+++ It’s the AUTONOMY , stupid. That was the message from the automotive industry at this year’s Consumer Electronics Show. Well, not just autonomy; connectivity and electrification are converging with self-driving cars to cause a profound shift in the car world. Of course, that won’t be a surprise to anyone who follows the industry; it’s been a talking point at every major motor show for the past few years. But the impact extends far beyond how cars are powered or controlled. And what a trawl around CES, the world’s leading tech show held annually in Las Vegas, highlighted is that car firms have realised that they can’t tackle this change alone. The impact of autonomous, connected and electrified cars is going to be profound. More than one person at CES claimed it would be the biggest change since Henry Ford pioneered industrial mass production with the Model T. Autonomous, connected cars require systems, software and technology that car firms have no experience in. Where there is change, there is opportunity; and companies large and small from both the technology and automotive worlds are racing to develop autonomous, connectivity and electrification systems, as well as deals to provide them to major original equipment manufacturers (OEMs). In return, car makers are racing to find the firms that can offer the technology and systems to speed up and streamline their efforts to make autonomous, connected and electrified cars. And the natural meeting ground for both parties is CES, which is why car manufacturers (out to prove to the world that they are forward-thinking) have been attending in growing numbers in recent years. Ford, Honda, Hyundai, Jeep, Kia, Mercedes-Benz and Nissan all had stands in 2018. But it’s an interesting dynamic: at a motor show, they’d be the big beasts, the headline attractions. At CES, the roles are flipped: the car firm stands were dwarfed by those of tech giants such as LG and Panasonic, whose grand constructions rivalled anything you’d see at Frankfurt or Geneva. In the auto tech section, the stands weren’t quite as big. But there were lots of them: firms showing off self-driving hardware or software, ultra-fast secure communication, HD mapping and electric charging points and systems. Many of those firms are already supplying OEMs, and such deals will only grow. Of course, car firms being car firms, they couldn’t resist wheeling out some new metal, although it all had a future-leaning twist. Hyundai used CES to launch the Nexo FCEV, a hydrogen fuel cell SUV. Sister firm Kia brought out an electric version of the Niro SUV. Perhaps believing a new powertrain variant of an existing car wasn’t enough for CES, Kia stuffed the concept with autonomous and connected devices that won’t be on the production version due later this year. Other new electric vehicles included first sight of new Chinese start-up Byton’s tech-laden Concept SUV and the Fisker Emotion, which promises a 640 kilometer range. Toyota went full concept with the e-Palette, a customisable self-driving electric machine that can be used as a mobile shop, delivery unit, office space or home. The firm is aiming to have a version running by the 2020 Tokyo Olympics. Rinspeed unveiled the Snap, its answer to how self-driving service vehicles might work in the future. Ford CEO Jim Hackett delivered one of the CES keynote speeches, largely focusing on the societal changes to cities that autonomous cars will bring. Fittingly, one of the star vehicle attractions on Ford’s stand wasn’t a new machine but a self-driving Fusion/Mondeo: used to trial driverless Domino’s pizza deliveries. The whole concept of the automobile might be changing, but we still need to eat. If all that makes this year’s CES sound a bit high-concept, there was plenty more real-world stuff on show. Mercedes-Benz showcased the latest development on its Mercedes-Benz User Experience, including the somewhat controversial inclusion of a new touchscreen that will be introduced to the new A-Class. Several firms showcased advanced driver alertness technology, while Nissan had a system that monitors a driver’s brainwaves so that the car can respond quicker. Nissan also provided an example of its vehicle-to-home charging concept, where an EV’s battery can provide power to the grid when not in use. It did so by using a new Leaf battery to power a macchiato machine. The whole concept of the automobile might be changing, but we still need coffee. There were more traditional consumer electronics, too. Samsung-owned audio firm Harman Kardon has developed a sound system that can actually alter the audio output to match the style of sister brand JBL (ask anyone who reads What Hi-Fi? and they’ll explain the difference to you). And then there were other car audio brands that just went old-school, sticking hundreds of speakers in the boot of a car and cranking the bass up. The Orion stand’s Jeep Wrangler was notably ear-splitting. But, ultimately, as loud as the speakers were, the real noise at CES was made by those involved in autonomy, connectivity and electrification technology. Years ago, the appearance of car firms at CES might have seemed a marketing stunt to try to appear in step with a ‘cool’ industry. Now it feels like a truly natural fit, in the same way that cars are becoming connected to the world around them. The future is coming – and the more the technology and automotive worlds align, the faster it will get here. +++
+++ DIESEL cars could make up just 15 percent of the UK car market by 2025, according to experts at a university in Birmingham. Although diesel power accounted for around half the new car market in 2016, last year saw a salesslump of more than 17 percent, with the Society of Motor Manufacturers and Traders (SMMT) blaming the reduction on “confusing anti-diesel messages”. Now, Professor David Bailey, from Aston University, has said diesel cars face a “perfect storm”, and the industry should be braced for another double-digit drop in diesel car sales in 2018. “Diesel cars face a raft of challenges”, he said. “Each one of could damage sales, and they are combining to kill off the domestic diesel sector, which was so rattled by the Dieselgate scandal. They face a ‘perfect storm’ of bad PR over pollution, coupled with concerns over increasingly strict regulations and sinking second-hand values. Sales of diesels are set to fall by up to 10 percent in 2018, and they could have as little as 30 percent of the market by 2020; shrinking rapidly to 15 percent by 2025”. However, Professor Bailey reckons diesel cars aren’t the only ones in for a tough time, suggesting that the new car market will cool dramatically. In 2016, the market hit a record high, but 2017 figures saw sales fall by almost 6 percent, and Bailey says 2018 could prove to be even worse. “The car market has been over-trading for some time now”, he said. “That is why 2016 remains one of the best years on record for car sales, despite the marked slowdown in overall purchases. But it’s hardly good news for the sector. None of the factors acting as a brake on car sales has gone away: wages are being squeezed, inflation is creeping up. Then factor in interest rate rises and an ongoing strengthening of European car markets, cutting the number of cheap vehicles offloaded on the UK, and we could be looking at another cut in sales of between 5 and 10 percent in 2018”. In a bid to stop the diesel market shrinking, the SMMT has said customers should be “encouraged to buy the right car for their lifestyle and driving needs irrespective of fuel type”, and claims that buying new diesels will help achieve “environmental goals”. Professor Bailey, though, says it’s time drivers were incentivised to move away from diesels and switch to electric cars. “Governments have missed several opportunities to encourage drivers to switch to electric vehicles, starting way back in 2001 when there was a misconceived drive to get people to opt for diesels. Now that it’s clear diesel is dying a slow death, the time is right for the government to take the initiative and offer up scrappage benefits to those who are prepared to ditch their diesels and switch to electric cars”, he said. +++
+++ Hyundai says it’s close co-operation with Toyota in helping advance the cause of HYDROGEN fuel cell vehicles is of more importance than any rivalry the 2 brands may have. Hyundai’s global vice chairman, Chung Eui-sun, said that while the uptake of hydrogen vehicles remains relatively small compared to pure electric vehicles, the 2 companies (as well as other manufacturers) must work closely together to build momentum. “Expanding the fuel cell market is more important than any rivalry”, Eui-sun said. “We have to solve problems together about any issues and it takes time”. Toyota continues its work on hydrogen-powered vehicles with the Mirai, while the recently unveiled Hyundai Nexo carries the banner for the South Korean brand. The Japanese and Korean companies are not historically seen as allies, but the push to further advance the cause of hydrogen-powered vehicles has seen the two team up on the global hydrogen council, with the aim of bringing many other manufacturers onboard. “I think Toyota is working really hard, and BMW and Volkswagen are also very interested in this area, so all other makers, they know how important EV and fuel cell EV is”, Eui-sun said. “At this time, we all have to work together. This is not just one company or another company, this is early stage, so we have to work together with other OEMs and suppliers; we are working together”. The main reason for the collaboration on hydrogen vehicle manufacturers is the lack of refuelling infrastructure, which hinders all manufacturers alike. However, if they lobby and speak as one voice, the chances of energy companies and governments around the world willing to listen and act, is improved. This collaboration will also apply to autonomous vehicle technology, which sees OEMs work closely with each other (going as far as buying mapping companies together) and technology companies alike. “As far as OEMs are concerned, each is concerned with integrating all the autonomous vehicle technology, but the suppliers that provide like image processing and data processing, and sensor technology and software, those are something we have to work really close with”. It appears, then, that for now at least, establishing the technology is more critical than any underlying desire to outdo one another when it comes to hydrogen vehicles. +++
+++ HYUNDAI has invested in the Singapore-based carpooling service Grab to tap into the Southeast Asian mobility market, the company said. Established in 2012, Grab is also known as the Uber of Southeast Asia, boasting a market share of some 75 percent in the region. It currently operates in 8 Southeast Asian countries across 168 cities with 2.3 million users and 3.5 million rides made daily. “The convergence of Grab’s competitiveness in Southeast Asia and Hyundai’s green car technology will innovate the mobility service industry”, said Chi Young-cho, executive vice president and chief innovation officer of Hyundai’s strategy and technology division. “Hyundai will continually search for cooperation with car-sharing service providers armed with world-class technology to lead the global sharing economy markets”. The company did not share details of the amount of investment. Revenue from car-sharing services worldwide is expected to reach $6.5 billion in 2024 from $1.1 billion in 2015, according to market research firm Navigant Research. Hyundai and Grab will look into developing a new carpooling service platform using Hyundai’s eco-friendly vehicles such as the Ioniq Electric, the company said. Hyundai added it has high expectations for the service to restore brand image in Southeast Asia, where governments are pushing eco-friendly policies. The latest investment in Grab was led by Hyundai’s strategy and technology division, which was set up in 2017 to better manage the rapidly changing automotive industry. Amid a global carpooling service boom, Hyundai has signed partnerships with a slew of car-sharing providers in and outside of Korea. In October last year, Hyundai launched a ride-sharing service with 100 units of the Ioniq Electric cars in Amsterdam, Netherland, the company said. For the first time in the auto industry, Hyundai had also supplied fuel cell electric vehicles for car-sharing. A total of 50 ix35 FCEV fuel cell electric vehicles were delivered to Linde, a leading German-based gas company in Munich, in June 2016, the company said. +++
+++ The electric version of the KIA Soul has entered its fourth year in the market, and changes made to it are quite considerable. The 2018 version of the Korean car has a new 30 kWh battery that replaces the old 27 kWh version. The extra 3 kWh allow it to travel up to 179 km on a single charge, or 29 km longer than before. Its range may not be as impressive as the Chevrolet Bolt’s (Opel Ampera-e) 383 km, but is believed to help Kia sell more examples of the zero-emission Soul. The Kia Soul EV has become a tad more expensive for the 2018 Model Year. +++
+++ TOYOTA ’s choice of Alabama as the new home for a shared factory with Mazda marks a major shift in U.S. vehicle manufacturing, with foreign auto makers soon set to build more cars and trucks in America than the Detroit giants. American car makers already have given up the crown in the overall U.S. car business, with market share of the so-called Big 3 dwindling to 44% in 2017. More cars were sold last year with Asian nameplates than domestic ones. In coming years, however, General Motors, Ford and Fiat Chrysler are likely see their dominance in vehicle production entirely evaporate as rivals from Toyota to Mercedes increase their American workforces and add new factories. In the first quarter of 2018, analysts project foreign auto makers will produce 1.4 million cars and trucks, roughly equal to domestic output. In the first 3 months of 2017, Detroit auto makers outbuilt non-U.S. rivals by more than 100,000 cars and trucks, or roughly 10%. A series of factors have fueled the shift. Japanese and other foreign companies (unencumbered by unions and decades of financial obligations and lured by U.S. states offering incentives) see an opportunity to bulk up their market share and localize production to mitigate risk. Meanwhile, executives at Ford, General Motors and Chrysler are prioritizing profits over revenue, scaling back production of low-margin compact cars and sedans and focusing more on pricier trucks and SUVs. Detroit, which once had considerable political sway because the city employed the bulk of the nation’s auto workers, is losing its influence at a time when state and national lawmakers mull legislation that will affect fuel economy, autonomous vehicles and the way cars have been bought and sold for a century. President Donald Trump has intensified the spotlight on American manufacturing. During the 2016 campaign and the early days of his administration, auto makers were routinely challenged by Mr. Trump to boost output in the U.S., and back away from shipping so many cars from Mexico. Toyota’s and Mazda’s $1.6 billion investment is the latest in a series of big-dollar expansions by Asian and European car companies in Southern states. The investment also is the first all-new automotive factory announced since Mr. Trump took office. Volvo is set to open a $1.1 billion factory in South Carolina this year, for instance, while BMW and Mercedes are expanding existing plants in the region. States from Tennessee to Georgia to Texas have lured auto makers from Japan, Germany and South Korea in recent decades with their willingness to offer attractive tax-incentive packages, cheaper labor and a lack of threats by labor unions such as the United Auto Workers. Toyota President Akio Toyoda said Alabama laid the groundwork to create “another made in America success story”, although specific financial incentives were not disclosed. 4 of the most-recent foreign commitments alone are expected to add 10,000 jobs and hundreds of thousands of units of U.S. production by 2021. Nissan and other foreign auto makers have said they are considering expanding their U.S. footprint. Several companies, including big players in China and India, have said they could start building cars on American soil within a half decade. “Any resurgence in the automotive space, or in any other space, is driven by the ability to attract” foreign companies to the U.S., Nancy McLernon, president of the trade association the Organization for International Investment, said. Since the financial crisis, hundreds of thousands of automotive manufacturing jobs have opened, many of which were provided by foreign car makers or parts suppliers. Meanwhile, Detroit’s auto makers (long stung by costly overhead and a capacity glut) will become more reliant on lower-cost countries in coming years as executives seek to avoid being overly exposed to their American workforce. Once nearly entirely dependent on Midwestern plants, General Motors and Ford are increasing the share of vehicles imported from China, Mexico or even India. While General Motors, Ford and Chrysler have made commitments to update certain U.S. factories to accommodate product redesigns or segmentation changes, executives say the days of domestic car companies building new plants in the Rust Belt or elsewhere are over. General Motors, Ford and Chrysler are retooling certain factories to replace slow-selling sedans or compact cars with trucks and SUVs that are expected to help shore up market share. But it will be hard to offset the hundreds of thousands of additional units planned by Toyota, the German auto makers and others. Even though factory downtime burns cash, executives at domestic car companies have been pulling back on production to boost near-term profits and keep inventories in check. Many of the investments by foreign players are long in the making, and a confirmation that auto executives see the U.S. market remaining a profitable place to build and sell cars. “We have been in the U.S. for 60 years and we need to make a very clear signal towards our retailers and towards our customers that the U.S. is our market”, said Lex Kerssemakers, former head of Volvo’s U.S. operations, in an interview in 2017 at the location where the company will soon build cars. “You can’t make a stronger statement towards our retailers: we’re not going to disappear”. In June, BMW said it would create 1,000 jobs at its plant in South Carolina by 2021, part of a $600 million investment to produce more SUVs at the plant. The plant produces cars that are shipped globally. “The U.S. is our second home and we look at what portion we can sell in the market locally, not just by export, but what is the biggest market in terms of local market”, said Harald Krüger, chairman of the board of management of BMW. “The U.S. is still the second biggest market for us in the world. It will only grow in the future so that’s why having a plant in the U.S. is strategic for us”. +++
+++ UK’s Business Minister Greg Clark is meeting with PSA boss Carlos Tavares in Paris to discuss the recently announced job cuts at VAUXHALL ’s Ellesmere Port factory. PSA said that around 250 more jobs will be cut from Vauxhall’s factory in northwest England, on top of the 400 cuts announced last year, reducing the plant’s output to a single shift. “The company explained that although the initial voluntary separation program at its Ellesmere Port plant announced in October has been successful, it needs to initiate a further voluntary program for eligible employees of a further 250”, PSA said in a statement. So far PSA hasn’t clarified if it considers closing down Vauxhall’s factory which currently produces the Astra model for both Opel and Vauxhall. Clark and Tavares will discuss a number of issues and that their meeting has been planned for some time. PSA is expected to decide this year whether to build new models at Vauxhall’s factory, with the final decision to showcase UK’s ability to attract new investments as the country leaves the EU. The future of Vauxhall’s plant in Ellesmere Port is “inextricably linked” to the recovery of the carmaker’s sales in the UK, the new boss of the brand has said. Stephen Norman said the brand must arrest falling sales to safeguard its UK production facilities. “If we can make Vauxhall into a profitable and growing brand on the demand side, the supply side will follow”, he said. Consumer demand for Vauxhall cars has declined considerably in recent years, as competition among mass-market brands has intensified and premium vehicles have become more affordable through monthly payment deals. Sales of Vauxhall cars fell 22 percent last year, to 195.137 vehicles. The decline in sales took the brand’s market share from 9.3 percent to 7.7 percent; the biggest market share loss suffered by any marque. Norman said it is his job is to “stop erosion” of Vauxhall sales. He said the Vauxhall brand is iconic and that being a British marque is part of its appeal. When asked if it is important for a British brand to produce cars in the UK, he said: I do think it’s important, but there are many exceptions, like Ford. Ellesmere Port, Vauxhall’s largest UK plant, makes the Astra. Around 80 percent of cars produced at the plant are exported to Europe. Maintaining the plant’s contract for producing the Astra when it comes up for renewal before the end of the decade is seen as crucial to the survival of the site. The car is also made in Poland at an Opel plant. But it could be produced at 2 PSA sites in France that currently make similar-sized Peugeot and Citroën cars. The opportunity to manufacture Opel and Vauxhall cars in the same factories as PSA vehicles was seen as key to PSA’s purchase of the brands last year. Michael Lohscheller, chief executive of Opel, has said he wants to achieve 1.1 billion euro of savings by 2020 across Opel and Vauxhall without closing any production sites. But he has also promised significant reduction in labour costs by cutting working hours and trimming staff levels. +++
+++ VOLVO could introduce hydrogen fuel cell technology in 10 years. The Swedish company says that despite electrifying at least one variant in every model by 2019 and introducing 5 fully-electric models in the next 3 years, its efforts are not solely concentrated on battery technology. Volvo vice-president of sales and marketing Bjorn Annwall said that the company was still developing both energy systems and fuel cell technology may make an appearance in its cars by 2027, or even earlier. “You should never say never when it comes to technologies”, Annwall said. “I think fuel cell is interesting but for the next 10 years it’s batteries. But a fuel cell is essentially a liquid battery, so at some point maybe. What’s the right way of packing fuel cells into a package, what’s the right battery management system. There’s still a lot of potential. It’s not very different, you can just replace the batteries with a fuel cells. It’s not like its 2 different lanes, right? They are similar drive systems”, he said. Annwall’s comments came when asked about developing solid-state batteries, which appear to be off the cards in favour of fuel cell technology. Volvo’s implementation of the technology may differ to brands such as Hyundai, which is introducing its Nexo FCEV later in 2018, and Toyota, which is testing its Mirai FCEV vehicle on our roads. But the concept is similar. Volvo Group’s research and development company, Powercell, has confirmed it has completed a pre-study with its parent company and is planning a 20 Kw hydrogen fuel cell range extender that will be fitted to the brand’s XC90 T8 and will maintain the battery at its optimum capacity to provide full power at all times. The car company previously moved away from the idea of using petrol-powered range extenders because of concerns over emissions and fuel use but the use of a hydrogen fuelled unit keeps emissions to zero. However, with very few hydrogen fuelling station, the infrastructure isn’t there to support it, and according to Annwall, such as network is at least 5 years off. “So maybe if we get some breakthrough in fuel cells, maybe it won’t be that hard to incorporate that into the path we are on right now, but I don’t see that happening in the next 5 years. But you should never say never”, he said. +++