Automobile Industry
GM & Europe:
The deal made with GM in Germany has implications for the rest of Europe. Will the German push to save jobs in Germany end up costing jobs in England or other countries?
For GM, this move marks the loss of European operations, and a loss of design capabilities from Europe. Its been said that many of the design ideas for US based cars has come from Opel, and the European based operations. With this missing, will this hurt GM's ability to tap global knowledge in the future?
Read more...
Bailout 2008-09
Fiat forged a strategic alliance with Chrysler. The Italian carmaker will take a 35% stake in the troubled Detroit company in return for access to its small-engine and transmission technology and international dealerships. The deal throws a lifeline to Chrysler, which risks having to repay an emergency $4 billion loan to the federal government and losing the chance of further help if it cannot provide evidence of a credible turnaround plan. See article
History
The first half of the 20th century was dominated by the US, as the car industry became the symbol of American excellence.
Growth
In 1900, there was no auto business, but by 1920's, it became the largest industry in the USA. It was important for production of glass, rubber, steel, and with road-building, steel production, oil, and many more industries. By the 1970's about one in 6 companies in the US were involved in the Auto industry.
Early years
The first cars were actually build in Europe in the 1880s. By 1900, there were about 30 American car companies. Some of the early entrepreneurs were Ransom Olds (Oldsmobile), James Packard, the Dodge Brothers (Dodge trucks), and Walter Chrysler, but the two most important forces in the US auto industry were Henry Ford (who started up the Ford motor company, and Alfred P Sloan the man who make GM into the economic powerhouse that it remained for the remainder of the century.
European Car industry
European Car industry
Our reviews:
Honda
Venture Capital and the Auto Industry
Private equity played almost no part of last year’s North American Auto Show. This time, around, however, it’s unavoidable. Not only Cerberus with Chrysler, but also Khosla Ventures backing alternative fuel-based auto startups, and GM taking a stake in Coskata Inc., a VC-backed developer of technologies for processing biorefuse into ethanol. Coskata had previously raised 17 million from Khosla Ventures, GreatPoint Ventures and Advanced Technology Ventures. On the flipside, layoffs at Tesla Motors.
1. Electric cars are coming. See the latest innovations from Tesla Motors and more...
2. New diesel engines
3. flex cars in Brazil - cars that run on both gasoline and/or ethanol (from sugar cane in Brazil)
4. alternative fuels for automobiles
Fisker Automotive Inc., an Irvine, Calif.-based maker of “green” sports cars, has raised an undisclosed amount of second-round funding from Kleiner Perkins Caufield & Byers. The company previously raised a $5.5 million first round led by Palo Alto Investors. Both rounds were placed by ThomasLloyd Capital. Fisker plans to roll out its first cars in Q4 2009. Get more info.
Global competition
Are the Chinese going to start producing cars for export (that the world wants to buy)? Chery Automobile is betting on it.
Race to build the least expensive global car
The car rental business world wide is massive, and its a great market for car companies to get consumers to try out the cars for themselves. Some car companies use sales to rental companies to move old inventory. Others, such as Honda believes that the rental business is bad for branding, and generally stays away from this market. Please add your thoughts...
USA Market data
Total US industry sales were 13.5m last year, according to GM....Cars sold in the US at an annualised rate of 10.3m in December. They were highest this decade at 17.4m in 2000.
Autodata, a market research firm, put total estimated annual industry car sales at 9.6m, their lowest level since 1982
GM said it estimated the overall annualised selling rate for cars at 9.8m in the US in January, compared with 10.3m in December, and less than China’s estimated selling rate of 10.7m last month.
”This is the first time in history that China has surpassed the US,” said Michael DiGiovanni, GM’s head of global sales and industry analysis.
However, auto market analysts in China said the figures were not comparable because the Chinese figure included all vehicles produced in China - including heavy commercial vehicles and buses - while the US figure did not. Chinese passenger car production last year was 5.8m.
Global stats
In 2005, 67 million automobiles (cars and light trucks) were produced worldwide. In 2006 16 million new automobiles were sold in the USA, 15 million in Western Europe, 4 million in China and one million in India. In 2007 the markets in Canada, USA, Western Europe and Japan are stagnating, while those in South America (especially Brazil) and Asia grow.
Although the locations of the headquarters of the major volume producers of automobiles are confined to a relatively small number of countries, their manufacturing facilities are distributed in many other countries around the world.
Reasons for the selection of manufacturing locations may include labor costs, political quotas for local content in certain markets and import tariffs. An example of the latter is the U.S. tariff of 25 percent imposed on imported pickup trucks. The result is that manufacturers of pickups intended for the markets of the North American Free Trade Agreement NAFTA area have to assemble their products in the U.S., Canada, or Mexico, to avoid the tariff.
Top 15 motor vehicle manufacturing companies by volume 2006
Total motor vehicle production (1000 units)
General Motors- GM - 8926
Toyota - 8036
Ford - 6268
Volkswagen Group - VW - 5685
Honda - 3670
PSA - 3357
Nissan - 3223
Chrysler - 2545
Renault - 2492
Hyundai - 2463
Fiat - 2318
Suzuki] - 2297
Daimler Chrysler - 2045
Mazda - 1396
Kia - 1382
Diesel engines
diesel engine market
Auto Regulation - emissions and fuel efficiency
Prices at the pump averaged around $1.93 per gallon across the U.S. in the summer of 2004. By the summer of 2006, self-serve gas was typically selling at $2.95 per gallon, although prices dropped significantly in the fall of 2006 only to rebound slightly by the end of the year. The first six months of 2007 saw prices swing from $2.85 to $3.30 and then back down again.
The fluctuating market for gasoline has many drivers reconsidering the vehicles they are willing to drive. Light trucks, usually defined as minivans, pickups and sport utility vehicles (SUVs), are quickly losing share to smaller, more fuel-efficient vehicles. This is very bad news indeed for the Big Three (General Motors, Ford and Chrysler). U.S. car makers in recent years have seen 60% or more of their unit sales in America to be in pickups, SUVs and minivans. Asian car manufacturers Toyota, Honda, Kia, Hyundai and Nissan offer product lines comprised of more than 50% sedans or smaller vehicles.
Meanwhile, according to J.D. Power & Associates, sales of large traditional SUVs fell 16% in 2006 from 2005. At the same time, sales of smaller “crossover” vehicles which get better gas mileage rose 6.5%.
According to the U.S. Environmental Protection Agency, the top fuel-efficient automotive models are hybrids produced by Toyota and Honda. The Honda Insight tops the list with a claim of 61 MPG (miles per gallon) in city driving and 66 MPG on the highway. It is followed by the Toyota Prius (60/61 MPG) and the Honda Civic Hybrid (48/47 MPG). However, sales of the tiny Honda Insight have been so slow that Honda is dropping the model, to be replaced with a new hybrid model in model year 2009.
Not surprisingly, lightweight, advanced diesel models rank highly for mileage, including the Volkswagen Golf TDI, Jetta TDI and New Beetle TDI, which average 38 MPG in the city and 46 MPG on the highway. In Europe, about one-half of all new passenger vehicles sold are diesel-powered.
CAFE (corporate average fuel economy) standards were first issued by U.S. federal regulators in the 1970s as a method of setting average fuel economy standards for carmakers. Currently, each manufacturer is required to achieve an average of 27.5 MPG on each passenger car they build and 20.7 MPG on pickups, minivans and SUVs. This means that an automaker can build a fleet of gas-guzzlers, as long as its line of compacts brings the average for all models within the accepted range. The federal government has been very forgiving: carmakers can use various loopholes in the regulations that allow them to inflate actual mileage figures. However, as of the beginning of December 2007, the U.S. Congress was close to passing legislation requiring much higher average mileage.
Adding fuel to the fuel economy fire are further stiff regulations adopted by the state of California in September 2004. The California Air Resources Board voted unanimously to adopt regulations to improve average fuel economy by as much as 40% by 2016. Moreover, the state adopted greenhouse gas regulations that require a 30% reduction, on average, on automotive emissions. California standards have a decided impact on manufacturers since that state accounts for 10% of all new auto sales in the U.S. In addition, a handful of states such as Oregon, Washington and six states in the northeast are expected to adopt California’s standards as they have other regulations in the past.
The state of California, long known for setting the strictest standards for emissions, is requiring new cars and light trucks to emit 30% less carbon monoxide, 20% fewer toxic pollutants and as much as 20% fewer smog-causing pollutants than current federal standards. Environmental groups lobbying for the new levels claim that these reductions can be accomplished by updating air conditioning refrigerants; designing more efficient transmissions, smaller engines, turbochargers and cylinder deactivators; and making exterior designs more aerodynamic. These groups, spearheaded by an organization called the Union of Concerned Scientists, project that these changes can be made at a cost of $1,960 per vehicle, and that the costs will be recouped by savings at the gas pump. Auto industry spokespeople claim that many of the proposed changes are not feasible, and if they were, would cost upwards of $4,360 per vehicle. Suits have been filed against that state, charging that California lacks the authority to implement rules that would impose such high costs.
A study by the National Academy of Sciences projected that improvements of as much as 40% in gasoline-driven car fuel economy could be achieved within 10 to 15 years through the use of enhanced technologies. For example, advanced transmissions and fuel-injection systems could minimize fuel usage and curtail unwanted power loss. While the manufacture of lighter vehicles could improve mileage, weight is not the single overriding factor. Technologies are available that could do wonders for fuel efficiency, although they would take considerable time, money and effort to fully deploy.
A study, prepared in part by John DeCicco at Environmental Defense, declared that the adoption of current and emerging technologies could drive the average efficiency of U.S. cars to 46 MPG and SUVs to 40 MPG. The study was co-authored by Feng An of the Argonne National Laboratory and Marc Ross, a physicist and automobile expert at the University of Michigan. They propose that two-thirds of the improvement would come from powertrain technology, while one-third would come from cutting three important factors: vehicle weight, air resistance and rolling resistance. In 2005, GM embarked on a three-year, $2.5-million program with the Robert Bosch Corporation and Stanford University to further develop Homogenous Charge Compression Ignition (HCCI), which could possibly increase gasoline engine fuel efficiency by 20% and at the same time achieve near-zero nitrogen oxide emissions, which deplete ozone and create smog.
A proven gas-saving measure is an inexpensive shift to a six-speed automatic transmission. The cost for the addition is a mere $400, but the measure is expected to add one to two miles per gallon in efficiency. Ford projects that one-half of the vehicles on the road in 2015 will have this kind of transmission.
GM claims that an improvement of between 6% and 12% in fuel economy can be achieved through cylinder deactivation technology. In these systems, one-half the cylinders shut down once a steady cruising speed is reached.
Another promising project is in the hands of MIT’s Plasma Science and Fusion Center. By combining turbo charging and direct fuel injection, plus mixing in the use of a small amount of ethanol, scientists working on the project believe that test engines’ power could be tripled. The idea is to increase the efficiency and power of small engines to the extent that they could be used in large vehicles such as trucks and SUVs with fuel economies equal to that of today’s hybrids.
A bright spot on the fuel efficiency horizon is a new hydraulic-hybrid system that is being tested on large service vehicles such as garbage trucks and UPS delivery vans. The EPA’s National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan has designed a hybrid garbage truck that uses a diesel engine assisted by a hydraulic pump and storage tank system that replaces the drivetrain and transmission. The pump and tanks makes it possible to store and reuse energy normally lost when brakes are applied, thereby increasing fuel efficiency as much as 60% and reducing carbon monoxide emissions by more than 40%. UPS is currently testing two hydraulic-hybrid vehicles. The EPA projects that the cost per vehicle to add the hybrid components is less than $7,000, while fuel savings over a 20-year lifespan could exceed $50,000.
Another new technology of note is an artificial neural network. The network, which is composed of hardware or software models of neurons embedded on standard silicon chips, detects cylinder misfires and controls idle speeds, which increases fuel efficiency. These networks are already in use in large-engine vehicles such as Aston-Martin’s 12-cylinder DB9 and Ford’s Econoline full-size van. DaimlerChrysler, GM and Audi are also working on implementing the technology for use in issues relating to variable valve timing and engine performance improvements. Serious measures such as these will have to be taken across the board by automakers in their vehicle designs in order to meet future emissions and efficiency stipulations.
Hybrid trucks and buses will soon be in high demand by major truck fleet operators such as UPS. For the latest information on pilot projects, technologies and fleet purchases, see the Hybrid Truck Users Forum.
www.calstart.org/programs/htuf/
Links
Automobile -Wikipedia
Wikipedia article
Wikipedia article 2
Automobile Accident Checklist