Mercedes Benz SLS AMG - CAS 2011
The 2011 Chicago Auto Show (CAS) boasted a 10 percent year-over-year increase in attendance. Local dealerships hope a heightened interest in a recovering auto industry will translate into a continuation of increases in monthly sales. Of course, lots of people are trying to figure out what will drive the market.
- Alan Mulally, President and CEO of Ford Motor Co. keynoted at the 2011 Consumer Electronics Show (CES) in Las Vegas. Deciding to show the new Focus Electric there, Mulally said, “The automobile has moved into the mainstream of our integrated digital world. To be able to share the next step in the evolution of our technology at CES… Not only is it the electric car, but an electric future. All the applications that allow us to operate in our electric world will be using consumer electronics technology integrated with the car platform.”
- By next year, Generation Y (the millennial generation born between 1982 and 2001) will make up 40% of the car-buying market in the US. In-car technology is one of the most important attributes for them, according to a recent Deloitte & Touche report. Built-in Bluetooth and Internet connectivity in their vehicles, more human-machine interfaces (HMIs), and devices like haptic controllers… in essence, the group wants an iPhone on wheels.
- Steve Foley, owner and president of Steve Foley Auto Group, Northbrook, Illinois, told me that car buyers may be impressed by quarter-mile speeds and electric batteries, but, in the end, they are often swayed by four-way lumbar supports and 20-gigabyte navigation and entertainment systems. Gadgets are now very user-friendly and appeal to a wide audience. Andrew Poliak, director of automotive business development at QNX Software Systems Co. in Ottawa says, “Today it seems cars are just one big bundle of consumer electronics.”
As I walked through McCormick Place, I saw huge GM, Chevrolet, Ford, Jeep and Toyota displays. Indeed, a connected world. Exhibits were highly interactive… and social. Interactive displays – four test tracks; BMW’s Build Your Own Car station; Chevrolet’s Motion sensor Volt info station; Ford Mustang Dino Experience; Mercedes Benz 3-D video screens. Toyota’s Prius “Spell the plural” contest and record your own YouTube ad; CAS on Facebook & Twitter. The Jeep exhibit was fabulous - a test track experience that featured a 20-foot drop and man-made snow. Hmmm, no exotics this year. Perhaps Ferrari is watching its marketing dollars.
So, what is driving the market? What do consumers want and how much are they willing to spend for it? I decided to informally talk with some product specialists and salespeople from area dealerships. The concensus: car buyers want it all – looks, power, fuel efficiency, safety features, navigation & entertainment systems, connectivity AND a reasonable price.
What turned on the attendees? Eight thousand consumers voted for their favorite vehicles (selected categories):
- Best All-New Production Vehicle: 2012 Chevrolet Camaro ZL1 Fastest Camaro ever offered by Chevrolet, the car is packed with performance technologies, highlighted by Magnetic Ride Control, chassis and suspension systems. Scheduled for delivery to dealerships in early 2012.
- Best Concept Vehicle: Infiniti Essence A “Wow” looking car, Essence features environmentally sound design. The technology and performance statement is a 592-horsepower gasoline/electric hybrid coupe. A key difference over some other hybrid systems is that both the 3.7-liter V6 and the electric motor feed their power only to the rear wheels. Essence previews a new type of electric motor, called 3D Motor, which operates in both propulsion and power regeneration modes so the battery pack is kept charged up.
- Best Green Vehicle: Chevrolet Volt Aha, here we have a remote-charging and vehicle-control program that owners can download and run from Blackberry and Apple iPhone cell phones. Among other things, it allows the owner to pre-heat or pre-cool the vehicle before getting in. The navigation system is standard, as is a hard drive for storing digital-music files.
- Vehicle I’d most like to have in my driveway: Chevrolet Camaro Just 11 votes ahead of the Ford Mustang, the Camaro’s safety features include ABS, traction control, antiskid system, front-side airbags, and curtain-side airbags. Rear-obstacle detection is standard on two models. Other available features - a wireless cell-phone link, USB port, satellite radio, and remote engine start.
OEMs face a big challenge: designing for the FUTURE. Integrating the product development cycle for both the car and consumer electronics is an option. More market research? Absolutely!
Electrification of the motor vehicle is an area of much increased R&D activity of late. The popularity of new powertrain technology will only grow. Market leaders will be those companies that have their fingers on the pulse of consumer trends and behavior.
- Strong consumer demand and the need for environmentally friendly vehicles with low emissions have resulted in tremendous innovation and advance in powertrain technology.
- Differing infrastructures and consumer needs around the world will require a portfolio of vehicle solutions. Successful auto companies will be those best able to accommodate the varied needs and preferences of their global customers.
- In a recent survey, over 10% of US drivers, which equates to approximately 20 million drivers, said they would consider purchasing a plug-in hybrid or electric vehicle. Even if only a small portion of the 10% are serious, there would still be enough demand to sell out the 2010 and 2011 production runs of the major and new manufacturers.
- Some of the biggest challenges for advancing the popularity of new powertrain technologies from the niche into the mainstream are access to charging stations, battery driving range and vehicle costs.
The Federal Reserve Bank of Chicago is preparing for Monday’s conference on the future of the auto industry (After the Perfect Storm). The meeting will focus on factors shaping the competitiveness of carmakers during the next decade. Four factors will receive attention: the existing uncertainty regarding engine technology, the need for flexible production systems, the extent to which carmakers need to globally integrate their product strategy, and the importance of successfully managing the supply chain.
I recently provided a client with an analysis of auto trends in the US. The ability to successfully market new powertrains will be key. Ten years down the road, who will develop the powertrain that carries the brand identication comparable to “She’s Real Fine My 409”?
I’ve been following the automotive industry for several years. Recently it’s become clear to me that the growth of hybrids will drive demand for new technologies. At last week’s SCIP meeting in Milwaukee, I heard a great discussion that helped me get a better fix on some of these trends.
By 2015, the supply of lithium-ion batteries will outweigh demand by about 62 percent according to Mary Ann Wright, manager of advanced auto batteries for Johnson Controls. Some industry analysts see a supply squeeze in the coming years as demand from electric vehicles heats up. Where do these predictions come from? How does the organization use environmental scanning to make better decisions?
The panelists were from Rockwell Automation and Johnson Controls. Here are my take-aways…
- It is important to build market intelligence expertise within a manufacturing company. Operatives in regions around the globe can provide the best information. Data purchased from external sources is suspect. Battery forecasts are “all over the place.”
- Turning information into intelligence is like putting together a puzzle. Listen to both the sales force and the plant manager. Engage the industry expert and converse with the chatty one on the airplane. Trade shows aren’t the best place to learn something new but they can validate what you already know.
- Everyone is focused on China and emerging markets. Of course all industry players trying to protect their share must be prepared to take on new competitors selling cheaper products. It’s tough to figure out what’s going on when there is no infrastructure in place to gather market data. Language barriers exist within the country as well as outside. Patent protection is suspect.
I left the meeting thinking that there are collaborative research opportunities with manufacturers trying to provide products to support the hybrid revolution.
