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Written by Stuart Birch
Product planners: How accurate is your technology radar?" Will the feature content you"ve bet on for 2020 be a hit or a costly miss in the marketplace? Vehicle engineering history is littered with misread technology trends and cancelled development programs. Future powertrains and fuels have been the trickiest. Pursuing gas-turbine power for cars in the 1960s, Chrysler built 55 units including one that demonstrated its multi-fuel capability by running on tequila. A number of truckmakers also followed the turbine route without payoff. At least a dozen OEMs collectively spent billions on Wankel rotary-engine licenses and prototypes over three decades. And Ford even flirted with the idea of micro nuclear reactors, working up its 3/8-scale "Nucleon" concept in 1958. Predicting the status of a new technology and deciding if and when to commit to its production is riskier than ever before, noted Prof. Neville Jackson, Ricardo"s Chief Technology and Innovation Officer. "Product planning always has been a crucial challenge for the industry," he told Automotive Engineering. "The increasing diversity of product offerings, including different powertrain technologies, requires very careful management not just of the product planning process for each individual model, but of the manufacturing flexibilities required to leverage cross-platform synergies." Jackson believes the entire automotive design, engineering and manufacturing sysem needs to be far better integrated across the entire product range. He cautioned that it will be too expensive to cover all of the technology options available. "The most difficult task will be to pick the winners," he said. Connected-car profits The recently published Global Automotive Executive Survey 2017 by KPMG, an advisory services company, highlights the challenges facing mobility-industry product planners. The online survey conducted last fall found that some 74% of U.K. automotive executives expect more than half of today"s car owners will not want to own a car within ten years. Self-driving technology and mobility as a service will take priority. "Carmakers" success will not be evaluated solely on the quantity of vehicles sold, but on the customer value over the whole lifecycle especially when the digital ecosystem will be ready for the market," observed John Leech, KPMG"s Automotive lead in the U.K. "OEMs need to rethink," he said, noting that over 75% of those surveyed believe that one connected car can generate higher revenues over its life cycle than 10 non-connected cars. KPMG deduced that the impact of consumers shifting away from an ownership model to a vehicle-use model will reduce demand for fewer cars and therefore reduced profits from building vehicles in the future. But the survey showed that this does not worry the majority of automotive execs: 85% of the respondents said they are convinced that their company will generate higher revenues by providing new digital services, than by selling cars alone. Ricardo"s Jackson noted that while the development of autonomous vehicle technology is clearly continuing apace, "there remain many technical, operational and safety challenges to be overcome in implementing [SAE] Level 4 or 5 solutions," he explained. "Once these are overcome, the attractions are obvious to the end user." He added that a further impetus is the currently "very poor" asset utilization of vehicles, estimated by many as less than 5%. "As the technology content and embedded value of vehicles increases, an increasingly servitized model of vehicle use may well emerge, based on pay-per-use or even shared usage," Jackson surmises. He added that while this is likely to substantially reduce the cost/mile for vehicle use, the transition will occur gradually. KPMG"s Leech believes the U.K. is particularly suited to the early adoption of Jackson"s "servitized" model. The government"s greenbelt policy has created a relatively dense urban population which, when coupled with high fuel prices, means that SAE Level 5 taxis offer a greater cost saving to the U.K. public, compared to European or North American markets. "I believe robot taxis will revolutionize U.K. urban transportation in the second half of the next decade," Leech said. Diesel"s future? The survey also found that 62% of the automotive executives regard diesel technology as pass . It concluded that "traditional" powertrain technology will eventually vanish from manufacturers" portfolios due to increasing concern over CO2 and NOx emissions. Ricardo"s Jackson is pragmatic about diesel"s long term future for passenger cars, calling the combustion technology " far from pass ." But he questioned whether the price of development and implementation still provides an attractive commercial case within the market, particularly for non-premium products. "The negative effects of the plans by some city authorities to penalize the use of diesel, may well dissuade customers from selecting diesel even if such measures are aimed primarily at the legacy fleet," Jackson noted. "For these reasons it is almost certain, that the diesel share of the passenger car market will reduce over time. This is not the case, however, for heavy duty vehicles such as buses and trucks, which are more amenable to retrofit after treatment measures aimed at existing fleets and where there are few if any alternative powertrain technologies available." One surprise from the KPMG findings: 93% of executives surveyed are planning for their companies to invest in technology for battery electric vehicles over the next five years. In fact they expect BEVs to dominate the automotive market by 2025.
Date written: 09-Feb-2017 08:34 EST
More of this article on the SAE International Website
ID: 6689
Product planners: How accurate is your technology radar?" Will the feature content you"ve bet on for 2020 be a hit or a costly miss in the marketplace? Vehicle engineering history is littered with misread technology trends and cancelled development programs. Future powertrains and fuels have been the trickiest. Pursuing gas-turbine power for cars in the 1960s, Chrysler built 55 units including one that demonstrated its multi-fuel capability by running on tequila. A number of truckmakers also followed the turbine route without payoff. At least a dozen OEMs collectively spent billions on Wankel rotary-engine licenses and prototypes over three decades. And Ford even flirted with the idea of micro nuclear reactors, working up its 3/8-scale "Nucleon" concept in 1958. Predicting the status of a new technology and deciding if and when to commit to its production is riskier than ever before, noted Prof. Neville Jackson, Ricardo"s Chief Technology and Innovation Officer. "Product planning always has been a crucial challenge for the industry," he told Automotive Engineering. "The increasing diversity of product offerings, including different powertrain technologies, requires very careful management not just of the product planning process for each individual model, but of the manufacturing flexibilities required to leverage cross-platform synergies." Jackson believes the entire automotive design, engineering and manufacturing sysem needs to be far better integrated across the entire product range. He cautioned that it will be too expensive to cover all of the technology options available. "The most difficult task will be to pick the winners," he said. Connected-car profits The recently published Global Automotive Executive Survey 2017 by KPMG, an advisory services company, highlights the challenges facing mobility-industry product planners. The online survey conducted last fall found that some 74% of U.K. automotive executives expect more than half of today"s car owners will not want to own a car within ten years. Self-driving technology and mobility as a service will take priority. "Carmakers" success will not be evaluated solely on the quantity of vehicles sold, but on the customer value over the whole lifecycle especially when the digital ecosystem will be ready for the market," observed John Leech, KPMG"s Automotive lead in the U.K. "OEMs need to rethink," he said, noting that over 75% of those surveyed believe that one connected car can generate higher revenues over its life cycle than 10 non-connected cars. KPMG deduced that the impact of consumers shifting away from an ownership model to a vehicle-use model will reduce demand for fewer cars and therefore reduced profits from building vehicles in the future. But the survey showed that this does not worry the majority of automotive execs: 85% of the respondents said they are convinced that their company will generate higher revenues by providing new digital services, than by selling cars alone. Ricardo"s Jackson noted that while the development of autonomous vehicle technology is clearly continuing apace, "there remain many technical, operational and safety challenges to be overcome in implementing [SAE] Level 4 or 5 solutions," he explained. "Once these are overcome, the attractions are obvious to the end user." He added that a further impetus is the currently "very poor" asset utilization of vehicles, estimated by many as less than 5%. "As the technology content and embedded value of vehicles increases, an increasingly servitized model of vehicle use may well emerge, based on pay-per-use or even shared usage," Jackson surmises. He added that while this is likely to substantially reduce the cost/mile for vehicle use, the transition will occur gradually. KPMG"s Leech believes the U.K. is particularly suited to the early adoption of Jackson"s "servitized" model. The government"s greenbelt policy has created a relatively dense urban population which, when coupled with high fuel prices, means that SAE Level 5 taxis offer a greater cost saving to the U.K. public, compared to European or North American markets. "I believe robot taxis will revolutionize U.K. urban transportation in the second half of the next decade," Leech said. Diesel"s future? The survey also found that 62% of the automotive executives regard diesel technology as pass . It concluded that "traditional" powertrain technology will eventually vanish from manufacturers" portfolios due to increasing concern over CO2 and NOx emissions. Ricardo"s Jackson is pragmatic about diesel"s long term future for passenger cars, calling the combustion technology " far from pass ." But he questioned whether the price of development and implementation still provides an attractive commercial case within the market, particularly for non-premium products. "The negative effects of the plans by some city authorities to penalize the use of diesel, may well dissuade customers from selecting diesel even if such measures are aimed primarily at the legacy fleet," Jackson noted. "For these reasons it is almost certain, that the diesel share of the passenger car market will reduce over time. This is not the case, however, for heavy duty vehicles such as buses and trucks, which are more amenable to retrofit after treatment measures aimed at existing fleets and where there are few if any alternative powertrain technologies available." One surprise from the KPMG findings: 93% of executives surveyed are planning for their companies to invest in technology for battery electric vehicles over the next five years. In fact they expect BEVs to dominate the automotive market by 2025.
Date written: 09-Feb-2017 08:34 EST
More of this article on the SAE International Website
ID: 6689
