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Magazine | Q3 2015

The Safety Issue

#ConnectedCar #eMobility #FreightEfficiency

#Manufacturing&Materials #PowertrainInnovation #Retail(R)evolution

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Welcome to Megatrends Q3 2015

Welcome to Automotive Megatrends Magazine - the only global publication dedicated to the business
models, technologies and trends which are shaping the automotive industry of tomorrow.

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Michael Nash

Business Editor:
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Production & Design:

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Manufacturing & Materials

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Chief Executive:
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Suppliers & Safety

Freddie Holmes

Cover image courtesy of: Honda R&D

Americas Inc. / 3DEXCITE

Automotive Megatrends Ltd

Automotive Megatrends Magazine

ISSN: 2053 776X

Megatrends | 3



> Safety

> About this issue

AUTOMOTIVE Magazine | Q3 2015

8 - The car crash of the future

Andrew Miller, Chief Technical Officer at Thatcham Research in the UK, looks
from an insurance industry perspective at the inuencing factors and implications
in a future where increasing numbers of autonomous and assisted vehicles will be
interacting with driven carst

y of: Honda R&D

Image courtes

Americas Inc.

The Safety Is

#eMobility #Fre on #Retail(R)evolution
Materials #Po

Some of the greatest advances in

automotive technology have been in
the area of safety. The goal now is to
not only prevent deaths or even
injury to vehicle occupants and road
users, but to prevent any collision at
Sadly, safety technology tment
varies by region, and the calls are
growing louder for global OEMs to
deliver vehicles in emerging markets
that are as safe as those they sell in
North America, Europe and Japan.
This issue of Megatrends magazine
the Safety Issue focuses on the
shift from human-driven cars to
technologically-assisted driving, with
semi and fully autonomous cars
using the same technology that was
developed to mitigate collisions in
the rst place.


From physical to virtual: will

technology see the end of the
traditional crash test?


Safety in emerging markets a long

way to go

20 - Emerging markets are taking vehicle

safety seriously (at least on paper!)
China has shown immense progress in adopting car safety standards, but other
developing countries, such as Mexico, India, and Brazil, lie far behind. Indraneel
Bardhan of EOS Intelligence, takes a closer look

Enjoy the magazine and join the


Martin Kahl, Editor

4 | Megatrends


The future of truck safety lies in



CV safety focus shifts to collision



> Connected Vehicles


Watch out, remote-controlled cars



Level up: gamers shaping the

automotive landscape

30 - Is the auto industry sleeping through the

cyber security nightmare?
As cyber attacks move from potential threat to reality, Rachel Boagey asks
whether the automotive industry has done enough to secure the connected car
against future cyber crime

> eMobility

40 - In the auto industry of the future, is there space for new EV

Megatrends looks at some of the start-up companies seeking to change the face of the EV segment


E-mobility and the untapped potential of emerging markets


The battery-powered home: Charging where it matters

Megatrends | 5


> Powertrain Innovation

50 - What future for CNG passenger vehicles?

Following Hondas plan to phase out its CNG programme in the US market, Megatrends spoke to CNG experts to ask if the
fuel has a future in passenger vehicles


Complexity and the IC powertrain - is there a solution?


Interview: Gian Maria Olivetti, Chief Technology Officer,

Federal-Mogul Powertrain

> Manufacturing & Materials


Could the auto industry warm to the

open source car?


Ford focuses on increasing

manufacturing safety through

58 - Contract manufacturing: quick x, or

growth opportunity?
Freddie Holmes investigates the prospects for contract manufacturing in
emerging markets
6 | Megatrends


> Retail (R)evolution

64 - 4S and beyond: reshaping Chinas retail landscape

Megan Lampinen looks at the development of the 4S dealership model in China


Embrace digitisation to rediscover

the art of customer service


Going omni-channel: An automotive



Tech heavy, asset light - the future

of automotive retail?

> Freight Efficiency

75 - Volvo Trucks underlines its commitment to HVO

Volvo Trucks is gearing up to ensure its Euro VI engines support hydrotreated vegetable oils (HVO)


No quantum leap in the move toward driverless trucks


GHG Phase II paves the way for HD WHR

Megatrends | 7


The car crash of the future

Andrew Miller, Chief Technical Officer at Thatcham Research in the UK, looks
from an insurance industry perspective at the influencing factors and implications
in a future where increasing numbers of autonomous and assisted vehicles will
be interacting with driven cars

he increasing level of autonomy of

vehicle systems such as steering
and speed control and greater
connectivity between vehicles is
already bringing signicant new
challenges across many areas of the
automotive industry.

The accurate assessment of likely risks

in a populated road environment is not
only essential to keep insurance
premiums competitive for the consumer,
but to ensure that appropriate long term
planning decisions are taken by
legislators, vehicle manufacturers and
repairers. So its no surprise that the
insurance industry is at the forefront of
actions to better understand future traffic
The rate at which autonomous
technology arrives on the highway will
be inuenced by the legislative

environment in each individual market.

For example, the legal framework in the
UK is quite favourable because it is
based upon the precept - common law
- that something is legal unless
specically prohibited. Many other
markets are governed by the opposite
argument and require specic
legislation in order to enable the
application and use of the new
technology. By producing reliable
simulation data to demonstrate the
likely impact of introducing greater
levels of autonomous functionality, we
can help policy makers to prioritise
appropriate legislation that will support,
rather than obstruct, the efforts of the
automotive industry.
It has been suggested that the
technical challenges of autonomous
communicating with each other, are

easier to address when the entire

vehicle population is autonomous, than
during the transition when they must
co-exist with manual vehicles. This may
be so but, from a risk perspective, we
already share the highway with drivers
of mixed abilities who often behave
unpredictably. Every autonomous
vehicle that enters service displaces a
manually driven one, replacing a
human driver who may be distracted,
tired or in a hurry with a machine that
will always prioritise safety when
making decisions. This means that
even during the transition phase when
the vehicle population is mixed,
autonomous vehicles are likely to
contribute to improved road safety by
incrementally reducing risk. There are
also as yet unknown risks which may
become apparent when the driven eet
interacts with the driverless. It is
impossible to predict or model these,
the best we can do is to reduce the
estimate of the potential road safety
benets to factor for these. However,
given the relatively poor competence of
human drivers, we should not be
surprised if these do not materialise!
At Thatcham Research the motor
insurers vehicle research centre in the
UK, usually referred to simply as
Thatcham we have begun a longterm modelling project to examine how
the imminent arrival of digital
technologies will affect the types of
accidents that occur, their frequency
and severity. The initial indications from
this Claim of the Future study are
highly encouraging, suggesting a
positive effect on safety, increased
personal mobility and even a potential
increase in national GDP by reducing

8 | Megatrends


the direct and indirect costs associated

with vehicle collisions. Interestingly, this
is supported by a recent report from
KPMG which identied that the overall
economic and social benet of
connected and autonomous vehicles in
the UK alone could be in the region of
51bn (US$80bn) per year by 2030.
Thats only 15 years hence, and reects
autonomous control is no longer a
distant prospect. Lane keeping and
intelligent speed control are already
with us on the highway, while in the city
assisted braking and guided parking
are becoming common options: BMW
recently demonstrated its Remote Valet
Parking Assistant that enables parking
while the driver is outside the vehicle,
using a smart phone app; other vehicle
manufacturers are championing similar

from inappropriate use of excessive

speed in high performance vehicles.

promised by the autonomous vehicle


The effect on the repair industry is likely

to reect fewer collisions, thanks to
better collision avoidance, but an
increase in the complexity of the repair
process. On a highly digitised vehicle,
this will entail management of a
number of interacting electronic
systems and thorough re-validation
before returning a repaired vehicle to
the customer. While the physical
volume of repair work is likely to be
much reduced, the level of skill and
facilities required to ensure a
satisfactory repair will be much wider,
and the total value in the repair chain
may not reduce proportionately with the
reduction in crash frequency which is

Another issue that is frequently

discussed concerns legal liability
following a collision involving an
autonomous vehicle. We already have
situations where the manufacturer of a
vehicle or a system which malfunctions
can be held legally responsible, so
whats the difference? The high levels
of connectivity associated with
autonomous operation mean we will
have unprecedented amounts of data
available, making it easier than ever
before to analyse events leading up to
a collision and apportion appropriate
liability and some of the current road
testing strategies include making
provision of telematics data a

The next steps are to begin linking

these relatively safe and easily
managed functions into a wider selfdriving capability. Insurers, who charge
the individual consumer a few hundred
dollars to cover a risk that could run
into millions, traditionally manage their
nancial exposure by consideration of
the vehicle type and driver prole when
calculating premiums. The new
technologies are many generations on
from simple warning alerts and have
the clear potential to reduce the threat
posed by inattentive, incompetent or
aggressive drivers. Unsurprisingly, they
could also help neutralise the dangers

Megatrends | 9



in their future considerations of the rollout of these technologies.

Of course, the unprecedented quantity

unprecedented system capacity to
communicate it all, and this could
certainly limit the rate at which
introduced. At present, 3G network
coverage is variable; in the future we
are going to need 4G or 5G to provide
the necessary level of connectivity. The
telecoms providers need reliable
forecasts of likely future demand in
order to support timely investment
decisions; otherwise, the mobility of an
entire region could be affected.
Governments must urgently review this

In predicting demand, the information

generated by organisations like
Thatcham helps provide useful
supporting data, but ultimately the
reaction of the consumer will always be
tough to predict; as the saying often
attributed to Henry Ford goes, If Id
asked what my customers wanted,
theyd have told me a faster horse. We
in the automotive industry may well be
surprised at the rate of growth,
because this new dimension in
personal mobility has appeal for all age
groups. Older
rediscover the freedom of independent

requirement for highly

autonomous vehicles.

10 | Megatrends


travel without the stress; younger

people who may opt to forgo driving if
it curtails their connectivity with others
will no longer have to make the choice
between one or the other.
On the other hand, consumer
condence in new technology can be
fragile. A recent poll found that many
adults who expressed a willingness to
travel in an autonomous vehicle were
less enthusiastic when asked if they
would let their children travel in one.
Faced with such conicting indicators,
the greater the amount of reliable
information we can share, the better
will be the quality of our long- term
planning. The revolution is here lets
be ready for it.

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From physical to virtual: will

technology see the end of the
traditional crash test?
Physical crash tests historically separate the safe cars from the unsafe, but all
aspects of crash testing including the dummies themselves are now migrating
from physical to virtual reality
By Rachel Boagey
tructural design and safety systems
protect vehicle occupants in the
event of a crash. But only independent
crash tests under controlled conditions
can differentiate one car from another
and determine just how well a car
performs under crash conditions.

As part of its New Car Assessment

Programme (NCAP) in the US, the
National Highway Traffic Safety
Administration (NHTSA) scores cars
using a scale of one to ve stars; the
higher the number of stars, the lesser
the likelihood of injury or death. The
Insurance Institute for Highway Safety
(IIHS) uses a four-level scale: Poor,
12 | Megatrends

Preparation for a crash test


In May 2015, Daimler announced a triple-digit million euro
investment in the worlds most advanced crash test
facility at Sindelngen in Germany. Despite using
simulation for much of its safety development including
around 15,000 realistic crash test simulations for a new
model the OEM continues to place signicant value on
real life crash tests. The new 270m x 170m facility is
scheduled to begin crash testing in autumn 2016. Even
in the age of computer simulation, crash tests remain
indispensable, guaranteeing the high standards of
passive safety in our vehicles - Thomas Merker, Director
for Body and Safety, Mercedes-Benz Cars Development
Marginal, Acceptable, and Good. In
Europe, China and Latin America,
NCAP also scores cars on a scale of
one to ve stars. But in the face of
virtual simulation, these traditional
crash testing methods may be under
threat of going the way of so many
other traditions.
IIHS tests evaluate two aspects of
safety: crashworthiness - that is, how
well a vehicle protects its occupants in
a crash; and crash avoidance and
mitigation namely the technology that
can prevent a crash or lessen its
severity. Asked about virtual crash
testing, Russ Rader, Senior Vice
President, Communications at the IIHS,
told Megatrends he believes that the
tests conducted by the organisation will
remain in the physical realm.
We dont see virtual crash tests
changing or replacing the laboratory
crash tests we conduct at IIHS, he
observed. Computer simulations help
automotive engineers design new
vehicles without having to crash real
cars over and over. They wont change
the crash tests conducted by IIHS,
which are designed to explicitly
demonstrate for consumers the
differences in how vehicles would
protect them and their families in the
real world. We need to conduct tests of
real vehicles in order to do that.
General Motors says it uses simulated
crash tests to help it build safer cars.
While a few decades ago, OEMs might
need to crash over a hundred cars
during the design of a single model,
now, thanks to computer-aided
engineering, its engineers can crash a
fraction of that number, all while
designing new, safer models much
quicker and more cheaply. John Capp,
Director of Global Safety Strategy and
Vehicle Programmes at GM explained
to Megatrends, Simulated crash tests
allow us to learn earlier in the design

Virtual crash test of S40 in 2006 - frontal impact, 55 mph

process before the hardware is

available and built, and also optimise
the performance across a broad range
of test conditions.

Perhaps someday, but some physical

crash tests are still needed as not all
simulations can capture everything that
happens in a crash test or that an ATD
(Anthropomorphic Test Dummy) can
measure. We use both simulation and
physical crash testing to develop our

Eight decades after GM engineers

developed the rst barrier crash test,
physical crash testing continues to
provide engineers with great insight into
how vehicles perform under crash
conditions. But it takes time. Theres
still a place for physical crash tests, for
example to validate the models, conrm
the performance, or in cases where the
simulation capability is still evolving.

The possibility of virtualisation extends

beyond the crash test into multiple
areas such as the dummies used in the
current physical tests.

Asked if the virtual crash testing

method may dispel physical crash
testing, however, Capp observed,

Studies show that roughly half of

drivers take defensive action, such as
sudden braking or steering, to avoid

The end of the physical dummy?

Megatrends | 13

Could it be curtains for the crash test dummy?

collisions, with vehicle occupants

commonly bracing themselves at the
same time. Occupant posture - whether
braced or relaxed - has a signicant
effect on body movement during a
collision. However, the dummies
currently used in virtual crash
simulations are unable to simulate the
reexive defensive actions that humans
take in the moments before an
imminent collision, such as bracing
ones body for impact.
For this reason, crash test dummies
are at the core of car safety research,
and along with the possibility of
physical crash tests giving way to the
virtual, we may also be about to
witness the last generation of physical
crash test dummies. Toyota very
recently showcased its latest crash
dummies THUMS 5 capable of
replicating human behaviour before a
crash, and now, research into virtual
crash dummies is the largest
coordinated effort in car safety.
A physical crash dummy effectively
acts like an airliners black box
recorder, recording data and in this
case registering impact forces
during a crash. Manish Menon,
Research Analyst at Frost &
Sullivan, suggests that a physical
crash dummy cannot currently
assess danger and therefore
replicate a human occupants
behaviour. Virtual crash test
dummies from now will be
capable of replicating precollision human reactions,
Menon notes. The muscle
modelling feature simulates the
body attitude of the vehicle occupant
from relaxed to braced, thereby
allowing for a more detailed computer
generated analysis of post-crash
injuries. This allows for accurate study
of the performance of seatbelts, airbags
and other passive safety equipment
during a collision. This difference alone
signals that the end for the physical test
dummies is near.
Menon notes that OEMs might look at
completely eliminating the use of
physical test dummies in favour of
virtual dummies. On the safety side,
the virtual test dummies offer
accurately modelling pre-collision
human movements to various other
parameters such as muscle tension
while pre-braking.
Apart from accurately determining precrash human behaviour, such as

14 | Megatrends


Image source: Honda R&D

Americas Inc. / 3DEXCITE


Honda R&D Americas uses a module of the 3D visualisation software
3DEXCITE DELTAGEN called DELTAGEN REAL IMPACT, a plug-in codeveloped with Dassault Systmes brand 3DEXCITE. Hondas North
American R&D arms previous work with DELTAGEN inspired the integration
of that visualisation software into Honda's LS-DYNA CAE simulation tool. The
resulting DELTAGEN REAL IMPACT enables the OEMs engineers to create
highly-realistic 3D renderings of crash events. The results serve as the basis
for testing and analysing different designs with greater speed and efficiency

muscle tension while pre-braking, what

interests OEMs the most about virtual
test dummies is the potential to save
cost and time, says Menon. At present,
a single state-of-the-art crash dummy
will cost an OEM between US$50,000
to US$600,000 when all the electronics
are accounted for. The whole process of
crash-testing itself is expensive, with
estimates of many thousands of dollars
for a vehicle prototype. By using virtual
test dummies, OEMs can signicantly
cut down not only cost but also
several months of

lead time. OEMs have drastically

increased the number of virtual tests on
a component level for safety. Using a
virtual dummy to verify these tests will
not only reduce costs but also save
OEMs development time.
GMs Capp notes that simulating the
human body in a crash is challenging,
but has been taken on by a consortia
of OEMs and researchers for a
number of years. It involves physical
testing, simulating and medical
knowledge to try to capture the
important aspects of the behaviour of
a human.

Not so fast!
A closer inspection of the issue at
hand, however, reveals creases that
need ironing out before physical crash
dummies can be completely replaced
by their virtual cousins. The virtual
human body is too complex to be
incorporated into a physical crash test
dummy. Therefore
imperative to verify the algorithm
against all possible human behaviour
just before a collision, states Menon.
Modelling the human brain might then
be the biggest challenge, as each brain
reacts differently to a particular
situation. To effectively use these
sophisticated human representatives
would require more effort than merely
progression, he says.
Menon continues, Physical dummies
will continue to be relevant for the
foreseeable future, continuing to do
what they were introduced for
logging data. And he sees an
important future for physical crash
dummies: In future, the physical test
dummies can be used to gauge the
occupant interaction with different
safety systems at the very start
of vehicle design. Then the
virtual crash dummies can
take over to investigate
variations, gender
variations, children
variation, obesity

Megatrends | 15



THUMS 5 is the latest version of Toyotas Total Human Model
for Safety (THUMS) virtual human model software. THUMS
5 can simulate a variety of states from relaxed to braced, thus
enabling more detailed computer analysis of injuries caused
by collisions. Vehicle occupants commonly brace themselves
whilst taking defensive action sudden braking, steering etc
to avoid collisions. An occupants posture whether braced
or relaxed has a signicant effect on body movement
during a collision, something that cannot be replicated by
current ATDs. Toyota has added a new muscle model to
THUMS which can simulate human postural states including
the human reex of bracing ones body for impact
and muscle tension in pre-braking, for
example. Finally, the physical test
dummy can validate and further netune the human-vehicle interaction.
While the world of vehicle safety
engineering may not be ready to give
up the crash test dummy in favour of
the human computer model just yet,
much work is being done in this area.
Dr. Christophe Bastien, Principle
Lecturer in Engineer Simulations at
Coventry University in the UK spoke to
Megatrends about the potential for the
future crash test dummy to lie in the
virtual rather than the physical world.
Bastien, who has spent his career
working in occupant safety, noted that
thanks to crash test dummies, the
level of fatalities on the road in the last
30 years has improved greatly, and
suggested that we need crash test
dummies to provide pointers to
engineers to design safer vehicle
structures. Bastien agrees with the
notion that crash test dummies are
merely machines which record

Image source: Honda R&D Americas Inc. / 3DEXCITE

forces. These metrics are linked with

injury criteria which are used to
predict, statistically, risks of injuries.
As a crash test dummy needs to be
used many times, it has to be
repeatable and unbreakable, which is
contradictory to a human being.
Dummies are not surrogates for
human beings, and some metrics in
the crash test dummies are still
deliberated, he noted: The sentiment
to use these metrics goes in the right
direction for safety: they are practical

to measure and to engineer.

unsatisfactory: only human models
can answer trauma injuries.
The future may well see OEMs and
suppliers adopting virtual crash tests
using virtual crash test dummies, but
the automotive industry seems
unprepared at this stage to do this at
the expense of physical crash tests.
Nonetheless, maybe virtualisation, in
reality, isnt as far away as we think.

Image source: Honda R&D Americas Inc. / 3DEXCITE

16 | Megatrends

We are not just engineers.

We are bodyguards.

If we were only steel producers, delivering cutting edge steel technology that provides
the highest level of safety would be impossible. To do it we have to be experts in high
strength steel, but also experts in car safety and have the experience to back it up.
For over 30 years, SSAB has been creating Docol High Strength Steel, which makes products
lighter, stronger and more sustainable so that every single car safety component can be
optimized and more lives can be saved.
Its not about steel. Its about life.


Safety in emerging markets

a long way to go
What price car safety in emerging markets? David Isaiah investigates

ccording to the UN, road traffic

injuries remain a major public
health problem and a leading cause
of death, injury and disability around
the world. Each year, nearly 1.3 million
people die and between 20 million
and 50 million more are injured as a
result of road crashes. More than 90%
of these deaths occur in low-income
and middle-income countries, which
have less than half of the worlds

save millions of lives, UN SecretaryGeneral Ban Ki-moon said at the time.

formula comprising of regulatory push

and demand pull.

One of the ve pillars of this plan calls

for the building of safer vehicles, with
seven recommended activities under
this pillar. Among them is the
recommendation to implement NCAPs
in all world regions, in order to increase
the availability of consumer information
about the safety performance of motor

Global NCAP has said in the past that

the combination of national and UN
safety standards and consumer
information promoted by NCAPs has
created a market for safer vehicles.
Nevertheless, vehicles in emerging
markets are still not regulated for safety
on the same lines as developed
markets and, as a result, casualty rates
are signicantly higher.

On 11 May 2011, the United Nations

launched the Decade of Action for
Road Safety 2011-2020. The Decade
of Action for Road Safety can help all
countries drive along the path to a
more secure future... Today, partners
around the world are releasing national
or citywide plans for the Decade,
hosting policy discussions and
enabling people affected by road
crashes to share their stories widely.
Now we need to move this campaign
into high gear and steer our world to
safer roads ahead. Together, we can

While stringent crash regulations in

Europe and the US have made cars
safer in these, and other developed
nations, than ever before, the same
cannot be said for cars in emerging
markets in Asia, Latin America and
Africa. According to Global New Car
Assessment Programme (Global
NCAP an umbrella organisation
which aims to support the development
of new consumer crash test
programmes in emerging markets), this
level of safety in developed nations has
largely been achieved through a

18 | Megatrends

Things came to a head in 2014, when
the rst ever independent crash tests
carried out in India, by Global NCAP,
showed that many popular small cars
in the country failed these tests, most
with a zero-star adult protection rating.
This led to an exchange between
Andrew Palmer, then Nissans Chief
Planning Officer and Executive Vice
President, and Global NCAPs
Chairman, Max Mosley.

Palmer called Global NCAPs scoring
of the Indian small cars absurd and
stated that people who criticise these
cars for not meeting US or European
crash standards are living in a dream
According to David Ward, Secretary
General of Global NCAP, vehicle
manufacturers operating in emerging
markets such as India, say their
standards are applied in whichever
country they are selling the products
and unfortunately there are many
emerging markets in which this is legal.
They are exploiting the lack of a global
minimum regulation in the market.
Latin NCAP
In 2012, Latin NCAPs crash test results
of eight models revealed that safety
levels of some cars remained 20 years
behind developed nations. Now, Latin
NCAP feels that the region is still on the
same page, despite the progress that
has been made in this area. The
reason for this is that when safety
requirements were adapted in Latin
America, other regions like Europe, the
US and Japan kept moving forward
with newer regulations and ever more
stringent requirements.
As a NGO [non-governmental
organisation] and working in the eld of
safety, we do recommend to
governments certain regulations, and
we are following Global NCAP
suggestions. But unfortunately we have
seen that the inuence from the
industry side in the Latin American
governments is much stronger than the
consumers inuence, or even the
WHO data, Latin NCAP Secretary
General, Alejandro
We have noticed something that is
very clear in our markets. We are
paying very high prices for some cars
that are locally built, which look exactly
the same as the European cars, but
they actually have much less
equipment. Take for example the Ford
Fiesta, the Peugeot 308 or the Renault
Clio. In all these cars we have seen
that in Latin America we are paying
30-40% more for a car that is
completely stripped from safety other
than just double airbags in the front
and ABS.

as 1996. In Latin American markets,

side impact protection requirements
are not required even now. Furas
manufacturers may not shoulder the
entire onus of vehicle safety, the car
industry nevertheless has a huge
inuence on governments, in order to
slow down the advent of new safety
equipment in cars.
In Brazil, from 2014, all new models
need to be equipped with double
airbags and ABS. Thats a mandatory
requirement as of 1 January 2014.
Argentina is the same, Uruguay is the
same, and Ecuador is the same. But in
Colombia and Mexico you can still buy
cars with no airbags," said Furas. "They
are still allowed to sell cars with no
airbags. The region is fractured into
these blocks."
We keep buying cars on the market,
testing them, and showing consumers.
We need to reach those consumers
that are planning to buy a car. Were
trying to disseminate as much
information as possible. Internet, social
media, all this is helping very much.
The most powerful tool is to inform
consumers, said Furas.
In emerging markets worldwide people
buying their rst car, on a limited
budget, look essentially for three main
criteria: good fuel mileage, good safety
and affordable insurance. One such
vehicle manufacturer operating in Latin
America, Volkswagen, appears to have
ticked all three boxes with its Up!
According to Latin NCAP, despite the
Brazilian-produced Up! sitting in the
entry-level price segment, it has
secured a ve-star Latin NCAP safety
rating. This, says the organisation,
shows consumers that it is possible to

buy an affordable car with a high safety

rating. Furthermore, the Up!s ve star
safety rating exceeds government
requirements, and Furas says he is
aware of other manufacturers working
to improve their cars in order to match
the Up!.
What price safety?
Meanwhile, in India, despite the fact
that many vehicle manufacturers have
increased safety levels in their cars
following the damning Global NCAP
crash test results at the start of 2014,
cars continued to perform badly in
Global NCAPs crash tests at the end
of the year. The two cars that were
tested, Maruti Suzukis Swift and the
Datsun Go, both received zero-star
ratings for adult occupant protection.
A key difference between Latin
America and India is the cost of a car
with reduced safety feature content. In
Indias highly cost-sensitive car
market, a car stripped of safety
features that would otherwise be
mandatory in Europe or the US, costs
less than the safer version. In Latin
America, on the other hand, buyers
pay more for the same cars with fewer
safety features.
However, the poor performance of cars
in the Global NCAP tests in India has
resulted in one positives outcome at
least: Indias decision to launch a
NCAP consumer testing programme.
We welcome the initiative of the Indian
government to launch its own NCAP
and recommend that this positive step
is combined with the application of the
UN regulations for frontal and side
impact, said Global NCAPs Ward.
Prompt action like this would prevent
the introduction of brand new models
like the Datsun Go, which has body
structure so weak that is pointless to t
an airbag.

In Europe, frontal crash protection and

side crash protection, as well as
antilock braking systems (ABS) were
the standard required by law as early

Megatrends | 19


Emerging markets are taking

vehicle safety seriously
(at least on paper!)
China has shown immense progress in adopting car safety standards, but other
developing countries, such as Mexico, India, and Brazil, lie far behind. Indraneel
Bardhan of EOS Intelligence, takes a closer look
cross emerging and frontier
markets, most car buyers have
maintenance cost, and fuel economy,
thereby ignoring the very important
aspect of safety. The governments in
these countries have also not given
safety due importance, with basic
safety features such as airbags and
ABS still not a legal requirement. Taking
advantage of this nonchalance among
customers and governments, OEMs
have long compromised on safety
features in cars sold in developing

In recent years, however, with

customers becoming more aware and
global safety organisations cajoling for
higher safety standards, some
emerging countries have introduced
Existing Safety Standards

increased safety measures, which in

turn will require signicant changes in
the cars sold by leading OEMs. While
this is expected to affect the bottom-line
of OEMs in these price-sensitive
markets, not abiding to the changing
environment is likely to prove equally
costly - if not in the short term, then
certainly over the medium-to-long term.
Vehicle safety standards in South
Korea match European levels, while
China has also shown immense
progress in adopting standard car
safety equipment and technology. But
other developing countries, such as
Mexico, India, and Brazil, lie far behind.
As per current car safety standards,
David Ward, Secretary General of
Programme (Global NCAP) rates


To be introduced in

To be introduced in

China-7, Brazil-5, and India-3 on a

scale of one to ten. This rating is
based on three key factors the state
of legislation, level of penetration of
different technologies in the market
place, and consumer awareness
levels. However, with India and Brazil
initiating the implementation of several
safety standards in recent months, they
are likely to match global standards at
least for crash testing. Crash
prevention, on the other hand, remains
a long-term goal.
The Indian automotive industry
received a major blow in 2014 when
Global NCAP conducted tests on some
of its most popular entry-level variants
(Maruti Suzuki Alto 800, Hyundai i10,
Ford Figo, Volkswagen Polo, Tata Nano,
Maruti Swift, and Datsun Go) and



South Korea



Crash Testing Standards

Compulsory Airbags and ABS

UN Minimum Crash Test Standard

Independant Crash Tesst Facility

Current NCAP Status

Bharat NCAP to be introduced in 2015

Mandatory Crash Test

To be introduced in

Under LatinNCAP

Under LatinNCAP

To be introduced in

Crash Prevention Standards

Mandatory Electronic Stability Control

20 | Megatrends



Unlike India and Brazil, the tightening of Chinas vehicle safety standards stems from the countrys C-NCAP (China
New Car Assessment Programme) initiatives. While the Chinese government has only mandated the use of seat belts
and frontal airbags, the number of airbags in vehicles in China is reaching European and US levels. This is primarily
due to the aggressive promotion of C-NCAPs safety assessment by the Chinese government, which has encouraged
the countrys population to value car safety. We undertake a lot of promotional initiatives such as advertisement and
highway hoardings to promote safety features among consumers. This has really helped in making consumers aware
of the importance of safety, says C-NCAP. Furthermore, C-NCAP has upgraded its test protocols to match its European
counterpart and expects standards to be on a par with each other by 2018. C-NCAP has also started focusing on
accident research and plans to include a test for pedestrian protection in future vehicles. It has also been considering
including test scenarios for AEB systems that will further help mitigate pedestrian collisions.
Even in the case of China, the pricing of the vehicles increased with the addition of safety features but the entire price
is not passed down to the con\sumers, especially in the base-level cars.
However, one of the key reasons why China has upped its vehicle safety standards is to build a good reputation for
exports. As Chinese cars gain traction due to competitive pricing and design, they suffer a poor reputation when it
comes to quality. Thus, they have consciously increased focus on safety norms to meet global standards. While they
are on the right lines, they still have a long way to go to reach global safety standards.

awarded zero-star adult-protection

rating to all of them. This, in addition to
having the highest number of road
fatalities globally, instigated the Indian
government to commit to introducing
regulations for mandatory safety
standards. As per new regulations, by
October 2017, all new cars will be
required to pass frontal and side crash
tests, with the deadline for new
versions of existing models extended to
October 2019. To pass this test, cars
will need to have reasonable body shell
strength and be equipped with airbags
and other standard safety features. For
conducting the test, the government
plans to develop two crash test
facilities, which are expected to come

online in 2015/2016. In addition, the

authorities plan to launch an Indian
NCAP. India is also creating a vehicle
recall policy, which will encompass
testing for manufacturing defects.
However, this legislation is yet to be
Ironically, the focus on safety standards
in India is a cause of concern for those
car manufacturers selling locally, which
have for so long focused on pricing and
manufacturing infrastructure and
technology, minimal changes are
required to adapt to these proposed
changes in safety standards, because
most models offer basic safety features

- such as airbags and ABS - in their

higher variants, and the OEMS use
India as major export hub for their cars
destined for Europe and the US.
However, with India being such a pricesensitive market, this will have a
considerable impact on the OEMs
bottom line. Moreover, many Indian car
buyers still fail to value safety, thereby
restricting the price tag that OEMs can
attach for these features.
The rst reaction of the OEMs is that
they are not very happy, since it will
make their cars more expensive. But in
the longer term, they will adapt to it as
they have done in other countries.
People will become aware and ask for

Megatrends | 21

Safety standard levels across the major emerging automotive markets
The number of airbags in vehicles is reaching the same level as Europe
and the US. Automakers in China are asking us for pretensioners for the
rear seats, not just the front. The level of safety electronics and sensing
on board Chinese vehicles is now very similar to the US and Europe.
Norbert Kagerer, Engineering Vice President, TRW Occupant Safety





South Korea



(In Mexico) For the company to make

more net profit and so that cars are sold
at more affordable prices, we would
toss aside some accessories. Air bags,
ABS brakes, those were the first to go.
Engineer, GM Mexico




Entry-level cars in Brazil are incredibly dangerous, it can't be denied.

The death rate from accidents is far too high. The manufacturers do this
because the cars are a little cheaper to make and the demands of the
Brazilian consumers are less; their knowledge of safety issues is lower
than in Europe or the US. Maria Ines Dolci, Coordinator, Proteste (a
consumer defense group)

safety. The OEMs focus will be to meet

the safety standards at affordable prices.
For example, child support restraints are
not made in India and are imported.
OEMs can ask the government for
concessions on these imports, says
Rohit Baluja, Director, Institute of Road
Traffic Education, India.
Several leading OEMs have criticised
the governments call to boost safety
standards in India. An engineer working
with a leading car manufacturer in India
stated, At this moment, there are no
talks about any changes being
introduced to the body. These matters
are handled at a very strategic level.
Nothing has been discussed on this
aspect as of now. In India, safety cant
really become a USP right now. Price
is and will continue to remain the main
selling point. If we talk about metro
cities, the demand for frontal airbags
has increased. So yes, safety has
become more important. But this is the
case in metro cities only.
It also seems that the government has
succumbed to pressure from the OEMs
and has softened several of the safety
standards. As per the regulations, India
will be following Chinas footsteps and
introducing crash testing at a speed of
56kph (35 mph) instead of 64kph,
which is followed globally (while China
started testing at 56kph in 2006, it also
increased its speed from 56kph to
64kph in 2011). Moreover, the
22 | Megatrends




While several leading OEMs have not

been very supportive of the Indian
governments decision to introduce
mandatory crash tests, those which
have pre-emptively incorporated these
features in their cars have been the
winners. Toyota, which made airbags
mandatory in all its models in October
2014 in India, saw sales surge by 34%
between October 2014 and April 2015.
Volkswagen, which in February 2014
made airbags a standard feature in all
its Polo hatchbacks, has seen the sales
of its entry-level variant rise since
making that decision. Since its poor
performance in the Global NCAP crash
test, Nissan Motors has also worked on
strengthening the body shell of its
Datsun Go by using higher-grade steel
520 MPa instead of the earlier 320
MPa and adding side beams to
enhance the strength and rigidity of the
Thus the way forward denitely begins
with OEMs embracing the introduced



(In India) It is worrying to see levels of

safety that are 20 years behind the fivestar standards now common in Europe
and North America. Poor structural
integrity and the absence of airbags are
putting the lives of Indian consumers at
risk. They have a right to know how safe
their vehicles are and to expect the same
basic levels of safety as standard as
customers in other parts of the world.
Max Mosley, Chairman, Global NCAP

authorities plan to conduct only head

impact tests for Indian pedestrians
rather than the head and leg impact
norms adopted by Euro NCAP. It has
further slashed the requirement for the
use of child dummies for some side
impact tests, which is a global
mandatory safety belt alarm, child alert
alarm, pre-tensioners, and airbags are
also pending.


South Korea is now at the level

of Europe (in terms of safety
standards). Penetration of ESC
is very high now. David Ward,
Secretary General, Global

changes. It is not incorrect to say that

the consumers continue to be price
sensitive, but that is because they are
not well informed about safety. Thus, to
see a genuine shift towards safety, both
the government and car manufacturers
have to work together to change the
mindset of the consumer and promote
vehicle safety as an equally important
factor in purchase decisions.
Its a shared responsibility of
government and manufacturers to
inform the consumers and move the
market forward. Our project of testing
cars has also helped build awareness
and get media attention. We will do
more testing at the end of this year and
get results beginning next year. The
combination of government action on
regulation, the response of individual
manufacturers and the work done by
NCAP will improve the whole situation
in India, says Global NCAPs Ward.
Brazil has a similar story, where the
cheapest models of some of its bestselling cars, such as the Volkswagen
Gol Trend, Fiat Palio, Chevrolet Celta,
Ford Ka, Peugeot 207, and Fiat Novo
Uno, received only one star when crash
tested by Latin NCAP. In a similar test,
a model put forward by Chinese OEM
Geely was awarded zero stars. This
was underpinned by the absence of
basic safety features such as airbags,
lack of body reinforcements, lowerquality steel, weaker weld spots to


support the vehicles, and outdated car

platforms. As a result, the Brazilian
government mandated airbags and
ABS on all cars in 2014. Just as it had
done in India, this regulation faced
much criticism from OEMs and was on
the verge of being postponed in the
face of resistance due to it leading to
an increase in the prices of basic
models, and employees being laid off
in the case of models being

spot checked for the entire time the

model is produced), the car models are
only required to meet the crash test
requirements once. Companies can
also send a car of their choosing.
These factors further may compromise
on the credibility of the testing.
Thus, as safety standards improve
across emerging markets, the onus
now lies on OEMs to adapt to these
changes. While this will impact the

To see a genuine shift towards safety, both the

government and car manufacturers have to
work together to change the mindset of the
consumer and promote vehicle safety as an
equally important factor in purchase decisions

government pushed ahead with the

regulations as decided, but offered
lower import tariffs for key safety
equipment to subdue the expected
price rise.
In addition, the government is
considering making electronic stability
control (ESC) a standard in all cars;
however, that remains in the future. The
Brazilian government also plans to
launch a US$50m independent crash
test centre by 2017. While the centre is
expected to run as a government body,
OEMs may provide part of the funding
for its operation and even use the
facilities, raising some concerns about
the labs autonomy. Moreover, since the
regulations lack a conformity of
production clause (which requires
automobile safety performance to be

prots of the vehicle manufacturers, it

also presents them with an opportunity
to gain a strong market foothold by
offering these safety features at a low
price. Moreover, although these
changes are happening primarily in
India and Brazil, companies must be
prepared for similar regulations to
come in Mexico and other Latin
American countries in the coming
As well as crash test standards, there
is considerable discussion about crash
prevention technology, the most
important being electronic stability
control (ESC). While this has already
become a standard technology in
several markets, such as Australia,
Canada, the EU, Israel, Japan, South
Korea, the Russian Federation, Turkey,

and the USA, Global NCAP is working

towards making ESC mandatory in all
cars manufactured by 2020. Our
overall priority is to ensure that all
passenger cars, irrespective of where
they are produced, must have the
appropriate minimum crash test
standards and the most important
crash prevention technology (i.e. ESC)
by 2020. To achieve this, the most
important countries to act are China,
India, and Brazil, states Ward. With
crash test standards also becoming a
standard among key emerging
markets, the introduction of ESC also
does not seem far from reality. In fact,
Brazil and China have already begun
considering mandating ESC. The
OEMs that anticipate this and work
towards it will be at an advantage.
It has taken time for several key
emerging and frontier automotive
markets to realise the importance of
vehicle safety, both for drivers and
passengers, as well as for other road
users; nonetheless, the fact that
governments have recently begun
introducing policy measures to bring
about this change is to be applauded.
The implementation of regulations and
the variation in standards that exists
across these markets remains a cause
for concern, as are aspects that OEMs
might use to their advantage by
bypassing certain global standards. It
is important that consumers also make
safety a priority when purchasing a
vehicle, which would force OEMs to
ensure that global standards are also
followed in emerging and frontier
markets. Brazil, China and India must
lead the way, so that OEMs implement
safety as standard across other
emerging and frontier markets.
Megatrends | 23


The future of truck safety

lies in technology
Autonomous truck technology will become increasingly important in trucking, but
primarily for safety, rather than comfort reasons
By Rachel Boagey
24 | Megatrends

015 marked a new direction for
truck safety, and the beginning of
the year witnessed the US National
Transportation Safety Board (NTSB)
publish its annual Most Wanted list.
This year, the organisation highlighted
its desire for more industry focus on
truck safety, including anti-collision
technology, better limits on driver hours
and tighter regulation of trucking
companies with high collision rates.

While commercial trucking is integral to

the economy, crashes, injuries and
deaths involving commercial trucks
have been increasing over the past
several years. In fact, the number of
people killed in the US in large truck
crashes increased for the fourth
consecutive year, totalling 3,964
people in 2013, according to the
National Highway Traffic Safety
Administration (NHTSA).
Research on the North American Class
6-8 truck safety systems market carried
out by Frost & Sullivan found that the
truck market in North America is
expected to require nearly 917,069
truck safety systems by 2020, up from
409,417 units in 2013. These gures
include Driver Information Warning
Systems (DIWS), Active Chassis
Integrated Safety Systems (ISS).

factors in driving growth of safety

systems in trucks.
Eliminating unnecessary deaths
through technology
Regulations put forward in the trucking
industry will also increase the number
of safety technologies in eets in the
future, which will reduce the crash
potential from inexperienced drivers
through the installation of on-board
safety technologies, Narayanan told
The introduction of acts aimed at
adoption will provide legislative
impetus for safety technologies, stoking
adoption by eets.
Volvo Trucks Accident Research Team
in Europe recently carried out research
into truck safety, which indicates that
90% of all truck safety incidents are
due entirely or partly to human error. By
2020, however, more than 35 million
trucks globally will be connected, and
collision-avoidance technologies that
could help eliminate cyclist and
pedestrian deaths caused by driver
blind-spots are likely to be required in
many markets by law.

Fleets that recognise drivers as their

most important asset tend to spec
more safety technologies on their
equipment, explained Jason Spence,
Product Marketing Manager-Long Haul
at Volvo Trucks. Many adopt safety
regulations but because of their
experience with the cost of a collision
to their business. The cost of truck
safety technologies is minimal
compared to the cost of collisions.
However, regulations do tend to bring
late adopters up to the safety standards
of the rest of the trucking industry.
Volvo Trucks goal of zero collisions
drives the advancement of future safety
systems, said Spence. We will
continue to develop and rene nextgeneration safety systems to support
the truck drivers operation of the
vehicle. These future safety systems
will monitor conditions outside the truck
more comprehensively and provide
real-time information to the driver
regarding potential hazards around the
vehicle. Since drivers are the most vital
part of the trucking industry, we will
continue to develop safety features and
technologies to help protect them as
well as other motorists and
pedestrians, he explained.

The research was carried out by

Lakshmi Narayanan, Senior Research
Analyst Automotive & Transportation,
Commercial Vehicles at Frost & Sullivan,
who noted that the growing awareness
among eets, impending regulations,
the need for eets to reduce Total Cost
of Ownership (TCO) reductions, and the
enhanced value proposition of safety
systems is expected to drive the market
over the 2013-2020 period.
A few technologies such as Integrated
Safety Systems, Lane Departure
Warning, and Blind Spot Detection
systems are expected to experience
the highest growth with driver
monitoring and crash avoidance
gaining importance among eets in
coming years, Narayanan told
Megatrends. In addition to reducing
the crash risk, factors such as system
reliability, fuel consumption reductions,
critical event reporting and use of
actionable data from such systems are
encouraging eets to install safety
systems. The value proposition of such
systems, apart from their high potential
in reducing crashes, improving highway
safety, and other collision-related
benets, are expected to be major

Megatrends | 25

Passive versus active
Going forward, improving truck safety
is not just reliant on technology,
although it will play an increasingly vital
role. Both passive and active safety
systems are important because it is not
always possible to prevent a collision
due to the actions of other drivers. We
believe it is just as critical to protect the
truck driver when a collision occurs,
noted Spence. If a collision is
unavoidable, many passive safety
systems absorb much of the crashs
energy to reduce its severity. To ensure
passive safety, Volvo builds every cab
with high-strength steel and designs
cabs so that in the event of a crash, the
engine and transmission drop down
and away from the driver and the
steering column collapses. We also
were the rst truck manufacturer in the
North American market to make a
drivers side airbag standard, Spence
Active safety systems help drivers
avoid collisions through alerts and
other forms of driver assistance. For
example, Volvo Enhanced Stability
Technology has been standard on
highway tractors in North America for a
decade, and the radar-based Volvo
Enhanced Cruise with Active Braking
helps drivers maintain a safe following
distance by reducing throttle and
applying brakes in instances when
drivers dont have time to respond to
sudden events.
Frost & Sullivans Narayanan believes
that, until higher levels of automation
beyond audio and visual alerts allow for
active safety systems to take over,
passive safety systems will continue to
play a vital role in improving safety.
Nowadays, systems that track and
monitor data from safety systems can
also be considered as passive
systems. Packaging of critical data for
actionable information for eets will
gain traction in the years to come.

26 | Megatrends

Autonomous safety
Daimler Trucks gave a glimpse into the
future of trucking safety, becoming the
worlds rst OEM to be granted a road
license for an autonomous heavy-duty
truck. The rst journey in the so-called
Freightliner Inspiration Truck, took
place in May 2015 on US highway 15 in
Las Vegas.
Daimlers initial research ndings
clearly show that autonomous driving
relieves the strain of truck drivers.
Measurements of the probands brain
currents (EEG) demonstrated that
driver drowsiness decreases by about
25% when the truck is being operated
in autonomous mode, and the driver
operations. The studies also prove a
high acceptance of the Highway Pilot
technology and a rapid adaption phase
of the probands.
We are concentrating on our strengths
when it comes to efficiency, safety and
connectivity, and thereby sustainably
securing our technological leadership.
We remain best-in-class when it comes
to lowering real cost of ownership and
are highly valued by our customers,
said Martin Daum, President and Chief
Executive of Daimler Trucks North
Increased safety, increased
In the next ten years and beyond,
although widespread adoption of fully

autonomous trucks is unlikely, Volvo

expects to see continued and
increasingly rapid adoption of active
safety systems for collision warning
and mitigation. Features such as our
Enhanced Cruise and Active Braking
and Lane Departure Warning (LDW)
will become more popular over the next
ten-year period, stated Volvos Spence.
He also believes that the driving forces
behind this trend will include attracting
and retaining truck drivers, maintaining
consistent operational costs, and
complying with regulations. We also
see a continued push toward recording
collisions as a tool for preventing them
and toward technologies that could
even track collisions that were avoided.
Ultimately, the goal is a steady, year by
year decline in truck crashes.
Narayanan believes that in this
timeframe, improved safe driving
practices, data analytics support, and
the ability of systems to take increased
preventive measures will lead to
increased demand for safety systems,
as a result of which telematics and
safety technologies will be highly
intertwined. Regulations mandating
LDW, stability control and forward
collision avoidance (FCA) will lead to
eets focusing on integrated safety
systems, reducing the need for
disparate sensors. Laying out a
common advanced electrical and
electronics platform will provide clear
boundaries for the integration of
electronics and safety systems in


CV safety focus shifts to

collision avoidance
Growing cities mean worsening urban congestion and increased road safety
risks for private individuals and commercial fleets alike. Lakshmi Narayanan
Ramanujam, Senior Research Analyst - Commercial Vehicle Research at Frost &
Sullivan looks at the future of truck safety technology

he global economy is cyclical, but

this has little impact on the steady
pace of urbanisation and city
expansion, which in turn impacts
especially on highways and city roads,
increases the potential for traffic
incidents. As a result, the truck
industrys safety focus has turned to
the development of safety systems that
aid drivers in anticipation or avoidance
of critical events or hazards.

Among eets, safety and collision

avoidance have become high priorities
worldwide. Fleets have begun to adopt
strategies to reduce crash-related costs
through installation of OEM and

aftermarket safety systems. From a

business standpoint, eets are looking
to optimise operations through vehicle
maintenance and operating cost
savings such as fuel, life cycle
management, and vehicle up-time. In a
challenging environment of stringent
decreasing prot margins, the focus for
the commercial vehicle industry has
shifted to adapt to these mounting
challenges. The installation of safety
systems can offer multiple cost-saving
benets by helping to reduce crashes
and potential liabilities.
In order to incorporate safety systems
in trucks, eets are looking at several

factors such as regulation, initial

investment, performance, and return
on investment (ROI). Furthermore, in
an era of skilled driver shortage,
improved safe driving practices,
reduced driver distraction, increased
ability of driver assistance systems to
take preventive measures, and
improved driver retention are also
being increasingly considered when
Regulations such as the US
Compliance, Safety and Accountability
2010 (CSA 2010) are forcing eets to
concentrate on enhancing safe driving
practices and integrating trucks with
advanced safety systems; eet
managers are also demanding systems

Megatrends | 27

that not only provide warnings, but also
intervene as driver distraction
increasingly becomes a major concern.
Cost-conscious eet owners are
compelling truck manufacturers and
suppliers to focus on delivering costcompetitive safety systems that provide
multiple safety benets. Integrated
safety systems, which offer stability
control systems in addition to collision
mitigation systems, are increasingly
being preferred in developed markets
such as North America and Europe.
Moreover, bundling technologies
reduces the complexity of systems for
eets and drivers, while also increasing
the ROI factor through the reduction in
distribution costs. Advances in sensor
and radar technologies are facilitating
the sharing of system components and
driving the growth of integrated safety
systems in such markets. In addition to
a shared platform for different
technologies, integration will result in
sensor fusion and sharing, while also
augmenting the growth of V2V and V2I
data connectivity in trucks. Systems in
use today, such as adaptive cruise
control, already enable fuel savings;
V2V and V2I communication in trucks
should further increase savings
Unlike emission regulations, there is a
wide disparity in standards for safety
systems in various parts of the world.
In North America, there is a greater
likelihood of stability control mandates
in Class 8 trucks. As a result, these
forthcoming mandates in favour of
Electronic Stability Control (ESC)

28 | Megatrends

systems, which enhance vehicle

stabilisation, are expected to drive ESC
as a standalone system in the region.
By 2020, forward collision avoidance
(FCA) mandates are expected in North
America, which will drive the growth of
collision mitigation and integrated
safety systems. Demand for active
chassis controls systems such as ESC
will be boosted by developments in
individual technologies and growing
awareness toward the effectiveness of
these technologies. In Europe,
regulatory mandates are in place for
Autonomous Emergency Braking
(AEB) and Lane Departure Warning
(LDW) systems for commercial
vehicles. Both AEB and LDW will
become mandatory for all new vehicles
from November 2015, providing a

strong incentive to OEMs and Tier 1

suppliers to invest in additional
functional technologies to assist
autonomous driving. To reduce collision
rates in North America and Europe,
there are discussions and deliberations
of regulations for backup cameras
around the 2019 to 2021 period. The
TRIAD markets have witnessed an
increase in demand for tyre pressurerelated systems, owing to the value
proposition offered in terms of crash
avoidance and fuel savings. With
growing acceptance by government
bodies and the global trucking industry,
the developed markets are likely to
experience a proliferation of collision
mitigation systems that would involve
the integration of stability control,
vision-based systems and active
braking systems.


OEMs expected to introduce such

systems around 2020.

While developed countries are turning

their attention toward advanced driver
developing markets are reliant on
braking systems for safety. Antilock
braking systems and stability control
systems have yet to gain signicant
penetration in developing countries
such as China, India, Russia and the
Next 11 nations, owing to low
awareness of the systems. Stricter
regulations are expected, especially in
China and India, which will signicantly
inuence the truck industry in the rest
of the world. The difference in
enforcement of regulations across
various regions of the world is an
impediment to speedier adoption of
systems such as ABS and ESC in
developing markets. Furthermore, the
rising disparity is also leading to
inated system cost increments in such
Besides active safety systems, video
safety solutions have recently gained
signicance in the commercial vehicle
markets of North America and Europe.
Video safety solutions provide farreaching safety across drivers, eets,
and cargo by proactively enforcing

performance. Backed by video
evidence, a video safety solution acts
as a line of defence for drivers in case
of faulty impounds or liability issues,
and reduces insurance costs for the
eet. A few aftermarket vendors offer a
four-camera solution that records a
360-degree view of the truck; this
integrates the existing video safety
solution into a surveillance solution
that provides a comprehensive
package, ensuring complete driver and
eet safety. Currently, the most
prevalent solution is a two-channel
module that deploys a forward-facing
camera positioned to capture the
drivers view of the road and a driverfacing camera that records the cabin
area to monitor driver distraction. In the
mid-term and long-term, four-channel
and six-channel modules are expected
to be in demand, catering to specic
applications like local distribution, oil
and gas, waste, and transit. While
video safety aftermarket solution
providers currently dominate the
scene, the market is expected to be
fragmented by vendors providing
safety systems and telematics, with

There has been a gradual shift in the

purchase decisions related to safety
systems by eet owners across the
world. The increasing importance that
eets in developed markets are
attaching to supplier support and
responsiveness is an opportunity that
should be leveraged to support
customers through the delivery of
actionable data for downstream analysis,
driver training, and other potential
revenue growth opportunities. With rising
adoption of integrated safety systems in
these markets and eets focusing on
feature sets provided by suppliers,
effective packaging of safety systems is
necessary to reduce the complexity for
drivers, in addition to providing costeffective solutions to eets.
Tier 1 safety system suppliers will stand
to gain from sensor fusion and sharing
to bundle multiple safety systems, and
rapid adoption of such technologies in
the developed markets. This will require
advanced technology vendors to invest
in electronic data interfaces and OEMs
to enable multiplexed electronic
architecture in vehicles. In developing
regulations would be the driving force
behind adoption of advanced safety
systems. Adoption of integrated safety
systems is expected to rise much later,
owing to the nascent stage of the safety
systems industry in these markets.
Fleet managers globally will show high
interest in systems that not only offer
the usual benets, but also result in
operating cost reduction, process
optimisation, driver and technician
training, amongst others. This is reason
alone for global OEMs and Tier 1
suppliers to develop localised growth
strategies to benet from opportunities
offered by all markets.
Megatrends | 29

Connected Car

Is the auto industry sleeping

through the cyber security
As cyber attacks move from potential threat to reality, Rachel Boagey asks
whether the automotive industry has done enough to secure the connected car
against future cyber crime

30 | Megatrends

Connected Car
in them to multiple risks, the industry
cannot delay in acting to protect the
connected car; indeed, many think the
industry should have acted sooner.
Before the storm
While ethical white hat hackers
open up interesting ndings in the
name of research for the automotive
industry, the concern is that if they can
successfully hack into a car, so too can
those with more malicious intent the
black hats.
convenience of technologies in cars
comes with the risk of introducing
vulnerabilities which attackers are all
too happy to exploit, explained Joel
Clark, Research Consultant from
vulnerability testing rm MWR
InfoSecurity. Speaking to Megatrends,
Clark insisted that the industry may
begin to see an increase in the
complexity of attacks as vehicles
become more connected. He also
noted that there are some wellunderstood, industry standard best
practices for keeping infrastructure
secure, which the automotive industry
could look to for inspiration. For
example, it is key that safety-critical
systems, such as engine management
or brake-by-wire, are segregated from
non-critical systems, such as the
navigation system. It should be
physically impossible to compromise a
users phone and use it to control
anything but which song is playing on
the radio.

characterise the connected car
industry. Every smart-car vendor offers
their own hardware and software, with
a custom set of tools and technologies.
They are all focusing on features rather
than security. Such an approach
increases the number of security bugs,
he said.
Using an already existing solution,
such as open source (OS) software, is
the right step towards a secure
connected car, believes Breslavskyi.
Still, not all of the vendors go along
with using third-party software. In this
case, the best way to ensure their
customers security is to establish a
Lifecycle when all development

requirements to production are
performed with security in mind
embodied in all-round security testing,
both automated and manual, he told
Tim Erlin, Director of Security and
Product Management at advanced
security rm, Tripwire, believes that
while software patches for vehicles
arent new, the demonstration of
vulnerabilities are clearly attention
grabbing. The risks of the connected
car lie in the ability to affect the
operations of the vehicle from the
outside world. The good news is that
secure software development isnt a
novel concept. There are known best
practices that can be applied to
automotive software as well, he

Controlled chaos?
ith consumer demands for
connectivity in the car increasing
by the day, a stable connection from
the car to the Internet is now a
necessity. But with this growing
necessity comes the increasing ability
of hackers to gain access to essential
vehicle functions and features. Once
inside, an attacker can utilise the
vehicles internal communication BUS
and depending on the vehicles
electronic architecture could
potentially take control of additional
modules, including safety critical
systems such as the anti-lock braking
system (ABS) and engine electronic
control units (ECUs). There is also the
possibility for hackers to take and use
information about drivers habits for
commercial purposes without their
knowledge or consent.

With these threats becoming more

prevalent, exposing the car and people

Autonomous dreams
Even though connected car technology
is not new, it hasnt become a
commodity yet, explained Nazar
Tymoshyk, Security Consultant and
Certied Ethical Hacker at technology
Tymoshyk told Megatrends that
although the industry is not currently
prepared to handle security threats to
vehicles, standards such as ISO 26262
are raising the ability for the industry to
come together and understand the
kinds of risks facing the connected car.
But the industry is yet to realise a
widely dened standard for security, he
said. For this reason, it is hard to
measure security and the compliance
of different versions of connected car
Stanislav Breslavskyi, a colleague of
Tymoshyk and a Security Engineer at
SoftServe believes that in a nutshell,

With the development of autonomous

connectivity play a critical role, security
becomes an even greater concern. Is it
safe to consider autonomous cars
before cyber security is properly
The rst autonomous cars will pop up
sooner than new safety rules, cyber
security measures, and standards get
designed and implemented within the
automotive industry, explained Yurii
Bilyk, Security Engineer at SoftServe.
In todays digital world, technology
isnt a privilege that can be isolated
and kept only for yourself; its
spreading too quickly and we cant fully
control it, he said.
The development of autonomous
vehicles and several other related, and
Megatrends | 31

Connected Car

Remot e Exploita
Una ltered Passenge
r Vehic
ris Valas
r o Vehi
R ear
c f
rlie iller,
M S ecur
herforTw itter
@open rce.or

2015.All Rig
hts Reserved.
-1 -

In a white paper released in August 2015, Chris Valasek and Charlie Miller detail a remote attack against an
unaltered 2014 Jeep Cherokee that resulted in physical control of some aspects of the vehicle. The white paper
was published to coincide with presentations at the Black Hat and DEFCON hacker conferences

very advanced, driver assistance and

active safety features continues in
parallel with connected vehicle
Mascarenas, FISITAs President and
Chairman of the Executive Board.
Many of the same solutions and best
practices apply, together with some
unique challenges. Consideration is
given to security, privacy, liability and in
addition the policy issues that need to
be worked through in order to provide
the regulatory framework that allows
these vehicles to operate.
Can the industry ever secure the
connected car?
There is no such thing as 100%
perfect security, believes Mohsen
Mohseninia, Vice President of
Development, Europe, at Machine-toMachine (M2M) communications
company, Aeris. If you have a 100%
secure system, nobody can talk to it
and it cant talk to anybody. It is a
balancing act.
Mohseninia explained that Aeris has a
dedicated core network, which means
that except for radio transmission
between the device and network,
everything else is an isolated network
communicating directly with the
32 | Megatrends

devices. That protects the devices

completely from any spam that may try
to enter, he noted.
Engineer at SoftServe, agrees. There
is no system that is fully secure, he
observed. It is only possible to reduce
risks to the minimum level, but some
security holes are always there, very
often as a result of little or no
knowledge about new vulnerabilities,
so-called zero-days attacks, or just
because of human mistakes. While
continuously adding new features to
their functionality, they are also
attracting hackers interest: the more
features a connected car has, the more
ways there are to attack the system.
Onwards and upwards
In the wake of high-level cyber attacks
on a growing number of major
departments, the issue of cyber
security is gaining increasing attention
in the mainstream media, and its clear
that cyber attacks are a present and
future danger that must be resolved.
Connectivity has always meant access,
but luckily, Tymoshyk believes the
industry is beginning to realise the

threat. The major risk for the industry

is the ability of an attacker to get
remote control of a vehicle, concluded
Tymoshyk. The silver lining now is the
fact that vendors start thinking about
security right from the development
Software manufacturers have always
and will always have the possibility of
vulnerabilities, from multi-million dollar
organisations down to the small
software vendor from your local town,
said Mark James, Security Specialist at
IT Security Firm ESET. Very few bits of
code can be declared 100% safe. The
main thing is being open to the fact that
you could be vulnerable and having the
plans and the means to nd, x and
distribute that x as quickly as humanly
possible. As more and more devices
become linked together we will see
them scrutinised and checked. Its not
a bad thing if handled in the right way
from all parties involved.
They say if you want to remain in the
same position, you have to run very
fast, and the same applies to security,
Serednytskyi said. Going forward,
therefore, it is clear that broader efforts
will be needed to control attacks from
hackers, even if in reality, the
connected car can never be 100%

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Connected Car

Watch out, remote-controlled

cars about!
Megan Lampinen investigates the automotive industrys growing interest in
remote-controlled cars
emote controlled cars arent just for
kids anymore. The past few years
have witnessed a growing number of
developments from OEMs and
suppliers alike involving devicecontrolled parking and manoeuvring,
usually through the use of a
smartphone or tablet computer.

destination, and then finding their

vehicle upon returning to the parking
garage or lot, observed Chris
Schreiner, Director of User Experience
Practice at Strategy Analytics.
Parking using a remote app is a
concept that has been around for a

few years, he added, pointing

demonstrated this technology at least
four years ago. That was launched in
September 2011, and smartphone
technology alone has advanced
significantly since then.

Nobody likes parking

In fact, all aspects of parking have
attracted digital developments as
companies seek to reduce the
challenges involved in finding a vacant
spot and then fitting ones vehicle into
it. Weve seen great interest from
services, but these have been
relegated to finding open parking
spaces, seeing prices of nearby
parking, navigating from the parking
spot to the users actual final

Megatrends | 35

Connected Car

Not just cars

Remote controlled parking is not limited
to passenger cars. In July 2014, ZF
Lenksysteme - a joint venture between
ZF and Robert Bosch now known as
Robert Bosch Automotive Steering adapted a car parking assistance
system for heavy commercial vehicles,
promising to make reverse-parking of a
EuroCombi trailer easy as pie. In the
app, the truck operator selects the
required direction and speed for driving
- 4, 2, or 1 kph for forward driving and
0.5, 1, or 2 kph. When reversing, he
touches the trailer image on the tablet
display with his nger and the truck
starts to move. To steer, the operator
drags the trailer on the display in the
required direction, and the parking
assistant automatically does the rest.
Once the destination is reached, the
operator takes his nger off the tablet
and the truck stops moving. The same

technique is applied when moving

forward. ZF believes the parking
assistant could prevent millions of
Euros worth of damage typically
caused during low-speed manoeuvres.

guiding the vehicle train in a

comfortable and easy manner by
having a good overview of the
surrounding area.
JLRs optimism

However, Schreiner suggests there is

more useful technology out there for
tackling the same problem. The trailer
app is less useful than an on-board
trailer assist feature. For instance, Ford
on its 2016 F-150s is providing an
onboard trailer assist feature called Pro
Trailer Backup Assist where the driver
can more easily do what that app is
able to, he commented.
Roland Greul, Manager Advanced
Engineering, Driver Assistance and
System Interconnection at Robert
Bosch Automotive Steering, told
advantage is to take a more reasonable
position outside of the vehicle, for

Jaguar Land Rover (JLR) believes

there is substantial potential for this
sort of technology. In June 2015, it
presented its Remote Control Range
Rover Sport research vehicle, to
demonstrate how an owner could drive
the vehicle from outside the car using
a smartphone. The smartphone app
allows an individual to control the
steering, accelerator and brakes. JLR
has suggested a driver could use the
smartphone to reverse the car out of a
parking space if someone has parked
too close for them to open the door.
The technologies featured on the
Remote Control Range Rover Sport
clearly represent developments on the
road towards autonomous driving. But
before we get there, do drivers really
want features such as smartphonecontrolled parking?
Wolfgang Epple, JLRs Director of
Research and Technology, told
Megatrends: We believe the Remote
Control Car has the potential to offer
real value to our customers. Sharing
such projects at an early stage is all
part of the research. It helps us to
gauge customer reaction and to assess
the demand for the technology whilst
the project is at an early stage. Weve
had a really positive reaction so far.

36 | Megatrends

Connected Car
Such functionality may be regarded
more as a nice-to-have extra than a
must-have safety essential, but Epple
believes it has real merit. This
technology offers huge convenience to
our customers. It will help to remove the
tedious and stressful parts of driving,
he explained.
Specically, it allows the driver to check
the precise positioning of the vehicle
when negotiating challenging terrain or
difficult parking situations. In addition to
helping drivers out of a tight space it
could also be used to provide a better
eld of view when exiting a narrow
townhouse garage, he suggests. In an
off-road environment it will allow the
driver to become his - or her - own offroad spotter and control the car while
not actually sitting in it to guide the car
remotely over off-road obstacles, Epple
What about the near-term feasibility of
these projects? Are we likely to see this
system make it into a production car in
the next few years? This is a research
project at this stage, but you will see
these sorts of technologies beginning
to launch post 2020, predicted Epple.
Other OEMs working on remote
parking concepts include BMW, which
has been developing its Remote Valet

Parking Assistant; Audi, and Daimler,

which in July 2015 released the latest
information on its Remote Parking Pilot
smartphone app. And on the supplier
side, in addition to the aforementioned
Valeo system, Continental has
developed a surround-view camerabased automated parking system which
can be operated from a smartphone
when the driver is outside the vehicle.

told Megatrends. Certainly there are

situations, particularly in dense
European urban areas, where
extremely tight parking spaces would
warrant the use of this type of feature.
But we dont see strong consumer
demand, particularly in the US, for this
feature. There is also consumer
apprehension and using the remote
aspect that would need to be

Legal, and other, hurdles

Like many new technologies under
development today, these systems may
require the support of new legislation.
Schreiner cautioned that legal hurdles
remain with regards to allowing
vehicles to be operated with no one in
them. Epple observed that the global
car industry is currently lobbying for a
change in the law and is optimistic on
the outcome. With the major benets
that remote or autonomous features
can bring, we dont expect this to be a
problem, he added.

The real potential, believes Schreiner,

is in eets. At International CES 2015,
experiment; using
Georgia Tech-owned golf carts, a
person sitting in a remote location can
drive the cars using real-time video
streamed over LTE. The purpose
initially could be to park or reposition
vehicles once the occupant has
reached the intended destination, and
longer term offers an interesting means
of returning a hired or shared car to its
original destination.

While Schreiner admits that there are

situations in which these technologies
could prove useful, he doesnt
anticipate a widespread global uptake
any time soon. These types of remote
control parking features have much
more niche use cases, which means
there will be less consumer interest, he

Remote control features are better

suited for eets and in particular car
rental and car sharing services,
Schreiner elaborated. Being able to
move eets around remotely to where
they are most needed from a remote
station would save a signicant amount
of money.

Megatrends | 37

Connected Car

Level up: gamers shaping

the automotive landscape
As OEMs begin to reach out to the gaming community, we talk to Nissans Darren
Cox and Fords Will Farrelly about how the two industries can work together
By Xavier Boucherat

are shaping many sectors of the

automotive industry.

using today. Its multi-functional, and can

be scrolled through with a pair of buttons.
Its no surprise, he added, that video
game developers should be so far
ahead in the eld of interface design.
Thats what games live and die on, he
said. Their success is dependent on
their interactivity, and their ability to
draw people in.

However, the last decade has seen the

relationship between the two industries
become increasingly intertwined, with
OEMs reaching out to the gaming
world. Now both the people who make
games and the people who play them

Darren Cox, Head of Global Motorsport

at Nissan, describes the companys long
association with video games. Its
nothing new, he said. "Polyphony, the
company who designed Gran Turismo,
designed the interface on the GTR. That
was ten years ago, not including the
years it was in development. We were
aware that the interfacing in the game
was more advanced that any of the
technology being developed in the car
world. If you look at the screen that was
used, its basically what everyone else is

he automotive industry has long

been a source of inspiration for
video-game developers. High-end race
simulators like Gran Turismo and the
Forza Motorsport series remain
popular, while titles with a motoring
core like the Grand Theft Auto series
have earned their development studios
universal acclaim.

38 | Megatrends

From sofa to driving seat

Cox was involved in the founding of the
GT Academy, which takes the worlds
best players of the Gran Turismo series

Connected Car
and turns them into real-life race
drivers. Originally a one-year project,
the idea was initially slammed by some
industry experts. Now in its eighth
year, it is universally recognised as an
established method for racing teams
when it comes to identifying talent and
selecting racers. Nissans own racing
team now boasts 13 drivers who have
arrived in the sport through gaming.
Part of its success, continues Cox, lies
in the gaming industrys ability to mine
untapped potential in countries where
traditional paths into motor-racing
simply dont exist. This year has seen
us work with countries representing
over 2.5 billion people in population, he
said. GT Academy is not just for
countries where motorsport, or even
motoring is already established. Two
years ago when we explained the idea
to Nissan Thailand, they asked us,
How do you normally nd racing
drivers? People in the UK drive past
go-kart tracks every day, but these
guys have no idea what go-karting
even is. So this is their way into motorracing, and its also a way for us to
bring motorsport and motoring in
general to them.
He added, I knew wed nd good
racing drivers. I had no idea wed nd
great racing drivers.
Ford has also been reaching out to the
gaming community, not just to aid its
vehicle manufacturing, but also to
explore the possibility of repositioning
itself as a door-to-door mobility
provider. August 2015s Gamescom,
Europes biggest trade fair for
interactive games and entertainment,
developers to gamify the experience of
urban travel.

Gamication, the application of gaming

qualities to other areas of activity, has
been behind the success of brands like
eBay. The bidding site is layered with
gameplay elements, such as the trust
score, the time counter, and the
surrounds consumers. Gamication
has seen developers enter industries
they previously had no association
According to Will Farrelly, a User
Experience Supervisor at the Ford
Smart Mobility centre in Europe, the
gaming community will prove
invaluable for the company, as it
prepares for the huge changes of
advances in mobile technology:
mechanisms to deal with stress and
anxiety, and this leads to largely fixed
travel patterns and behaviours. Thats
not good for a city because it often
leads to saturation of urban transport
He gave the example of the London
Undergrounds central line at 8
oclock on a Monday morning.
Anyone whos ever had that pleasure
will know its absolutely saturated, he
explained. We know there are
alternative travel modes that run in
parallel, but theres little visibility of
these modes, and where there is,
many customers have no trust. They
lack the confidence to step outside
their routine and try out a new mode.
If gamification were able to do that,
and get even 5% of people off that
train, we could better balance
Farrelly believes that travellers had a
relatively low level of engagement with
mobility information, which is often
impersonal, and typically deals only

with time, costs and location. We see

personalising mobility, he predicted.
We see opportunities to get more
engagement by making something
The effect on manufacturing
Both Cox and Farrelly acknowledged
the impact that gamer technology and
the inclusion of gamer mind-sets in the
manufacture of vehicles.
Simulators are in use everywhere
now, said Cox. We moan about not
seeing a drip-down of motor-racing
technology into road cars. You dont see
the front wing of a Red Bull team car
appearing on an Inniti like you might
have back in the day. But we are seeing
a drip-down of the mindset, processes
and electronics brought to racing by
gamers into the general motoring
industry, and simulators are a great
example of that.
Meanwhile, Farrelly thinks solutions for
personal vehicles brought about by
gamication might have a dramatic
effect on driver behaviour. He
concluded, The car is naturally a part
of the multi-modal travel solution were
working towards, and our commercial
vehicle services as well. So in terms of
the role of Ford Smart Mobility for Ford
products, there is opportunity to
integrate gamication there. This might
include trip and travel planning in the
city, but also encouraging positive
behaviours around use of electric
mode in hybrids, and encouraging
drivers to use their vehicle in a way
that doesnt add to congestion
A version of this article rst appeared

Megatrends | 39


In the auto industry of the

future, is there space for
new EV manufacturers?
Megatrends looks at some of the start-up companies seeking to change the face
of the EV segment
By Michael Nash

espite the fact that it remains a

niche segment, having enjoyed
slower growth than earlier predictions
has suggested, the electric vehicle
(EV) segment continues to grow. In
2014, for example, sales grew 60%
compared to the previous year, with
similar projections estimated for 2015.

Numerous studies that have examined

the outlook for the EV market over the
next decade predict strong growth. A
recent AlixPartners report forecasts
annual growth rates between 24% and
31% until 2025, which suggests there
is room in the market for numerous
new model launches.
With over 50 EV models currently
available to purchase worldwide, most
OEMs already have future EV
programmes well under way. Coupled
with market dominators like Tesla, how
much scope is there for smaller
companies that are hoping to change
the complexion of the EV segment by
launching new models?
Megatrends seeks to address the
automotive world of a decade from now
and beyond. With that in mind, can we
expect to see new EV brands on the
market in ten years time?
Detroit Electric
With an extensive history, the Detroit
Electric marque is by no means a new
40 | Megatrends

Detroit Electric
HQ: Detroit, Michigan, USA

company. Originally founded in 1907, it

saw some early success with the
Detroit Electric, a buggy-style fourwheeler built by the Detroit-based
Anderson Electric Car Company that
ran for over 200 miles on a single
charge, with a top speed of 20mph
(32kph). But the company was forced
to le for bankruptcy following the stock
market crash of 1929.
Fast-forward to 2008, when Albert Lam,
former Chief Executive of the Lotus
Engineering Group, revived the
company. It was officially relaunched in
March 2013, when it started work on
developing a two-seat all-electric
roadster the SP.01. Lam says that

Product: Detroit Electric SP:01

Launch date: 2017

preparations for the introduction of the

electric sports car are gathering
momentum, and expects the car to
reach Europe rst.
Were truly delighted that were just
weeks away from bringing to fruition our
plans to introduce Detroit Electrics rst
pure electric sports car, said Lam in
June 2014. While Detroit was our
preferred initial assembly location, the
regulatory process for the production
and sale of the SP:01 in the US has
taken longer then expected. That
means the assembly operations have to
be located in Europe to allow us to bring
the vehicle to market globally in line
with our timing plans, he explained.

customers a choice of battery
technology, enabling either an ultra fast
charge or a longer range, but always
with supercar levels of performance.

Faraday Future
HQ: Gardena, California, USA
Product: TBC. 100% electric, zero-

Faraday Future
Based in California, Faraday Future
(FF) believes it is poised to lead the
entire automotive industry into the
future. The company is developing an
all-new premium EV using a team of
engineers who boast extensive
experience in the technology and
automotive industries.

personalised vehicle
Launch date: 2017


ground up. It also says that its

workforce is expanding rapidly.
The company has not indicated any
plans as to when it will bring its rst
offering to market. Like FF, everything
is hush-hush at Atieva, with a company
spokesperson refusing to divulge any
additional information for this article.
Lightning Car Company

In fact, the team has a strong tie to

Tesla Motors. FF was founded by Nick
Sampson, who was previously Teslas
Vice President and Chief Engineer. He
is joined by Dag Reckhorn, formerly the
Director of Manufacturing for Teslas
Model S, and Porter Harris, who
developed batteries at SpaceX and
also worked at Lotus.
FF plans to bring a vehicle that is 100%
electric, zero-emission, fully-connected
and personalised in ways youve never
even considered possible to the market
by 2017. Other details are tightly under
wraps, as a spokesperson told
Megatrends, I have been instructed to
hold off on furthering information about
FF for the time being.

Iain Sanderson is the owner of

Lightning Car Company, a UK-based
start-up that is hoping to bring a high
performance EV to market. The
Lightning GT has been on the brink of
reaching production for some time.
Originally, delivery was meant to start
in 2012, but the launch has been
pushed back, currently to 2015.
Equipped with a lithium-titanate battery,
the GT will have a range of over 250
miles. However, Sanderson says that
the company is aiming to offer our

Speaking to Megatrends, Sanderson

describes the barriers facing a start-up
EV company: The biggest difficulty is
getting funding. The UK is a daughter
economy for car OEM ownership,
mother economies being Germany,
Japan, China and the US. We should
have gone to one of these latter
countries from the off. But blame for our
delay on getting the model to market
cant be completely pinned on funding.
Consumers have also had mixed
messages, and the EV segment wont
take off unless opinion leaders, like
politicians, are using the technology.
Founded in 2013, nanoFlowcell AG is a
research company that has developed
a powertrain architecture by using
quantum chemistry and molecular
engineering. The companys Quant F
and Quantino models made their debut
at the 2015 Geneva Motor Show.
Both models have followed a prototype
called the Quant e-Sportlimousine
the companys rst offering that marked
a quantum leap in the development of
electric mobility. According to the
company, its nanoFlowcell battery
enabled a range of 600km (373 miles).
Whats next for the company? One of
the main tasks for nanoFlowcell AG in
the coming weeks and months will be
to identify suitable partners from
various elds for whom deployment of
the nanoFlowcell is a feasible
proposition, says Jens Ellermann,
President of the Board of Directors,

Atieva is another California-based
start-up that is looking to take the EV
segment by storm. It was also created
by a former Tesla employee, namely
Bernard Tse, who was Vice President
and Board member from 2003 to 2007
before he left and created his start-up.
On its website, Atieva says it is
designing and creating a breakthrough
electric car in the heart of Silicon Valley.
Were redening what a car can be, by
building an iconic new vehicle from the

HQ: Menlo Park, California, USA

Product: A breakthrough electric car

Launch date: TBC
Megatrends | 41

the government loan of US$465m that
was available to EV start-ups in the US
is unlikely to be repeated. In April
2010, Tesla Motors received approval
for about US$465m in low-interest
loans from the US Department of
Energys Advanced Technology Vehicle
Manufacturing Program.
Niche inside the niche

Lightning Car Company

HQ: Coventry, UK

nanoFlowcell.. Initial discussions have

already taken place in this respect.
Along with the automotive sector, areas
such as aerospace, transportation and
terrestrial applications are also
predestined for the use of ow cell
technology. Corresponding research
projects have already been initiated by
nanoFlowcell AG and are progressing
High expectations
Speaking to Megatrends, Cosmin
Laslau, Senior Analyst at Lux
Research, detailed the environment
into which these companies will enter
when they decide the time is right.
Were seeing some important strides
being made for model choice and
desirability: consumers will soon have
multiple SUVs to choose from with
plug-in drivetrains, which is great
because of how popular this class of
vehicle is. And by the end of the
decade all major German OEMs will
offer their cars with plug-in options, he
Laslau notes Tesla as a key player in
the EV market, and one that is currently
dominant as an EV-exclusive company.
However, he believes that with tesla at
the upper end of the market. Among
the OEMs that could compete with
Tesla is GM, which is doing good work
by pursuing micro-hybrids, hybrids,
plug-in hybrids, and pure electric
vehicles, in addition to fuel cell
approach is important to cover a
majority of buyers.
42 | Megatrends

Product: Lightning GT
Launch date: 2015

With the advances in EV products

being made by Tesla, GM, Nissan,
BMW and other established OEMs, is
there room in the market of the future
for small start-up EV companies?
Laslau believes not, and lists several
reasons why Tesla may have been the
last EV start-up to enjoy success: rst,
the ability to fund a business using a
personal fortune, and tap into a
network of peers for additional funding.
Second, timing: Tesla started at a
unique time when other OEMs were
desperately looking to accelerate their
own EV technology, hence both
Daimler and Toyota investing in Tesla in
return for EV battery pack supply deals.
OEMs have largely moved on since
then, and do their own EV work inhouse now.
Finally, there is the added factor
government support; Laslau thinks that

HQ: Liechtenstein
Product: Quant E, Quant F, Quantino

If companies like Atieva, Faraday

Future and Detroit Electric are to see
success, Laslau thinks they must ll
gaps in the EV market that are not
already occupied: They must focus on
niches. The last thing the industry
needs now is another US$30,000 EV
hatchback with limited driving range, or
another US$80,000 luxury plug-in
sedan. Those particular markets have
been oversaturated. Niches such as
sports cars, or untapped larger markets
such as pickup trucks, offer interesting
However, even if they do ll niches,
Laslau does not believe the companies
will do anything revolutionary. This is
due to the fact that the only real
possible differentiator between EV
makers is their battery how much it
costs, how much it weighs, how much
space it takes up. The probability of
small start-ups having access to better,
companies like Tesla is very slim.
Nevertheless, small EV start-ups will
continue to pop up, he continues.
Most will fail, and EVs will slowly push
on, thanks to larger incumbent OEMs.
There is no going back from plug-in
vehicle technology now. The only
question is, how many decades will it
take to go from 1% market penetration
to 10%, 50% or more?

Launch date: Quant E - 2015; Quant

F - 2016; Quantino - TBC



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E-mobility and the

untapped potential
of emerging markets
David Isaiah considers the prospects for EVs in emerging markets

he e-mobility segment worldwide

may be small at present, but its
current growth is expected to continue.
Some studies put the total number of
electric cars on the roads worldwide at
more than 700,000 units. The bulk of
the sales have come in the last ve
years and in 2014, for instance, more
than 300,000 EVs were registered

Navigant Research expects EV sales in

the light-duty vehicle segment to reach
around 6.4 million units in 2023. This
gure comprises hybrid EVs, plug-in
hybrids and battery EVs. While
stringent emissions standards and the
demand for better fuel mileage are
seeing more EVs on the roads,
conventional vehicles are ghting back
with new technologies aimed at
improved fuel economy.

Even with proper infrastructure, the

segment suffers from range anxiety,
owing to the limited range of these cars
per charge, coupled with an incomplete
infrastructure. This last factor, of
course, is constantly improving.
Automotive Executive Survey 2014,
around 40% of the respondents from
the US, Western Europe and China feel
that EVs could make up 11-15% of new
Compared with the rms 2013 survey,
respondents from Brazil were far more
optimistic about the growth of emobility in their country, while
respondents from Russia had lowered
their expectations signicantly. India,
meanwhile, has the lowest projection of

any of the major automotive markets,

KPMGs survey revealed.
In this article, Megatrends takes a look
at the prospects for EVs in emerging
markets, with a focus on Brazil, Russia
and India.
Julian Semple, a Senior Consultant
and Manager at CARCON Automotive
in Brazil, believes that e-mobility in
Brazil will be a long time in coming.
In 2014, a total of 855 EV or HEV
(hybrid EV) light vehicles were sold in
Brazil, which represents only 0.026% of
total sales. In the rst half of 2015, a
total of 408 EVs and HEVs were sold,

At present, the countries with the most

number of electric cars on their roads
include the US, Japan, China, France,
Norway, the Netherlands and the UK.
With the exception of China, the
obvious pattern is that e-mobility is a
concept that has secured a wider
adoption with developed countries,
rather than emerging markets such as
Brazil, Russia or India.
One of the main factors, of course, is
price a natural deterrent in costconscious emerging markets. Another
is the availability of recharging
infrastructure upon which EVs rely.
44 | Megatrends



EV Stock: 10,778
EVSE Stock: 3,117

EV Stock: 40,887
EVSE Stock: 6,208



EV Stock: 43,762
EVSE Stock: 12,114

EV Stock: 6,990
EVSE Stock: 3,100

EV Stock: 24,419
EVSE Stock: 2,821


EV Stock: 2,799
EVSE Stock: 1,721

United Kingdom
EV Stock: 21,425
EVSE Stock: 2,866


EV Stock: 3,536
EVSE Stock: 775


EV Stock: 743
EVSE Stock: 1,330


EV Stock: 108,248
EVSE Stock: 11,511


United States

EV Stock: 7,584
EVSE Stock: 2,520

EV Stock: 275,104
EVSE Stock: 21,814


EV Stock: 83,198
EVSE Stock: 30,000


EV Stock: 30,912
EVSE Stock: 8,600


EV Stock: 2,689
EVSE Stock: 328

South Africa

EV Stock: 48
EVSE Stock: N/A

Source: IEA (EVI)

representing 0.032%. The top seller is

the Ford Fusion HEV imported from
Mexico, which benets from the trade
agreement between the two countries,
Semple told Megatrends.
One factor that is fairly unique to Brazil
is the countrys focus on ex-fuel
engines, which, as an alternative to
conventional engines, could challenge
any chance of e-mobility in the country.
Furthermore, Semple explained that
there has been opposition to EVs from
Brazils sugarcane producers. Another
question is whether Brazil would have
the capacity to supply electricity to a
large number of recharging stations.
Brazil has experienced a drought in the
last two years, and most of its electricity
is generated by hydroelectric plants.
Currently there are about 130 EV
charging stations in Brazil, mainly
energy companies such as CPFL and
Itaipu Binacional. By 2017, these
companies forecast that the charging
stations will grow to 153, focused in the
city of Curitiba and Campinas. The
infrastructure for a country as big as
Brazil is very small and limited to a few
areas, Semple says.
EVs and HEVs are still very expensive
in Brazil and there has been discussion
in congress for a while to place
incentives for EVs and HEVs, which
would make them more competitive. But
I dont see EVs and HEVs taking off in
Brazil in the near future. Perhaps, if the


cost of hydrogen fuel cell vehicles can be

reduced, that could be a good alternative
for Brazil, he told Megatrends.
There are, however, some positive
signs for electrication in Brazil. For
instance, the electric bus segment
seems to have the potential to expand
in the near future.
Meanwhile, e-mobility in Russia is quite
underdeveloped. Only a few thousand
units are sold each year, including
hybrids, plug-in hybrids and fully
electric vehicles and most of these
are imported. With the price of gasoline
in Russia still much cheaper than in
many other countries, it is unsurprising
that consumers continue to favour
conventional ICE-powered vehicles at
the expense of electric and hybrid
The Russian consumer generally
does not find the electric vehicles on
offer attractive due to a number of
things. The infrastructure to charge the
cars is insufficient and only being
developed in large cities like Moscow;
the price of e-cars is too high and the
choice is not great; limited service
offerings is also a problem, as well as
the usual e-mobility concerns around
the time needed to charge, and
insufficient driving range, says Ulrik
Andersen, Partner at KPMGs Moscow

Percentage of 2014 Global

EV Stock in EVI Countries

While there has been a more active

development of charging infrastructure,
especially in big cities like Moscow, the
levels are far from sufficient.
Developments in recent years, such as
cutting import tariffs on battery EVs
from 19% to zero, show that the
government is interested in promoting
this vehicle segment, says Andersson.
Other measures that have been
implemented or are being discussed by
regulators include incentives for EV
owners such as specic tax breaks,
loan support, free parking and
permission to drive in bus lanes, says
Andersson. Localisation of production
and import substitution are buzz words
these days. However, when it comes to
e-mobility, this approach is awed and
somewhat backwards. You cannot
apply a push-approach, certainly not in
a market that is already repressed and
where you have a product that is
generally not accepted.
Andersen believes that the government
has to get consumers onboard and
create a pull-effect, i.e. a demanddriven need for the production. Any
other way during the difficult economic
circumstances that the country nds
itself in, says Andersson, will have very
little effect.
I am sure that e-mobility will slowly
develop in Russia, albeit from a very
low base, but my expectation is that it
will be at a slow pace. Much hinges on
Megatrends | 45

Adoption and Manufacturing of
Electric Vehicles (FAME) under
NEMMP was announced in this regard
in early 2015.

the governments support. It is not quite

clear to what extent support is available
and during these turbulent economic
times, where state budgets are
squeezed, it is difficult to imagine that
e-mobility will suddenly be a major
priority for the government, considering
what else needs funding these days
and what funding is actually available,
Andersen says.
The common factor that India has with
other emerging markets is that demand
for EVs is denitely muted. As a result,
suppliers are also approaching emobility cautiously, adopting a
wait-and-see approach. To make
matters worse for this segment, India
has been suffering from a delay in
policy implementation, resulting in
manufacturers struggling to meet sales
The electric vehicle industry is looking
to the government to create an
ecosystem conducive for market
announcement in 2010 by Indias
Ministry of New and Renewable
Energy (MNRE) of a Rs950m

Source: IEA (EVI)

46 | Megatrends

(US$15m) incentive scheme for

manufacturers, things have not moved
at the desired pace, leaving substantial
ground to be covered in terms of
building infrastructure and promoting
the use of electric vehicles, says
Indraneel Bardhan, Managing Partner
of EOS Intelligence.
The National Mission for Electric
Mobility (NCEM), set up in 2011,
launched the National Electric Mobility
Mission Plan (NEMMP)-2020 in 2013
with the aim of investing about
Rs140bn in the next eight years to
create infrastructure and promote the
use of EVs in the country.
It was estimated that about Rs200bn
would be required to develop the
market, with the industry contributing
about Rs60bn. However, NEMMPrelated government spending could
start only in FY2015-16, wherein
Rs10bn was earmarked for next two
scals, Bardhan explains.
It is expected that a majority of the
government expenditure would be
focused on providing monetary
incentives to boost sales of electric
vehicles. A scheme named Faster

In India, e-mobility supporting

infrastructure is currently a work-inprogress, with most electric vehicles at
present being charged at home. Most
charging stations have been, or are
being installed, by Mahindra &
Mahindra, the OEM that owns the
Reva brand of electric cars. The cost of
these cars is high as well, in India,
owing to imported components. As a
result, there can be up to 30-35% cost
differential between an electric and
ICE vehicle, according to EOS
Even if the government is able to cover
time delay, the main challenge for the
government as well as the industry
would be to create customers for EVs
amid declining conventional fuel prices.
Gasoline prices have declined by about
10% in the past year and, with the Iran
Nuclear Deal coming into effect, there
is speculation that prices will drop
further, says Bardhan.
Electricity availability may also be an
inhibiting factor, as power cuts are
regular in non-metro cities, and metro
cities also witness power outages
during peak demand periods. The
government is working on an ambitious
24/7 power supply programme by 2019,
which, if accomplished, may help in
market expansion beyond metro cities.
According to a McKinsey Global
Institute study (published in 2011), 600
urban centres generate about 60% of
global GDP. Over the next decade,
while that number will remain
unchanged, the membership will
change; 136 new cities will join the list
by 2025, all of them from the
developing world and overwhelmingly 100 new cities - from China.
The creation of 100 all-new cities in
China and 36 others in emerging
markets presents an opportunity to
design the layout and infrastructure of
those cities to favour EVs, and perhaps
even at the exclusion of ICEs. With
China leading the emerging markets in
committing to reduce CO2 emissions,
and its recent efforts to promote
electried and so-called new energy
vehicles, e-mobility in emerging
markets may currently appear an
unachievable goal, but the potential
and opportunities these markets
present are vast.

Mercedes-Benz energy storages are also suitable for private
use to buffer surplus power virtually free of any losses

The battery-powered home:

Charging where it matters
Freddie Holmes investigates potential uses for EV batteries once they reach the
end of their usefulness to the vehicle itself

n July 2015, the National Renewable

conducted a study on the viability of
reusing discarded electric vehicle (EV)
batteries, and found that they still retain
approximately 70% of their original
capacity at the end of their usable life
in a vehicle.

increased year-over-year by 53% in

2014. As such, there is a large and
growing market of batteries tted in
early EVs making their way beyond
useful life for powering the cars for
which they were intended, and an
opportunity has arisen to utilise those

How then, should these discarded

batteries be used after being stripped
of their automotive duties? Domestic
power provision seems an obvious
application, and is one that is being
explored with growing enthusiasm by
OEMs in collaboration with battery

There are a number of reasons why

domestic power provision is an
attractive prospect, and solar power is
already widely used by many homes for
the same reasons. Batteries with
remaining life could be used to offset
peak power demand, and ensure
continuous and reliable power in
developing countries. In addition, there
is the potential for businesses and
homes to reduce their reliance on the
disconnect altogether and become

The number of EVs hitting roads

around the world is increasing. Latest
gures from the International Energy
Agency (IEA) show that global sales of
battery electric vehicles (BEVs)

A number of OEMs are approaching

the idea of domestic power provision
admittedly with caution at rst, but
several plans are taking shape.
Produce and reuse
GM took initial steps in 2010 by
partnering with Swiss supplier ABB to
collaborate on battery research for EVs.
This had progressed by November
2012 to the production of a prototype
power storage unit that utilised
repackaged batteries from the
Chevrolet Volt EV.
Five Volt batteries that were past their
useful life were integrated into a
modular unit capable of providing two
hours of electricity needed by the
equivalent of three to ve average US
homes. Pablo Valencia, Senior Manager
of Battery Lifecycle Management at GM
Megatrends | 47


Five used Chevrolet Volt batteries work with an adjacent solar array and two wind turbines to help supply power to the administrative offices at
GMs new Enterprise Data Center

observes that in many cases, when an

EV battery has reached the end of its life
in an automotive application, only 30%
or less of its life has been used. This
leaves a tremendous amount of life that
can be applied to other applications like
powering a structure before the battery
is recycled.
As for whether these domestic
charging stations could utilise new Volt
batteries as a way to provide EV
owners with a reliable and convenient
charging solution, Valencia told
Megatrends: Theres definitely a
potential for us to use
secondary use Volt

energy storage, but we have nothing

to announce today. There are minimal
modifications that you need to make to
the batteries when they are used in a
secondary use application. For one,
you have to reconfigure the modules
so they can be packed more efficiently,
and we also make slight modifications
to the battery management system
itself to manage the energy flow in any
new application.
A quick Internet search would suggest
that the partnership may have lost
momentum, but Valencia advised that
GM is still actively working with ABB on
the implementation of secondary use
systems on the grid, adding: We are
not focused on using new batteries for
home power solutions.
The current focus of the project is
on extending the useful life
of battery systems after
they have reached the
end of their useful life in
the vehicle, he explained.
We think this strategy is
more benecial in terms of
overall economics when you
consider that a battery could be
deployed in a secondary use
application for more than ten years
beyond the vehicle, depending on
As it stands, ve used Volt batteries are
helping to keep the lights on at GMs
new Enterprise Data Center at its
Milford Proving Ground facility in

48 | Megatrends

ABB is also involved with Shenzhen

BYD Daimler New Technology (BDNT),
the Chinese joint venture (JV) between
Daimler and BYD. In 2013, the Chinese
government introduced a fast charging
standard GB/T 20234 to encourage
technical innovation and stimulate
market acceptance of EVs. This
standard aimed to provide Chinese
consumers the opportunities to
conveniently charge their vehicles at
home and in public.
In February last year, ABB began
providing home wall-mounted fast
chargers for BDNTs battery electric
Denza model. Arno Rhringer, Chief
Operating Officer of BDNT, heralds the
ability to install these chargers
efficiently as equally important as the
efficiency of the battery technology
In October 2009, Nissan and
Sumitomo Corporation announced
plans for a JV, titled 4R, to reuse,
resell, refabricate and recycle lithiumion batteries previously used in EVs. At
the time, Nissan noted expectations of
the demand for second-life batteries to
reach the equivalent of 50,000 EVs per
year by 2020.
More than ve years down the line in
June 2015, 4R Energy teamed up with
Green Charge Networks to develop
and distribute second-life lithium-ion
batteries from Nissans Leaf EV for
stationary commercial energy storage.
A lithium-ion battery from a Nissan
Leaf still holds a great deal of value as

energy storage, even after it is removed
from the vehicle, says Brad Smith,
Director of Nissans 4R Energy
business in the US.
The rst unit will be installed at a
Nissan facility later in 2015, where
multiple Leaf batteries will offset peak
electricity demand. The system can
also be paired with solar power for
renewable energy.
Private energy storage
Daimlers next venture into domestic
charging came through its subsidiary
Deutsche Accumotive. Established in
2009, the company develops, produces
and markets highly complex drive
batteries for hybrids and EVs for
Daimlers Mercedes-Benz and smart
In June 2015, Deutsche Accumotive
began the provision of private energy
storage units. These (Mercedes-Benz
branded) lithium-ion battery units can
incorporate up to eight 2.5kWh battery
modules for a capacity of up to 20kWh.
Unsurprisingly, Tesla one of the
pioneering companies to go purely
electric with all its vehicles had
already taken a similar step with the
announcement of Powerwall in May
The shake up
Powerwall is a stationary battery to
provide power to homes and
businesses in a step to shake up the
entire energy infrastructure of the
world, according to Chief Executive
Elon Musk. In an industry that

vehicles, Powerwall appears to be a

relatively simple idea: take the batteries
that are already in production for the
Tesla Model S, and prepare them for
domestic use.
This is going to be a great solution for
people in remote parts of the world,
where there are no electricity wires, or
intermittent or extremely expensive. You
can take the Tesla Powerwall and it can
scale globally, Musk told press at a
conference in May 2015.
Unlike Daimler and ABBs offerings,
Powerwall will use solar energy to
provide environmentally-friendly power.
It will come in two forms a 7kWh unit
for US$3,000 and a 10kWh unit for
US$3,500 both of which will use the
same batteries that Tesla produces for
its EVs.
The fact that it is wall mounted is very
important, commented Musk at its
launch. It is at against the wall, it has
all of the integrated safety systems and
converters, and it addresses all of the
needs. If you are thinking about buying
a battery, it gives you peace of mind,
he explained. You dont need to worry
about being out of power.
Here comes the sun
The Powerwall can also be stacked. Up
to nine can be combined, so if youve
got a pretty big thing going on, you can
have up to 90kwh, he added.
As for the rationale behind the
development of the Powerwall, Musk
stated: How energy is delivered across
the earth today is pretty fact, it

The solution, he says, is fairly

obvious: the sun. We have this handy
fusion reactor in the sky; you dont
have to do anything, it just works. It
shows up every day and produces
ridiculous amounts of power. He told
press that contrary to popular belief,
very little land is needed to
completely get the US off of fossil
fuels. Elaborating, Musk explained
that the area needed to power the
entire globe with photovoltaic panels
would be less than 1% of the total
land mass of the US, and most of that
could be deployed on existing
rooftops and buildings.
For much larger buildings that require
greater levels of power, a Powerpack is
available, and can be designed to scale
innitely. With 160 million Powerpacks,
the entire US can transition to solar
power, and with 900 million, the world.
To transition all transport and all
electricity generation and heating
globally, approximately two billion
power packs would be required. Is that
a crazy number? It is not. The number
of vehicles put on the road every year
is two billion, so this is within the power
of humanity to do. Weve done it
before, he concluded.
Telsa is a pioneering company, as it
has proven by hedging its bets entirely
on EVs when there was no real
demand. As such, only time can tell
whether this was a sound investment,
but the company is beginning to face
stronger competition from global OEM
giants, hinting that the company is on
the right track. Does this suggest then,
that just as the Model S arguably
sparked a renaissance in EV demand,
new competitors will arise and begin a
domestic charging battle?

Megatrends | 49

Powertrain Innovation

What future for CNG

passenger vehicles?
Following Hondas plan to phase out its CNG programme in the US market,
Megatrends spoke to CNG experts to ask if the fuel has a future in passenger
By Michael Nash
ompressed natural gas (CNG) has
seen some signicant success in
terms of adoption as a transport fuel in
various countries around the world. As
the battle between the alternative fuels
rages, with liqueed natural gas (LNG),
biofuels, renewables and electricity
among those vying for their chance to
reduce fossil fuels, what sort of future
lies ahead for CNG?

2015 the end of the road?

Whilst several OEMs continue to y the
ag for CNG, others have decided to
abandon ship. Honda, for example,
50 | Megatrends

Powertrain Innovation
infrastructure for natural gas refuelling
and consumer demand remains a
challenge, he remarked.
The main message
According to the US Department of
Energy (DoE), CNG fuelling stations
US$45,000 and US$1.8m, depending
on the size, fuelling capability, and level
of equipment that is incorporated.
Some compressors alone can cost
around US$550,000, but price varies
depending on equipment size,
specications and manufacturer.

recently announced a plan to phase out

its CNG programme in the US.

production of both of these products

with the end of the 2015 model year.

In a company statement, John Mendel,

Executive Vice President, Automobile
Division, American Honda Motor
Company explained that the next
generation Civic will not come with a
CNG variant: With two new engines on
the new Civic, including our rst turbo
engine, we are targeting class-leading
fuel economy for Civic, with EPA
highway fuel economy a few ticks
above 40 miles per gallon. Due, in part
to this ability to advance fuel economy
technology, the Civic line-up will no
longer include a hybrid or a natural gas
model, as we will discontinue

Production of the Civic CNG model

was carried out at Hondas Indiana
plant. Sales of the variant remained
steady for a number of years. In 2014,
however, they started to decline
dramatically, dropping 65% when
compared to 2013. Mendel believes
that the lack of supporting refuelling
infrastructure was the main reason
behind the CNG models demise.

Honda has promoted CNG-powered

vehicles for many years. For most of
the past 15 years we have been the
only automaker with a dedicated CNG
vehicle. Despite this commitment, the

Andrew West, Founder and Chief

Executive of American Natural Gas a
company that designs, constructs,
operates and maintains NG fuelling
stations thinks the price tag can be off
putting. The stations arent cheap, he
admitted. They are a big investment,
and sometimes the price is daunting. But
our customers attest that both through
our design criteria and with our in-house
technical experience, we provide a very
reliable NG fuelling experience.
He is condent that, as the CNG
network continues to grow, the price of
stations will fall. Is the CNG fuelling
network developing quickly enough in
the US? Absolutely. The message is:
we are all doing this, whether it is on
the demand side, the vehicle
development side, or the expansion of
the fuelling infrastructure. It is all being
done for the right reasons. The larger
the strategy, the more economic the
savings will be. And that margin is
getting greater everyday, West added.

Megatrends | 51

Powertrain Innovation
Asked why he thinks Honda cancelled
its CNG programme, he replied, Its
purely to do with economics. While I
applaud Honda their Civic CNG is
great and it has done a lot in terms of
raising awareness for the technology
is a small sedan really the right type of
vehicle to use the technology in? I think
you need something bigger, and to
have an unlimited production run just
wasnt realistic.
Europe is committed
The US is not the only place where
CNG is seeing enthusiasm. Several
European OEMs continue to push the
segment forward with sustained
investment, and many have models
that have been present in the market
for some time. SEAT, for example,
offers two CNG models - the Leon TGI
and the Mii Ecofuel Start&Stop.
The company has recently voiced its
condence in the segment, stating, In
the last ve years, sales of cars
powered by CNG have tripled in
Europe, while they have increased sixfold in Spain in the same period.
Speaking to Megatrends, Andrew
Shepherd, SEATs CNG expert said the
economics behind CNG make it an
enticing prospect for consumers: The
combination of the latest technology
engines and a lower fuel price means
that running costs with CNG are
signicantly cheaper than other
traditional fuels, with savings between

52 | Megatrends

30% and 50%. A CNG car costs

around the same to buy as an
equivalent diesel version, so the
savings in running costs can be
achieved right from the rst day of
The recently announced commitments
by both the EU and individual Member
States to promote CNG as an
alternative to traditional fuels will
undoubtedly push forward the share of
NG as a vehicle fuel over the coming
years, concluded Shepherd. Italy is
currently the benchmark for CNG sales

and with the combination of service

stations and vehicle availability, the
CNG market share there stands at
around 5%. This kind of market share
is perfectly achievable in Europe as a
whole if we make the most of the
current favourable legislation for
promoting alternative fuels and
Hondas decision to cancel its US CNG
programme may have signalled the
end of CNG as a passenger car fuel in
that market, but in Europe, it appears
to remain a serious contender.

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Powertrain Innovation

Complexity and the IC powertrain

- is there a solution?
Globalisation is presenting some fascinating challenges for powertrain
technologists. Richard Harrington talked to Delphis John Fuerst about its impact
on the technology roadmap
ometimes, things just dont work
out as planned. Taking coffee with
John Fuerst, Delphis Vice President
Engineering, Powertrain Systems, was
one of those moments. Having come
prepared to discuss the companys
developments in diesel, gasoline and
hybrid vehicle technologies, Fuersts
approach to portfolio management was
so intriguing that the interview nished
with barely a mention of 48 volt
architectures or cylinder deactivation.

As Delphis most senior powertrain

engineer, Fuersts role is more about
vision and planning than it is about the
details of each innovation. He is an
engineer in business, thinking like an
entrepreneur on behalf of Delphis
investors and customers. To the man in
the street it may look like globalisation
is creating uniformity, but from Fuersts
perspective it is opening up a
increasingly clever thinking to ensure
54 | Megatrends

that each regional requirement is met

My challenge is working out how to
help our customers be more
competitive while meeting all the
regulations worldwide, he explains.
That makes cost a very important
element of our strategy, but we must
not lose connection with the other
factors that increase competitiveness
such as fuel economy, durability, low
warranty, light weight, serviceability
and how the car drives. The balance of
priorities is different in each market,
and so are the challenges such as
fuel quality and service capability - that
set the boundaries for our technology
Take fuel quality as an example,
described by Fuerst as the only
mission-critical component over which
we have no control. Figures from Volvo

suggest that while the UK and

Northern Europe have consistently less
that 10 ppm of Sulphur, some of
Southern and Eastern Europe retails
fuel with multiples of this level. On the
South Eastern perimeter, the level of
fuel illegally imported from Africa is so
high that a long-distance haulier could
unknowingly ll his Euro VI truck with
fuel at 500 ppm or more. Some of the
additive blends have been described
as frankly bizarre.
As countries industrialise, they adopt
Western standards in their big, wealthy
cities, but the rural areas typically
advance far more slowly, says Fuerst.
China is an example where we will
increasingly have to meet world-class
emissions standards in the cities, but
the vehicle may then be driven 50 miles
into the countryside and lled-up with
fuel that really shouldnt go anywhere
near modern fuel injection and
emissions control systems.

Powertrain Innovation
enhanced by sophisticated electronic
control. Its this latter area where we
see the big advances over the next 1015 years, allowing us to provide a
stable physical platform that can
accommodate a huge diversity of
Delphi already ships 20 billion lines of
software code every day, across all of
its product lines (which includes active
safety, infotainment and electrical /
electronic architectures) and sees this
gure rising rapidly. In a candid
moment, Fuerst reveals that calibrating
powertrain software already consumes
more time than developing the
hardware, and that the companys
accelerating investment in test systems
traditionally for hardware validation
is now largely focused on rening the
control calibrations.




Having a robust strategy for solving

these challenges is vital to Delphi,
which anticipates 95% the world
vehicle market will still be fuelled by
diesel or gasoline by 2040. Our
strategy can be characterised as
nding the simplest approach that
delivers the greatest value, says
Fuerst. The key here is a detailed
understanding of what creates value for
our customers and how this changes in
each of their markets. We then develop
exible, modular hardware that offers a
high level of adaptability, greatly

Equally vital is the ability to acquire

robust, high-resolution data to feed the
software, but there is a risk here of
technologies like this will be key to
improving emissions during highly
transient events, which due to planned
changes in the test cycle are very much
the immediate challenge, reveals
Fuerst. High resolution data will also
simplify the calibration process and
reduce the engineering investment
required by our customers.
An example is the companys new
single wire, closed loop diesel injector,
which uses current ow between the
needle and the valve seat to provide
precise needle lift data. This could send
its output to a new type of controller
that uses physics-based models to
provide a much faster response than
can be achieved with todays look up
type controllers. The key to further
improvements in transient emissions is
an ability to open and close the injector
valve extremely quickly and accurately.

John Fuerst, Vice President Engineering, Powertrain Systems, Delphi

In a diesel application, we are heading

for event separations of less than 100
s, which will allow digital rate shaping.
We already have the valve technology
in production; we now need to ensure
we can deliver the control signal with
the required resolution, explains
Fuerst. The Model Based Controller
will anticipate where the control
requirement is going, removing latency
so the optimum setting can be
achieved more quickly.
Technology convergence
In some respects, the synergies
between gasoline and diesel have come
a full circle. When Delphi acquired the
diesel business, it was greatly enhanced
by the electronics capability we had
developed at our gasoline business,
says Fuerst. Now we are using
capabilities developed in our diesel
hardware to enhance our gasoline
systems as they move to higher injection
pressures with more, smaller injection
events, possibly cooled EGR and
advanced valve trains that allow cylinder
deactivation and reduce pumping
losses by allowing the throttle to stay
wider open, more like a diesel. We are
already seeing gasoline engines with
Miller timing operating at a 14:1
compression ratio, compared with
around 10:1 for conventional gasoline
engines and 15:1 17:1 for diesel.
Delphi has already worked with one
major European vehicle manufacturer
on a single control system for both
gasoline and diesel. The injector hole
shapes and manufacturing processes
have aligned, and the understanding of
fatigue developed in the diesel
business is now proving invaluable as
gasoline injection pressures potentially
double (to about 400 bar) as the next
generation of GDi is introduced.
This trend is particularly apparent in
Delphis work on Gasoline Direct
Compression Ignition (GDCI), which
uses compression ignition of gasoline
over the full engine speed and load
range. Testing has demonstrated low
NOx and soot emissions with fuel
savings up to 35% compared with
conventional gasoline. This is a
conventional multi-cylinder engine with
conventional parts. What were doing is
improving efficiency by using proven
technologies in an innovative ways,
taking full advantage of sophisticated
electronic control. That cuts the cost of
innovation as well as the risks and the
timescales, states Fuerst. For me,
thats an ideal strategy.
Megatrends | 55

Powertrain Innovation

Interview: Gian Maria Olivetti,

Chief Technology Officer,
Federal-Mogul Powertrain
Electrification, downsizing, downspeeding, turbocharging and the use of
aftertreatment all feature heavily in the future of the internal combustion engine,
as Gian Maria Olivetti explains to Michael Nash
ederal-Mogul has made two recent
announcements regarding the
development of products for internal
combustion engines (ICEs). The rst, a
new high strength aluminium alloy
material, was designed specically for
use in diesel pistons. According to Gian
Maria Olivetti, Chief Technology Officer,
Federal-Mogul Powertrain, the material
allows for smaller and lighter cylinder
blocks, which helps our customers to
make each new engine generation
more compact, lighter and with a
smaller carbon footprint than its

The second, and more recent

development is in the eld of valve
stems. Olivetti commented: Hollow
valve stems are both an enabling
technology and a direct contributor to
the reduction of CO2 emissions; by
lowering the valve head temperature
they allow more efficient downsizing
strategies and by reducing mass they
cut the energy absorbed through
Responsible for the coordination of
R&D activity and product development
worldwide, Olivetti has been with the
company for eight years following his
role as Chief Engineer at Fiat Iveco.
What are the major trends governing
the development of your ICE
We are active in developing
components both for transmissions
and engines. For the latter, the trends
are clear. At Federal-Mogul, we
strongly believe that ICEs will still
56 | Megatrends

remain the centre of the powertrain for

decades to come. There will be
increasing electrication content, and
we see more plug-ins and pure EVs
becoming available, but there are still
many issues with both these
architectures. So for us, it is essential
to support the development of ICEs.
The trends are more or less the same
for both diesel and gasoline engines
turbocharging are all prominent. So too
is the use of aftertreatment.
Essentially, every development we are
making is related to what is happening
in the combustion chamber, which
needs to withstand higher temperature,
higher cylinder pressure, but with
reduced lubrication in terms of quantity
and viscosity. We also reduce the
weight and friction of moving parts.
We focus on two aspects materials
and coatings. All the materials we are
developing will withstand the higher
temperatures, and all the coatings we
are developing will operate using less
lubrication whilst reducing friction.
Were there any major challenges or
issues when developing hollowvalve technology?
Hollow-valve technology is not
something that is completely new in the
market. It was used in the racing
industry in the past, together with
titanium valves, and also in some highend applications.
The point is that, through our
innovation, it is becoming a suitable

Gian Maria Olivetti

technology for high volume production.

The technology was previously used in
4-litre, 3-litre and sometimes 3-litre
turbo engines, all of which were
relatively low volume. Furthermore, the
stem of the valve was large at around
7mm. Now the trend is to have a lighter
valve, approximately 5mm in diameter.
So the main challenges were to gure
out a way of industrialising the
technology for high volume production,
while ensuring the valves were small
and lightweight.
We are the only company in the
market that is able to make hollowvalves that are 5mm in diameter.
Currently, we have two applications in
production, and we are certain that
our developments in this area highlight
Federal-Moguls leading position with
cutting edge technology. It is a key
enabler for turbocharged gasoline
engines that are operating at high
temperatures with great levels of

Powertrain Innovation
What is next for Federal-Mogul and
its ICE development strategy?
There are going to be no big
evolutions made in ICE engines.
Instead, evolution is something that is
relatively gradual and solid. We want
to continue improvement using our
specialist experience in materials,

Comparison of a hollow valve to a conventional solid valve

Where does the demand reside for

the DuraForm-G91 material?
The development was clearly aimed at
diesel engine pistons, because the
pistons in a diesel engine to those in a
gasoline is very high. In the latter, you
hardly reach 380 degrees, but in a
diesel you easily reach 450 degrees.

reliability. Consumers like those in North

America that buy diesel trucks and
SUVs wont consider buying a gasoline.
The challenge is, therefore, to make
diesel engines as green as possible.
Even though some of the technology
used in diesels today is of a very high
quality, we will continue to leverage our
engineering capabilities, and make the
diesel cleaner and even more durable.

We have just started with our

DuraGlide coating for piston rings,
which is a special coating for reduced
friction that can work almost without oil.
It will reach production in 2016. We are
also developing something that is quite
innovative in the eld of ignition a new
highly efficient ignition for gasoline
We believe that the volume of diesel
cars being produced will not shrink,
but will remain stable. That means
that the large majority of volume
increase will come from gasoline, so
we will concentrate our efforts in that
A version of this article rst appeared

Consequently, the combination of

mechanical and thermal fatigue of the
piston is much more challenging in a
diesel than in a gasoline hence the
demand for such a material.
One of the major limitations of diesels
is the combustion strategy, which is
extremely inuential on emissions. The
events that occur in the combustion
chamber effects the efficiency of the
aftertreatment, and if you dont have
freedom in the combustion chamber to
tune the calibration aggressively, you
loose the opportunity to have high
efficiency in the engine.
With the diesel discouragement
currently rife across various countries
in Europe, how important could the
material be for the segment?
I understand the concerns about
diesels, but nevertheless, I cannot see
a signicant reduction of volume of
diesel-based vehicles in Europe.
Similarly, they are increasing in North
America as we speak.
People like diesel cars because of their
efficiency, and because the reliability is
proven. With some other architectures,
like new turbocharged direct injection
(DI) gasoline engines, there is still a
question mark in terms of their

Megatrends | 57

Manufacturing & Materials

Contract manufacturing:
quick x, or growth opportunity?
Freddie Holmes investigates the prospects for contract manufacturing in
emerging markets
s Russia works through the impact
of its market crash, domestic
OEMs such as GAZ Group have found
contract manufacturing to be a viable
option to keep prots steady, if not on
the rise.

stemming from currency depreciation
and political turmoil, VW and Skoda
have continued to produce cars at the
GAZ factory in Nizhny Novgorod
through their existing contract
manufacturing arrangements.
Russian market shows potential, but
its not straight forward
This initially began with contract
manufacture of the Skoda Yeti in
October 2011. The VW Jetta followed in
March 2013, and then the Skoda
Octavia in May that year. A signicant
overhaul of the plant in Nizhny
Novgorod was undertaken to kit out the
location to VWs standards. Previously,
the general assembly site was used for
the short-lived Volga Siber project in
2009, and most of this equipment was
modernised. The body shop, however,
was a brand new greeneld
Gnther Heiden, who was appointed as
Chief Operating Officer at GAZ Group in
December 2013 after more than 20
years at Magna, notes that currently, the
market situation for VW and everybody
58 | Megatrends

The 10,000th Sprinter Classic rolls of the assembly line in the GAZ plant in Nizhny Novgorod
attended by (from left) Gnther Heiden, Chief Operating Officer GAZ Group, Vadim Sorokin,
President GAZ Group Sren Hse, Head of Mercedes-Benz Vans Russia and Rene Mack, Director
Sales & Marketing Mercedes-Benz Vans

is difficult. We have a maximum

capacity of 110,000 cars per year, and of
course we want to utilise all of that.
GAZ also manufactures the MercedesBenz Sprinter T1N van for Daimler.
The market is there, and we sold over
6,400 units last year, explains Marco
Wildgrube, Head of Quality, T1N,
Mercedes-Benz Russia. I would say it

is a huge investment, but of course we

want to stay, he adds.
Production has been scaled back since
the project started two years ago. Before
the crisis, a two-shift operation
produced around 70 vehicles per day.
Currently, ve vehicles are produced per
hour, equating to a daily output of 40
vehicles in one shift. Currently, the plant

Manufacturing & Materials

is operating at below-capacity levels, but
Wildgrube is quick to point out the risks
of over-production in the current
economic climate: It is almost a target
to not produce more than the demand
because we want to avoid the problems
associated with high inventory.
As it stands, the plants maximum
annual production capacity is just over
15,000 units. Despite adjusting
production, the 10,000th Sprinter rolled
off the line in June 2015, 23 months
after production began in July 2013.
Why have global OEMs VW and
manufacturing operations within an
emerging market such as Russia?
A balancing act
Andrew Bergbaum, Managing Director,
Automotive at business advisory rm
AlixPartners explains that the
manufacturing in low cost countries, is
the proximity to a low-cost base for all
of the large components that are
expensive to ship. However, he points
out that all of this then has to be
balanced against the cost to ship out
the nished product, as well as the
additional cost of engineering due to
building a car not in the OEMs own
Bergbaum lists the levels of overcapacity in the BRIC markets: Russia
at just 35% factory utilisation, India at
54%, China at a healthier 76% and
Brazil at 51%. Only a select few OEMs
actually need additional capacity.
When they do need it, these regions
probably only make sense if there is a
local market to deliver to, he explains.
For VWs Russian operations, materials
are brought in from Mexico, the Czech
Republic, and Europe, before being
delivered to one of GAZs central
As for whether the partnership with VW
will stay steady with three models, or
expand to include a greater model
range in future, Heiden explains that it
is up to VW, but reinforced that from his
experience, contract manufacturing is
not just something you do for one or
two years, its long term.
Risk management
Mercedes-Benz also has contracts with
Magna Internationals Austria-based
subsidiary Magna Steyr, which

manufactures complete vehicles for a

range of global OEMs. Karl Stracke,
Engineering describes the suppliers
involvement in contract manufacturing
as being in the service industry to its
OEM customers.
Sometimes, if the customer goes with
a new product and there is a higher risk
for them in the market, they will use the
contract manufacturing business model
as a rst step, and then look to whether
they can invest by themselves
internally, he adds. This, he says,
effectively limits risk for the OEM: On
a competitive level it is a better deal for
the OEM to go with the contract
manufacturer rst, before putting all of
the structure and xed costs down into
their own operations.
But reputation, says Stracke, is crucial
manufacturing. And reputation has
clearly played its part for Magna Steyr:
the Graz plant in Austria has been
producing Mercedes-Benzs G-Class
for 35 years, as well as models for
Aston Martin, Audi, BMW, Chrysler and
Peugeot, amongst others. If you do not
have a good image in the market, you
dont get the job. You need to have
excellent quality, a highly engaged,
motivated and well educated team, and
the right footprint, he explains.
Mexico and India showing promise
Magna Steyr sees potential in
expanding its contract manufacturing
footprint, with Mexico high on the list.
Mexico is also an ideal hub to export
cars to global automotive markets,
including China, and at least in the past,
South America. This is why we think it
is not just because of the low labour
costs, it is also because of good
conditions to export cars around the
globe. We also see some requests from
Chinese OEMs that are interested in

that hub, so we are working to help

them export their vehicles down the
road to emerging markets, but then also
to mature markets, explains Stracke.
Jaguar Land Rover recently entered a
contact manufacturing agreement with
Magna Steyr for this reason. The
rationale behind this agreement is to
create additional volumes needed to
support its plans for further growth.
In India, OEMs have been carrying out
temporary suspensions in production in
order to keep inventory levels in check.
manufacturing is a good option for
OEMs because of the exibility it
brings. Indian automotive components
manufacturer Omax Autos says it has
completed deliveries of an order for 20
vehicles to an unnamed OEM. Volvo
too has considered looking to India for
a local contract manufacturing partner
through either Hindustan Motors,
Mahindra & Mahindra or General
Get your wallet out
When considering setting up contract
manufacturing operations from scratch
in an emerging market, Dave Andrea,
Senior Vice President and Chief
Economist at Michigan-based Original
Equipment Suppliers Association
(OESA), points out that there is a
signicant investment required. A plant
whether refurbished or completely
greeneld requires all of the systems
and controls any OEM would have, but
the plant layouts dont include the same
xed investment that you might have for
running a 300,000 unit vehicle through.
However, to get the kind of exibility to
be able to run three shifts or to run six
different models down the same line,
the capital investment needed for that
exibility either remains the same or
Megatrends | 59

Manufacturing & Materials

Could the auto industry warm

to the open source car?
A handful of pioneering companies are applying open source (OS) concepts to
car development - and they believe OS is the key to the future of the automotive
industry. Could they be right?
By David Isaiah
he term open source is most
commonly associated with software
development, but several pioneering
companies are pursuing the notion that
open source principles can also be
applied to hardware development.

Leading names in this niche area of

vehicle design include OSVehicle,
Riversimple and Local Motors.
It is a natural extension of other
complex systems that have been open
sourced, for example, operating
systems, database management
systems, and the like. But it is in its
infancy because companies using an
open source vehicle development
methodology are still deciphering the
complexity of the tools and the supply
chain, John B. Rogers, Jr., Chief
Executive and Co-Founder of Local
Motors told Megatrends.
Founded in 2007 as a low-volume,
manufacturer, Local Motors has taken
its business to another level by
focusing on 3D printing. The Phoenix,
Arizona-headquartered company now
has a goal of having 3D printed cars on
the road before the end of 2016. The
company printed an entire car and
drove it at the 2014 SEMA show in Las
Vegas, and repeated the feat at the
2015 Detroit Auto Show. Local Motors
system works in ve steps submitting
ideas, voting on a design, prototype
solutions, micro manufacturing, and
nally marketing and sales.
Today only few companies truly
embrace open source hardware
development, said Simone Cicero,
Open Source Strategist at OSVehicle.
Were talking about OSVehicle and
Wikispeed, while other companies and
60 | Megatrends

Assembly of OSVehicles TABBY EVO takes less than one hour

projects have opened the blueprint

design in some ways, for example
Local Motors, but with non commercial
licensing, or Tesla, which has opened
access to its patents pool.
According to Local Motors, co-creation
is an essential element of vehicle
innovation...Microfactories bring the
internal Local Motors team, the virtual
community together to make this
concept a reality. Utilising the Local
Motors website, designers, engineers,
fabricators and enthusiasts can submit
their ideas, receive helpful feedback,
and develop their designs.
While conventional factories are large
and entail signicant monetary
investment, employing thousands of
workers, new small, microfactories
operate on a much smaller scale, and
thereby much lower budgets.
As a concept, how valid is open
source vehicle development in the

global automotive manufacturing

scenario? OS Vehicle believes that
this model will be a key enabler of the
transition towards a new vision for
vehicle manufacturing. In todays
global automotive industry, however,
there is little use for an open source
This is because large incumbents
already share designs and even
production lines but there is no
possibility for new entrants and small
players to get involved. Open source
development models will lower the
barriers to entry and will allow much
smaller, or specialised, players to join
without asking for permission,
OSVehicles Cicero told Megatrends.
However, by removing this barrier to
knowledge, other ancillary parts of the
industry, such as servicing, will be
open to a wider set of participants as
well, without obliging creators to deal
with activities in which they are not
interested, he says.

Manufacturing & Materials

Local Motors feels open source vehicle
development is critical to the future of
rapid technology development within
the automotive sector.
If we are right, parts of the industry are
going to rapidly reformulate their place
in the value chain in order to be able to
respond to the new tools that are
available. If we want to see ying cars
within our lifetime, we need to embrace
open source, Local Motors Rogers
On the production front, Local Motors
plan is to operate an efficient,
multinational microfactory network, in
order to build game-changing
innovations. Essentially, this companys
view of a microfactory is one that
allows for the creation and production
of new vehicles, based on local needs.
In short, open source vehicle
production is translating into a shift
from large vehicle manufacturing plants
that form the basis of the current
production scenario, to, as OSVehicle
puts it, a one-room factory. The
advantage of such a concept is that
such small factories can be distributed
all over the world, especially in
emerging markets.
We empower local people to create
local brands, creating local jobs,
serving local customers and better
reuse existing businesses, skills and
facilities, states OSVehicle. There are
certain distinct advantages that open
source vehicle production brings to the
vehicle manufacturing process.

The main advantage today is the real

experimentation in new forms of
manufacturing, such as 3D printing,
FabLab manufacture and assembly,
new materials, intelligence on board,
logistics, Cicero said.
Also, by opening [up] all the information
you instantly open doors to a broad
range of manufacturers that can carry
out a self assessment and evaluate
their capabilities to produce the product.
Therefore you can have a much more
widely distributed production process
that can help brands build more
sustainable vehicles by combining local
fabrication and an open bill of materials
of COTS (commercial off-the-shelf)
Financial advantage
It is here where open source vehicle
production offers a distinct advantage.
Manufacturing is the most capitalintensive stage of the entire automotive
process, and as a result, it is where the
greatest nancial risk lies.
Open source methods allow us to
make better choices before we commit
our precious capital. Therefore it is a
manufacturing more efficient, Cicero
told Megatrends.
Future of open source vehicle
There are, at present, very few
companies that are involved in open
source vehicle development
or production, and to
varying degrees.

Nevertheless, this is a concept which is

seen to have much potential for the
future and some, like OSVehicle,
believe the concept will soon be
integrated into the automotive industry.
Were at the point in which this
industry is no longer sustainable, its
too inefficient, it produces huge
negative externalities. Open source is
key to enabling a transition towards a
better industry, an industry that will
innovate on cutting edge technologies
instead of focusing on providing a
hundred different models that are all
the same at the end, Cicero said.
He believes open source will result in
an industry that leaves communities
and users to co-design innite niche
products that can be easily integrated
into more complex services and may
constitute opportunities for local jobs in
assembly, servicing and mobility
service development.
In Local Motors view, open source
vehicle development will take the same
pathway as open source software,
open source apparel and other
industries that have opened up their
source code.
In the next couple of years, if
embraced aggressively by practicing
companies and organisations, open
source will be second-nature to STEM
(science, technology, engineering and
mathematics) education, to our
childrens future and to the products
that we will hold so dear in a
collaborative economy, concluded
Local Motors Rogers.

Megatrends | 61

Manufacturing & Materials

Ford focuses on increasing

manufacturing safety
through virtualisation
In recognition of the physical nature of vehicle assembly, Ford refers to its
assembly line operators as 'industrial athletes'; we talked to the OEM about its
use of virtualisation to improve processes, reduce physical strain and improve
workplace safety for these 'athletes'
By Rachel Boagey

ssembly line work is no easy job,

and can often be risky and
physically demanding. To combat this,
Ford is using virtual reality to keep its
workers safe and assist them on
nearly every part of the car-building

While automotive designers focus on

a vehicles look and the customer
manufacturing experts focus on two
key areas design feasibility and the
safety of employees on the
production line.

Since 2003, Ford has reduced the

injury rate by 70% for its more than
50,000 workers in the US, and many
more around the world, through new
ergonomics technology, lift-assist
devices, workstation redesign and
data- driven process changes.

The companys ergonomists play a

key role in reducing worker injuries
by generating data to predict the
physical impact of building vehicles;
on average, Ford ergonomists
complete more than 900 virtual
assembly task assessments per
new-vehicle launch, centred on
three core technologies full-body
motion capture, 3D printing and
immersive virtual reality. Each
provides critical data used to
evaluate the overall safety of the
assembly process for employees,
while maintaining high vehicle
quality for customers.

Fords Ergonomics and Variation

Analysis Lab is a 1,800sq-ft facility in
Dearborn, Michigan, that opened in
January and serves as a testing hub
for everything from attaching
connecting hoses and pushing in

62 | Megatrends

We refer to our assembly line

employees as industrial athletes, due
to the physical nature of the job, said
Allison Stephens, Technical Leader
for Assembly Ergonomics at Ford.
decisions through ergonomics testing
that has led to safer vehicle
production processes and resulted in
greater protection for our employees.
Marty Smets, an Ergonomics
Specialist at Ford, explained that the
company focuses on reducing the
physical demands of the job and
reducing repetitive strain injuries.
The virtual manufacturing process
also allows the OEM to identify
issues before parts are made,
reducing costly mistakes. By
agging issues during the virtual
phase, we reduce costly late
changes. Our Ergo process is

Manufacturing & Materials

completely integrated into our
manufacturing engineering process
now so that its streamlined and no
different from any of the other
requirements to which our part
designers need to adhere, said Smets.

Our goal is to provide a healthy, safe

and productive work environment at
our Ford manufacturing facilities
worldwide, said Michael Torolski,
Ford Executive Director, Vehicle
Engineering. The ergonomics and

virtual manufacturing processes

support our injury reduction strategy
and enable early validation of
production-technology changes.
A version of this article rst appeared

Through signicant investments in the

programme, Ford has achieved a not
only a 70% reduction in employee
injury rates, but a 90% reduction in
overextended movements, difficult
hand clearance and tasks involving
hard-to-install parts.
As we collect data from our process
over time, we use that information to
rene and improve as we continue to
innovate, Smets added. Such things
as 3D printing, visual work instructions,
and operator training are ways we see
it could be used down the road.

Megatrends | 63

Retail (R)evolution

4S and beyond: reshaping

Chinas retail landscape
Megan Lampinen looks at the development of the 4S dealership model in China

s Chinas tremendous growth

momentum slows and competition
heats up, getting the retail experience
right becomes all the more important
dealerships in the country have been
pursuing the 4S model, a full-service
approach that brings together sales,
service, spare parts and surveys
(customer feedback).

as higher retention rates, observes

Huu-Hoi Tran, Director, Automotive
Sector, KPMG China. For customers,
4S shops have the reputation of good
quality work, are rich in maintenance
and repair expertise and represent a
place where the customer can trust
that his or her car gets the right
maintenance and care, including spare
parts that are original and approved by
the OEM.

One-stop shop
The concept of authorised 4S shops is
ideal for an OEM to build up customer
relationships and to serve customers
across their lifecycles, providing quality
services and ultimately achieve higher
cross- and up-selling potentials as well
64 | Megatrends

For the operators, the 4S approach

helps retain customers for service as
long as the car still has the OEM
warranty, but as Tran cautions: As soon
as the car no longer has the OEM
warranty, the price battle starts as
Chinese consumers are very cost and

price sensitive and could potentially

choose independent service and
maintenance shops.
Arrival in China
While the retail concept has been
around for some time in many of the
worlds leading automotive markets, it
was revolutionary when it rst came to
China. In the late 1990s, if you wanted
a service, you would have to take your
car to a place down the road. There was
a separation of the sales network and
the service network, explains Beatrix
Frisch, Automotive and China expert for
PROGENIUM. With the arrival in China
of Volkswagen, this all changed.

Retail (R)evolution

Volkswagens rst sales joint venture,

starting in 1997 with FAW-Volkswagen,
started to revolutionise the whole sales
system, notes Frisch. The existing
system wasnt working, and the there
was no OEM control over either sales
or service. What the OEM did was
apply in China the same approach it
used in Germany - 4S. The idea was
to integrate the whole servicing around
a car, because it was all split up and
segmented, with no control at all, she
The one-stop shop approach was
popular not just in Germany but also
across most of Europe and North
America as well. If you bought a car,
you went to your dealer and there you
could service the car as well. You could
buy spare parts and accessories. And
usually everything around the services
on the insurance side and registration
was done by the dealer. But at the time,
that was never done in China,
observes Frisch.
Not without challenges
The retail model became an idol in the
Chinese market and other OEMs soon
followed VWs lead. However, the
challenges for dealers, starting with a
hefty nancial commitment. You have
to buy land to set up a 4S dealer. It was
quite a high investment, says Frisch,
estimating the outlay at Yuan 30m Yuan 40m (US$4.8m-US$6.4m) for
every location. Then you have to nd
the areas to exploit, because the land
is still owned by the government.
KPMGs Tran echoes the sentiment,
stating: Establishing 4S shops is
expensive in terms of setup and
operations costs. And customer service
excellence initiatives are very human
capital intensive. He adds that the
current market slowdown only
exacerbates the situation: Especially in

the new normal environment, sales

numbers are stagnating and 4S shops
are forced to focus on service and
aftersales to remain protable and
A 5th S
A few years ago, BMW took the 4S
approach one step further with addition
of a fth S - Sustainability. Its 5S
features as a reinforcement of the
companys corporate commitment to
design, engineering and construction.
However, dont expect to see any big
impact on the industry. The market
doesnt care. It is more about corporate
social responsibility than any advantage
for the customers, says Frisch.
While she has little expectation of any
great impact from an expanded
approach including sustainability,
Frisch does see another disruptor in
the wings in the form of entertainment.
A lot of the luxury car brands in China
offer things like cinemas, hairdressers
and massages to customers. If they
bring their car for a service, they dont
want to leave the car because it is
much too valuable. So they or the driver
wait for the car. That means that they
need more services as entertainment
for the waiting time, she explains.
Notably, this development is specic to
China at the moment.
Legislative developments
While 4S operators face an uphill battle
on many fronts, Tran believes the most
signicant at the moment comes from
the Independent After Market (IAM)
reform with the de-regulation of the
September 2014, the government
announced a guidance designed to
transform the automotive maintenance

industry. This was considered the start

of anti-trust actions in the automotive
aftersales market, states Tran.
One important aspect of the guidelines
that will impact the aftersales market
involves the opening of the technical
information for maintenance to
independent car services. Automotive
manufacturers will have to provide, with
compensation. the repair technology
data to all maintenance companies,
repair shops and even customers
instead of only providing to authorised
4S stores, he explains. The goal is to
promote fair competition in the
automotive maintenance industry and
adjust the price level for service,
maintenance and repair work.
Another potentially important aspect of
the guidelines involves the deregulation of the automotive parts sales
channel. In the past, the car makers
had strict control over the supply of
parts, especially those at the 4S stores.
This situation will change since the
guidance encourages the parts
suppliers to provide original parts and
independent brand parts to the
aftersales markets, says Tran. It also
permits authorised parts dealers and
maintenance companies to re-sell the
original auto parts to unauthorised
maintenance companies. Furthermore,
the guidance stipulates that customers
have the right to independently choose
the maintenance companies and
aftersales services.
Guideline details have not yet been
released, but as Tran observes: It is
expected to mainly focus on
encouraging competition in the
aftersales market, emphasising the
consumers benets and regulating the
automotive market. As a consequence,
lower original parts prices are expected
and the traditional prot model of the
whole auto industry needs to be
Megatrends | 65

Retail (R)evolution

Embrace digitisation to
rediscover the art of
customer service
From paperless car sales transactions to robots in the service bay, car
companies need to go digital to improve the sales and aftersales experience,
stay ahead of the competition and retain customers
By Megan Lampinen

dealers/service providers are
catching on to the fact that digitalisation
can improve the customer experience
in the areas of retail and servicing. A
number of forces are at work behind
the trend, but part of it stems from a
rise in the number of transactions that
dealers are handling.

Recent research from information

management specialist EDM Group
found that 64% of the car dealers it
surveyed expect their industry to invest
heavily in technology to help deal with
the continued growth in car sales. This
digitalisation is taking numerous forms,
but Spencer Wyer, EDM Groups Chief
Technology Officer, believes one area
that could dramatically change is the
paperwork involved in a sale
The problem is simply the paper, he
told Megatrends. EDMs document
improvements in time and efficiency.
We are not reinventing the sales
process because its a well-trodden
process in automotive which involves
documents. We are simply making the
experience better for the customer and
more efficient and faster for the retailer
by removing paper and using
advanced technology called Intelligent
Capture to check multiple factors in a
set of documents and either
automatically pass for payment within
66 | Megatrends

minutes or refer to someone if there are

any problems. This enables people to
focus on the exception rather than
having to look at every document, most
of which are ne.
Up-to-date repair status
Workshop Automation service system
to enhance customer satisfaction
across its global workshops. Workshop
Automation harnesses state-of-the-art
digital technology to keep customers
up to date with information on their
vehicles repair status with tablet PC
devices. Owners can also receive realtime information through kiosks in
information on Hyundai products,
brand and marketing activities.
Improving customer service is at the
heart of Workshop Automation, Nick
Tunnell, Aftersales Director at Hyundais
UK operations, told Megatrends. He
observed that digital technology is a
growing and increasingly important part
of customers interactions with all
brands... Customers are increasingly
time poor, their expectations of
automotive retailers continues to
increase. Technology is becoming ever
more integrated and part of our daily
lives with everyone increasingly better
connected through ever more powerful
devices. Subsequent generations will
inevitably continue and accelerate that

Service technician robots

At Audi, service robots are being
introduced to help improve the speed
and accuracy with which dealership
technicians diagnose problems with
Audi vehicles. The robots, known as
Audi Robotic Telepresence (ART),
provide a one-on-one virtual link that
technicians, allowing the latter to
inspect and help service vehicles as if
they were right by the car themselves.
In developing the robots for its
technicians, Audi sought the expertise
of robotic telepresence solutions
specialist VGo. In their efforts to
improve customer satisfaction while
also lowering costs for their dealers,
Audi wanted to improve the speed and
accuracy of providing assistance to
dealer repair technicians, Ned
Semonite, Vice President, Products
at VGo,
Megatrends. With a specially modied
VGo available at all their dealers
service centres, Audi can get a factory
expert in the service bay to work
alongside the local technician at a
moments notice.
The remote expert controls the robot
and can see and control their view,
enabling the local mechanic to
physically make the repair on the car.
The benets are many. Time spent on
the phone and with email exchanges is
reduced. Diagnoses can be quicker

Retail (R)evolution

Megatrends | 67

Retail (R)evolution

since the remote expert sees what the

local technician sees. Correct repair
processes can be visually veried. And
most importantly for the dealership,
service bays are not tied up waiting for
factory help, Semonite explained.
As Brian Stockton, General Manager,
Technical Support, Audi of America,
added, development of the technology
sprang from growing demand at
dealerships: This is a strategy to
address how we could get ahead of
this wave of increased sales volume
and increased dealer traffic. It also
establishes a much more solid
partnership with the dealership
Again, providing a positive customer
experience is at the heart of the
concept. Once the car is in the
customers hands and something goes
wrong, were going to disappoint the
market. Our job is to get the vehicle
right the rst time as quickly as we
possibly can, Stockton said.
Beyond automotive
Alison Vincent, Chief Technology
Officer at Cisco UK & Ireland, observed
68 | Megatrends

that tapping digitalisation to improve

customer service is not limited to the
automotive industry. Providing better
ways to access remote and valuable
expertise is a common trend for all
industries that want to digitise their
business. Customer experience is a
great initial focus point and the
initiatives from Hyundai and Audi are
examples that show the automotive
industry has acknowledged technology
as an enabler for business growth and
diversication; thats the rst step of the
journey, she observed.
In the healthcare and nance sectors,
for example, telepresence technology
is frequently used to provide remote
access to important skills, such as
those offered by a medical consultant
or a mortgage advisor. It makes sense
that the automotive sector investigates
similar ways to enhance their customer
experience. Digital disruption - the
movement of business transformation
by way of digital technologies - is an
inevitability and we believe signicant
investment will be applied to the
automotive sector over the coming
years as businesses seek to change
their models and remain attractive to
customers, she added.

For now, OEMs face the risk of being

outperformed by more digitally
proactive rivals. Recent research from
Cisco forecasts that digital disruption
will displace about 40% of incumbent
companies in almost every major
industry within the next ve years. The
companies that survive will be the
ones who can re-invent their
businesses, and most likely will have a
digital centre, in which business
models, offerings, and value chains
are digitised to the maximum extent
possible, said Vincent. This doesnt
mean that every automotive business
will discard what has made it a
success or copy the current in-vogue
digital tactics. Rather, they must
challenge the assumptions that have
made them a success previously, and
stress-test the ways in which they
deliver value to customers. In more
and more industries were seeing
markets, and larger rms having their
market share reduced because they
didnt spot a transition or new business
model quickly enough.
When it comes to brands using digital
technology to stand out from the
competition, Vincent sees the move as
beyond important - it is more about
survival. She expects that successful
companies will need to embrace
digitisation in all its aspects. They will
digitise their assets and services, then
they will maximise analysis on the
reams of data that digitising provides,
which will ultimately lead to them
showing true differentiation from all

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Retail (R)evolution

Going omni-channel:
An automotive challenge
Ian Woolley, General Manager of EMEA at Ensighten, outlines his vision for the
ideal best-practice, automotive marketing technology platform

nline advertising attracts big

spend from some of the worlds
largest automotive companies, with the
likes of Audi and BMW vying to raise
their brand awareness with online
consumers. In the US in particular,
spend is rising fast. The sector is now
the second biggest in digital
advertising, set to reach US$7.30bn
this year, a rise of 17.3%, according to

Online brand exposure and research

often makes a big contribution to a
consumers decision to purchase, even
though customers typically visit
showrooms to book a test drive or
make a purchase. Additionally, long
purchase cycles make it tough for
automotive brands to know whether
their online spend is affecting the
bottom line.

when, where and how they make

purchase decisions.
How do online behaviours drive
automotive purchases?
Online platforms and advertising plays
a unique role in the automotive sector.
Automotive advertising, for example,
doesnt result in ecommerce sales as it
does for a fashion retailers or travel
companies. Instead, it is often
responsible for upper-funnel marketing
actions, such as strengthening brand
awareness and reputation. Therefore
an inherent understanding of what
constitutes a desired action online is
crucial, especially in terms of what is
marketing activity something usually
measured by click-through and
conversion rates.

For automotive brands, marketers need

to assess and measure the value of
online behaviours less in actual
purchases and more based on how a
customer uses online information such
as clicking on advertising, conguring
a car on the manufacturers website,
using tools like model comparisons or
booking a test drive online at a local
Savvy automotive marketers are
beginning to use this kind of online
activity as a precursor and predictor for
offline behaviour, often long before a
buyer visits a showroom. This involves
looking at consumer online behaviour
for example, conguring a car and
comparing it directly to offline sales to
identify how much a particular type of
online activity affects the sales of a
specic model.

Nevertheless, understanding the

relationship of online behaviours and
offline patterns of purchase has never
been more important, as the 2014
Autoshopper Study results by JD
Power shows. People who use the
Internet to shop for a car spend on
average nearly 14 hours doing so
before they buy. Furthermore, those
spending more time online tend to visit
more dealerships before they make a
decision to purchase. And the study
reported that nearly four-fths visit not
just the manufacturer, but also thirdparty, websites to browse information
like vehicle ratings and reviews.
Fortunately, marketers now have
available the technology to collect,
integrate and analyse online and offline
data, giving automotive brands an
opportunity to gain a holistic, single
view of customers revealing why,
70 | Megatrends

Online brand exposure and research often makes a big contribution to a consumers decision to
purchase, even though customers typically visit showrooms to book a test drive or make a purchase

Retail (R)evolution

Online advertising plays a unique role in the automotive sector. Unlike fashion or travel, automotive advertising doesnt result in e-commerce
sales; instead, it is used for upper-funnel marketing actions, such as strengthening brand awareness and reputation

Heres what a best-practice, marketing

technology platform can support in the
automotive space:
Identify which vehicles are being

viewed and researched within

specic geographic territories,
down to postal code regions;
Evaluate campaign performance
and spend at any campaign tier
from global, country and region,
down to postal code empowering
in-market teams;
Understand which ads, both online
and offline, are driving website
traffic, showroom visits and vehicle
purchases at the national and local
Understand how social media
activity impacts brand awareness
and sentiment, as well as
advertising effectiveness;
Learn which campaigns are
resonating with consumer segments
and geographic territories;
Track consumer behaviors across
website visits to understand the
stages of purchase consideration;
Target specic promotions for
models and specic dealerships
that will likely fall below sales goals
indicators, such as online car
conguration trends;
Plan local inventory to match
consumer interest, which makes
dealers more efficient and
ultimately drives down costs.

franchisees and manufacturers just as

it is between upper-funnel branding
activity online and offline sales. By
uniting sources of online and corporate
data, dealerships can run many types of
analyses, yielding critical information
about prospective buyers and how these
consumers are motivated to purchase.
For example, local dealerships need to
have access to data and analytics
revealing which local TV, radio and
newspaper ads are driving website
traffic, showroom visits and actual
They also need to correlate showroom
traffic and call centre volume to web,
social and mobile behaviours.

Marketing teams have the technology

required to fully harness the power of
online data and integrate it with offline
data, enabling the auto industry to
better understand buyers as they
interact online, respond to local and
national advertising, visit showrooms,
take test drives and make purchases.
From this foundation, manufacturers
and dealers can work jointly to
personalise and optimise the customer
experience wherever and whenever
consumers interact with the brand. After
all, that is the Holy Grail in todays
marketing, regardless
of industry.

Processes and technology that

support a shared view of the
consumer, including internal
portals that drive performance
and accountability, will enable
manufacturers and franchisees
to avoid the duplication of
efforts that is rife across the
automotive industry as they
will instead be empowered
with a full picture of
the customer across
all touchpoints.

How can manufacturers and dealers

work together?
Many dealerships are independently
owned, and it is therefore important to
disconnects between

Megatrends | 71

Retail (R)evolution

Tech heavy, asset light - the

future of automotive retail?
Current resource-intensive online car configurators are clunky and quickly out of
date. Could a Cloud-based, 3D, software-based solution be the answer?
By Llewelyn Fox

he results of studies recently

published by both Frost & Sullivan
and Accenture, support the belief that
the pattern for future vehicle sales will
soon include a signicant contribution
from direct online sales. Through the
industrys early forays into online
selling, car buyers are displaying a
great propensity for buying online - at a
rate that surpasses the industrys
collective growth. Frost & Sullivan
statistics suggest that 20% of car sales
will be completed entirely online by
2025, which equates to forecasted
sales of US$4.5bn. Furthermore, the
Accenture gures show that 75% of
Americans are already happy to buy a
car without leaving their front rooms.

So, does a future generation of

automotive armchair shoppers spell
the end for traditional dealerships and
sharp-suited sales patter? Not
necessarily, according to ZeroLight
Chief Executive, Darren Jobling, whose

technology-led company has recently

been announced as a visualisation
partner to Audi. The growth of online
sales is, according to Jobling, only half
of the automotive retail revolution the
other half is the digitisation of the
dealership network. He makes a
compelling case for how his companys
car conguration technology can
provide dealerships with powerful tools
to drive continued success while also
playing a key role in the future growth
of online sales.
Digitising the dealer network
ZeroLight is making some big claims.
The bottom line is that ZeroLight
aims to change the way the industry
sells cars, says Jobling. A digitised
market place has the potential to
provide OEMs and dealers who
embrace new technology with a
fantastic opportunity to tap into
renewed growth and customer

ZeroLight aims to change the way the industry sells

cars - Darren Jobling, Chief Executive, ZeroLight

72 | Megatrends

interest, he says, as a nod to

ZeroLights development of the realtime 3D visualisation technology that
powers its advanced car configurator.
By adopting advanced congurator
technology for their showrooms, dealer
networks can continue to remain
relevant to the modern-day car buyer
The proliferation of large model ranges
and extensive options, add-ons and
congurations means that it is
impossible to accurately represent
every option in a traditional forecourt
environment, and even the glossiest of
brochures can never truly characterise
a brands values and connect with the
buyer in a way that a genuinely
interactive experience is able to, says
technology provides dealers with the
tools to ourish in a digitised retail
environment a heightened visual,
interactive experience will lead to a
scenario where customers see more
benet and real value in a showroom
visit. They can ick through the options
in real time using stunning Ultra High
Denition screens, experience the
textural subtleties of limited edition
options or bespoke nishes, and see
instantly the way their choices impact
the cars looks and dynamic
performance. They will be able to
connect emotionally to their car in a
way which would not have been
possible with brochures and physical

Retail (R)evolution



This vision may not be new - digitised

dealerships such as Audi City have
been in the industry for several years but what is original is the ZeroLight
claim to make a digital experience
available in every showroom. From
tablets and computer screens, to touch
screens and kiosks, large 4K Ultra HD
screens, video walls and virtual reality
headsets - ZeroLight is a exible
solution with many sizes and form
factors that can work with any
showrooms size and oor plan,
explains Jobling.
It doesnt just apply to existing
showrooms in the dealer network:
ZeroLight believes its technology
makes the dream of scalable digitalonly dealerships a reality. Making the
most of network and store format
innovations to capitalise on high footfall
areas such as shopping centres and
high streets is key to the industry, and
we should look to digital solutions to
enable this, he muses.

Online uptake and consolidation

Talk of the future rise of online in the
automotive retail sector must not
overshadow the fact that over 90% of
prospective new car customers already
use the Internet when considering a
new purchase, many of them the
vehicle manufacturers official site. This
online research invariably results in
toying with colours and trim options
manufacturers website, says Jobling.
The makeup of a traditional, lastgeneration congurator requires an
extraordinary resource commitment
from vehicle manufacturers, both in
generating thousands of images and
the subsequent post-processing and
quality control required to compose
even the most basic system.
Jobling explains that these are what
ZeroLight call asset heavy, tech light
congurators: They require enormous
effort to establish, with thousands of
images, and even when complete the
customer experience is very basic. As
model ranges and options packs

What ZeroLight is offering is a tech heavy, asset light solution. There are many
benefits to this, but, most of all, the customer experience is greatly improved Darren Jobling, Chief Executive, ZeroLight

continue to expand, the nancial and

physical commitment required to
maintain the online presence becomes
ever more burdening.
What ZeroLight is offering is a tech
heavy, asset light solution. There are
many benets to this, but, most of all,
the customer experience is greatly
improved, he enthuses.
The technology at the heart of the
ZeroLight web congurator solution is
the same as in its dealership solutions,
though now located in the Cloud to
utilise the graphical power of Cloudcomputing. This means users of the
online congurator continue to benet
from a live, 3D scene of the car and the
customisation that this brings. Weve
removed the hard processing work
from the customers device and placed
it in the Cloud, explains Jobling. The
result is that any customer can have a
fantastic, 3D conguration experience
regardless of the specication of their
PC, laptop or tablet. One of the key
innovations is that customers do not
need to download or install a plugin to
make it work.
The benet to the OEM of a softwareled solution is also very clear to see,
believes Jobling: That investment in
the software is never lost; it continues
to pay off over time and continues to
get better with updates. With an assetled solution, your investment is lost
when the car changes, since all of your
images need to be discarded and
remade from scratch.
This is a fresh new thinking regarding
the makeup of car congurators, and
ZeroLight can provide real impetus to
the growth of online car sales. Were
reimagining the online car congurator
with new real-time 3D visualisation
technology, says Jobling, with the
purpose of inspiring online congurator
uptake to the point where customers
will readily buy entirely online, satised
that they have explored, customised
and matched the car to their needs
using the tools on the website.
As the inclination to buy through the
web increases, expect the utilisation of
advanced 3D online congurators to
come to the fore and gradually align the
automotive industry with what we have
come to expect of the modern retail
experience: a digital freedom to explore
complementing manufacturers ability
to accurately express the full potential
of their products.

Megatrends | 73

Freight Efficiency

Volvo Trucks underlines its

commitment to HVO
Volvo Trucks is gearing up to ensure its Euro VI engines support hydrotreated
vegetable oils (HVO)
By Michael Nash

ust as it did with its Euro V engines,

Volvo Trucks is readying its Euro VI
engines to be hydrotreated vegetable
oil (HVO) compliant. The OEM believes
the alternative fuel will play an
important role in the commercial
vehicle (CV) segment when it comes to

Know your roots

It is called hydrotreated because in
production oxygen is replaced by
hydrogen, which is quite a well known
and established process, Lars
Mrtensson, Director Environment and
Innovation, Volvo Trucks,

Megatrends | 75

Freight Efficiency
a renewable diesel produced by
hydrotreating vegetable oil or animal
fat, and is classied as HVO. In terms
of its chemical composition, it is a
hydrocarbon comparable to fossil fuel.
As a result, it can be used as such in
all modern diesel engines or blended
with fossil diesel. As a premium-quality
fuel, NEXBTL renewable diesel meets
the toughest requirements set by
automotive manufacturers, and is far
better in terms of quality than
conventional FAME-type biodiesel.
Predicting trends

Megatrends. The end product is a

synthetic diesel fuel, almost identical to
regular fossil fuel diesel.
He suggests the process used to make
HVO is similar to that of making
biodiesel, but the outcome is very
different. Diesel produced through fossil
fuels poses many problems, particularly
in the form of particulate emissions or
nitrogen oxide (NOx). But, unlike
regular diesel, far fewer greenhouse
gases (GHG) are emitted, and you dont
get any tank deposits or lter blocking.
Despite these differences, the fact it is
almost identical to traditional diesel
gives HVO a very big advantage, he
continues. Because of its inherent
properties, HVO can be distributed
using the existing diesel fuelling station
network. There is no need for a
separate infrastructure, and the fuels
can even be mixed freely together.
When considering other alternative
fuels like natural gas (NG), the fact that
HVO can use existing lling stations
could be extremely inuential in terms
of future uptake.

and your limits

Mrtensson is condent that the CV
segment will continue to increase its
reliance on HVO: It is an important fuel
today, and will become even more so in
the future. We think its the most logical
next-step for biodiesel. We hope more
investments will go into this sector,
primarily from producers of the fuel.
Although HVO provides some
desirable positives, he admits there are
some barriers that face the fuel if it is
to be adopted in the CV segment, the
main two factors being resource and
production capacity. That is why there
needs to be more players in the eld,
with bigger plants and strong supply
chains. Currently, there is one company
that is dominating called Neste Oil.
Other players include Total, which has
started understand the fuels potential.
Kaisa Hietala, Executive Vice President
of Nestes Renewable Products
renewable form of diesel: NEXBTL is

To promote growth in the eld, Volvo

Trucks will cooperate with the fuel
producers and fuel distributors. We
need to grow the awareness among the
authorities, our customers and the
general public, so that everyone is very
clear on the strategy and the positives
of HVO.
Where in the world could HVO be a
viable alternative to diesel and
gasoline? Mrtensson highlights
Europe, US, Japan and China as
potential areas of adoption, as CO2
regulations for heavy-duty vehicles
(HDVs) are being continuously
With the new regulations set to be
enforced by 2018 in Europe, he is
condent that Volvo Trucks decision to
make all its Euro VI engines HVOcompatible is a move that predicts the
future trends and growth avenues. We
are convinced HVO will be a strong
prize for the future, in terms of
developing even more fuel efficient and
clean trucks, meeting the targets, and
giving our customers the best

Just as it did with its Euro V engines, Volvo Trucks is readying its Euro VI engines to be hydrotreated vegetable oil (HVO) compliant

76 | Megatrends

so in
on g

Weve been
set a target of
54.5mpg by
Check out our free guide to
the companies making that happen.

Freight Efficiency

No quantum leap in the

move toward driverless
Many within the automotive industry believe driverless trucks will hit the road
before passenger cars
By Freddie Holmes

Many OEMs have an eye on selfdriving truck technology - as do their

suppliers - but with legislation posing a
hindrance to testing and a number of
vehicles in general are still some way
off, when can the autonomous truck
realistically be expected?
Likely but when, and why?
Recent developments across the
trucking sector have led to suggestions
that autonomous trucks will become a
78 | Megatrends

reality before passenger cars. HansWerner Kaas, a Senior Partner at

McKinsey, agrees, and believes this is
likely to happen between 2023 and
There are several reasons behind this.
The rst is that trucks spend the
majority of their time on the highway at
a more-or-less xed speed. Semiautonomous technology such as
adaptive cruise control, lane departure
warning and blindspot detection
effectively enables the truck to drive

itself in these conditions.

The autonomous truck of the future is
an extension of existing, individual
systems already available for todays
commercial vehicles, says Bill Kahn,
Peterbilts Principal Engineer and
Manager of Advanced Concepts. Kahn
emphasises that heavy-duty trucks are
an ideal platform for automated
operation because, compared to
passenger cars, commercial vehicles
travel the majority of their miles on
modern highways, at constant speeds

Freight Efficiency

(V2V) and vehicle-to-infrastructure (V2I

or V2X) wireless communication and
radar to pair trucks together. This
allows several trucks to travel closely
together and create an aerodynamic

and for extended periods of time.

Peterbilt has gone as far as
demonstrating how its autonomous
Model 579 truck could perform, but is
yet to take testing to public roads.
In 2012, trucks transported around 70%
of all freight tonnage in the United
States, a total of 9.4 billion tons.
Globally, road freight transport is
expected to triple between now and
2050, and autonomous trucks are
expected to provide an opportunity to
cope with this growth in an efficient and
safe manner.
Get in line
Platooning is heralded as the gateway
to fully-autonomous trucking. The
technology uses vehicle-to-vehicle

Denso recently demonstrated its

support for this technology by nalising
an investment agreement with Peloton
developer of platooning systems for
large truck transportation eets.
Megatrends heard from Patrick Powell,
Director of Heavy Duty Engineering at
Denso, who explains that for the lead
truck in a platoon, there is reduced
drag compared to a solo vehicle, and
for the following trucks there is reduced
air resistance. With less effort required
from the engine, the trucks will
consume less fuel, all without input
from the driver. The distance between
trucks varies based on a number of
different factors such as the
environment, weather and hills, and the
designs or weight of the trucks
travelling, he notes.

For platooning to work, however,

connected corridors need to be in place,
says Martin Green, Planning Manager,
Connected Technology at Visteon.
The connected corridor looks at ways
to provide ubiquitous coverage over
some of the managed motorway
networks so that information about
road conditions and vehicle speed can
be directly transmitted into the vehicle,
reducing the reliance on road signs, he
says. Ultimately, Green believes the
goal is to be in a situation where a
platoon of trucks travelling down a
major route can be monitored at every
step of the way. As soon as something
goes wrong further down the line, such
as congestion, you can do something
about it immediately, he points out.
Volvo Trucks also has stakes in
However, as it stands, it seems that
platooning is as far as the OEM is
looking in the short- and medium-term.
According to Gran Nyberg, President
of Volvo Trucks North America, no one
is going to see autonomous heavy-duty
trucks in our lifetimes.

Megatrends | 79

Freight Efficiency

Neck on the line, or foot in the door?

Nybergs comments suggest a
lingering pessimism within the industry,
but many OEMs are actively
investigating autonomous trucking in
self-contained off-road environments,
away from potential hazards such as
pedestrians, traffic and infrastructure.
Because of the risks, it has taken a
while for anyone to dip a toe into the icy
waters of public road testing.
In July of last year, Daimler Trucks
demonstration of an autonomous truck
in action when the Mercedes-Benz
Future Truck 2025 drove along a
cordoned-off section of the A14
Autobahn near Magdeburg, Germany.
According to the OEM, taking this truck
to a public road in the US was the next

logical next step on the journey to

series production.
Less than a year later, on 5 May 2015,
the state of Nevada granted Daimlers
Freightliner brand with a road license
for an autonomous heavy-duty truck
the rst OEM to receive such a license.
Freightliners Inspiration Truck drove on
highway 15 in Las Vegas equipped with
an intelligent Highway Pilot system
which includes a front radar and stereo
camera, as well as driver assist
systems (DAS) such as adaptive cruise
control (ACC).

Daimler says Nevada was selected as

the demonstration location because it is
one of four states with laws regulating
autonomous vehicle operation. Florida,
California and Michigan have also
passed legislation allowing testing of
autonomous vehicles. Legislation
enabling testing in Nevada that passed
in 2011 and 2013 regulates the testing
and operation of autonomous vehicles,
including commercial trucks. However,
such standards specify that a minimum
of 10,000 miles (16,000km) must be
driven in autonomous mode under test
conditions before a license can be
Good news for suppliers
As well as advanced driver assistance
systems (ADAS) that are enabled
through camera, ultrasonic, infrared,
radar and lidar sensors, there are other
systems that need to be considered.
Although adoption is slow (for now),
Nexteer Europes Engineering Director,
Paul Poirel, recognises that many
OEMs are making the switch to electric
power steering. But just how important
will these units be in fully-autonomous
driving? In some instances, the driver
will not be driving he will be distracted

80 | Megatrends

Freight Efficiency

or reading so if there is any kind of

fault or alert, he will need a few
seconds to regain control of the
vehicle, Poirel tells Megatrends.
Because of that, the steering system
will need extra exibility and reliability
in order to operate in terms of
milliseconds rather than seconds.
The US National Transportation Safety
Board (NTSB) recently made a number
of recommendations to address road
safety, such as requiring OEMs to
install forward collision avoidance and
autonomous emergency braking (AEB)
systems as standard equipment on
commercial vehicles (CVs). These calls
have been echoed by Meritor Wabco,
which currently supplies its own
collision mitigation system, OnGuard,
for trucks in North America. OnGuard
alerts the driver to potentially critical
driving situations. These technologies
are crucial within autonomous cars, as
they effectively act on the drivers
behalf to avoid an incident handy in
the event of an unexpected road
hazard or moments of driver
Slowly, slowly
In an interview with Megatrends, Steve
Hampson, President and General
Manager at Meritor Wabco, tackled the
question of whether the industry is
taking control out of the hands of the
driver. Hampson believes the driver still
has an important role to play, and
there are stepping stones to an

autonomous or semi-autonomous truck

its not a quantum leap.
As the prospect of self-driving trucks
draws ever closer to becoming a reality,
there is some speculation as to
whether they will still be making
headlines in 2025, or whether selfdriving trucks by then will be the norm.
Weighing in on the topic, Hampson
explained that the life-cycle of trucks
will have an impact on the mix of
autonomous vehicles: The landscape
will certainly be different in 2025, but
the average age of a heavy truck in the
US is eight or nine years. In 2025, there

will be vehicles that are ten, 15 years

old, operating on the highway as well
as vehicles with the new technologies.
You have to take into account there will
not be a totally driverless highway
straight away, he said.
Looking forward, Hampson foresees
increased support for the driver, but
admits there will be circumstances
where some form of human control will
be always required. The main point
would be nding the right balance of
technology, convenience, safety and
efficiency. That will be what drives us
forward over the next ten years.
Megatrends | 81

Freight Efficiency

GHG Phase II paves the

way for HD WHR
What role will waste heat recovery (WHR) systems play in helping US heavy-duty
truck OEMs meet GHG Phase II regulations? Michael Nash speaks to one of the
field's leading players

Target in focus

he next phase of US emissions and

fuel consumption regulations for
medium and heavy duty trucks,
officially titled Greenhouse Gas
Emissions and Fuel Efficiency
Standards for Medium- and HeavyDuty Engines and Vehicles Phase 2
(referred to from this point forward as
GHG Phase II), was outlined in June
2015. Among the key technologies that
could help eets reach the targets is
waste heat recovery (WHR), a
technology that is expected to be
especially relevant in the latter years of
GHG Phase II.

Formerly known as Norgren, IMI

Precision Engineering is a leading
supplier of motion and fluid control
technologies. It believes WHR
systems will be instrumental for the
automotive industry as it looks to
reduce its carbon footprint. In fact, the
company recently stated, WHR is the
single biggest opportunity for large
greenhouse gas (GHG) legislation
and deliver fuel efficiency gains for the



Capturing and reusing energy that

would otherwise be lost thermally,
WHR systems can improve the
emissions. The technology can be
implemented on vehicles that use
conventional internal combustion
engines (ICE) as well as those with
hybrid systems.
Speaking to Megatrends, Mark Sealy,
Engineering Director, Commercial
Vehicle Sector at IMI Precision
Engineering discussed the proposed

Tailpipe boiler


gas in




Capturing and reusing energy that would otherwise be lost thermally, WHR systems can improve the efficiency of vehicles whilst simultaneously
reducing CO2 / Image source: IMI Precision Engineering

82 | Megatrends

Freight Efficiency

IMI Precision Engineering is targeting an initial 4% fuel saving using waste heat recovery (WHR) systems. We see 5% as a possibility in the longer
term. We think the first systems to be adopted will deliver a 3% to 4% fuel saving, with others that are more developed recording around 5% Mark Sealy, Engineering Director, Commercial Vehicle Sector. Image source: IMI Precision Engineering

rules for US GHG Phase II, and

explained how WHR systems could be
inuential as eets look to meet the
What were now focusing on in Europe
and the Americas is the next agenda,
which is the fuel efficiency, CO2 and
general GHG reduction initiative. This
is bringing with it projects such as
natural gas programmes, tyre ination
ideas, and aerodynamic solutions.
WHR systems are now of strong
interest too, he observed.
He suggests that trucks need to nd
small savings in several areas to be
able to hit the GHG Phase II
regulations. Realistically, what sort of
savings can heavy-duty commercial
vehicles (HDCVs) hope to achieve
when using WHR systems? Were
targeting 4% fuel saving initially, Sealy
predicts. We see 5% as a possibility in
the longer term. It all depends on how
complex you want the systems to be.
We think the rst systems to be
adopted will deliver a 3% to 4% fuel
saving, with others that are more
developed recording around 5%.
A mandatory must-have
After examining the proposed GHG
Phase II regulations, IMI Precision
Engineering came to the verdict that
WHR systems will be inuential in the
near future: Our interpretation of the
GHG Phase II regulations, although
they are not nalised, is that pre-series

adoption of WHR will happen by 2021.

We think thats the earliest date that the
technology will be deployed, and it will
probably be one or two pioneers in the
The early adopters, or pioneers will
use fairly simple rst generation
systems, benetting from the 3% fuel
described. Systems that enable
savings of around 5% will be
exclusively built for the long-haul
segment, he adds.
After these initial spells of use, he
expects progress to commence rapidly,
with WHR systems becoming a fairly
wide scale option by 2024. Looking
further ahead, he is condent that
WHR will be mandatory on trucks in
the Americas by 2027, based on EPA
Sealy suggests that future European
GHG emissions and fuel consumption
legislation is likely to follow the
proposals set out by the US
companies are reluctant to launch
products in two parts of the world
simultaneously, so there is bound to be
a gap. But the motivations are also the
business case in Europe, because fuel
prices are higher.
Essentially, he outlines a tiered
approach to WHR uptake, which
reects the EPAs hurdles which see
GHG targets becoming more stringent

in 2021, 2024 and nally 2027, when

they reach their peak.
Overcoming barriers
Before WHR
mandatory, and even before they see
initial uptake, Sealy admits there are a
number of issues that must be
addressed: One is that working uids
arent yet regulated. There is no standard
of approved regulation for using working
uids in these super-heated conditions
on vehicles. Were told that this isnt a
deal breaker, but nevertheless, all the
regulatory bodies have to work out the
standards and the tests.
The second is the cost issue, which
continues to be a problem for WHR
systems. But, like most technology,
Sealy is condent that as volume
production increases, the price of the
systems will fall: The equipment is
prohibitively expensive for the amount
of yield today, although its pretty close
one can imagine that one more round
of simplication, a bit of volume, and
another hike in diesel prices and were
there, he predicts.
Finally, durability remains an issue with
WHR systems, and after Euro VI,
nobody wants to bolt another piece of
complexity onto a truck that has any
reliability issues. Its a matter of time
and patience. If we can go through a
couple of winters with the same piece
of equipment, I think the eet operators
will be convinced.
Megatrends | 83

N gist
ow e
! r

Whats next
for Indias
passenger car and
commercial vehicle

Find out at Automotive Megatrends India

in Pune on December 2-3.