+++ Carmakers squeezed between carbon emissions cuts and falling sales of fuel-efficient diesels have used the Frankfurt auto show to spotlight a future generation of electric cars that will largely come too late to help them out of their bind. But elsewhere at the show, suppliers like Valeo and Delphi are lifting the lid on a quicker fix: affordable 48V HYBRIDS . These “mild” hybrids, which add some electric power to existing petrol models without a costly redesign, are now being deployed without fanfare by brands from Volkswagen to Volvo. It is diesel’s disgrace and decline, executives and analysts say, that has finally set the stage for mass electrification. While diesel pollution problems became notorious with the Volkswagen test-cheating scandal, the subsequent shift to petrol is bloating carbon dioxide (CO2) emissions, making the next round of European Union goals harder to meet. “Our view is that 48 volts on a gasoline engine is an alternative to diesel”, said Karin Thorn, vice president for vehicle propulsion at Volvo. “If and when the diesel market is dropping, something else needs to take its place”. Diesels are stalling already, in fact, and weaker second-hand values suggest the slump can only accelerate. An attention-grabbing pledge by the Swedish carmaker to”electrify” its entire range by 2019, initially hailed as a bold step, now looks more like an industry-wide reality. PSA Group, which had previously seen no need for 48V hybrids, now plans to introduce them “across the board” in response to diesel’s faster-than-expected decline, the Peugeot maker’s programmes chief Patrice Lucas told. By quadrupling the 12-volt standard in conventional car electrics and allowing a beefed up starter motor to feed extra power to the drivetrain, complementing the combustion engine, carmakers can transform petrol cars into mild hybrids without redesigning the vehicle’s architecture and factory tooling. The motor delivers a noticeable torque boost and recovers braking energy to recharge a battery: smaller and cheaper than those required by electric cars or “full” hybrids such as Toyota’s Prius, which typically run at 100-300 volts. Total manufacturing cost comes in 500-1,000 euros below an equivalent diesel. “It’s the most interesting enabling technology and will comfortably replace diesel”, said Evercore ISI analyst Arndt Ellinghorst. “It can do the job and it’s already cheaper. You don’t have to be an early adopter to buy one”. By 2020, the brokerage expects 48V cars to outpace European sales of full hybrids, including plug-ins that can be recharged with a cable and driven in electric-only mode. By 2025, it predicts, they will equip 55 percent of all cars sold. The technology is surfacing first in luxury cars such as the Mercedes S-Class on show at the Frankfurt event before trickling down to the mass market, chiefly in Europe and China. Volkswagen’s next Golf, a benchmark in compact cars, will arrive with 48V electrics in 2019, and other models will follow, development chief Frank Welsch told. “The technology has a lot of potential and will make hybrids more affordable for the masses”, Welsch said. Renault, Japanese affiliate Nissan and Hyundai are among other mass car manufacturers with 48V in the pipeline. In 2021, the key EU emissions goal drops to 95 grammes of CO2 per kilometre from its current 130 grammes; a challenge exacerbated by the replacement of standard lab tests with on-the-road “real driving emissions” measurements. Despite incentives, neither battery technology nor charging infrastructure is ready for the mass electric-car uptake required to put a dent in average emissions by then. The headache is compounded by the decline of diesels, which emit 15-20 percent less CO2 than petrol alternatives. Fortunately, 48V hybrids deliver savings in the same bracket. Their simplicity also lets carmakers adjust their fleet emissions on shorter lead times than typically required to redevelop a drivetrain, which may help to avoid stiff EU fines of 95 euros per excess gramme of CO2, per vehicle sold. Among suppliers, Valeo stands to benefit most with a 40 percent share of mild-hybrid orders, Citi analysts predict. Continental and Delphi are also well positioned. Paris-based Valeo expects some carmakers to effect more abrupt U-turns than PSA’s; in some cases installing 48V systems without waiting for model facelifts. Innovation director Guillaume Devauchelle declined to name names. “These solutions will become market standards”, Devauchelle said, adding that tougher rules on nitrogen oxide (NOx) pollution from diesels would deepen their cost disadvantage. Later 48V hybrids will squeeze out more efficiency by shifting the electric motor lower down the transmission, below the engine. Valeo has electrified Magna’s Getrag gearboxes and GKN differentials. “What automakers are finding is they need more than just advanced combustion engines to reach the fleet average reductions”, said Mary Gustanski, Delphi’s engineering boss. The supplier is combining 48V hybrids with cylinder deactivation that cuts engine capacity when less power is required, for additional savings. The system is in development with one European and one Chinese carmaker, Gustanstki said. The coming profusion of 48V cars should outsell pricier, higher-voltage hybrid incumbents such as the Prius, as market projections show; a prospect Toyota takes in its stride. Thanks to a quarter-century of hybrid investments, the Japanese carmaker can meet future CO2 targets with ease, global planning chief Didier Leroy said in Frankfurt. “We’re in a different position”, Leroy said. “We don’t have to rush to find a temporary solution. We don’t need to develop 48V to be competitive”. +++
+++ Munich prosecutors have arrested a former board member of Volkswagen unit Porsche in connection with an emissions scandal at carmaker AUDI , a person familiar with the matter said. Wolfgang Hatz, former research and development chief at Porsche and head of powertrain development at Audi and parent Volkswagen in previous roles, was taken into custody, the person said, marking the first arrest of a former board member of one of Volkswagen’s units in Germany. A lawyer representing Hatz declined to confirm the arrest and also declined any further comment. Hatz left Porsche last year, having been suspended since Volkswagen’s emissions test-cheating scandal broke in September 2015. Investigations found no evidence against him, Porsche said in May 2016. Munich prosecutors earlier said they had arrested a second suspect and widened the number of suspects in their investigation. They did not disclose the suspect’s identity. Prosecutors have also searched personal premises, a spokeswoman for the Munich prosecutors said, adding that corporate locations were not part of the raid. Audi had no knowledge of the arrest and continues to cooperate with authorities, a spokesman said. German business daily Handelsblatt first reported the arrest and Süddeutsche Zeitung disclosed Hatz’s identity. Audi admitted in November 2015, two months after parent Volkswagen’s diesel emissions scandal broke, that its 3.0 liter V6 diesel engines were fitted with an auxiliary control device deemed illegal in the United States. In March, Munich prosecutors searched offices at the carmaker’s Ingolstadt base, where about 44,000 workers are employed, and the premises of Jones Day, a U.S. law firm hired by Volkswagen to lead an investigation into the emissions scandal. Four months later, the U.S. Justice Department said it had charged a former Audi manager with directing employees at the company to design software to cheat U.S. emissions tests in thousands of Audi diesel cars. The former Audi manager, Italian citizen Giovanni Pamio, was subsequently arrested by Munich prosecutors on suspicion of fraud and false advertising in connection with the carmaker’s emissions scandal. +++
+++ While BMW and Toyota have entered a deal to co-develop a sports car project, each company will be producing entirely different models. BMW is busy preparing for the rebirth of the Z4, which will inevitably be known as the ultimate driving machine. A spokesman revealed the reason why BMW joined up with Toyota for this project, saying that they have to achieve “economies of scale” especially with the decreasing demand for roadsters. He further explained why doing this alone will not benefit either company; that’s why the new Z4 will somehow share certain characteristics with the upcoming Toyota Supra. The product development for each vehicle type often costs about 2 billion dollars. It is rather sad how sales for the roadster segment have gotten worse in the last 2 years, he stressed. The official name for BMW’s much awaited Japanese counterpart however was not yet been confirmed at the time of this writing. The joint project, which involves both Toyota and BMW, will also mean that both sports cars will be using the same platform. Meanwhile, BMW’s chief for global designs Adrian Hooydonk had also said that the 2018 BMW Z4 concept seen last August previews almost exactly how the production car will soon take its form. It is possible that BMW’s rear wheel drive roadster will come with 3 engine options starting with the base model as the Z4 s20i with 2.0-liter turbocharged gas engine that’s capable to deliver up to 184 p. Next is the more potent s30i Z4 model with the same powertrain though it hould be able produce around 252 horsepower. The third is the 340 hp M40i with straight six unit. BMW will likely offer this with an optional power upgrade of at least 30hp when you avail the Competition Package. Other than the base model with 6-speed manual transmission, all others will be receiving an 8-speed AT gearbox as standard. What is interesting however is that the spokesman opened up about the BMW Z4’s exterior design and said that it will have this totally different makeup. Not only did he talk about a design that will make it absolutely BMW but he also mentioned the brand’s unique driving experience. Needless to say, the joint development will help both companies take advantage of the benefits that usually come with having shared investments and resources. +++
+++ CHINA has set a deadline of 2019 to impose tough new sales targets for electric plug-in and hybrids vehicles, slightly relaxing an earlier plan to launch the rules from next year that had left global automakers worried about being able to comply. Car makers will need to amass credits for so-called new-energy vehicles (NEVs) equivalent to 10 percent of annual sales by 2019, China’s industry ministry said in a statement. That level would rise to 12 percent for 2020. A single vehicle can generate multiple credits meaning the proportion by NEVs by volume would likely be lower. The targets, announced by the Ministry of Industry and Information Technology (MIIT), closely mirror previously announced plans, but remove an explicit 8 percent quota for 2018, in effect giving carmakers an extra year grace period. The quotas are a key part of a drive by China, the world’s largest auto market, to develop its own NEV market, with a long-term aim to ban the production and sale of cars that use traditional fuels announced earlier this month. Global automotive manufacturers, however, had urged a softening of the proposals for all-electric battery vehicles and electric plug-in hybrids. Under the rules, car makers will receive credits for new-energy vehicles including plug-in hybrids and fully electric cars that can be transferred or traded. Firms with annual sales volumes above 30,000 units will need to comply with the targets. These credits (which will vary depending on the range and performance of the vehicle) will be used to calculate if firms have met their quota, a system which would likely mean the actual proportion NEVs made up of total sales was lower. “The rules could result in the production of more than one million EVs annually in China by 2020, or about 4 percent of sales”, Simon Mui, a transport and energy exert at the U.S.-based Natural Resources Defense Council wrote in note. Carmakers were in general positive about the move. “We welcome the Chinese auto industry’s shift towards greater adoption of NEVs and will comply with relevant regulations presented by authorities”, Ford said in a statement responding to the announcement. General Motors said it would “strive to comply with the NEV mandatory requirements”, though it added “continued joint efforts by the government and companies are essential to build broad-based consumer acceptance for NEVs. GM has sufficient capacity to manufacture NEVs in China”. Honda said it planned to launch an electric battery car in China next year and would “try to expand our lineup of new energy vehicles” to meet the quotas. China is keen to combat air pollution and close a competitive gap between its newer domestic automakers and global rivals. It wants to set goals for electric and plug-in hybrid cars to make up at least a fifth of Chinese auto sales by 2025. Reuters reported in August that China would delay the implementation of the NEV quotas until 2019, giving global automakers more time to prepare. +++
+++ HONDA said it has invested $267 million and will add 300 new jobs to support increased production of its revamped Accord at the automaker’s plant in Marysville, Ohio. Honda unveiled the newest-generation Accord in July, one of four reengineered midsize sedans that Asian automakers are betting on to win market share as Detroit rivals shift focus to SUVs, crossovers and pickup trucks. The new Accord, like rival Toyota’s all-new Camry, offers more horsepower, safety technology like standard collision-avoiding braking and better fuel economy, although Honda did not release figures. Honda’s investment in Ohio consists of $220 million for the Marysville plant, including a new $165 million welding department with 342 welding robots. The automaker is also investing $47 million at its Anna, Ohio, engine plant to provide turbocharged engines for the Accord. The Marysville plant also makes the Acura TLX, a luxury midsize sedan, and the Acura ILX, a luxury compact sedan. With the new investments, the plant will have a capacity of 440,000 vehicles a year and can add volume for the Accord as necessary, Steve Rodriguez, Honda’s manufacturing leader for the Accord, told reporters on a conference call. Ray Mikiciuk, Honda assistant vice president for sales, said the company is not giving a sales forecast for the Accord, but added “I don’t expect to sell fewer Accords in 2018 with this great new product”. Honda’s announcement follows Toyota’s last month that it would take a 5 percent stake in smaller rival Mazda as part of an alliance that will include a $1.6 billion U.S. assembly plant and collaboration on electric vehicles. The plant came as a surprise for investors at a time of weakening U.S. new vehicle sales. It also stands in contrast to recent moves by General Motors and Ford. Faced with declining sedan sales, GM has cut the third shift at a couple of its plants. Ford has announced it will move production of its next generation Focus sedan to China from Mexico to save $500 million in retooling costs. The U.S. automaker also announced in May it was laying off more than 1,000 salaried workers. Passenger car sales have steadily declined since 2012, when they made up 51.2 percent of the U.S. market. Sedans sagged to a 38.1 percent share in the first half of this year. +++
+++ HYUNDAI said Thursday it took the top spot in J.D. Power’s Initial Quality Study for cars sold in China for a second consecutive year, despite its sales being hit hard by diplomatic rows between the 2 countries. Hyundai was able to retain its No. 1 position this year due to improved vehicle quality and services, beating 42 competitors, such as Volkswagen, Toyota and Nissan, the company said in a statement. Hyundai hopes the achievement will help revive its lackluster sales in the world’s largest vehicle market. The maker of the Sonata and the Santa Fe topped the initial quality rankings because it was able to report the smallest number of problems, at 84 per 100 vehicles. It was followed by Hyundai’s affiliate Kia with 88 problems, Mazda with 96 and Renault with 97, it said. Three models from Hyundai and one from Kia topped rivals in their respective segments: Hyundai’s Verna subcompact, Langdong (or Elantra) compact and Tucson, and Kia’s K5 Optima midsize sedan, the statement said. Hyundai has suffered sharp sales declines this year, as China has taken steps against South Korean products since March in retaliation against the installation of the Terminal High Altitude Area Defense system in South Korea. Beijing has argued the THAAD system could spy on its military, though Seoul and Washington have said it is directed purely against missile threats from North Korea. In the January-August period, Hyundai sold a total of 2.87 million vehicles globally, down 7.2 percent from 3.09 million units a year earlier. Its sales in China plunged 40 percent to 674,810 during the same period. Kia also suffered a 53 percent on-year decline to sell 172,674 vehicles in China in the first eight months of 2017. +++
+++ INFOTAINMENT technology that automakers are cramming into the dashboard of new vehicles is making drivers take their eyes off the road and hands off the wheel for dangerously long periods of time, an AAA study says. The study is the latest by University of Utah professor David Strayer, who has been examining the impact of infotainment systems on safety for AAA’s Foundation for Traffic Safety since 2013. Past studies also identified problems, but Strayer said the “explosion of technology” has made things worse. Automakers now include more infotainment options to allow drivers to use social media, email and text. The technology is also becoming more complicated to use. Cars used to have a few buttons and knobs. Some vehicles now have as many as 50 buttons on the steering wheel and dashboard that are multi-functional. There are touch screens, voice commands, writing pads, heads-up displays on windshields and mirrors and 3-D computer-generated images. “It’s adding more and more layers of complexity and information at drivers’ fingertips without often considering whether it’s a good idea to put it at their fingertips”, Strayer said. That complexity increases the overall amount of time drivers spend trying to use the systems. The auto industry says the new systems are better alternatives for drivers than mobile phones and navigation devices that were not designed to be used while driving. The vehicle-integrated systems “are designed to be used in the driving environment and require driver attention that is comparable to tuning the radio or adjusting climate controls, which have always been considered baseline acceptable behaviors while driving”, said Wade Newton, a spokesman for the Alliance of Automobile Manufacturers. But Jake Nelson, AAA’s director for traffic safety advocacy and research, said drivers testing all 30 of the 2017 model year cars and light trucks took their eyes off the road and hands off the wheel while using infotainment systems. The test drivers used voice commands, touch screens and other interactive technologies to make calls, send texts, tune the radio or program navigation all while driving. Clearly automakers haven’t worked hard enough to make the systems quick and easy to use, Nelson said. Researchers rated 23 of the 30 vehicles “very high” or “high” in terms of the attention they demanded from drivers. 7 were rated “moderate”. None required a low amount of attention to use. Programming a destination into in-vehicle GPS navigation systems was the most distracting activity, taking drivers an average of 40 seconds to complete the task. At 40 km/h, a car can travel the length of four football fields during the time it takes to enter a destination. Previous research has shown that drivers who remove their eyes from the road for just 2 seconds double their risk for a crash. Under pressure from industry, the National Highway Traffic Safety Administration in 2012 issued voluntary safety guidelines to automakers for dashboard technology instead of enforceable safety standards. The guidelines recommend that automakers lock out the ability to program navigation systems while a car is moving. However, the ability to program navigation while driving was available in 12 vehicles in the study. The guidelines also recommend automakers prevent drivers from texting while driving, but three-quarters of the vehicles tested permit drivers to text while the car is moving. Texting was the second-most distracting task performed by test drivers. Drivers looked away from the road less when using voice commands, but that safety benefit was offset by the increased amount of time drivers spent interacting with the systems. AAA said drivers should use infotainment technologies “only for legitimate emergencies or urgent, driving-related purposes.” It also urged automakers to block the ability to program navigation systems or send texts while driving. Automakers should also design infotainment systems so that they require no more attention to use than listening to the radio or an audiobook, it said. Nearly 70 percent of U.S. adults say they want the new technologies in their vehicles, but only 24 percent feel that the technology already works perfectly, according to an opinion survey conducted for AAA. “Drivers want technology that is safe and easy to use”, said Marshall Doney, AAA’s president and CEO, “but many of the features added to infotainment systems today have resulted in overly complex and sometimes frustrating user experiences for drivers”. +++