from industry leaders.

Approximately 1.4 million crashes each year arecaused by drivers using mobile phones, and at least200,000 more are caused by drivers texting whiledriving - US National Safety Council

Distraction was a contributing factor in nearly 10%of traffic fatalities and 18% of injuries in the US in2010 - NHTSA

More than 3,000 people were killed in distracteddriving crashes in 2010 - NHTSA

Industry viewpoint:light vehicle safety

Distracted drivers

believe that OEMs should notbe prevented from selling lowNCAP-rated vehicles.Thisposition was reinforced by 69%saying that OEMs should beallowed to sell cars of differingstandards in different regions

of respondents were willing tostate a specific NCAP rating asthe lowest rating that should beallow, the most popular answerwas three stars, chosen by 33%

NCAP

saw active safety systems as themost likely to improve safety indeveloped regions over thenext ten years

Someone is killed ormaimed on the world’sroads every six seconds- FIA Foundation

6seconds

59% of respondents believethat there is still considerablepotential for advances inpassive safety while theremainder believe that furtheradvances will require activesystems

Active v passive

thought that incentives, fromgovernment or throughinsurance companies, should beoffered to encourage thepurchase of safer cars

Price and incentives

said that regulators shouldrecognise the burden of coston OEMs when enforcing safetytechnology; 30% thought thereshould be safety at any cost

thought that consumers will bereluctant to pay extra for safetytechnology but neverthelessexpected it to be provided

of respondents said that inter-vehicle connectivity as theplatform for advanced activesafety systems has the potentialto increase occupant andpedestrian safety long term

Technology

named collision mitigation andavoidance systems (CMAS) asthe technology with the mostpotential to road safety

said that lane keeping assistancesystems are the most likely toadvance road safety

of countries havecomprehensive laws relating tofive key risks: speeding; drinkdriving; and the non-use ofhelmets, seat-belts and childrestraints - Decade of Action forRoad Safety 2011-2020

Legislation

In developing countries, 37% said that drivereducation would cause the greatest increase in roadsafety; legislation came a close second with 31%

said that NCAP ratings shouldnot be legally enforced

FACTS & FIGURES

Page 53: Automotive World Megatrends Magazine – Q2 2013

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Page 55: Automotive World Megatrends Magazine – Q2 2013

CV POWERTRAIN

Megatrends | 54www.automotiveworld.com

In India, the most important driver ofpowertrain development is legislation, so it isalmost no surprise that the move towards anew transmission has come just as thegovernment announced plans to raise highwayspeeds. In the mid-term, however, the rush todevelop powertrains better suited to higherengine ratings can be helped by fittings such asautomated manual transmissions (AMTs).

In emerging markets, “fuel consumption will bean ever important factor in the buyingdecisions of customers,” says Alistair Peel,Business Development Manager at Ricardo.“But how do we select the technology thatgives the user the best benefit for the leastcost on their vehicle? This must be achievedwhile controlling risk, durability and warrantyto protect the brand and sales.”

According to Peel, AMTs are expected tobring a 5-7% fuel consumption benefit tofleets over the next two decades. And, asemissions limits move from noxious gases toCO2, any moves to a Euro VII standard willlikely include a new CO2 limit which OEMsand engine suppliers will have to adhere to.

The opportunity to reduce fleet mpg hasalready been quickly taken on in thosemarkets which have adopted this technology:AMT-equipped trucks such as the FreightlinerCascadia, available in the US market, andIveco’s Stralis in Europe, have proven savingsof 9.31 mpg and 4% respectively.

The residual value of an AMT-equipped truckis likely to absorb much of the up-front costincurred by fleet managers adopting thetechnology. Iveco was the first European OEMto fit AMT as standard, in 2000. By 2007, thevalue of an AMT-equipped three-year-oldvehicle in the UK was over US$2,300 greaterthan one without. Notably, in that year, AMT-equipped trucks accounted for the majority ofEuropean HD sales.

Beyond the residual value benefit, however, liesthe AMT’s greatest advantage, namely that it

simplifies the driving process.AMTs may not turn bad driversinto good ones, but they cancertainly affect the output ofless-skilled drivers, thusimproving average fuelconsumption across the fleet.

Commenting on AMT adoptionin the US market, NanduSrinivasan, Director ofEngineering at Eaton says,“There is so much emphasisgoing into driver habits, andtheir ability to affect efficiency.AMTs are one way ofminimising a driver’s influenceon that cycle in terms of acceleration anddeceleration. We only see this going up.”

Considering the Indian driving test is regularlylabelled the “easiest in the world”, not onlywill repair costs, caused by less-skilled driving,be reduced by AMTs, but the pool of potentialdrivers will also be widened to those withlittle or no truck experience - with no worryof serious engine damage. As Peel points out,AMTs “increase the durability of transmissionsand clutches, and also manage shift patterns tooptimise engine speeds.”

At present AMTs dominate the low speed,high weight truck sector in India, i.e. oncyclical vehicle duty trucks such as buses andrefuse collection. While many see this as anideal solution for driving in slow Indian traffic,others believe AMTs should be regarded as

more of an intermediate answer, not as thelast word in this sector.

“Instead of going the way of the fullyautomated transmission, and upgrading theexisting manual transmission, AMT is a goodoption in between,” says Neelkanth Marathe,Senior Deputy Director of PowertrainEngineering at the Automotive ResearchAssociation of India (ARAI).

Offering a more generous estimate of 10%fuel economy benefit, Marathe continues,“AMT is going to be a very useful transmissionoption in the Indian scenario…it can beretrofitted very well.”

Until the onset of AMT, however, Peel believesthat India will continue to be dominated bymanual transmissions.

AMT: the future of Indian trucktransmissions?Automated manual transmissions are expected to account for 30% of the Class 8 market in the US by2014, and are now mostly standard across the HD trucks on offer in Europe. By contrast in India,scepticism is still rife when it comes to this non-traditional technology. But with new government plans toraise truck highway speeds, AMT looks set to become the new driving force in truck transmissions

DDaavviidd IIssaaiiaahh

The automated manual transmission (AMT) slots between the manual and automated transmissions. Gearchanges are accomplished without using a foot clutch pedal; instead, when a gear is selected, the AMTautomatically disengages the clutch, changes gear and engages the clutch again while modulating the throttle.

The system is comprised of a dry clutch, gearbox and an embedded, dedicated control system, which useselectronic sensors, processors and actuators to effect gear shifts. The heart of the gear control system isthe transmission control unit (TCU). AMTs require no engine or gear modifications, meaning less physicaleffort for the driver, and are more comfortable to use than a manual transmission.

Page 56: Automotive World Megatrends Magazine – Q2 2013

HARMAN

55 | Megatrends

For infotainment supplier Harman, future-proofing is not just key to business, it is thecompany’s guiding principle. What started as asmall partnership in the 1950s developing hi-fisystems, has branched and grown into one ofthe automotive industry’s leading suppliers ofinfotainment and connectivity features.

Today, Harman has a firm grasp of the marketand a knack for knowing just what consumerswant. At a time when connectivitydevelopment was just beginning to turn tomore affordable, and thus more accessible,systems, Harman announced its ConnectedRadio entry-level connectivity platform at the2013 CES, which links a smartphone to abudget radio to give access to fullinfotainment services.

“The younger generation, for example, do notstart out with a premium car but have arequirement for connectivity,” says MichaelMauser, Harman’s Vice President and Co-president of the Infotainment and LifestyleDivision. “Infotainment is a major buyingattribute for sales of cars.”

More recently, Harman has been pushing intothe area of safety in the connected car. Havingpreviously incorporated algorithms designedby safety app developer iOnRoad into systemarchitectures, Harman acquired the companyback in April. The buyout means thatiOnRoad’s advanced driver assistance system

(ADAS) features will be built into Harman’sscalable and premium heads-up displays.

“In the future, infotainment systems will haveto focus far more on safety,” says Mauser.“Our target is to make it affordable, bringingsafety into all car platforms, not just thehigh-end. We owe it to consumers to so.”

Taking a very holistic view of things, Mauserbelieves that connected services aresecondary in the driving environment andmust be designed specifically for it, with nopossible cause for distraction. “The moreconnectivity functions we bring into the car,the more important safety is becoming,”Mauser says. “You can bring connectivity justthrough a smartphone and MirrorLink into thecar - but that is not good enough to createthe same user experience and to prevent orreduce driver distraction.”

Creating a user experience which is up to

Clouding thefutureSafety, connectivity, accessibility and future-proofing are intertwined, says Harman, which has more than akeen eye on the consumer electronics industry

RRuutthh DDaawwssoonn

“We have to provideautomotive grade

applications into the car. It’snot just about copying andpasting something which is

already available on asmartphone”

www.automotiveworld.com

Page 57: Automotive World Megatrends Magazine – Q2 2013

HARMAN

Megatrends | 56

date with consumer expectations, whiledealing with the “unique” environment that isthe connected car, is no easy task. While manyOEMs and suppliers continue to focus onconsumer electronics and connecting theminto the car, Harman is taking a different tact,driving down development cycles to keeppace with the consumer electronics industryand customer expectations.

“Time to market was further reduced withthe introduction of our scalable head units,”Mauser explains. “If you look at customisablesystems from the past, there was a development time or time to market of about

three years. Now our scalable units have atime to market of maximum 18 months. Thatwas the first step but of course it doesn’tclose the gap [between the pace of change inthe automotive and consumer electronicsindustries]. But with the introduction of ourAndroid systems and Aha [Harman’sinteractive radio product], we were able tointroduce personalisation into our head unitsand make them future proof, which ourcustomers are very interested in.”

It is this attention to future-proofing that istaking Harman up to the next level. AlthoughMauser admits that they are not “100% thereyet, the android system is a step in the rightdirection. It allows you to basically upgrade

the system through the cloud. You don’thave to go back to your PC and

update as you would have in theold days”.

All this is well and good, but connectivityneeds to pay too. When asked which businessmodel will prevail when it comes to deliveringconnected products, Mauser says it is up tothe OEMs to decide on one - and stick to it.

“In Germany, BMW, Audi and others havecompletely different views on how tostructure things. Of course, OEMs want tokeep their piece in that area, at least fornow, and that, from my point of view, islimiting opportunities. The overallopportunities are already far bigger when itcomes to service and downloading ofapplications, but OEMs are still restrictingthat quite intensively.

“There is not one answer to the question ofwhat model will prevail. Take our Aha solution- that is completely free of charge. There is nolicence or something like that, we just providethe service to the OEM but each one ishandling it a little differently. Porsche ischarging the end customer some incrementalexpenses to get the optional product, butother OEMs are using it as a standardfunctionality. I think it will actually be a mix ofmodels that work.”

Its current products may be future-proof asfar as the predicted market looks now, but thesupplier’s keen survival instinct means that it isstill keeping watch of how the connectivityindustry could develop. At present, Mauserpredicts APE and 4G to be the main drivers ofdevelopment in the connected car.

“Supporting a good bandwidth of dataconnectivity into a car and reliability of thatconnection will be very important,” Mausersays. “What you are used to having whenyou’re connected at home, you’re going toexpect from your car as well, especially formobile office functions. When you want tokeep your car up to date, you have to have avery good connection with a highbandwidth.”

While it certainly seems that clear skies areahead for this supplier, it is the firm grasp ofconsumer desires that will keep it flying high.

www.automotiveworld.com

Page 58: Automotive World Megatrends Magazine – Q2 2013

HARMAN

57 | Megatrends www.automotiveworld.com

Promoted as blurring the lines between publicand private transportation, the HarmanRinspeed microMAX, unveliled at the 2013Geneva Motor Show, is a futuristic solution totoday’s mobility problems.

At just 3.73m long, the microMAX is shorterin length than a Mini Clubman but standsmuch taller at 2.12m. The car runs off a 28kWmotor and has a range of 100km (62 miles).Large windows and upright seating make thisvehicle seem just as light and breezy as itseco-friendly, ultra modern ethos.

“It’s very much like Facebook,” a Rinspeedspokesperson commented. “This is a newcommunity type of mobility.”

But how can a personal vehicle be compatiblewith a community concept? Harman’s solutionis urbanSWARM: a cloud-based system whichmelds several Harman products alreadyavailable, in a new, connected way.

urbanSWARM is what really ties themicroMAX together: the system links withother vehicles in the area and accessesnavigation data in real time across the whole

fleet. Not only does this allow passengers tofill spare seats at will, it also helps driversnavigate traffic using data which has beencrowd-sourced from other microMAX carson the road. This is the ultimate application ofcloud and V2V technology, designed tomaximise urban movement. The system alsocalculates potential ride opportunities in realtime and can determine transfer options ifnecessary. Once a seat has been requestedonboard, a driver can choose to accept orreject the passenger. Inside the car, passengerscan access their own infotainment options,synced via the cloud: music, books and videoscan all be viewed, keeping user preferencesthe same from vehicle to vehicle.

Although Rinspeed typically focuses onconcept vehicles, Michael Mauser, Harman’sVice President and Co-president of theInfotainment and Lifestyle Division, is sure thatthe microMAX has real world application rightnow: “It’s not just a concept. If you go back afew years you will see that a lot of Harmansolutions found in Rinspeed concept cars arein production.”

“This megacity solution makes urban travel

much more efficient,” the Rinspeedspokesperson continued. “In most cities nowwe have the problem of infrastructure notgrowing fast enough; there are too many carson the road. This is an efficient system fortransporting people on a smaller footprint.The techniques necessary to do somethinglike this all exist now - all we need is forsomeone to decide to do it and it would bepossible to build up a network very fast.

“Unlimited funds will not suddenly becomeavailable for infrastructure improvements, aseven the most powerful economies arestruggling to solve traffic problems.”

With more start-ups, smaller OEMs andsuppliers looking to make private transportmore open to public use, traditional forms ofmobility are set to diverge even further thanhas been foreseen up to now. Although thereis a mobility segment for vehicles like themicroMAX to satisfy, the success of thevehicle could depend on community mood.But with car sharing gaining ever morepopularity, urbanSWARM could very well bethe next step in cloud infotainment and trafficmanagement for such vehicles.

!Micro mobility!!maximised!

Page 59: Automotive World Megatrends Magazine – Q2 2013

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Page 61: Automotive World Megatrends Magazine – Q2 2013

POWERTRAIN ELECTRONICS

Megatrends | 60www.automotiveworld.com

Robert Bosch Engineering and BusinessSolutions (RBEI), headquartered in India, isBosch’s centre for powertrain electronics foremerging markets. Its main activity is toprovide services and solutions internally forBosch, supporting the automotive arm ofBosch worldwide. Its focus in the automotivesphere is on software development andsupport, as well as hardware support,specifically electronic control units, explainsHadi Syed Abdul, Head of HardwareDevelopment at RBEI. “The teams here workwith the operations in Germany, particularlyin the CV and diesel systems areas, and wesupport them with their electronic controlunits, hardware, and software. We also haveteams in the mechanical area which supportvarious other CV components, including finalelement analysis, validation, liability and so on.”

As well as working as an internal supplier toBosch, RBEI also serves external customers.“When we go to the OEMs, we go as Bosch,”explains Hadi.

The development of vehicle powertrainelectronics, and in particular, the market forCV powertrain electronics, in India is in itsinfancy, says Hadi. “The CV industry in India isnow relatively new to electronics inpowertrain. When I say the Indian industry, Imean the Indian OEMs. The category of trucksnormally used in India is not really in the high

payload segment. Now those truck OEMs alsowant electronics and this is where we comein. We’re able to adapt and give them 24Vsolutions - they are more powerful than forpassenger cars but they are not very heavyduty ECUs.”

Strength in cost innovation

Bosch in India has exported its cost innovationstrategy to other parts of the Bosch group, andHadi says this is one of the strengths of theIndian operation. “Being in India, we understandthe local conditions and we can leverage thetechnology which is used in Europe andAmerica, and bring the cost down for localrequirements.” Not only does this ensure thecost is right for local needs, but RBEI alsoensures that whatever cost innovation hasbeen tried out in India is also available formarkets like Brazil, Russia and China.

The Indian operations lie at the heart ofBosch’s global activities. “We work as one withBosch in Germany,” says Hadi. “There is a veryclose cooperation and a strategy that we spell

Bosch, RBEI and India’simmense hunger for technologyMMaarrttiinn KKaahhll

Robert Bosch Engineering and Business Solutions Limited (RBEI) is a wholly-owned subsidiary of Boschwith the majority of its approximately 12,000-strong workforce located in India. In addition to itsoperations in Bangalore and in Coimbatore, in the Indian state of Tamil Nadu, RBEI has sales andmarketing offices in other parts of the world, primarily one in Germany. It also has a sales office inFarmington Hills, Detroit, offices in Japan, the UK and a large development centre in Vietnam.

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Page 62: Automotive World Megatrends Magazine – Q2 2013

ELECTRONICS

61 | Megatrends www.automotiveworld.com

out together. If you talk about software, it'sthe same repository. So you may have amodule which is then used for, say, a high-endCV, and that module can be broken down inan architecture which can be used in whole orin part for an emerging market. If you find onecomponent which is doing well in theemerging market, this could easily be appliedin another market. This kind of modelarchitecture helps us to move solutions fromdifferent parts of the world to areas wherethere's a new interest.”

Contradicting demands

Whilst cost is key, cost innovation is not aboutreduced quality or durability. “The demands ofthe emerging market are very contradictory,”says Hadi. “We started off some years backsaying that it costs less so it'll be less rugged,or maybe of lesser quality. But now we seethat the demands made on electronics or onproduct robustness are much higher. We wantcost effective designs, but they have to berobust to withstand misuse and the elements.We build these aspects into our modules,which then also makes Bosch products for therest of the world very rugged and robust.”

RBEI uses a modular structure approach,explains Hadi. “If an Indian OEM, or an OEMlike Renault based here in India, wants thefeatures which are used in a Renault car inFrance, we can very quickly deliver that.Because it's a common repository, we followthe same procedures, policies, qualityguidelines, structures, architecture. It's veryeasy for us to provide a product sample. Wecan quickly provide the same thing that isbeing used in a Renault car in France, or afeature that Renault uses in Brazil. Being in allglobal regions is a major strength of Bosch.Germany is one of our main entities, but so isIndia. We are partners. We have competencecentres in key markets, but we are all in touch

with each other. And it's relatively easy for usto first know what is happening in the rest ofthe Bosch world and be able to offer that toour OEM customers here.”

Vehicle electronics in India

How will the Indian market for electronics inlight vehicles and CVs develop over the nextten years? Is it possible to envisage parity inthe near or medium term between thedemands for electronics in India and Europe,for example? “Yes and no,” says Hadi. “I thinkthe demand for more electronics will probablyfirst come into cars and motorcycles. Whenyou compare India to Europe, the literacylevels are very different. But the hunger fortechnology in India is immense. Themotorcycle and car sectors definitely demandmore electronics, because the users demandthe electronics. My personal feeling is that theCV world will lag behind the passenger carworld and it will be primarily driven bydemands like consumption or emission limits.”

Hadi says he expects strong growth in theIndian LCV and ultra-low segments. By ultra-low, he is referring to vehicles in the onetonne range, in the segment effectively createdby the Tata Ace. “With the Ace, Tata has reallybrought out that new segment, and thesegment came in because there was a movefrom the government not to allow heavyvehicles into cities. These vehicles were idealfor bringing deliveries into the city. But thishas also found favour with the rural market.Every OEM worth its salt is now trying to getinto this market. I'm curious as to when OEMsfrom outside India will try to enter thismarket, and what solutions they will offer.”

The passenger car market also offersconsiderable opportunities for developmentin in-vehicle electronics. “The population isvery large, and if you look at the number ofcars owned, there is a very attractiveopportunity. Here, the user experience willmean that technology and electronics will playa major role.”

Bosch plant at Nashik, India

Bosch has been present in India since 1922

Bosch Bangalore

Page 64: Automotive World Megatrends Magazine – Q2 2013

THE BIG PICTURE

63 | Megatrends www.automotiveworld.com

The industry’s new found love of the benefits of Big Data has takena slight downturn, as consumers look to privacy matters and howtheir user data can be kept anonymous. It is a well known fact thatwe as humans are all predictable so, no matter how anonymised alarge data set may purport to be, analysts claim it is still very easyto pick out an individual based on their habits.

This fact seems wholly adverse to the notion that Big Data is thenext innovation expected to revolutionise the way we usetechnology both in and out of the car. After all, “The connectedvehicle is all about Big Data,” says Dr Wolfgang Bernhart, Partner atRoland Berger Strategy Consultants. Furthermore, “the financialvalue of the connected vehicle lies in Big Data.”

But beneath the worries, there is one matter which is oftenoverlooked when the privacy issue arises: Big Data is alreadyproviding drivers with real benefits taken for granted in themodern age - without any noticeable detriment to privacy. General

Motors, for example, capturesdata from its OnStar system to lowerinsurance premiums; Ford’s Energi plug-inhybrid generates around 25 gigabytes of dataper hour which is then processed and given backto the driver via a mobile app, in the form of batterylife, performance stats and information on the nearestcharging stations; and navigation companies like TomTom areusing vehicle data to monitor traffic flow and pinpoint congestedareas.

So how can the industry overcome privacy problems to providethe services that are fast becoming expected as standard in newcars? Discussing the connected car in general, Nicole Yelland,Director of Marketing and Communications at Livio says simply,“The car is already the next phone docking station. Just like Wi-Fi,we'll figure out smarter solutions for security”.

!Big Data,!!big brother?!

Page 65: Automotive World Megatrends Magazine – Q2 2013

THE BIG PICTURE

Megatrends | 64www.automotiveworld.com

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Page 67: Automotive World Megatrends Magazine – Q2 2013

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Page 68: Automotive World Megatrends Magazine – Q2 2013

SYSTEMS INTEGRATION

67 | Megatrends www.automotiveworld.com

Connecting withintegrationAs the cost of processing power falls, it seems obvious that intelligent control systems across the wholevehicle system would become more commonplace. Yet with such increasing sophistication, OEMs andsuppliers are still struggling to connect with each other. So is now the time to re-evaulate controlcommunications standards? Olivier Raynauld, Global Manager of Suspension Technologies at BWI Group, asupplier of vehicle dynamics technology, certainly thinks so

AAaarroonn KK.. WWaarrnneerr

As the man in charge of a product which callsfor very delicate incorporation into a vehicle,Raynauld has amassed a great deal ofexperience when it comes to systemsintegration. However, he believes that the waysystems are integrated now is just not goodenough: the industry needs a standardprotocol to work from when it comes tocommunications between in-vehicle systems.

“Creating new standards will not only simplifythe design process,” says Raynauld, “but it willalso decrease integration and testing times,generating profitable production volumes andcost savings which can ultimately be passed onto new car owners.”

The level of personalisation, connectivity andsafety expected by today’s car buyers ispushing to new heights all the time. Assmartphones get smarter and more focus isput on active safety systems, OEMs andsuppliers are under increasing pressure tobring out bigger and better innovations.

The status quo

“Historically, protocols haven often beendeveloped as a pragmatic response to a

specific need, without the requirement for alarge amount of data sharing outside of asingle system,” says Raynauld.

As ever, the best way to set the ease at whichelectronic systems can be integrated is todefine the parameters within which this can bedone. At present, several regulations - includingISO26262 on safety and reliability procedures,and AUTOSAR (Automotive Open SystemArchitecture) - set the industry standard.

“When OEMs agreed on the rules set out inAUTOSAR and ISO26262, that was a hugestep in the right direction, but both still haveshortcomings,” Raynauld explains. “AUTOSAR,for example, was intended to establish openstandards for electronics architecture to helpdevelop new software and interfaces thatcould work with other systems. But duringnegotiations, several points were added tomeet the very specific needs of some OEMsand Tier 1s, which bloated the standard at theexpense of clarity. This has meant that severalcompanies have developed their own versionsof AUTOSAR to work from.”

ISO26262, for example, does not definesoftware protocol structure, but ratherfocuses on the safety aspects that come into

“The ultimate objective should be to bring high level integration toall vehicles to allow for not just consumer comfort andenjoyment, but to provide the next level of vehicle safety

Olivier Raynauld, Global manager, Suspension Technologies, BWI Group”

New standards for systems integration willmean that components like BWI Group’sMagneRide suspension (pictured) can connectmore easily with the rest of the vehicle

This lack of clarification andfocus on minor specifics is justone illustration of the lack of

unity in this corner of theconnectivity world

Page 69: Automotive World Megatrends Magazine – Q2 2013

SYSTEMS INTEGRATION

Megatrends | 68www.automotiveworld.com

play should an electrical or electronic systemmalfunction. Neither standard, therefore,provides the clarity or unity needed forstandardisation in the latest systems.

This lack of clarification and focus on minorspecifics is, of course, just one illustration ofthe lack of unity in this corner of theconnectivity world. Another lies in the methodby which OEMs implement communicationsprotocols: this matter has so far beenleft to individual manufacturers todecide, resulting in dozens ofinterpretations. The burden then fallsto suppliers, who areexpected to make theircomponents work in anuneven environment.

Even though, essentially, a supplier’s product- a brake sensor, for example - may remainvisually unchanged, it must undergoextensive testing to ensure there are no

system conflicts.

“Providing a universal architecture that issuitable for all existing functionalities anduseable by all OEMs would massively save oncosts and time, both in the short- and long-term,” Raynauld argues. “That would allow Tier1s to focus on inventing new functionalities,instead of making existing tech fit in with anynumber of OEM systems.”

A universalapproach

Much as the USBport standardised the

memory stick/PC interface, astandard interface for OEMs andsuppliers would allow any systemto be integrated with any

platform without theaforementioned need for work after

initial product development.

“The ultimate objective should be to bring highlevel integration to all vehicles to allow for notjust consumer comfort and enjoyment, but toprovide the next level of vehicle safety,”Raynauld says. “Within two years, achieving afive star Euro NCAP rating will requirevehicles to be fitted with an autonomousemergency braking system (AEB) - whichworks through a system of sensors, a controlunit, suspension, brakes and potentially air bags,all working together and communicating.”

As the move from passive safety tocollision avoidance becomes more

important, so too will systems likeAEB and the subsequent

requirement for betterintegration standards.

Raynauld hopes futurelegislation will push

the requirement forcollision detection,

warning andavoidance

systems. Afterall, he says,“Wealready dothis forhigh endvehicles,

but withgreater

harmonisation we canachieve the timescales and

budgets which will make itmore realistic for a mass market

vehicle.”

At present, the primary obstacle toelectronic system integration being

streamlined is largely political. There has beenvery little incentive for OEMs to collaborateon a standard in the past. However, althoughprevious attempts at creating a set ofparameters have had mixed results, they haveat the very least created a basis for co-operation.

“The electronics and general vehicletechnology landscape has changed sosignificantly since the introduction ofAUTOSAR and ISO26262 that a simpleupdate won’t suffice,” warns Raynauld. “Theeconomic climate is now putting pressure onall manufacturers to streamline design andproduction, so the list of benefits thatregulation would bring grows.

“There are solutions which meet immediateand short-term needs, such as Flexray, which isa faster but more expensive protocol, andEthernet. But no solution which is currentlyavailable offers the flexibility and scalabilityrequired for a long term strategy to deal withever increasing connectivity demands.”

As mentioned earlier, similarly to howcomputer manufacturers created areplacement to the Basic Input/OutputSystem (BIOS), to cope with the growingvariety of components and peripherals onmodern desktops, now is the best time formanufacturers and suppliers to look at a newcross-industry protocol.

“Once we achieve this, a more holisticapproach can be taken to data sharing and thebenefits it can bring to developing vehicleconnectivity will grow exponentially.”

At present, the primary obstacleto electronic system integration

being streamlined is largelypolitical. There has been very littleincentive for OEMs to collaborate

on a standard in the past

Page 70: Automotive World Megatrends Magazine – Q2 2013

INSIDE THE INDUSTRY

69 | Megatrends www.automotiveworld.com

IPI tax reductions: the optimumopportunity for BrazilianinvestmentJJuulliiaann SSeemmppllee,, CCAARRCCOONN AAuuttoommoottiivvee

In October 2012, Anfavea, Brazil’s nationalassociation for vehicle manufacturers, forecastthat the industry will invest between US$25bnand US$35bn by 2015 to meet marketdemand. The main driver behind thisinvestment is the future potential growth ofthe automotive market - which expanded by4.6% in 2012 to 3.8 million vehicles, and is setto match this again in 2013 - making Brazil thefourth largest automotive market after China,the US and Japan.

With this growth has come new legislation:Inovar-Auto is a Brazilian governmentprogramme that sets out several importantfactors which the domestic automotiveindustry is to achieve by 2017. This includesfostering new investment, promoting andapplying technological innovations andimproving supply chain competitiveness.

This new automotive programme, approved in2012, comprises cars, light commercialvehicles, heavy commercial vehicles, chassiswith engines, and components. Companieswhich can apply are those OEMs alreadyestablished in the country with productionplants, and those which are investing in newplants and/or new vehicle models. OEMs thatwant to enter the Brazilian market for thefirst time and plan to invest in new factories,as well as importers, can also apply to join theprogramme; preliminary enrollment startedlast year and final enrolment and approval isdue by the end of July this year.

Those brands which do not come under theremit of this legislation are subject to a hefty30% increase in industrial products tax (IPI).But this tax rise can be avoided relatively easily,by any manufacturer which can prove that itintends to play out a long term business plan.

The most important, and seemingly mostobvious, factor is localisation, but this is notrestricted solely to the Brazilian borders: thosevehicles manufactured in the Mercosur region(Argentina, Brazil and Uruguay) or Mexico willfall under the programme and escape the IPIincrease. The latter is, however, limited to the

annual quota set betweenBrazil and Mexico, andboth the Mercosur regionand Mexico are not subjectto a 35% import tax.

Local producers must alsoincrease the number oflocal manufacturingprocesses for lightvehicles from the eight of12 available now to ten of12; the 12 processes arestamping, welding, painting,plastic moulding, engineassembly, transmission assembly, steering andsuspension assembly, electric system assembly,brakes and axle assembly, monocab or chassisassembly, final assembly and R&D/testing.Heavy commercial vehicle manufacturers mustalso increase their process steps from nine of14 now to 11 of 14 in 2016.

Another incentive for localistion is the ceilingset on IPI tax reduction for importers,restricting annual imports to 4,800 vehicles.This has caused a huge rush to apply for localplants by around 14 OEMs, including Chrysler,BMW, Volvo and Chery.

Acting almost conversely to this, for OEMsinvesting in new plants, IPI reduction is limitedto just 50% of the annual plant capacity. Butrather than deterring manufacturers, it hasproven to be something of a balancing act:BMW, for example, agreed with the localgovernment in April to invest US$300m in itsfirst Brazilian plant, with an estimated outputof 32,000 cars per year. Other brands settingup new plants include JAC Motors, Nissanand DAF Trucks, and feasibility studies arebeing carried out by a number of OEMsincluding Audi and Jaguar Land Rover.

Investment in new products is also beingconsidered: the CAOA Group has announcedinvestment of US$150m to produce theHyundai ix35 SUV under license, whileMitsubishi is planning to build both the Lancerand ASX locally.

A further 2% IPI tax reduction can beachieved by investing in R&D, engineeringand supplier development, with the provisothat R&D expenses must increase from0.15% of the net revenue in 2013 to 0.5% by 2016.

However, the boost in localisation is not theonly thing that the Inovar-Auto scheme isgeared towards: efficiency of the average OEMproduct range must also improve by 12% by2017. This is equal to a fuel economyimprovement of 13.6%. If an OEM achieves afuel economy improvement of 18.6%, it will beentitled to another 1% IPI tax break from2017; if the manufacturer achieves 23.6%, thena further 1% will be granted.

One condition that sits within this is therequirement that all vehicles must besubmitted to a fuel efficiency labellingprogramme; at present, only 36% of productsare submitted. Non-compliance with theprogramme will make brands subject to a fine.

For a country that is oft-criticised for being aprotective market, this latest round of IPI taxreduction begs to differ. OEMs have quicklyrealised the potential that lies within theBrazilian market: now is the time to invest inthis South American country.

Julian Semple is a Senior Consultant and Managerat CARCON Automotive in Sao Paulo, Brazil.

Fiat Betim plant, Brazil

Page 71: Automotive World Megatrends Magazine – Q2 2013

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