Electric cars - A few concerns

Seeing some recent announcements of North American car manufactures, new electric cars triggered a few concerns. Coming from a country that sells electricity to the USA, I can see that there may be a handful of countries that could handle the new rush to electric/hydrogen powered cars. But what about the other 95 per cent of the automobile consumer world. The electricity available for a direct turn around in types of cars we drive would put electricity amperage at the price of gold and the pollution created through adapting old generating technology would make the whole world look like Beijing before and after the Olympics this year.

Do not get me wrong because I too do not like paying for expensive gasoline; also I am a true believer in developing technology that improves our earth’s environment.

The auto industry is only trying to protect its investors by making a quick swing to alternative solutions and prop up sales to get back to generating a profit. The producing of the energy supply is a government issue, but hydrogen and electricity cannot be produced  in quantities predicted without creating more pollution than the current automobiles worldwide. The world is now reeling under the economic turmoil in the financial markets, yet every week we observe that big auto manufactures have a new electric/fuel-cell car to announce. Like the CAFÉ fleet regulations in the USA, a world organization needs to track the amount of available energy to the amount of the new technology cars produced.

A worldwide monitoring group that will overlooking a sector-by-sector energy produced and amount of new technology cars that can be sold. If the auto industry just keeps selling the new electric/hydrogen car without giving governments enough time to react then coal/atomic-generating systems will be the only quick fix. Although it is nice to see the consumer market warming up to these new thoughts, I believe it’s going to be a polluting nightmare and the blame will be on government not on the manufactures.

A mechanism to control the speed to new technology development has to be put in place or we will witness another debacle just like what happened to the non-regulated mortgage business. In ten years, we will have Auto manufactures sitting with millions of new cars and no means to power them or we will have a layer above the earth blocking most of the precious sunlight.

Paul Banning

pbanning@shaw.ca

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It’s different!

Yes, the forthcoming issue of Auto Focus Asia, scheduled for September 2008 release, is going to be different from its predecessors. Unlike, the previous editions, which gave maximum footage to engineering and technology aspects in the automobile industry, the forthcoming issue has allocated some space for writeups and interviews from OEMs.

The change can be spotted right away as the cover story this time deals with car makers’ tryst with Hollywood. “In-film placements, The Hollywood Connection,” the cover story, comes as a surprise to all our regular readers. Apart from the cover story, there are a few other articles that are OEM-centric and talk about latest cars. This change is being brought mainly to attract a wider range of audience. The publishing house is also contemplating to put the magazine on stands and a few select outlets across India. However, the inclusion of OEM-centric articles doesn’t dilute the technology quotient of the magazine and the technical content will still be cut above the competitors.

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US$ 8.7 billion – Ford’s highest ever quarterly loss

Ford Motor Company posted US$ 8.67 billion loss in the second quarter of 2008 as against US$ 750 million profit in the same quarter in 2007. Ford blames the loss on reduction in the value of assets in North America and Ford Motor Credit Company’s lease portfolio.

Ford is quick to announce that it will introduce six European small car models in North America by 2012 to cope with the market shift from trucks and SUVs to cars. It will also retool a couple of its truck and SUV manufacturing plants to build small, fuel-efficient cars. Simply put, Ford is trying to reinventing itself in North America. Alan Mulally, Ford’s CEO, as always, has been positive and said the company’s European and South American operations are robust and profitable, while the Asian operations have the momentum.

But can the investors be as bold as the CEO? On the surface, considering the company’s performance over the last few years and the factors affecting the global automotive industry, there seems to be no respite for Ford and its US counterparts in the near future. In fact, the situation might get worse.

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Renaults NOx Capturing Technology

Renault has introduced a new NOx trapping technology to reduce emissions at source by burning the exhaust gasses. The technology will be introduced in the 2.0 dCi engine of Renault Espaces that will be available in France and Germany from September 2008.

The NOx trap, through a chemical process, converts nitrogen oxide into a neutral gas. It also oxidizes hydrocarbons and carbon monoxide. NOx in the exhaust gas reacts with platinum, barium and rhodium impregnated in the catalytic converter. Platinum converts NOx into NO2 which is trapped as aqueous barium nitrate solution by barium oxide resulting from oxidation of barium. Then the nitrogen oxide is converted into a neutral gas mainly nitrogen and released as car emission. The technology shall help Renault meet European regulations such as Euro5 standard that is due to come in September 2009.

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GM is 100 years old

“I hope GM really celebrates it. They’ve had an enormous impact on the industry and they’ve had some amazing talents there … who did some groundbreaking work,” said Bill Ford, Chairman of Ford, on the occasion of 100 years of GM.

Congratulations to one of the most revered car manufacturers! Started exactly a hundred years ago by William (Billy) Durant, GM was the top car manufacturer in the world, before being challenged by Toyota during the early 2000s. In fact, during 1950s, GM accounted for more than half of the vehicles sold in the US with Chevrolet being the top selling brand supported by Oldsmobile, Pontiac and Buick.

The entry of Japanese car makers in the US marked trouble for all the US car makers and GM was no exception. Though GM endured the oil crisis in 1973, the shift in consumers preference toward small cars (manufactured largely by the Japanese companies), dented its sales. 1980s saw GM bounce back as people began preferring SUVs as the oil prices stabilized, but by the beginning of 1990s GM’s market share slipped to 35% in the US.

Since the late 1990s, GM has been crippled by huge pension fund problems, lack of innovation and tough competition from foreign car makers. Of late, the situation has got worse and a number of analysts predict that bankruptcy filing is in the offing. Further, there seems to be no respite in the near future due to slowdown in the US economy, rising gasoline prices and increasing raw material costs. Though these factors hold good for all auto manufacturers, GM, along with Ford and Chrysler, are victims of the huge pension and healthcare contracts they have with their workers.

Hope the centenary celebrations bring in new spirits and change fortunes of the sagging car maker, which has delivered some world class cars.

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Lighter Vehicles for Fuel Efficiency and Emission Reduction

Car manufacturers are embarking on lightweight materials for producing lightweight and ecofriendly cars to meet the emission norms resulting from global environmental concerns. For instance, European Commissions emission reduction norms require automotive manufacturers to cut car emissions from the current level of 160 g/km of CO2 to 130 g/km by 2012. The new regulation, which is awaiting approval by member states of the European Union, requires CO2 emissions to be in proportion to the car weight. Violation of the regulation will attract a penalty of up to €95 per excess gram of CO2 emitted by the automobile.

This has sparked the demand for lightweight materials such as polypropylene that can be used for producing cars without compromising on cost, performance, safety and recyclability. A number of lightweight high strength materials including aluminum, magnesium, titanium, advanced high-strength steels, fiber-reinforced composites and metal matrix composites can be used for producing lightweight cars, but high production cost of these materials makes them unviable. According to the US Department of Energy mild steel can form a suitable substitute for these materials.

The US Department of Energy is conducting research on developing novel technologies that can reduce material cost and enhance their manufacturability. For every 10% of weight reduced in a car, the fuel economy increases by 7%. Researchers in the automotive industry are striving to develop materials that meet the emission norms. Research efforts are being focused on:
• Cost reduction
• Developing enhanced manufacturing, processing, and forming technologies
• Design data, predictive modeling, and test methodologies
• Joining, recycling, repair, and non-destructive evaluation

Worldwide auto manufacturers are also implementing efforts to make their vehicles fuel efficient, lightweight and ecofriendly. Mazda Motor Corporation has expressed plans to enhance the fuel efficiency of its vehicles by 30% through 2015. The process also includes weight reduction of new vehicles produced by 100 kilograms. Mazda has been implementing efforts to produce ecofriendly vehicles for quiet some time. From 2001 to 2008, Mazda has increased the average fuel economy of its vehicles sold in the Japanese market by 30%. Volkswagen has taken up the mission of reducing the weight of all its models ranging from Bentley to Skoda.

Engineers in General Motors and Ford are using new adhesive technologies and thin steel to reduce automotive weight and they have gained significant success by doing so. Shawn Morgans, Ford’s body structure technical leader notes that the company has reduced the weight of the 2008 Ford Focus by 3.7 pounds through increased use of crash-durable structural adhesives in the upper body. He further commented that “We have reduced spot welds; the focus from here on will be to reduce the gauge of the steel.” (Source: www.designnews.com)

In view of the rising fuel prices and environmental concerns, consumers are showing preference towards fuel-efficient and lightweight vehicles. People worldwide are replacing SUVs and pickups with smaller crossovers and fuel-efficient cars. In the US, used car dealers are refusing to buy SUVs as they are unable to find any takers. As reported in April 2008, small cars are emerging as the largest segment in the US auto market and accounted for 18% of the new car sales.

Responding to the changing market demands and rising cost of raw material, automobile manufacturers are concentrating more on producing lighter vehicles. Thus, in the future lightweight, fuel efficient and environmentally friendly vehicles are expected to rule the market.

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GM: Where is the light?

Seems like there is no respite in the offing for GM as its shares, on Wednesday, sank to their lowest level in more than 50 years. This followed Merrill Lynch’s speculation of near term bankruptcy for the car maker and the rating cut for GM from “buy” to “underperform”. Predictions of short cash reserves and a nearterm bankruptcy filing, along with the declining US auto market influenced GM shares, which plunged down to less than US$ 10 and are expected to go down below US$ 7.

GM’s over dependence on the truck and SUV market, which has seen sales falling to the lowest level in the last one decade, rise in oil prices, weak US dollar, and shift in consumer demand from SUVs and trucks towards small and fuel-efficient cars and crossovers are playing havoc on its performance. It is believed that the company requires to raise nearly US$ 15 billion to keep its business afloat.

GM is not sitting quiet and has been trying its best to come out of red. It has restructured its North American operations and begun producing more cars and attractive models. However, the initiatives couldn’t stop the company from bleeding. GM could have shown poorer results but for the sudden demand for certain small and midsize cars. One positive for GM is that it has performed better that its US-based rivals.

Finally, Citi Investment Research analyst, Itay Michaeli sums up the situation brilliantly saying, “While we do not believe GM is facing an immediate cash crunch, the urgency to shore up liquidity to navigate through a difficult 2008-09 has risen significantly in recent months.” (Quote from MSNBC)

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New Auto Focus Asia Website

The wait is finally over. Auto Focus Asia website (www.autofocusasia.com) now sports a trendy and colorful look.The revamped version of Auto Focus Asia was launched successfully this Monday. The revamp was based on lot of research by the editorial department and the IT team at Ochre Media Pvt. Ltd. It all started with the revamp of Pharma Focus Asia (www.pharmafocusasia.com), another vertical from Ochre Media. The research that went into designing and developing that website was used in manufacturing Auto Focus Asia. Further customization to suit the needs and tastes of readers from the automotive industry was done to make the website look more attractive and contemporary.

The new website gives ample scope to display magazine contents on the home page and an easy navigation structure makes readers’ stay with the website a comfortable one. The website also provides more space for advertisers, which are eager to reach their target audience quickly across the globe.

For more details visit www.autofocusasia.com or

write to editorial@autofocusasia.com

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Auto Focus Asia Issue 3 launched

The third issue of Auto Focus Asia was launched last week. The first impression or the general opinion among our colleagues was that the magazine looked better than the previous issue, in terms of cover design, content mix and lay out of the articles.

The following articles received more accolades:

1. Car Key
2. Improving Automotive Design Process
3. Design for Recycling

and of course, the cover page.

The work for the next issue of Auto Focus Asia (Issue 4, to be released in August-September 2008) has already begun. Based on the feedback from a number of readers and our esteemed authors, the editorial team is trying to add a few topics that are aimed at gaining the attention of a variety of audience, without tampering the B2B focus of the magazine.

For more information about the magazine and its contents, visit www.autofocusasia.com.

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Tata Motors - Welcoming wonders or troubles?

“The Empire drives back… It took a company from a former colony to come to the rescue of a beleaguered British brand”

Thus reads an article in yesterday’s newspaper. And there are two ways of looking at it. You could say Ratan Tata has got hold of two of the most admired brands or that he is welcoming an ocean of troubles. This is because the element of pride that comes with Tata acquiring the two marques (Jaguar and Land Rover) cannot just overshadow the skepticism about the company’s future plans and strategies to manage those brands.

It is really great to know that Tata Motors, India’s largest vehicle manufacturer, is now the proud owner of the iconic British brands - Jaguar and Land Rover (JLR). Tata Motors has bagged this US$ 2.3 billion deal from Ford Motors, on whose bottom-line were weighing these marques. What Tata Motors gets with this deal—manufacturing and assembly plants, R&D centre, hitech design centres and engineering facility all with an employee base of almost 16,000. The reason why Ford had to sell these brands is it wants focus on core brands and the domestic market where it has not been doing well.

Though owning two of the world’s most popular brands is a great achievement, the Indian auto major has several challenges ahead. Many wonder if the timing of this acquisition was right considering that Tata Motors has been working on two important projects, at home—Tata Nano, the people’s car and Tata’s joint venture with Fiat to manufacture vehicles in India and Thailand. The point here though may be that managing JLR business will have no direct impact on Tata Motors’ domestic business. Jaguar has been a loss making brand while Rover’s profits in the last 2-3 years have been making up for those losses, for Ford. Will these brands remain British? Will an Indian company which has never manufactured/marketed a luxury car be able to manage the challenges of high-end car business? It’ll be quite difficult for even Mr. Ratan Tata to answer these questions but this is what he had to say about his dream-come-true acquisition. “Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover. We will not tinker with the brands in any way… they are special global brands and whoever acquires them has a responsibility to nurture them and enable them to prosper.”

Tata had earlier failed to sell its Indica in the UK where it was rebranded as City Rover. How well Tata can manage the business of Jaguar and Land Rover depends on how it takes up the marketing activities. Tata could focus more on the Jaguar brand as Land Rover is already hot. The attention can be more on Jaguar’s current and upcoming models XF and XF while steering clear of its bereft X-type. Tata’s deep pockets can help the company look at expanding the distribution of these products to developing markets in the Eastern Europe, Southeast Asia, China and the Middle East – an investment strategy unviable for Ford as it already had major issues which needed strict attention.

For all the drama that has been happening and more to be unfolded in the future, one can predict that Tata Motors definitely stages a chance of transforming the Jaguar brand, considering the group’s successful acquisition record in the recent past.

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